Where does the money allocated to the Hungarian community living in Transylvania go?
Since 2009, DAHR as the sole manager of the subvention targeting the Hungarian community living in Transylvania, received a total amount of 28 million euros. A smaller share is destined for community program tenders, book publishing and media outlets. But where does the rest of the money go? Until now no information about the public money spending has been made public.
On March 14 2016, Department of Interethnic Relations (DIR) employees bring us huge cardboard boxes packed with at least half cubic meters of documents containing the requested materials and place them into the reading room situated at the back of the Victoria Palace for consultation purposes. These documents were the financial reports DAHR has been sending to DIR since 2009.
We are allowed into the reading room with the condition of leaving our phones and cameras behind. We take our place at the table next to the magnetic gate and start examining the documents respecting DIR’s rules.
But soon we loose our initial enthusiasm: as we skim through the material, we realize that these reports do not provide us with the full picture of how DAHR has been spending its yearly amount of 18-20 million lei (according to the daily exchange rate the amount equals to 4-4.5 million euros) public money. The amount Bucharest allocated to DAHR had to be used in the service of the Hungarian community of Transylvania, yet the DAHR website has never published any information about how the money was being spent.
We’ve sent in our first request of examining DAHR’s financial reports in January 2016. Back then it seemed that DIR would send us copies of all the requested documents. But later we were told that fulfilling our request was an impossible task as DIR lacked the necessary resources for carrying out such an overwhelming task.
After some heel-dragging we eventually gained access to the Government headquarters and were allowed in only for a single research day.
The series in Hungarian:
Even though it was impossible to go through all the documents, this is what we discovered:
– besides the open call for applications, the Communitas Foundation also has a separate fund NGOs close to DAHR can apply for through a restricted, invitation-based application procedure;
– a significant amount of the budget is spent mostly on the maintanance of DAHR premises – overhead costs, maintanance costs and repairs;
– staff expenditure also takes up a significant share of the allocated budget support: since 2009, the number of DAHR employees almost doubled, their salaries in many cases exceeds the average pay;
– in the past years DAHR bought several mid- to high-end cars and also bought higher value properties, some of which are used as company housing.
Since 1994, all 19 officially recognized minority groups living in Romania benefit of financial support, destined for preserving their culture and traditions.
The money coming from the budget of the Government’s General Secretariat is allocated via the Department of Interethnic Relations (DIR), a body of the General Secretariat. The financial support goes to organizations representing minority groups, which in the case of the Hungarian minority, since 2009, is DAHR.
How this money is spent became the topic of many discussions and debates within the Hungarian minority. Initially, prior to the 27/1996 law that regulated the functioning of political parties coming into force, the money was managed by DAHR and distributed with the help of NGOs. As of 2003, DAHR named Communitas Foundation as the sole distributor of the funds received as budget support.
Even in the early 2000s, the distribution of funds ocurred based on criteria that lacked precise definition. This topic was spoken of for the first time on the Discussion Forum on Internet news website Transindex, then Krónika newspaper wrote a series of investigative reports about the Communitas funds. Given that the money was intended for supporting the Hungarian minority, it was sent to Communitas foundation and DAHR as a political entity also benefited of budget support.
As of 2009, DAHR gave up their share of party funding and took up the role of manager of the fund allocated to the Hungarian minority. From that moment on the role of the Communitas Foundation was to distribute the funds coming from DIR via DAHR, more precisely, to distribute a share of it based on open applications.
Our report focuses on the timeframe 2009-2015, because we lack all essential information on this period, given that nor DAHR, nor any media outlet in Transylvania has ever published details related to it.
For quite a while now an ongoing debate evolves around who the beneficiary of this money is, who owns it? Does it belong to the organization identified as the manager according to the governmental decision, or does it belong to the Hungarian community in Transylvania? The apparent nitpicking has much at stake. If indeed DAHR is entitled to this money – as its leadership claims –, then DAHR has the right distribute the money according to its own criteria. In that case, they have the obligation to report to the DIR, to the General Secretariat and to state intitutions having the authority to audit on public money spendings.
