50.50

Dark money, dirty politics and the backlash against human rights

This extract of Peter Geoghegan’s new book ‘Democracy for Sale: Dark Money and Dirty Politics’ traces Victor Orbán’s rise to power.

Peter Geoghegan
Peter Geoghegan
20 August 2020
Hungarian prime minister Victor Orbán at the European Council. Brussels, Belgium 2020.
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Nicolas Economou/NurPhoto/PA Images.

In late 2017, I arrived in an icy Budapest to give a journalism workshop at the Central European University. One of the first things I noticed when I disembarked from the airport bus in the centre of the Hungarian capital was the posters. They seemed to be everywhere. From billboards and bus shelters a craggy, ageing face framed by a thin smile and an aquiline nose looked down. I recognised it instantly as the CEU’s Hungarian-born founder George Soros. Next to the image was a line of text: “Don’t let Soros have the last laugh.”

This propaganda drive cost the Hungarian government almost €20 million. For Viktor Orbán, it was small change in his almost decade-long campaign to portray George Soros as the number one enemy of the Hungarian people. Its success has inspired far-right leaders and activists around the world.

Orbán, a well-built man with the broad shoulders of a weightlifter, has revelled in his status as Europe’s most successful nationalist demagogue. As Brussels looks askance, Orbán has built barbed wire fences to repel immigrants. Laws have been introduced to protect ‘family values’: marriage is defined as solely between a man and a woman; human life begins at the moment of conception; large families get mortgage breaks; there are tax incentives for stay-at-home mums. Hungary’s media and civil society are tightly controlled. Many of the institutions that Soros funded – including the Central European University – have effectively been forced out of the country. (Soros’s philanthropic organisations are also among openDemocracy’s funders.)

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Fidesz election poster showing Soros with his arms around the four opposition candidates. Kiskunhalas, Hungary 2018. | Gregor Mayer/DPA/PA Images.

A few months after I gave my talk at the CEU in Budapest, Orbán made a pre-election address in front of the Hungarian Parliament. Even by Orbán’s standards it was more foghorn than dog whistle. The prime minister told his compatriots that they were “fighting an enemy that is different from us. Not open but hiding. Not straightforward but crafty. Not honest but unprincipled. Not national but international. Does not believe in working but speculates with money. Does not have its own homeland but feels it owns the whole world.”

Orbán’s words could have been lifted from The Protocols of the Elders of Zion. When Jewish leaders accused him of anti-Semitism, Orbán decried them as enemies of free speech. In April 2018, his Fidesz party won a third consecutive term in office.

Marriage is defined as solely between a man and a woman; human life begins at the moment of conception; large families get mortgage breaks

It is easy to forget that in the late ‘80s, Viktor Orbán was one of the most articulate voices of a new liberal generation railing against the moribund communist system. He began working at the Central European Research Group, which was funded by the Soros Foundation. Orbán soon received a Soros-funded scholarship to study at Oxford, but only stayed in England for three months before returning to Hungary to run in the first free elections in 1990, winning a seat for the recently-created Fidesz. He was just twenty-six. Within eight years, he was prime minister and widely seen as one of the most trenchant anti-authoritarian voices in Eastern European politics. But after a single term, he lost power in 2002.

Defeat hit Orbán hard. Out of office and languishing in opposition, he vowed to regain power. The onetime Hayekian libertarian reinvented himself as the nationalist protector of Hungarian minorities in neighbouring states. He made stirring speeches defending the Catholic Church. “Personally, Orbán has never been very religious,” says Kim Lane Scheppele, a legal scholar at Princeton who studies Hungary and first met Orbán in the 1990s. “He used this new uniform as a route to power. That’s all that matters to him. Power.”

Orbán’s ultra-conservative reinvention was not an overnight success. In 2006, Fidesz unexpectedly lost a second successive election. Now, Orbán looked abroad for strategic advice, to the world of highly-paid political consultants. Israeli president Benjamin Netanyahu introduced his Hungarian friend to the legendary US pollster Arthur J. Finkelstein.

