Mythbuster: Questions and answers about Ökotárs Foundation

Over the past months, the Hungarian government and pro-government media has published numerous malicious rumors viewing Ökotárs, its partners and the activities of the EEA/Norwegian NGO Fund in a bad light. These rumors include heavy, sometime contradictory accusations against us and even these are constantly changing: it started out with the claim that we are indirectly supporting parties from the Fund. It turned out that this is not true. Than it continued with that we support party-related NGOs. It turned out that this is not true either. It continued that we are pseudo-civil.  This is not true either, of course. And now they say that our operation is irregular. We will refute this as well.

What’s more: we say that all these insults and even the administrative harassment is politically motivated. The government  wants to crack down independent NGOs. With this Q & A we would like to make it clear for everyone what Ökotárs is doing and to refute every politically motivated accusation appearing again and again in the media. We want to get things straight and answer all possible questions.

What is Ökotárs Foundation and what has it been doing?

Ökotárs Foundation is a not-for-profit, politically independent organization promoting environmental improvement and awareness among civil society and the general public. We promote the development of the environmental movement through providing grants, training, fellowships and technical assistance where necessary. Thanks to our grant programs numerous civic initiatives developed successfully, gained widespread support and became influential in their regions. You can read about our activities year by year in our annual reports. In summer 2013 were the first winners of the second EEA/Norwegian NGO Fund announced: 105 micro- and 23 macroprojects have started then. Also the first wave of attacks has started against Ökotárs then.

Is it true that Ökotárs does not carry out direct political activities?

Yes. Ökotárs works solely for the environment, for environmental awareness and for the development of the Hungarian NGO sector. We are not involved in party politics, we do not support parties and we have never been doing so. Ökotárs got under the fire of political controversies as a results of the governmental attack. From 2010 until 2014 (what’s more since 2008) the operation of Ökotárs was exactly the same as today - the government however had no problem with the activities and management of the foundation prior to 2014.  We have even cooperated for example in the process of preparing the new NGO law. Put in another way: we were doing exactly the same job during the office of left-wing and right-wing powers as well.

What kind of relations does LMP (Politics Can be Different, and other parties) have with Ökotárs?

Being politically independent, non-profit foundation, Ökotárs does not support and have never been supporting parties. The same is true for LMP. Previous political activity however does not  disqualify anybody to be personally involved in the work of Ökotárs. Respecting  the right to freedom of political expression we do not control or comment the political beliefs of our colleagues and members. We believe that it is illegal and unacceptable in a democracy for a government to blacklist “problematic” people - e.g. for the reason that he/she was a contact person for collecting signatures in support of a given candidate during an election.

At the same time, political background is not considered as an eligibility criterion in case of CEOs of state corporations either, although in these cases the money of Hungarian taxpayers is at stake. Indeed, people with a political history are favoured to take leading positions in state corporations. You can see that the government sees no conflict in earlier political involvement if it’s about the Hungarian tax payers money. At the same time they find it unacceptable in the distribution of the EEA/Norway grants even if the operation of Ökotárs is perfectly immaculate. In fact we even go beyond the standards as we have all assessors and Selection Committee members to sign an extra statement on confidentiality and conflict of interest.

Does the operation of Ökotárs comply with the law?

The operation of Ökotárs does comply with the law and this was underlined by several audits and examinations carried out by independent institutions and organizations. The accusations of the KEHI (Government Control Office) report are unsubstantiated and contains no information as to who they think have made what mistake in what amount.

Why does Norway supports Hungarian NGOs?

The European Economic Area and Norway Grants (or Financial Mechanism) represent the contribution of Iceland, Liechtenstein and Norway to reducing economic and social disparities and to strengthening bilateral relations with 16 new or less developed EU member countries in Central and Southern Europe, including Hungary.

The three countries have it in common that they are all members of the European Economic Area but not of the EU, while they enjoy the benefits of the common market. With the Grants they are helping to reduce disparities within the EU (similarly to the Structural Funds of the Union). It is important to know that only ten percent of the EEA/Norway Grants goes to the funding of NGOs.

Why Ökotárs is handling the money of Norway?

Under the Memorandum of Understanding signed between Hungary and Norway, the Financial Mechanism Office (FMO) is responsible for the NGO program management has announced a two-phase call for proposals at the end of 2011 for the local implementation of the NGO Programme. In the first phase the applicants’ professional competence was examined: the donors requested the Ökotárs led consortium (made of Autonomy Foundation, Foundation for Democratic Rights and Carpathian Foundation-Hungary) to submit references that prove their good relationship with the NGO sector, their independence from the government and their relevant experience in managing grants. This is a standard procedure in almost all EU tenders.

Seven organizations have applied to this call from Hungary but only the consortium led by Ökotárs fit all three criteria; the other six applicants were not selected to the second phase, when a detailed plan about the entire program period had to be submitted: what kind of calls will be announced with what allocations for who, when, etc.

Why is it better that the EEA/ Norwegian NGO Fund is not managed by the state?

