Hungary becomes a den of Russian spies in the EU

In late November 2022, Ukrainian special forces detained a suspected Russian agent on the Ukrainian-Hungarian border. The man tried to transfer secret information to Hungary on a flash drive, which he hid in his rectum, the DW reported.

The flash drive contained stolen personal information about high-ranking officials and employees of the Ukrainian internal intelligence service of the Security Service of Ukraine and the Ukrainian military intelligence service of the Defence Intelligence of Ukraine, as well as confidential data on Ukrainian army bases, weapons, and logistics.

As it turned out, the spy intended to transfer the disk to the Russian Embassy in Budapest.

Investigative journalist Szabolcs Panyi recently wrote about the case for the Balkan Insight website. He has long been investigating Russian espionage activities in Hungary.

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Photo: Direkt36

A den of spies at the heart of the EU?

Panyi fears Budapest may become the center of Russian espionage in the EU. Currently, the Russian Embassy in Budapest employs more than 50 accredited diplomats, and in Prague, Warsaw and Bratislava combined – just over 20 people.

“It is well known that many agents pose as diplomats because it gives them immunity, meaning the host country’s authorities cannot prosecute them,” Panyi said.

Immunity of embassy and bank employees

But it’s not just Russian embassy staff who enjoy immunity; employees of the International Investment Bank (IIB), founded in Soviet times, do too.

Three years ago, the bank moved its headquarters from Moscow to Budapest. This means it has nothing to fear from Hungary’s financial regulators and judiciary and no need to worry about criminal investigations.

Read also: Russia’s disinformation campaign in Hungary with a troll network

Hungarian opposition suspects the creation of a FSB network

When this step was announced, the Hungarian opposition suspected that the Budapest government supported the FSB network creation.

The reason for this is that the head of the MIB, Nikolai Kosov, comes from a family of spies: his father was a KGB agent in Budapest, and his mother was once described by the Russian state news agency TASS as “one of the greatest spies of the twentieth century.”

Russian spies can operate freely

Following Russia’s invasion of Ukraine on 24 February 2022, EU and NATO members Bulgaria, Romania, the Czech Republic, and Slovakia announced they were suspending their participation in the IIB. Hungary did not follow their decision.

Moreover, all EU member states – except Hungary – were ready to expel Russian spies disguised as diplomats after the invasion.

Hungarian authorities are in no hurry to expel Russian spies

Szabolcs Panyi noted that many cases would confirm the activity of Russian special services in Hungary.

One of the examples he cited was the case of Kovács Béla (nicknamed “KGBela”), a former member of the European Parliament from the right-wing Jobbik party. 

Kovács was reported by the Hungarian domestic intelligence service in April 2014 but was not charged with espionage for Russia until April 2017. It took eight years to reach a final verdict, and by then, Kovacs had moved to Moscow.

Hackers gained access to computers of the Hungarian Foreign Ministry

Research conducted by Panyi and his associates also shows that Russian hackers have repeatedly penetrated the IT networks and internal communications of the Hungarian Foreign Ministry since at least 2012.

Szabolcs Panyi said that although the government in Budapest has not confirmed these attacks, Hungary’s Western allies are well aware that the ministry’s IT systems have been compromised, so they are cautious about sharing classified information with Hungary.

Hungarian “golden visa” case

Hungary’s “golden visa” program also posed a significant security risk. It allowed foreigners who bought so-called “residence bonds” for 300,000 euros to receive a five-year visa for the Schengen area, effectively allowing them to travel freely in most of Europe. 

The program was launched in 2013 and was closed four years later under pressure from the EU.

In cooperation with the Ukrainian open-source intelligence group Molfar, which conducts military investigations and fact-checking in Eastern Europe, Panyi and his associates also exposed the case of Andrei Naryshkin, the son of Sergei Naryshkin, the head of Russia’s foreign intelligence service, the SVR.

Russians in Hungary with high-ranking friends

Andrey Naryshkin and his family came to Budapest on a “golden visa” and could live in Budapest. The apartment of Naryshkin is registered as the company property of a businessman who has been friends with the chief of staff of Prime Minister Orbán Viktor Rogán Antal for more than ten years.

Photo: MTI/dpa/picture-alliance

Rogán was responsible for the marketing of gold visas until 2017. According to the non-governmental organization Transparency International, companies affiliated with Orbán’s ruling Fidesz party earned about 411 million euros from marketing golden visas.

Read also: Why Hungary harms Ukraine and how Europe exposes Budapest’s intentions

Abuse of the naturalization procedure

The naturalization procedure for members of the Hungarian minority in Ukraine has also caused security problems. As the checks were insufficient, many Ukrainian citizens who did not speak Hungarian could obtain Hungarian citizenship, allowing them to travel freely in the Schengen area.

The official government newspaper often reports on the revocation of Hungarian citizenship for Ukrainians with dual citizenship who allegedly provided false information during the naturalization procedure. This is another way Russian intelligence services could gain access to Schengen countries.

Hungary’s dependence on Russia

Panyi and his associates also investigated the close ties between the Orbán government and Putin. They concluded that Hungary’s dependence on Russian fossil fuels, joint business deals in the energy sector, and the fact that Russia provided both technology and money for the expansion of the nuclear power plant near Paks in Hungary allowed Moscow to keep Orbán in its orbit.

“Cooperation in the energy sector, as well as Russian intelligence activities in Hungary, have a long history,” Szabolcs Panyi explained.

As cheap energy is of systemic importance for the Hungarian economic model and European supply chains, this cooperation has never been in doubt.

On the contrary, Panyi said, it was seen as one of Hungary’s advantages as an economic powerhouse and meant that all the ruling parties in Hungary sought to maintain good relations with Russia.

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