Few lobbyists were as well connected in Republican politics as Finkelstein. Having worked for Barry Goldwater, Richard Nixon and Ronald Reagan, and once shared a college radio show with the radical libertarian Ayn Rand, Finkelstein had begun running a consultancy that specialised in working in post-communist states in eastern Europe. In Ukraine, Finkelstein introduced another veteran Republican lobbyist, Paul Manafort, to pro-Russian Ukrainian oligarchs.

A long-time New York associate of Donald Trump, Finkelstein also had a hand in Manafort becoming the Republican candidate’s campaign chair for five months in 2016. (Manafort was later given a seven-and-a-half-year prison sentence after pleading guilty to fraud and conspiracy in his lobbying for pro-Kremlin politicians in Ukraine. A federal judge in Washington denounced him as a man who “spent a significant portion of his career gaming the system”.)

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Donald Trump’s campaign manager Paul Manafort at the Republican National Convention in Ohio, US 2016. | Mark Reinstein/Zuma Press/PA Images.

Finkelstein made Hungary the centre of his political consulting empire. He relocated to Budapest and began working for Viktor Orbán. ‘Finkie’, as Orbán liked to call him, believed that the most successful political campaigns united voters against a clearly defined enemy.

It wasn’t hard to find a villain in crisis-stricken Hungary. The country was a financial mess. In 2008, Hungary was bailed out by the ‘Troika’ – the World Bank, the EU and the International Monetary Fund – who demanded harsh austerity measures. Finkelstein and his protégé and business partner George Birnbaum told Orbán to target “the bureaucrats” and “foreign capital”.

The strategy was a huge success. In 2010, Orbán won two-thirds of the vote. Safely returned as prime minister, he now sought to consolidate his rule. “We had an incumbent with a historic majority, something that had never happened in Hungary before,” George Birnbaum later told Swiss journalist Hannes Grassegger. “You need to keep the base energised, make sure that on Election Day they have a reason to go out and vote.”

Finkelstein set about finding a new foe for Orbán. This time, however, the adversary would have a face. “Arthur always said that you did not fight against the Nazis but against Adolf Hitler. Not against al-Qaeda, but against Osama bin Laden,” Birnbaum said. Finkelstein had an idea for the perfect guy in the black hat. Someone who was hated by the right as a Jewish funder of progressive causes, and despised by the left as the embodiment of big capital: George Soros. Orbán’s friendship with Netanyahu and vocal support for Israel gave political cover against accusations of anti-Semitism. 

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Israeli Prime Minister Benjamin Netanyahu shakes hands with Hungarian Prime Minister Viktor Orbán at a press conference in Jerusalem in 2018. | Marc Israel Sellem/Xinhua News Agency/PA Images

With uncanny prescience, Finkelstein had come up with a “campaign idea, so big and so Mephistophelian, that it will outlive itself”. It was a grim irony that the Soros bogeyman was created by two Jews whose families had fled Europe. Birnbaum’s father was an Auschwitz survivor.

Soros was already a hate figure on the American right by the time Finkelstein pitched up in Budapest. He had spent huge sums funding political movements around the world, including in the US. Soros first attracted the attention of the Republican right after speaking out against the Iraq War and donating money to the Democrats against George W. Bush in 2004. On Fox News, Bill O’Reilly described Soros as “an extremist who wants open borders, a one-world foreign policy, legalised drugs, euthanasia, and on and on”.

Orbán went further. With Finkelstein’s guidance, he constructed Soros as an existential threat to Hungary’s very way of life. Soros’s support for democracy and open societies was really a stalking horse for a globalist plot to destroy the nation state itself. This was a new model for attack politics in an era of global division, one that the far right would exploit to devastating effect.

Orbán constructed Soros as an existential threat to Hungary’s very way of life

During the 2016 US presidential campaign, Soros went from obscure Fox News talking point to moral panic. As I drove across the United States in the months before the election, I was bewildered by the number of voters who mentioned Soros. His name came up in blue-collar bars in Bethlehem, Pennsylvania and outside up-market shopping malls in Cleveland, Ohio.

At the time, I was barely aware of Soros. I knew he had ‘broken the Bank of England’, making $1 billion on Black Wednesday in 1992 as Britain was forced to withdraw from the European Exchange Rate Mechanism. I knew he was a major philanthropist. But that was about it. By the end of my reporting trip through America, I was a Soros aficionado. I had seen his face surrounded by flames in a poster in the window of a suburban house and been told that he was masterminding a communist take-over of America. Trump’s final TV ad featured Soros as a visual representative of “global special interests”.

