National Conference for Cleaner Public 1 Life Budapest, 20-21. March 2003 1 Organized jointly by the United Nations Office on Drugs and Crime (UNODC) and the Secretariat Responsible for Public Assets of the Prime Minister’s Office 08/03/04 TABLE OF CONTENTS I FOREWORD.....................................................................................................................5 II EXECUTIVE SUMMARY ..............................................................................................7 A Introduction.......................................................................................................................7 B. United Nation’s Support for the Hungarian Programme.............................................8 1. About the Global Program against Corruption...............................................................8 2. Hungary: pilot country for the Global Program against Corruption...............................8 C. National Integrity Meeting for Cleaner Public Life ......................................................9 Broadbased Assessment Conducted by Gallup ..................................................................9 D. Action Plan ........................................................................................................................9 1. Ethical Issues, lobbying, asset control, financing of political parties.............................9 2. Public procurement, supplying, public procurement culture........................................10 3. Education, human development, polling ......................................................................10 4. Crime prevention, fighting crime, public administration .............................................10 5. Subsidies, monitoring, inspection systems, contradictions in the tax system ..............10 E. Next steps .........................................................................................................................11 F. Conclusion .......................................................................................................................12 III NATIONAL CONFERENCE FOR CLEANER PUBLIC LIFE................................13 A. Introduction.....................................................................................................................13 B. Honest Public Life- Strong Public.................................................................................16 C. Global Dynamics of Corruption ....................................................................................18 D. The Global Programme against Corruption................................................................22 1. The challenge................................................................................................................22 2. The response; ................................................................................................................22 3. Country Projects ...........................................................................................................22 4. Tools .............................................................................................................................23 E. Building Integrity To Curb Corruption .......................................................................24 1. The Issues .....................................................................................................................24 2 Impact of current anit corruption initiatives? ...............................................................30 3. Conclusion ....................................................................................................................34 4. Bibliographical References...........................................................................................36 IV BACKGROUND .............................................................................................................38 A. Hungarian participation in the Global Program against Corruption of the UN (1999-2002)................................................................................................................38 B. The Action Plan Against Corruption ............................................................................43 C. Defining Corruption .......................................................................................................46 1. “Grand” and “Petty” Corruption...................................................................................46 2. “Active” and “Passive” Corruption ..............................................................................46 3. Bribery ..........................................................................................................................47 4. Embezzlement, Theft and Fraud...................................................................................48 6. Extortion .......................................................................................................................49 7. Abuse of discretion .......................................................................................................49 8. Favouritism, Nepotism and Clientelism .......................................................................49 9. Conduct Creating or Exploiting Conflicting Interests ..................................................50 10. Improper Political Contributions..............................................................................50 D. Gallup-Researches on Corruption ................................................................................50 2 08/03/04 IV POSITIONS OF THE KEY POLITICAL PARTIES .................................................62 A. The government of the national centre: a new approach in the fight against corruption ........................................................................................................................62 B. Management of public monies, state and municipality property...............................64 C. What did the MDF do against corruption under the Orbán government.................67 V. MEASURES TO BUILD INTEGRITY TO CURB CORRUPTION.........................70 A. Legislation against Corruption (in harmony with the European Union ...................70 1. The legal package includes five main themes: .............................................................70 2. About trade secrets........................................................................................................71 3. The budget act...............................................................................................................71 4 Criminal law..................................................................................................................72 5. Conclusion ....................................................................................................................73 B. Crime prevention and crime punishment against corruption....................................73 C. The role of the Hungarian Customs and Finance Guard in the fight against corruption ........................................................................................................................80 This expostulation is eternal. ............................................................................................80 2. What were our measures? Here I will list only a few – the most important ones: 81 D. The importance of a Code of Ethics as a weapon in the fight against corruption ........................................................................................................................84 1. Justification of the Codes..............................................................................................84 2. Creation of the Code .....................................................................................................85 3.The circle of subjects .....................................................................................................86 4. Spheres of regulation that should be included actual in the objective regulation ........86 5. Coming into force of the Codes’ contents; why would corruption be curbed? ............87 6. Sanctions.......................................................................................................................87 E. Are there suitable tools to be used against corruption occurring during the tender procedures? .........................................................................................................89 F. The problems of monitoring international transactions .............................................95 G. Activities of the prosecutors’ organisation in the fight against corruption................100 VI ACTION PLANS DEVELOPED BY THE FIVE GROUPS ....................................104 A. Group 1: Ethical matters, lobbying, property accounting, financing of political parties..............................................................................................................104 1. The necessity and effect of ethical codes....................................................................104 2. Necessity and effects of modifying party financing ...................................................104 3. Need for a lobbying act and the possible directions of regulation .............................105 4. Property accounting ...................................................................................................106 B. Group 2: Public procurement, supplying, procurement culture..............................108 1. Preparation