But if the government created these funds for the benefit of the Hungarian minority and DAHR is only the institution with legal personality managing it, then DAHR has the moral duty, if not the legal obligation to report to the Hungarian community about how that money is being spent.
An annex of a governmental decision states DAHR’s role clearly and we learn that the second interpretation is the right one. It is the annex of the 369/2009 governmental decision which for the first time names DAHR as the beneficiary and as the administrator of the budget support allocated to the Hungarian minority community.
But let us go back to the financial support granted by the General Secretariat: this money cannot be spent according to DAHR’s own will. The Government decisions and the protocols signed between DIR and the beneficiaries state clearly that the money is to be spent on maintainance, on headquarters’ repairing costs, on rent, on supporting media outlets and book publishing, on cultural events, on movable and immovable property and can also be used as own contribution for EU applications.
NGOs used to handing in financial statements on how Norwegian Funds or European Funds were spent will be surprised to know that the A3 form which contains DAHR ’s the detailed report of the annual 4-4.5 million euros, is basically a single page of A4 paper.
The final report with all the annexes is not thicker than an approximately 100 pages document which is enclosed in a folder and contains mostly the list of events supported by DAHR, together with the list of sponsored NGOs and publications taking up dozens of pages.
As we are going through the annexes of the A3 folders it is striking to see that DAHR reported on spendings amounting to several hundred thousand euros by providing minimal, outlined information and in some other cases reports consisted of merely one or two words.
When it comes to purchasing real estate, no sales agreement copies nor land registry documents are annexed to the A3 forms. In the case of a real estate purchased in Bucharest, we only found the following: „Real estate, Bucharest” and the amount payed, 904 thousand lei (approximately 200 thousand euros).
In case a real estate undergoes renovation works, there is no references made to what kind of works are being carried out, nor companies carrying out works are named.
The same occurs with cars: for instance we learn that in 2013 an advance of 38 thousand lei (8500 euros) was payed for a Skoda vehicle, but it is not clear whether the car has eventually been purchased or not.
In some cases we encounter striking inaccuracies: DAHR has given the incorrect address of at least one real estate purchased in 2009. At the mentioned address in Cluj we found a seed plot with a tiny wooden shelter on it. The purchased real estate can be found at a different number.
But let’s take a close look at a document handed in to the DIR: DAHR’s budget of revenue and expenditures. If we look at the DAHR income, we see that the biggest share of the yearly budget came from the support received from DIR. DAHR, based on the agreement signed with DIR cannot use the received budget support for election campaign purposes, those expenses have to be covered by funds coming from other sources. But what is striking is that membership fees and donations go up in election years (2012, 2014).
When it comes to expenditure, it seems that not only DAHR’s operation costs, but also, at least partly, some expenses of DAHR supported NGOs (through Communitas Foundation or any other funds) are being covered, be it fuel costs, consumables (office supplies and cleaning products), or travel and delegation costs.
We believe this is the only explanation of why these costs are so high. In 2012, 403 thousand lei (90 thousand euros) was spent on fieldwork expenses – and if we divide that with the amount established by the law (which in case of domestic travels is of 32.5 lei/day and in case of travels abroad, approximately 35 euros/day), then we have 12 thousand days of domestic travels or 2600 days spent abroad.
If we look at fuel expenses, we see the same pattern: the 650 thousand lei (145 thousand euros) for 2012 is the equivalent of approximately 110 thousand of liters of fuel (at a price of 6lei/liter), and this is enough to cover 1.4 million kilometers. This means that this amount of fuel is enough to circle the planet 36 times.
Between 2010-2012 the funds that can be used for organizing cultural events grew constantly: while in 2010 only 3.5 million lei (780 thousand euros) were destined for such purposes, in the electoral year of 2012 this amount doubled and reached 6.16 million lei (1.37 million euros). It is not clear what amount was spent on organizing DAHR events and what was spent on events organized by civil organizations. It is not clear either which were campaign related events, for which DAHR budgeted 3.5 million lei (780 thousand euros).