It subsequently emerged that accounts connected to the GRU, the Kremlin’s military-intelligence agency, were pushing Soros conspiracy theories on Facebook ahead of the presidential election. Russia had long criticised Soros, wary of the democratic revolutions in Ukraine, Georgia and other post-communist states on its borders that it believed Soros had supported. In office, Trump would often spread anti-Soros propaganda, mendaciously accusing him of funding a caravan of migrants on America’s southern border.

Soros has also emerged as a cipher in British political debate. He openly spent millions funding anti-Brexit campaigns after the EU referendum, much to the chagrin of right-wing newspapers. During the 2019 British general election, Conservative candidates were accused of having shared Soros conspiracy theories on social media. Labour was also embroiled in a long-running controversy over anti-Semitism in the party.

All of this would be familiar to watchers of Hungarian politics. Orbán, as his confidante Steve Bannon pointed out, was “Trump before Trump”. He was the only EU leader to endorse Trump in 2016, and he had taken the anti-Soros mythology and run with it. After Orbán’s re-election in 2018, the crackdown on Soros-funded organisations intensified. An act of parliament was passed to change the licensing of foreign universities and limit international-funded non-governmental organisations. Vladimir Putin had done the very same. Orbán’s move was directed very precisely at Soros-funded institutions.

The Central European University, which had promoted independent academic research in the region since 1991, eventually announced that it was moving much of its operations to Vienna, though the Budapest campus remains open. “In Hungary, the law is a tool of power,” Michael Ignatieff, the university’s rector, said at the time. The Hungarian office of Open Society Foundation, the main vehicle for Soros’s philanthropy, closed. 

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The Central European University (CEU) in Budapest, Hungary 2018. | Jens Kalaene/DPA/PA Images.

The relentless focus on Soros gave Orbán the cover to dismantle the pillars of Hungarian democracy. In 2011, a year after re-election, he introduced an entirely new constitution in just nine days. Veteran judges on the constitutional court were forced to retire so that their seats could be filled with more Fidesz-friendly jurists. Most of the media was taken over by the party’s oligarch supporters.

Laws were introduced that distorted the popular ballot. Orbán gerrymandered electoral districts to ensure his dominance. Liberal strongholds, predominantly in cities, were divided so that large numbers of voters were packed into a handful of parliamentary seats, while districts in Hungary’s conservative countryside have far fewer people. Fake parties were created to split the anti-Fidesz vote.

In 2014, Fidesz received fewer votes than it had in 2002 and 2006, when it lost elections, but it ended up with the parliamentary supermajority that it needed to push through radical constitutional changes. In 2018, Fidesz won more than two-thirds of the seats in the Hungarian parliament despite taking less than half of the vote. “Orbán combined American-style gerrymandering with the British first-past-the-post system,” legal scholar Kim Lane Scheppele told me. “He has turned Hungary into a dictatorship in plain sight.”

Orbán is a master of distraction and political sleight of hand. Often when he introduces a legislative change that cements his power, it has been accompanied by a contentious symbolic gesture that flames Hungary’s culture wars and grabs the attention of the opposition and international media. “When Orbán wants to do something in Parliament, he will announce that he is building a statue to a wartime anti-Semite or something equally appalling, and everyone runs off to cover that,” said Lane Scheppele. “It’s the same tactics that Boris Johnson and Dominic Cummings use in Britain.”

Ahead of the 2018 general election, Israeli private intelligence firm Black Cube was reportedly involved in a campaign to discredit Hungarian NGOs, especially those linked to Soros. Black Cube agents using false identities secretly recorded prominent civil society activists. The tapes were released to a Hungarian government-controlled daily newspaper three weeks before the vote. Orbán used the revelations to attack civil society organisations.

Black Cube had previously been hired by disgraced Hollywood mogul Harvey Weinstein to collect information on actresses and journalists investigating his sexual predations, but this was the first time that the firm, created by former Israeli intelligence officers, had been cited in an election campaign. Black Cube refused to confirm or deny whether it had worked in Hungary but said it fully complied with the law and took “legal advice from the world’s leading law firms”.

