It is a fundamental social requirement for the community of citizens to control the use of public funds and national assets. The supervision of the management of these assets is also supported by—apart from constitutional control mechanisms, the procedures of the State Audit Office, the Government Control Office and the investigating authorities—the enforcement of the freedom of information. The ability of the press, NGOs, and members of society to access and disseminate data of public interest and data public on grounds of public interest is at all times one of the most important values and goals of the democratic rule of law.
The current legal environment, in the spirit of the Fundamental Law and its National Avowal, provides also for fairness in public life, the control of responsible management of the national assets and as its prerequisite, public scrutiny. Accordingly, the provisions of Act CXCVI of 2011 on National Assets (hereinafter ‘National Assets Act’), Act CVI of 2007 CVI on State Assets (hereinafter ‘State Assets Act’), and the guiding rules of the Privacy Act are designed to enforce the principles of transparency, accountability and the purity of public life. The publicity of the use of public funds and national assets is supervised first and foremost by the NAIH.
In 2017 also, the Authority examined the transparency of the use of public funds and national assets in a number of cases. In the course of its investigations, the NAIH started out from the often-quoted provision of the Fundamental Law: ‘Every organization managing public funds shall be obliged to publicly account for its management of public funds. Public funds and national assets shall be managed according to the principles of transparency and the purity of public life. Data relating to public funds and national assets shall be data of public interest’ (Article 39 (2)).
This constitutional requirement also covers the traceability and transparency of public finance management and the public accountability of the transfer of national assets. Article 39 (2) of the Fundamental Law, in fact, constitutes one of the most important limits of the exercise of public authority and the use of public funds. First, it ensures their public control by declaring it the fundamental right of individuals; second, it clarifies and supplements this by declaring information on the use of public funds as data of public interest; and, third, it makes transparency the constitutional obligation of bodies managing public funds.
The essential purpose of national assets is to provide for the performance of public service duties, [1] and national assets are to be managed responsibly and properly. The task of national asset management is primarily to run the state and local governments in order to perform public service duties and meet the prevailing needs of society in a transparent, efficient and cost-saving way that is consistent with the existing potential of the state and local governments and based on unified principles; to protect the value and condition of state and local-government property, to use it to increase its value, to utilize it profitably, enlarge it, and also to sell those elements of it that are rendered superfluous for the performance of the state or local-government duties. National assets, their value and changes, are registered by the exerciser of ownership rights. Registering the value may be dispensed with if the value of the given property cannot be determined by nature.[2] Registration shall also include the designation of the primary-purpose public service duty of the asset. The data registered, with the exception of classified information, shall be public.
In addition, the NAIH also took into account that the Constitutional Court, in Decision 25/2014 (VII.22.) AB, bindingly confirmed that bodies and persons managing or disposing of public assets qualify as bodies with public service functions under the Privacy Act.[3] Data on the management and disposal of state assets that are not data of public interest shall be deemed as data public on grounds of public interest.[4] The Constitutional Court therefore clearly confirmed that the requirement of transparency generally extends to bodies and persons managing public assets, further strengthening the transparency and controllability of the operation of public funds and state assets.
By way of summary, it can be stated that the current legal environment focuses not only on the fact that a body or person actually fulfils a public service duty as defined by law but also on the fact of disposal and management of national assets. Thus the Fundamental Law and the laws detailing its provisions doubly ensure the transparency of the management of public funds. On the one hand, the Fundamental Law itself provides for standards of data of public interest and data public on grounds of public interest. Since this is the basis of the Hungarian legal system, it can be stated that the transparency of the management of public funds is ensured at the highest, constitutional level. On the other hand, taking also into account the rules of the National Assets Act and State Assets Act, the provisions of the Privacy Act on the accessibility of data of public interest and data public on grounds of public interest must be applied in this regard.
1) In one case, the NAIH received a consultation submission requesting the Authority to deliver its opinion whether the salaries and other benefits of the employees of the Pallas Athéné Foundations and of the company they established are to be considered as public information.[5]
In its opinion, NAIH first of all considered whether the Pallas Athena Foundations and the company it established qualify as entities with public services functions. In this respect, the Authority took into account that, under Article 162 (2) of Act CXXXIX of 2013 on the Magyar Nemzeti Bank (hereinafter ‘the National Bank Act’), the Hungarian National Bank, in line with its tasks and primary objective, may establish a business association in which it has a majority holding or may create a foundation. In its Decision no. 8/2016 (IV.6) AB, the Constitutional Court explained in this respect that: ‘When the state-owned National Bank creates a business association or a foundation, the sources of the assets it contributes to their establishment or operation (starting capital and support later provided) are necessarily public funds.’[6]
In the reasons of that decision, the Constitutional Court found that ‘the companies established by the National
Bank, in which it is a majority or exclusive shareholder, i.e. it controls them, as well as the foundations the
National Bank establishes, manage public funds, and are consequently—as per Section 39 (2) of the Fundamental Law—obliged to ensure the publicity of data in respect of the data of public interest and data public on grounds of public interest they process in accordance with Article VI (2) of the Fundamental Law and the appropriate prescriptions of applicable laws’.[7] Both the Pallas Athéné Foundations and the company they created qualify as bodies with public services functions under the provisions of the Privacy Act.