Apart from a few exceptions, in the first cycle of the EEA/Norwegian Financial Mechanism (2004-2009) the NGO funds were managed by institutions or organizations contracted by the governments of the beneficiary countries. The evaluation of these programs has proved that these funding programmes worked the most efficiently where - such as in Hungary - the FMO has directly contracted foundations that are independent of the state. Compared to state institutions such foundations can operate less bureaucratic, much more flexible grantmaking systems, that can quickly react to the needs. Being dedicated people often with NGO backgrounds themselves, the staff of the foundations build real partnerships with the applicants and the grantees instead of superior-subordinate relationships; they are open to the grantees creating an honest atmosphere. As it is their common interest to support successful and efficient projects the grantmaker and the grantee are able to solve any difficulties together that occur during the project.

What kind of organizations are supported by the NGO Fund?

The purpose of the Fund is decided by the EEA and Norway, not us. The donors have set the overall objective of the Fund as: “to strengthen civil society development and enhance contribution to social justice, democracy and sustainable development”. Certainly we would not be able to do our job if we wouldn’t agree with these objectives.

To this end applications can be submitted in seven thematic areas: democracy and human rights, gender and equal opportunities, community and organizational development, youth and children issues, environment and sustainable development, provision of welfare and basic service to vulnerable groups, empowerment of vulnerable groups, including Roma.

In 2013 Ökotárs  disbursed funds in the following proportions (since 1995 our annual reports are available on our website):

How are the applications assessed in the NGO Fund?

Applications that pass the administrative pre-screening are assessed and scored in writing according to the criteria announced in the call, by two external assessors who are selected by the Ökotárs-led consortium. In case of serious differences of opinion, a third assessor is involved, too. The assessors have to have expertise in the given field (appropriate qualification), a good overview and knowledge about the NGO sector and experience in evaluating grant applications (at least 50 assessed applications). The recommendation for support is formulated by the Selection Committees (one for each thematic area) which overviews the ranking list that was created upon the assessor’s scores. The Selection Committees have three members, two representing the operator foundations and one external expert. The list of recommended projects is approved finally by the Approval Board, whose members are representing the operator foundations.

The assessment and the selection process examines whether the submitted project plan contributes to the overall objectives of the NGO Fund and to the goals of the thematic area, the planned activities are likely to bring results on the given area and whether the applicant NGO  adheres to the other conditions set out in call. Cost efficiency is also an important consideration, just like the applicant’s knowledge and capacity to implement the plans.

Are the members of the Selection Committee directly active in politics?

No. The applications are scored by two assessors and the Selection Committee decides about the ranking list. Every participant of the assessment process have signed a strict confidentiality and conflict of interest statement. The names of the assessors and the Selection Committee members are not public to avoid the risk of lobbying. The seven Selection Committees of the NGO Fund - made up of different members - don’t have any political activity they only work on the professional assessment of the applications.

Is it true that the Selection Committees are made of the representatives of grantees?

Conflict of interest rules of the Selection Committees are clear: all assessors and committee members declare if they hold positions or are involved in any NGO in other ways. No one assessed or read any application where they would be involved in. (Many experts did not accept the job for the very reason they wanted to apply with their organization.) This way it was impossible that assessors or Selection Committee members would have give funding to “themselves”.

The same rules that apply to the composition, confidentiality and conflict of interest of our Selection Committees are used in the board and jury of the Hungarian Excellence Program, too.

We follow the established Hungarian practice when the assessors’ name is kept in secret to prevent pressure on members and common practice is followed in the definition of conflict of interest as well.

Is it true that the Hungarian government has no insight to the process of selection?

It is not true. The observers of the government - precisely the Ministry of Human Capacities - are invited to every meeting of the Selection Committee where they have participated and signed a strict declaration of confidentiality and conflict of interest.

Who and for what have received funding so far?

The list of supported projects is available on our website in user friendly and easily searchable format. We publish the name of the supported organizations and how much they receive from the NGO Fund for what purpose.

Anyone who goes through this list can see that the majority of the supported activities are not even remotely related to party politics contrary to the government’s slanders. Protection of the environment, reduction of poverty, transparency and equality are not party politics, even if the parties engage in these topics sometimes - however, they do it less then they should.

In this period of the NGO Fund the projects of more than 400 NGOs received funding in amounts from 1-2 million to 40 million HUF. The latter are the 23 macro projects which are 2,5-3 years long and they serve the development and capacity building of another 200 NGOs as well (besides the grantees).

The funds will change the lives of tens of thousands of people: the projects give new experience and knowledge, they increase the confidence of disadvantaged groups, provide access to services, strengthen the cohesion of communities and the list goes on.

Do the supported organizations do any direct political activities?

No. We don’t support parties and politicians. There are related areas of course: an anti-corruption organization could expose that the government is abusing public money and from this point the case can easily turn political. You should see that the majority of the supported organizations were among the beneficiaries during previous governments, too. The right-wing being in opposition that time had no problem with that at all.

Is it true that the majority of the supported projects are anti-government?

The NGO Fund is not judging it if the supported projects are critical about the activities of any government in power. Anyone can check out in our website if there are any anti-governmental activities among the supported projects. We do not participate in the funding of party political activities.

Is it true that activities of the winner NGOs are not related to the public discourse and politics?