As of 2013 the budget structure changes. A series of items representing material expenses disappear, but a new list of expenses is introduced, namely the civil organizations that DAHR supports financially. We learn that the yearly budget of the Communitas Foundation bearing the role of organizing calls for applications for Hungarian civil organizations of Transylvania is of 5.8- 7.9 million lei (1.3-1-7 million euros). The open call for applications only takes up half of the funds, 3.7-4 million lei, the other half is destined for the invitation-based call for applications.
Examining the budget structure we find out that there is a separate fund of 1.2-1.3 million lei (300 thousand euros) destined for cultural events organized by DAHR. We can suppose that this fund covered the 2013 DAHR Congress held at Miercurea Ciuc/Csíkszereda and the 2015 one at Cluj/Kolozsvár. The financial report states that the cost of the former was 320 thousand lei (71 thousand euros). The latter was significantly more expensive: 458 thousand lei (100 thousand euros).
Support for media outlets and bookpublishing represents a separate item, even though Communitas Foundation also has a public allowance for these activities. What is again surprising is that the Károly Kós Academy (KKA) led by the the former DAHR president, Béla Markó has an allocated fund of 600 thousand lei (130-140 thousand euros). Another surprise is to discover a number of Hungarian civil organizations in Transylvania which benefit of a yearly normative support.
But now let us get back to the financial reports DAHR sent in to the Department of Interethnic Relations and the Government Secretariat. This report bears the name of A3 form together with the annexes attached to it.
The reports archived at DIR are basically folders consisting of approximately 100 pages, where the essential information on big payments takes up only a few pages. The rest of these documents consist of exhaustive lists of civil organizations that benefited of financial support. We did not request any copies of these lists.
As all the documents sent in by DAHR to the Government Secretariat, these A3 forms lack details and seem to be nothing more than a summary. Even as we skim through them, it’s striking to see that for small amounts up to 500-1000 lei a detailed description is given, huge payments are dealt with in just a couple of words.
What we’ve learnt from these reports is that the bulk of the financial support is spent on operation costs (repair and maintenance of the headquarters, staff expenditure, movable and immovable property).
Events make up a very extensive items list – but it is not clear which of them are DAHR events (be it Council of Alliance Representatives or Congress) and which are cultural events organized by civil organizations with Communitas Foundation support.
The list of salaries reveals that the number of employees has doubled since 2009. While the majority of employees are definitely not overpayed, leadership members receive a salary that is way above the monthly average salary and when it comes to service cars, leadership members ask for almost all the extras. Even though these cars are already quite expensive even with the standard equipment.
As we skim through the A3 reports, we see that the yearly maintanance and repair costs of the headquarters usually amounting to 3-4.5 million lei, in 2011 is significantly higher: in a single year DAHR spent 8.5 million lei (1.9 million euros) for these purposes.
This is quite unusual, as DAHR, despite having a couple of bigger headquarters where several dozens of employees work, this amount would not be that exaggerated, but the majority of DAHR’s headquarters do not have more than 1 or 2 rooms and there only a maximum of a couple of employees work, so in those cases it is almost impossible to have such huge overhead costs.
Besides the A3 form, every year DAHR sends in a wage grid put together as superficially as the rest of documents we had the chance to examine. The wage grid reports on a number of 168 employees for 2015, whereas Péter Kovács, the Executive Director of DAHR stated in a Facebook post that DAHR has 116 employees (when we created the infographics, we considered the data found in the documents sent in to the government.)
Moreover, it is not clear either wheather the salaries declared in the reports should be understood as gross or net payments and the 2015 wage grid reveals that the leadership positions do not reflect the current DAHR structure. There are two presidential positions named (probably from the days when László Borbély was Policy Vice President, but since then, the Secretary General became Executive Director, and his seven Executive Deputy Directors assisting him were not included on the list.
If we are to trust this report, we can see that since 2009 the number of rapporteurs has gone from 21 to 34, and the number of employees fulfilling the vaguely defined position of „computer operator” went up from 8 to 30.
We should also be aware that by today the number of those who are assisting DAHR in spreading its message is very high, especially if we consider the overall number of the Hungarian minority living in Transylvania. In 2015 five journalists and six editors were included in the wage grid.