As a next step, the NAIH examined whether the wages and other benefits of these employees employed under
Act I of 2012 on the Labour Code were data public on grounds of public interest in accordance with the Privacy Act and other legislation. In this respect, the Authority emphasized that there is certain group of data where publicity must be enforced relating to the employees of the foundations and company as persons exercising the duties and powers of a body with public services functions. The employees concerned are those whose activities are among the duties of the body with public services functions as defined by law. In their case, it is primarily the information listed in Section 26 (2) of the Privacy Act that can be accessible to anyone: the name, scope of responsibilities, scope of work, and executive mandate of the employees.
In addition to the range of data mentioned above, other personal data of the employees related to the performance of the public service duty may also be deemed to be data public on grounds of public interest pursuant to Article 26 (2) of the Privacy Act. As the use of public funds is at stake, transparency and controllability—being public interest—is of paramount importance. For this reason, the wages paid to the employees concerned, as well as their regular, ad hoc, cash and in-kind benefits, such as holiday rebates, bonuses, substitution fees, earning allowances, and target bonuses, qualify as personal data arising in connection with the performance of the public service duty, which anyone can access.
At the same time, the freedom of information and the right to informational self-determination must be enforced with mutual respect to each other; thus defining the range of other personal data relating to performing public service duty must take into account whether their publicity does not disproportionately violate privacy rights.
According to the NAIH's practice in this regard, the information under Section 26 (2) of the Privacy Act concerning those employees whose activities are not directly related to the performance public service functions of the authority may not be accessible. This includes, inter alia, employees who do not take part in decision making, neither in the preparatory nor in decision-making stage. Examples include drivers, cleaning staff, etc.
- In another case, the complainant requested the NAIH to investigate an application for disclosure of data of public interest not fulfilled by Magyar Villamos Művek Zrt (MVM).[8] The purpose of the request was to obtain copies of the documents relating to the granting of assistance to the Civil Összefogás Közhasznú Alapítvány (Civic Union Public Benefit Foundation; CÖKA). MVM refused to fulfil the data request, stating that: ‘the support was covered not from public funds but from its own resources’, and thus information about it was not subject to Article 26 (1) of the Privacy Act.
In the course of the investigation, the NAIH found—from publicly available company data—that MVM's sole shareholder is the Hungarian State, which exercises its shareholder's rights through the Hungarian National Asset Management Inc. Pursuant to the relevant provisions of the National Assets Act and the State Assets Act, the MVM constitutes national and state assets. Consequently, the MVM qualifies as a body with public service functions, which is obliged to enforce the right of access to data of public interest and data public on grounds of public interest.
The NAIH also stated in its opinion that MVM manages public funds, therefore information on its management, the use of the funds it manages, constitute data of public interest under Article 3 (5) of the Privacy Act and Section 39 (2) of the Fundamental Law. By denying to fulfil the request to access data, MVM therefore violated the fundamental constitutional right of the data requester to access data of public interest.
- NAIH delivered a similar opinion following an investigation concerning the unlawful denial of a request for disclosing data of public interest by Antenna Hungária Zrt.[9] In this case, the company claimed in response to NAIH's first warning that revenue from its own market activity did not fall within the concept of public funds, and also denied its being a body with public services functions.
In its opinion, therefore, the Authority called the attention of the company to the fact that several factors justify why publicly owned companies qualify as bodies with public service functions. On the one hand, these entities perform a wide range of public or municipal activities and tasks. The laws themselves name the specific companies that carry out prominent public service duties. On the other hand, the financial and other assets available to the companies owned by the state or local government constitute state or national assets.[10] These companies make decisions on them, their management, and use. Now, pursuant to Section 7 (1) of the National Assets Act, the fundamental function of national assets is exclusively to ensure the fulfilment of public service duties. Under Section 5 (2) of State Assets Act, bodies managing public funds qualify as bodies with public service functions. Limiting the group of the entities solely to those defined in the formerly effective annex of the State Assets Act would therefore amount to emptying out the regulation, and consequently lead to an unconstitutional restriction of the fundamental right to freedom of information.
It follows from the foregoing that a company owned by the state or a local government ‘is obliged to ensure access to the data of public interest [and data public on grounds of public interest] it processes as a body with public service functions in accordance with provisions of law’.[11] Now, under Section 3 (5) of the Privacy Act, the data of public interest includes all information relating to the activity of the body with public service functions, or arises in relation to the performance of a public service duty, ‘in particular data concerning the scope of authority, competence, organizational structure, professional activities and the evaluation of such activities covering various aspects thereof, the type of data held and the regulations governing operations, as well as data concerning financial management and concluded contracts’. However, the relevant legislation does not include any exception for the ‘management’ of a body with public service functions, and this includes funds from either the state and local governments or market sources. The procedure of Antenna Hungária Zrt thus continued to fail to comply with the fundamental constitutional right of access to data of public interest.