The activities of NGOs are naturally part of the public discourse and it is their exact goal to improve the society and the public life.

Who is monitoring the operation of the NGO Fund and how?

The operation of the NGO Fund is being overseen by the Financial Mechanism Office from Brussels. The Office can hire external companies to conduct audit - in 2011 for example they contracted the audit firm Ernst & Young which didn’t detect any corruption-related abuse or mismanagement of the funds. The Ernst & Young audit report is available here in English with a summarized Hungarian commentary.

Is it true that the operation of Ökotárs is fully transparent?

Yes. Our financial statements, our annual reports since 1995 are available on our website, the operation of the foundation and every other information sought by the authorities are there - the same is true for the majority of the organizations we support. Instead of the illegal house search the police could have just switched on their computers and download the documents they needed. However, as the aim of the police was to threaten and put political pressure on us, they insisted on the illegal house raid for which the court sentenced them.

Is it true that the money Ökotárs and it’s consortium partners are distributing is not the money of Hungarian tax payers?

Yes. The resources of the NGO Fund are provided by Norway, Iceland and Liechtenstein, the Fund doesn’t have any Hungarian budgetary resource involved even indirectly.

The investigation of the Governmental Control Office (GCO) is truly legally unfounded?

Yes, the GCO should not investigate the operation of the NGO Fund. Ökotárs and the consortium members have cooperated with the GCO and handed over documents despite the GCO has no rights to investigate the NGO Fund. Based on the Memorandum of Understanding signed by the Hungarian government and under the related regulations the offices of the Hungarian government has no auditing rights over the NGO Fund. In fact the Financial Mechanism Office (FMO) in Brussels and external agencies authorized by the FMO are responsible for this program.

What is happening with the investigation of the GCO?

As we stated earlier the Financial Mechanism Office overseeing the NGO Fund and the Norwegian government does not acknowledge the eligibility of the GCO investigation. Our behavior was nevertheless consistent, legitimate and sincere all along, in adherence to the FMO’s requirements: we handed over every public part of the documentation to the GCO. However, the consortium did not hand over undisclosed data, including the detailed documentation of 58 supported organizations as we are not the owners of those data but the office in Brussels. The GCO declared administrative irregularities but nothing so serious that could not be easily corrected or which would justify the attacks against us. Even those politicians and members of the government who speak out against Ökotárs and the consortium do not quote the GCO’s report any more - probably not without a reason.

Is it true that the police was convicted for the house search?

Yes. On September 8th last year the National Bureau of Investigation searched the premises of Ökotárs, the house of a staff member, the office of the accountant and the IT managers and the office of Demnet Foundation. Everyone who was involved in the searches made complaints against the raids. The Central District Court of Buda upheld the complaint in its decision dated 23rd of January. The decision says that the search and seizure was illegal as suspicion of offense has not been established.

Contrary to the government's charges, the Court found that there were no grounds for suspicion of misappropriation at the time of the searches and there was no ongoing investigation regarding the suspicion of unauthorized financial activity. This order of the Court cannot be appealed.

What is happening in the police investigation?

Under the current circumstances the investigation of the National Bureau of Investigation falls apart. Reading the press reports it looks like that the investigation bureau and the tax authority are unable to clarify the competences between each other - it seems to be difficult even to decide which authority should do what in the investigation. So much is clear: since the 8th of September the police has not contacted Ökotárs or its partners, and we don’t have any first-hand information about any further steps.

Is it true that the NAV (National Tax Authority) has suspended the tax number  Ökotárs and it’s partners?

Saying that we have not cooperated with the KEHI at the end of September the NAV has suspended the tax number of all consortium members which decision we have appealed against. At the end of the year NAV have upheld this in a second instance decision.

The consortium members immediately brought an action for judicial review of the NAV decision suspending the tax numbers and asking the court to suspend implementation of the NAV decision as well. The court has accepted this for all the four foundations which means that the "suspension  has been suspended". Thus the tax numbers of the foundations stays in effect, for the duration of court proceeding. Suspension of the tax number does not automatically mean the termination of the foundation, but in the longer term, it can lead to the cancellation of the tax number, without which the operation becomes impossible. Without the tax number the organization can not operate, is not entitled to the 1% personal tax offers, can not pay it’s employees and can not apply for state funds.

What is Ökotárs and the consortium doing in their own defense?

The foundations are telling their truth at every public channel and forum believing that in the defense of civil society public opinion is the partner. Besides we use the power of the law to counter every attack we find illegal as we believe in the value of strong civil society that has to be defended by all means. We also continue to do our job and stay transparent and accountable.

What about the Swiss-Hungarian NGO Fund? Why were the funds transferred to another organization?

The news have put the case in a false context and made it look like that the Ökotárs-led consortium was pushed out of the operation of the Swiss-Hungarian NGO Fund. This is not true. Ökotárs and its partners are still in charge of the practical implementation of the program, like the follow-up of the supported projects, monitoring and approving the reports. Only the payments are transferred by the Széchenyi Program Office to the organizations following the directions of Ökotárs. In other words the substantive work is still done by Ökotárs and the consortium partners - taking full responsibility - the changes in the payments are purely technical.