The yearly amounts spent on cars are significant as we learn from the list of movable and immovable properties. According to our calculations, since 2009 DAHR bought 24 new cars using the allocated governmental support. According to Péter Kovács, DAHR owns 29 cars.
The vast majority of these cars are fairly equipped Dacia Logans – probably used by the employees. Those in management positions use Škoda Octavia, a medium category vehicle or the high-end category Volkswagen Passat or Škoda Superb.
Hunor Kelemen, the DAHR president received a Honda Accord in 2009, but lately he was seen using a Škoda Superb (though, according to our information, he still has the Honda as well.)
The most expensive vehicle is a VW Multivan, a minibus that the Hungarian PM, Viktor Orban also uses during his delegations. Even the stardard models are fairly expensive at a price of 37 thousand euros. DAHR paid 230 thousand lei (51 thousand euros), meaning they opted for almost all extras.
In the past years DAHR has also brought a series of expensive real estates, like the 3 room apartment located in Cluj, on Fagului street, bought for 800 thousand lei (180 thousand euros) and a real estate in Bucharest, purchased in 2014 for 900 thousand lei (200 thousand euros). In 2012 an advance of 100 thousand lei was payed for a third real estate – but its location is not clear from the reports, nor is it clear whether it has eventually been purchased or not.
One of the main arguments DAHR provides when asked about the reports on the received governmental funds is that the Romanian authorities are constantly controlling the organization and no problems were ever found. Nor the consulted documents nor the talks held with the representatives of DIR ever mention the controls carried out on how the funds were spent.
The report is a formality due to the fact that in the past 25 years DAHR was a member of the government coalition parties and the Department of Interethnic Relations was run by DAHR politicians: by Attila Markó, and later, until 2015, by Enikő Laczikó. The yearly protocols between DAHR and DIR are signed by government representatives who are DAHR members.
As we have found out, DIR checks the reports in terms of accountancy accuracy: what matters is that the numbers add up. No questions are ever asked about the purpose the money has been spent on.
„Besides the documents enclosed in the protocol, we have no other sources of information at our disposal” – Amet Aledin, the DIR Secretary of State told Átlátszó Erdély when asked about details of the financial reports.
„Since the department was created, it did not have a role as an auditor. The department was mainly responsible for wiring the financial support and the amount is not even included in the department’s budget” said Attila Markó, the former head of DIR to Átlátszó Erdély, adding that according to the legislation in force the department has the role of monitoring and no authority for auditing. This means that it’s only concern is that the money is spent in legally defined terms.
We also addressed the Court of Auditors and asked for the 2009-2015 protocols of the controls carried out at DAHR and civil organizations close to DAHR.
We were told that the last control carried out at DAHR took place in 2009, when suggestions were made for the 2008 period, a time frame when DAHR benefitted of funds in accordance to the party law in force. The NGOs we mentioned earlier did not undergo any control for that period.
We wanted to know what the Court of Auditors found, as this is the only state institution with the authority to examine not only the legality of the public money spending, but also on whether the money is spent appropriately.
We came across another Court of Auditors report from 2009 which basically states the same what we are: the system for reporting is defined too vaguely, a more precise definition of how minority organizations should report on their budget support is needed, and a separate law is required for its regulation.
The Court of Auditors points out that there are no legally defined procedures on how the financing of these institutions should work, nor the maximum allowed accountable costs are set. The share of co-financing is not fixed nor are the salaries of the employees. The protocol also states that DIR should have elaborated a draft law.
As a result of the series of articles published by Átlátszó Erdély, DAHR and the Communitas Foundation started publishing their financial data in July 2016. We have not received any reply for our information requests sent in May 2016, and we opted for legal redress.
Translation: Etelka Tamás-Blaha
This story was supported by the Center for Independent Journalism as part of the project “Relaunching Journalism via Supporting Investigative Journalism and Providing Incubation Services of Digital Media” funded by the Open Society Foundations. The contents of this article are the sole responsibility of the author(s) and do not reflect the views of funders who have no involvement whatsoever in content produced through this project or any prior knowledge of content before its publication.