View all newsletters
Have the short, sharp Spear's newsletter delivered to your inbox each week
  1. Wealth
August 4, 2009

Spooking the spooks

By Spear's

A group of retirees had penetrated the state’s own intelligence agency, and was acting as a secret service within a secret service.

Not many outside Budapest have ever heard of Sandor Laborc, but next month, on 1 September, he is scheduled to resign from his post as Director-General of Hungary’s National Security Office (NBH).

This organisation was created, with western support, after the collapse of the Soviet Bloc, and has been headed since December 2007 by Laborc, who was trained by the KGB in Moscow. After six years in the Soviet Union he spent twenty-two years operationally in the Ministry of the Interior.

Laborc’s decision is linked to a criminal investigation of a private security firm, UD Zrt, which was largely staffed by former members of the old Communist security and intelligence apparatus. The company was suspected of having run illicit surveillance operations against politicians, and when the NBH’s computers were examined they were found to be infected with covert programmes linked to UB.

In other words, a group of retirees had penetrated the state’s own intelligence agency, and was acting as a secret service within a secret service.

In eastern Europe, this is not a rare phenomenon. Western intelligence advisers have always recognised that it is simply impractical to create an entirely new security agency overnight with no files and no employees with any experience.

In Warsaw, when Marian Zacharsky was appointed head of Poland’s intelligence service, there were protests from Washington and London because he was a veteran Soviet-era professional who had been convicted of espionage in California and imprisoned. On that occasion he stepped down, albeit reluctantly, and now lives in exile in Switzerland.

In that example, the complaint was that Zacharsky was an unreconstructed hardliner, but the problem elsewhere has been the tendency for redundant career professionals to use their skills in the private sector for almost any client, without exercising much discrimination.

Content from our partners
Stoneweg, Icona, and CBH Strengthen Partnership with Cromwell Acquisition, Adding €4 Billion AUM to Stoneweg
Why investors should consider investing in nature
HSBC Global Private Banking: Revisiting your wealth plan as uncertainty abounds

In those circumstances retirees, with all their technical skills, have been linked to organised crime, local mafia groups and some entrepreneurs and oligarchs who were none too fussy where they acquired the information that gave their business an advantage over the competition.

UD Zrt came under scrutiny by the National Bureau of Investigation in September 2008 and the enquiry was terminated nine months later with an as yet unpublished report that has led to Laborc’s resignation and his replacement by Laszlo Balajti who presently heads the National Security Service.

This expedient, of transferring the equivalent of the head of the FBI or MI5 to run a country’s intelligence agency is an indication of the gravity of the situation. It happened when the FBI’s Judge Webster was appointed Director of Central Intelligence in 1987 after Bill Casey’s illness, and when Dick White, then MI5’s D-G, took over SIS in 1956. On both occasions there had been a crisis, and a reliable gamekeeper was drafted in to restore order among the poachers.

However, what as happened in Budapest is symptomatic of the influence Moscow still has, or the Kremlin thinks it has, over their old Warsaw Pact comrades. The west, and the British in particular, have gone to considerable lengths to retrain and indoctrinate eastern bloc personnel with democratic values, and there has been much success in the Czech Republic, Poland and Romania.

Alas, Bulgaria, Slovakia and now Hungary have slipped into some old bad habits, but the objective of encouraging agencies that are democratically accountable definitely remains worthwhile.

Select and enter your email address The short, sharp email newsletter from Spear’s
  • Business owner/co-owner
  • CEO
  • COO
  • CFO
  • CTO
  • Chairperson
  • Non-Exec Director
  • Other C-Suite
  • Managing Director
  • President/Partner
  • Senior Executive/SVP or Corporate VP or equivalent
  • Director or equivalent
  • Group or Senior Manager
  • Head of Department/Function
  • Manager
  • Non-manager
  • Retired
  • Other
Visit our privacy policy for more information about our services, how Progressive Media Investments may use, process and share your personal data, including information on your rights in respect of your personal data and how you can unsubscribe from future marketing communications.
Thank you

Thanks for subscribing.

Websites in our network