Norway condemns Hungarian NGO crackdown

BUDAPEST/OSLO (Reuters) - Norway condemned a Hungarian crackdown on non-government organisations on Tuesday after police, as part of a criminal investigation, raided the offices of an NGO that distributes Norwegian funding.

Earlier this year, Budapest launched a legal investigation against organisers and beneficiaries of Norway Grants, saying the Scandinavian nation was helping them advance the political goals of an opposition group.

The probe now includes new criminal allegations of misuse of funds and illegal banking activity at Okotars, the foundation that distributes Norway Grants funding in Hungary, police told the website index.hu in a statement.

Reuters questions seeking police comments were not answered.

"We uncovered irregularities about the activities of Okotars, who distributed funds in violation of the original goals," government spokesman Zoltan Kovacs told Reuters over the phone. "Whether they also committed illegal banking will be up to the courts to establish."

Police special forces raided the offices of Okotars and another organisation on Monday, confiscating boxes of documents.

"This issue has reached an entirely new level," said Okotars director Veronika Mora, who has rejected allegations that Okotars had misused funds from Norway Grants. She said the police raid was "outrageous and completely disproportionate".

She said police seized documents on short-term bridge loans that Okotars gave to non-government groups at minimal interest to help them secure cofinancing for European Union grants, adding such loans were completely legal.

The agents also took documents related to the Norway Grants funds given to a dozen organisations which the government had identified to Reuters earlier this year as problematic because of "leftist political ties".

The groups so labelled included Transparency International, the Hungarian Civil Liberties Union or the investigative journalism portal atlatszo.hu.

Norway has frozen most of the 153.3 million euros available to Hungary in European Economic Area (EEA) grants in response. The 13.5 million euro budget intended for the NGO programme, called the Norway Grants, has remained open.

In a statement issued on Tuesday the Norwegian minister in charge of European affairs said Hungary was on track to a more authoritarian society.

"By ordering the police raid it is clear that the Hungarian authorities are continuing their harassment of civil society organisations," said Vidar Helgesen, Norway's minister for European affairs.

"(The raid) is completely unacceptable. It shows that the Hungarian Government intends to stop the activities of NGOs that are critical to the authorities. It also shows that the Hungarian Government is failing to respect common European values relating to democracy and good governance."

Hungary rejects any accusations from Norway about the erosion of democracy and civil society.

"We forcefully reject the politically motivated statements of the Norwegians," Kovacs said.

(Reporting by Marton Dunai; editing by Ralph Boulton)