Orbán’s political takeover - buttressed by a German industrial lobby that relies on cheap labour in Hungarian plants – has largely been bankrolled by cash plundered from the European Union that he rails so fervently against. A 2019 New York Times investigation found that Orbán uses billions of euros in EU subsidies as a patronage fund that enriches his allies, protects his political interests and punishes his rivals. “The ideology is a ruse. The money is where the action is,” said Lane Scheppele.

“The ideology is a ruse. The money is where the action is”

Brussels has done little to stem the tide of Hungary’s rampant corruption. Instead, Orbán has treated his frequent public dressing-downs in the European Parliament as a PR opportunity. He smiles for the cameras as Western politicians berate him. His florid responses – anti-liberal, anti-globalist, anti-EU – are clipped and circulated across social media.

It is a message that chimed with voters across post-communist Europe, frustrated after decades of being told that there was no alternative to a market-led liberal democracy that often enriched the elite and left the majority disenfranchised and alienated. As Bulgarian political scientist Ivan Krastev and US law professor Stephen Holmes wrote: “The very conceit that ‘there is no other way’ provided an independent motive for the wave of populist xenophobia and reactionary nativism that began in central and eastern Europe, and is now washing across much of the world.”

Europe’s migration crisis gave Orbán the chance to take his message of ‘illiberal democracy’ to an international stage. In July 2015, as the number of Syrians coming through Turkey and Greece increased, Orbán adopted a very aggressive stance against accepting refugees. As the Hungarian government hastily erected holding centres along its border with Serbia, he warned of invading Muslim hordes. When Angela Merkel announced that Germany would admit hundreds of thousands of refugees, Orbán and other leaders of the so-called Visegrád group – the Czech Republic, Hungary, Poland and Slovakia – publicly rejected the German prime minister’s humanitarian appeal. “I think it is just bullshit,” said Mária Schmidt, one of Orbán’s closest political advisors.

For most refugees, Hungary was only a staging point on the way to Western Europe. The numbers settling in Central and Eastern Europe have been relatively small. But immigration plays into wider societal concerns about demography in many post-socialist states. More citizens have left the EU’s eastern states in the wake of the 2009 financial crisis than have arrived as migrants. Images of crowds of migrants outside Budapest’s Keleti train station fed a perception that Hungary was being overrun.

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Victor Orbán electoral poster alongside official government anti-immigrant poster in Miskolc, Hungary 2018. | NurPhoto/NurPhoto/PA Images.

Orbán declared that the gravest threat to the survival of the white Christian majority in Europe was the incapacity of Western societies to defend themselves. Hungary’s government passed a series of anti-immigration measures, including a “Stop Soros” bill in 2018, which makes it a criminal offense to provide assistance to undocumented migrants applying for asylum or residency permits. 

The Hungarian Helsinki Committee, a human rights organisation, has accused Orbán of systematically denying food to failed asylum seekers held in detention camps on Hungary’s border – an action it described as “an unprecedented human rights violation in 21st-century Europe”. He has also made homelessness a criminal offence.

The migration crisis elevated Orbán’s status among global ultra-conservatives. When the influential World Congress of Families met in Budapest in 2017, Orbán was met with rapt applause. Founded by American and Russian ultra-conservatives in the 1990s, the WCF has become an important forum for the backlash against rights. The Southern Poverty Law centre as listed the congress as an “anti-LGBT hate group”.

Orbán’s appeals to ‘Christian liberty’ may be just rhetoric, but he has actively sought to turn Budapest into a capital of conservative thought. American white nationalist Richard Spencer has been a frequent guest, as have numerous leading Russian conservatives and former Australian prime minister Tony Abbott. Steve Bannon told me that he was “very close” to Orbán and had to cancel a scheduled visit to Budapest in late 2019 to assist President Trump’s battle against impeachment. 

“The World Congress of Families has become an important forum for the backlash against rights” 

British Tories looked eastwards, too. Conservative MPs such as Daniel Kawczynski expressed their admiration for Orbán’s regime. A group of pro-Brexit libertarians, including leading figures from the TaxPayer’s Alliance and the Adam Smith Institute, lobbied for the establishment of a Museum of Communist Terror in London inspired by the similarly-titled Budapest attraction. Elsewhere, former Thatcher speech writer John O’Sullivan – a prominent advocate of the Anglosphere at the turn of the millennium – has run the Orbán-friendly Danube Institute think tank in Budapest. 