- In another case, the NAIH investigated the request for data of public interest that was not performed by Bp2017 Nonprofit Kft.[12] In doing so, the Authority emphasized that the company as a body disposing with national assets was not to have denied the request for data on certain contracts it had entered into under Section 27 (3) and (3a) of the Privacy Act, even on grounds that some of the data contained therein cannot be disclosed. According to the so-called data principle, data subject to disclosure restriction in the document must be rendered unrecognizable, while the information that can be disclosed shall be supplied in a readily intelligible form and by way of the technical means asked for by the requesting party.[13] The NAIH therefore found that Bp2017 Nonprofit Kft. violated the relevant provisions of the Privacy Act.
- The NAIH also examined the question concerning the publicity of the annex to the contract for modernizing public lighting disclosed on www.gyal.hu. The mayor's office of Gyál only partially fulfilled the request for data provision, because, in its view, the disclosure would have affected business information. During the course of the proceedings, the NAIH reviewed the documents (more than 350 pages) requested to be accessed and the information contained therein in detail. It then found that the disclosure of the data contained in certain parts of the documents—with the exception of (personal) data public on grounds of public interest pursuant to law (chamber and company registration)—may be lawfully restricted on grounds of legitimate business interest under Section 2:47 of Act V of 2013 on the Civil Code and Section 27 (3) of the Privacy Act. However, access to the information not specified in the opinion cannot cause disproportionate damage to business activity, and should therefore have been made available to the requester of the data, which it was made following the investigation.
- The NAIH also investigated the Heves Megyei Vállalkozás- és Területfejlesztési Alapítvány (Heves County Foundation for Enterprise and Regional Development, hereinafter ‘the Foundation’) for denying a request for data of public interest that, in its view, would have harmed the personal interests of its clients due to a confidentiality agreement.[14] The Authority found during its proceedings that the founders of the Foundation included the Local Government of Heves County, the Local Government of Eger County, the City of Hatvan, and the Hungarian Foundation for Enterprise Promotion. For this reason—and in view of the rules governing the transparency of national assets management—the NAIH deemed it unacceptable for the body with public service functions to conclude a confidentiality agreement with its clients in order to limit the disclosure of data of public interest and data public on grounds of public interest process. It is thus closely linked to the transparent and accountable operation of the Foundation, a body managing public funds, to disclose the data in all the detail the requester asked for.
- The NAIH also investigated whether the monthly allowance given to Shane Tusup, Olympic champion Katinka
Hosszú's trainer, by the Magyar Edzők Társasága (‘Hungarian Coaches Society’, MET) in the framework of the Special Coaches Programme qualified as data public on grounds of public interest.
In the course of its proceedings, the Authority found that the financial source for the operation and financing of the
Programme was provided by the appropriation for the development of priority sports in the Act on the Central Budget of Hungary. Consequently, the funds managed by the Programme qualify as public funds, and thus constitute data of public interest within the meaning of the Fundamental Law.[15] Under effective legal provisions, on the other hand, a natural person who establishes a financial or business relationship with a person subject to a subsystem of general government finances is obliged to provide information to any person on the data public on grounds of public interest arising from that relationship.[16] This includes, inter alia, Shane Tusup’s share of the sum under the subsidy contract concluded between the Ministry of Human Resources and the MET.
Finally, the NAIH took into account the fact that the salary paid to Shane Tusup under the employment contract with MET qualifies as data public on grounds of public interest pursuant to the Privacy Act.[17] If it is not possible to know what kind of benefits the professionals participating in the Programme are entitled to, the control of the use of public funds provided for by the Fundamental Law is not ensured.
[1] Section 7 of the National Assets Act.
[2] Section 10 (1) of the National Assets Act.
[3] Section 5 (2) of the State Assets Act.
[4] Section 5 (1) of the State Assets Act.
[5] Case no. NAIH/2017/871/V.
[6] Reasons (19) of Decision no. 8/2016 (IV.6) AB.
[7] Reasons (29) of Decision no. 8/2016 (IV.6) AB.
[8] Case no. NAIH/2017/4100/V.
[9] Case no. NAIH/2017/5250/V.
[10] Reason (22) of Constitutional Court Decision no. 8/2016. (IV. 6.) AB.
[11] Reason (46) of Constitutional Court Decision no. 25/2014. (VII. 22.) AB.]
[12] Case no. NAIH/2017/2725/V.
[13] Section 31 (1)–(2) of the Privacy Act.
[14] Case no. NAIH/2017/1368/V.
[15] Section 39 (2) of the Fundamental Law.
[16] Section 27 (3) and (3a) of the Privacy Act.
[17] Section 26 (2) of the Privacy Act.