How Hungary supports Russian espionage

At the end of November 2022, Ukrainian special forces arrested a suspected Russian agent at a border crossing into Hungary. The man was in the process of smuggling classified information into the EU country – on a USB stick hidden in his anus.

The data carrier contained stolen personal information about the leadership and personnel of the Ukrainian internal intelligence service SBU and the military intelligence service GUR, as well as sensitive information about the bases, weapons and logistics of the Ukrainian army. As it turned out, the spy intended to deliver the stick to the Russian embassy in the Hungarian capital, Budapest.

Journalist Szabolcs Panyi reported for that Portal Balkan Insight about the case. He has been researching Russian espionage activities in Hungary for a long time. Budapest, he fears, could become the center of Russian espionage inside the European Union. There are currently more than 50 accredited diplomats working in the Hungarian capital, while in Prague, Warsaw and Bratislava there are hardly more than 20. “It is known that many agents work disguised as diplomats because they enjoy immunity, i.e. they are not persecuted by the authorities of the host country be allowed to do,” explains the journalist.

immunity for a bank

In addition to the employees of the Russian embassy, ​​the employees of the International Investment Bank (IIB), founded in Hungary during the Soviet era, also enjoy immunity. The bank’s headquarters moved from Moscow to Budapest three years ago. This means that the money house does not have to fear the Hungarian financial supervisory authority, criminal investigations or the courts.

When the move was announced, the Hungarian opposition suspected that the government in Budapest would support the expansion of a KBG network. And not without reason, because IIB boss Nikolai Kosov comes from a family of spies: his father was once a KGB resident in Budapest, and his mother was recognized by the Russian news agency TASS as “one of the most notable spies of the 20th century”.

Russian spies have a free hand

After Russia’s attack on Ukraine on February 24, 2022, the EU and NATO countries Bulgaria, Romania, the Czech Republic and Slovakia previously involved in the IIB announced their withdrawal from the bank – but Hungary stayed with it. Furthermore, since the start of Russian aggression, all EU countries have been willing to expel Russian spies operating under diplomatic camouflage – except for Hungary.

The investigative journalist Szabolcs Panyi can list many cases in which the Russian intelligence service is active in Hungary and this has been noted by the Hungarian authorities without protest. An example is the former MEP of the right-wing conservative Jobbik party, Bela Kovacs, nicknamed “KGBela”. He was reported by the Hungarian Office for the Protection of the Constitution in April 2014, but was not charged with espionage for Russia until April 2017. It took eight years for a final judgment to be passed. During this time, Kovacs was able to escape to Moscow, Panyi told DW.

Hackers in the Hungarian Ministry of Foreign Affairs

His research and that of his colleagues also shows that Russian hackers have repeatedly penetrated the IT networks and internal communications of the Hungarian Foreign Ministry since at least 2012 – and also after the start of the war against Ukraine. The government in Budapest has never confirmed these incidents, but Hungary’s western allies know full well that the ministry’s IT systems are infected. Because of this, they shared secret information with Hungary with caution.

The naturalization of ethnic Hungarians from Ukraine and the “golden visa regulation” also led to considerable security risks. It provided that foreigners could obtain a five-year visa for the Schengen zone by purchasing so-called residence bonds worth EUR 300,000 plus EUR 60,000 in court fees. The program started in 2013 and was shut down four years later under pressure from the EU.

In cooperation with the Ukrainian research team Molfar, which conducts military investigations and fact-checking for Eastern Europe, Panyi and Co. uncovered the case of Andrei Naryshkin. The son of Sergey Naryshkin, head of the Russian foreign intelligence service SWR, came to Budapest with his family on a “golden visa” and was able to live undisturbed in the Hungarian capital.

Contacts up to the Prime Minister

Naryshkin’s apartment was registered as the corporate property of a businessman who has been friends for more than a decade with Antal Rogan, head of the cabinet office of Hungarian Prime Minister Viktor Orban. Rogan was responsible for marketing the golden visa until 2017, first as head of the responsible parliamentary committee and from 2015 as head of the prime minister’s cabinet. According to Transparency International, companies close to Orban’s ruling party Fidesz have earned around 411 million euros from marketing the Golden Visa.

The naturalization procedures for members of the Hungarian minority in Ukraine also led to security problems. Lack of control allowed many Ukrainian citizens who did not even speak Hungarian to acquire Hungarian citizenship. This gave them unrestricted freedom to travel within the Schengen area. In the government official gazette one can repeatedly read reports about the withdrawal of Hungarian citizenship for dual Ukrainian citizens. Apparently they had cheated on their naturalization. Even so, Russian secret service agents could have been given free access to the Schengen countries.

Depends on Russia

Panyi and his colleagues also investigated the background of the Orban government’s close ties with Putin. They concluded that Moscow had made the Hungarian government vulnerable to blackmail – for example, by becoming dependent on Russian fossil fuels and by making joint deals in energy and expanding the Paks nuclear power plant with Russian technology and financing.

“The cooperation in the field of energy management as well as the activities of the Russian intelligence service in Hungary have historical roots,” explains Panyi. Since cheap energy is systemically important in the Hungarian economic model and in European supply chains, this cooperation has never been questioned. On the contrary, it was seen more as an advantage for Hungary as a business location and led to all government parties in Hungary relying on good relations with Russia. In addition, members of the political and economic elite often studied in Russia and married Russians. This also strengthened the Russian influence in Hungary.