US 'deeply concerned' by Hungary's probe into anti-graft watchdogs

BUDAPEST (Reuters) - The United States criticised Hungary's new sovereignty law as anti-democratic after a Hungarian body that monitors suspected foreign political interference launched an investigation into two anti-corruption watchdogs.

The law, which was passed in December 2023, bans foreign financing for parties or groups running for election and carries a punishment of up to three years in prison.

The law also set up an authority called the Sovereignty Protection Office to explore and monitor risks of political interference.

The Office launched an investigation on Tuesday into the Hungarian branch of the anti-corruption watchdog Transparency International (TI) and an online investigative outlet, that focuses on corruption.

The U.S. State Department said it was deeply concerned at the investigations and called them draconian actions.

"The Hungarian government's attempt to harass, intimidate, and punish independent organisations runs counter to the principles of democratic governance rooted in the rule of law," a State Department statement said.

"This law places no limit on this entity’s ability to target the human rights and fundamental freedoms of its own citizens and puts at risk any country, business entity, or individual that chooses to engage with them," they added.

The law has also been criticised by the European Union and by a panel of constitutional law experts from the Council of Europe, a human rights watchdog, which said it could have "a chilling effect" on free and democratic debate in Hungary.

A Hungarian government official dismissed the State Department's criticism.

"We understand that some would like to secretly interfere in the political processes of foreign countries, but we insist on #transparency!" Prime Minister Viktor Orban's policy director wrote on the social media platform X on Friday.

"The aim of the Sovereignty Protection Act is to combat foreign interference in Hungarian politics through transparency. In our view, this will also strengthen Hungarians' confidence in democracy," Balazs Orban wrote.

Relations between Budapest and Washington have soured because of Hungary's foot-dragging over the ratification of Sweden's NATO accession - finally passed by Budapest in February - and also over Orban's warm ties with Moscow and his attempts to block military aid to Ukraine.

The U.S. ambassador to Hungary also recently criticised Orban's nationalist government for its close ties with China and policies that discriminate against the LGBTQ+ community.

(Reporting by Anita Komuves; Editing by Sharon Singleton, Hani Richter)