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Hungary Gave Tobacco-Sale Rights on Party Links, HVG Says

Hungary distributed tobacco sale-permits in the city of Szekszard after members of Prime Minister Viktor Orban’s party vetted applicants for political loyalty, the news website HVG.hu said, citing a recording from a meeting.

Applicants “need to be committed right-wingers” and the opposition “Socialists must not win,” the news website quoted Szekszard Mayor Istvan Horvath as telling fellow ruling-party members. Akos Hadhazy, a party member in the city 160 kilometers (100 miles) south of Budapest, earlier told HVG.hu that the licenses were awarded based on political sympathies.

Horvath, who previously denied that such a meeting took place, today told reporters that nothing illegal happened in connection with the tobacco-shop tenders, according to the state news service MTI. The conversation about the applicants occurred at an “informal consultation,” he said, MTI reported.

“This is a local affair -- the Cabinet isn’t dealing with this,” Andras Giro-Szasz, a government spokesman, told reporters in Budapest today.

Orban is facing elections next year. Backing for his ruling Fidesz party rose to 29 percent among eligible voters in April from 27 percent the previous month, according to a Median poll published May 6. That compares with 13 percent support for the Socialists, the biggest opposition party. Median polled 1,200 adults between April 19 and 23 and the results had a margin of error of 3 percentage points.

‘Smear Campaign’

Hungary is limiting the distribution of tobacco products nationwide to approved outlets in the latest industry overhaul by Orban, who has a two-thirds parliamentary majority. Janos Lazar, Orban’s chief of staff, denied reports yesterday that ruling party members fraudulently influenced the allocation of permits, blaming Philip Morris for a “political smear campaign,” Heti Valasz reported yesterday.

Iro Antoniadou, a spokeswoman for Philip Morris, had no comment when contacted by Bloomberg by e-mail and phone on May 8. Socialist Chairman Attila Mesterhazy has asked the chief prosecutor to investigate the tenders, MTI service said yesterday.

Lawmakers rushed through changes to freedom-of-information laws last week, putting “major limits to citizens’ right to access public information by saying only state bodies may hold enough data to carry out large audits,” Transparency International said in a statement on May 8.

“Notably, the amendment was proposed as civil society groups pressed for access to the bids in a tender for tobacco retail licenses, which reportedly went to government party loyalists,” Transparency International said. “This law will allow public decision makers to reject such requests.”

President Janos Ader returned the law to parliament on May 8, telling lawmakers to make clear that the bill doesn’t restrict access to information of public interest. The ruling party will “fully take into account” Ader’s request, MTI reported yesterday.

To contact the reporter on this story: Zoltan Simon in Budapest at zsimon@bloomberg.net

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net

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