Spy row Hungarian PM keeps job

Medgyessy: Said he wanted to protect against "political blackmail"

BUDAPEST, Hungary -- Hungaria's prime minister was still in office on Wednesday after admitting that he served as a communist secret service counter-intelligence officer 20 years ago.

Moving to avert a political crisis over newspaper and opposition accusations that he had been a state spy, Peter Medgyessy told parliament he had been a counter-espionage officer at the finance ministry from 1977 to 1982.

But he was able successfully to defuse the affair -- for now at least -- by proposing to open up secret service records and name those in public life who had held such posts.

He said that during his work as a counter-espionage officer he had been protecting the secret that Hungary was looking westwards and secretly preparing to join the IMF.

The PM, who took office only last month after winning April elections, had threatened to resign if he did not have the confidence of his own Socialist Party and his junior coalition partner, the liberal Free Democrats.

His party backed him on Tuesday night.

On Wednesday, Free Democrat leader Gabor Kuncze told reporters his party backed the premier after it cut a deal to open up past secret service records to the public.

"There is no coalition crisis. The prime minister continues to enjoy the full support of the Free Democrats," he said.

Kuncze said proposed changes to laws governing secret service records would "prevent any further misuse of these by politically motivated parties."

"We are in the middle of a very dirty political game and the present government should not tolerate it," Kuncze added.

Legal threat

Rightist daily Magyar Nemzet on Tuesday carried a photocopy of a March 1978 contract in which then Interior Minister Andras Benkei promoted "Comrade D-209" -- alleged to be Medgyessy -- to first lieutenant in Hungary's spy-catching service.

Medgyessy said the document was false, adding he would sue the newspaper after it published a second document on Wednesday.

"I helped prevent foreign spies from getting their hands on Hungarian secrets and ensured they should not be able to block our joining the IMF," he told parliament.

"I would like to emphasise that a spy-catcher is not an agent, not an informant. Counter-intelligence and intelligence are ancient professions and serve to protect the country."

Medgyessy told parliament he would submit an emergency bill to release classified secret service data on political figures in a bid to avoid future "political blackmail."

Government spokesman Zoltan Gal said proposals could be put to parliament later this summer.

Hungary came under Soviet occupation in 1945 and was an unwilling host to the Soviet military until June 1991, when the last foreign troops left the country.

In November 1956, the Soviets crushed a popular uprising led by communist reformer Imre Nagy.

Hungary's secret services remained under strong Soviet influence for decades and were as unpopular as former East Germany's infamous Stasi.

But the years when Medgyessy worked in counter espionage was a delicate, less pro-Russian time for Hungary as the central European state tried to edge away from the Soviet Union and open up to the West, secretly joining the International Monetary Fund in 1982 and sounding out European Union membership.

Medgyessy, 59, an economist, joined the Finance Ministry after graduating in 1966 and held various positions until 1987.

Six years ago, Poland's then Prime Minister Jozef Oleksy was forced to resign when the political right alleged he had been a KGB informer. A military prosecutor later cleared him of any wrongdoing.