In December 2019, shortly after the British general election, Tim Montgomerie, an advisor on social justice to Boris Johnson, addressed a Danube Institute meeting in Budapest. Montgomerie  praised Hungary’s “interesting early thinking” on “the limits of liberalism.” “I think we are seeing that in the UK as well,” he said, adding that Britain should forge a “special relationship” with Orbán’s Hungary after Brexit.

Orbán, however, demurred when Brexiters called on him to come to their aid. Despite pleas from his long-time ally Nigel Farage, Orbán refused to block the European Union’s extension to Brexit in September 2019.

That same month, at an international demography conference in Budapest, Orbán returned to his favourite theme: immigration and George Soros. “Political forces,” he said, wanted to replace the white European population with “others”. What more openly fascist thinkers call ‘the great replacement’ is promoted by the Hungarian head of state.

“The political vision nurtured by the World Congress of Families has become frighteningly mainstream,” says my openDemocracy colleague Claire Provost, an investigative journalist who has spent years tracking the backlash against rights for women, LGBTQI people and minorities. “The longer I spend with these groups, the less I think they’re actually fixated on specific issues like abortion. While they talk a lot about women’s wombs, theirs is a much wider political project, to support authoritarian societies led by ‘strongmen’.”

“While they talk a lot about women’s wombs, theirs is a much wider political project, to support authoritarian societies led by ‘strongmen’.”

Viktor Orbán has shown how quickly supposedly liberal democratic norms and conventions can be defanged and dismantled. Of course, autocrats are also on the rise in many other parts of the world, bolstered by many of the same American and Russian networks and socio-political dynamics that are helping to upend politics in Europe. From the Philippines and Brazil to Turkey and India, a new generation of strongmen has emerged. They often use similar tactics – weaponising religion and mobilising fear of the ‘other’ – but have adapted these strategies to local circumstances.

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Brazilian President Jair Bolsonaro in New Delhi, India 2020. | Photo by Sanjeev Verma/Hindustan Times/Sipa USA.

The authoritarian model “moves around not as a caravan but as spare parts”, says Princeton legal scholar Kim Lane Scheppele. Populists take inspiration from one another but also buy advice from “political consultants that go from place to place and help the new autocrats set up shop”. Steve Bannon boasted to me that he talked to Europe’s populist leaders “on a fairly regular basis” and was “still working behind the scenes driving stuff.”

Steve Bannon boasted to me that he talked to Europe’s populist leaders “on a fairly regular basis”

There is often a temptation to believe that your country is immune, or at least inoculated, from the worst authoritarian excesses. I watched the early hours of Donald Trump’s election victory in 2016 in a bar in New York’s East Village, surrounded by young liberals. As Republican victories mounted up and Clinton’s path to the White House became increasingly vertiginous, one turned to me and said, “Even if Trump wins, it doesn’t matter that much. The constitution will protect us.”

I heard a similar sentiment dozens of times in the hours and days that followed. But in truth, the American system of checks and balances had already been eroded long before Trump arrived on Pennsylvania Avenue. Previous presidents often used executive orders to bypass Congress, especially after the end of the Cold War.

In the UK, the limits of an uncodified constitution have become increasingly apparent. Brexit has seen executive power increase markedly. In the name of popular sovereignty, long-held conventions of British parliamentary politics have been abrogated. The Supreme Court may have ruled it unlawful, but many voters seem to have little problem with a prime minister misleading the Queen, as Boris Johnson did when proroguing Parliament in late 2019. The end, increasingly, seems to justify the means.

As the rise of nativist movements in Europe graphically shows, hard-won political battles can quickly be reversed. Change does not always mean progress: it can bring fewer rights, freedoms and opportunities. Dark money and shadowy, unaccountable networks of political influence and persuasion, empowered and amplified by powerful and largely unregulated technology, are swiftly bending democracy out of shape. Worse still, they are destroying faith in the idea that politics can and should be transparent, and accountable to citizens. The question now is what can be done to stop democracy going dark.

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