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The seal of the U.S. Central Intelligence Agency inlaid in the floor of the main lobby of the Original Headquarters Building.

The seal of the U.S. Central Intelligence Agency inlaid in the floor of the main lobby of the Original Headquarters Building. (Wikimedia Commons)

BERLIN — The U.S. ambassador to Hungary expressed concerns over Budapest’s eagerness to “deepen and expand” ties with Russia, in a public display of frustration Wednesday just days after the fractious relationship between the two NATO allies was laid bare in a leak of classified U.S. intelligence documents.

His comments came as the U.S. Treasury on Wednesday took the unusual step of sanctioning an entity associated with an ally, targeting the Hungary-based International Investment Bank, dubbed Russia’s “spy bank,” and three of its current and former executives resident in Hungary, one of whom is a Hungarian national.

Western officials contend that the bank is being used as a hub for Russian intelligence operations in Europe.

“The presence of this opaque Kremlin platform in the heart of Hungary threatens the security and sovereignty of the Hungarian people, their European neighbors and their NATO allies,” Pressman said in a Budapest news conference, adding that the United States has raised its concerns to Hungarian officials “on numerous occasions.”

“Hungary has dismissed the concerns of the United States government,” he said, and now Washington wanted to show it “will take action against Hungary’s choices.”

The Hungarian government’s press office did not respond to a request to comment.

The move is likely to further rankle Hungarian Prime Minister Viktor Orban, who has made no secret of his ideological differences with the Biden administration — regularly referencing the days of better relations with his “friend” former president Donald Trump.

In a political strategy session in February, Orban identified the United States — a fellow NATO member — as one of his party’s “top three adversaries” in the world, according to a CIA update that was among the U.S. military documents leaked online.

The leak highlights the deepening diplomatic rift between Washington and Budapest.

Orban — the closest thing Russian President Vladimir Putin has to a sympathizer within the European Union — has aggravated the United States and European allies by extending his country’s energy ties to Russia and stymying the Western response to the war in Ukraine.

Hungary, which stands accused of democratic backsliding, was also the only E.U. country not invited to President Biden’s Democracy Summit last month.

Meanwhile, the Hungarian government is focusing on forging a closer relationship with the American right. Budapest is slated to host an American Conservative Political Action Conference event for the second year running next month. And Hungarian President Katalin Novák, a close political ally of Orban, traveled to Tallahassee to meet with potential Republican presidential candidate, Florida Gov. Ron DeSantis, last month.

Orban’s comment on his strategy session “constitutes an escalation of the level of anti-American rhetoric in his discourse,” the intelligence update read.

“It’s day and night,” Petr Tuma, a visiting fellow at the Atlantic Council’s Europe Center, said of the shift in relations between Hungary and the United States since the Trump administration.

Hungary’s conservative leader has been public about his sense of a fundamental clash with the United States on LGBTQ issues — between the Biden administration’s liberal politics and “traditional” family values. Hungary has clashed with the E.U. on that, too, and is facing legal action from 15 E.U. members over its “Child Protection Law,” which bans the portrayal to minors of homosexuality or any “divergence” from birth-designated gender.

But the war in Ukraine has brought new friction.

The International Investment Bank’s presence in Budapest “enables Russia to increase its intelligence presence in Europe, opens the door for the Kremlin’s malign influence activities in Central Europe and the Western Balkans, and could serve as a mechanism for corruption and illicit finance, including sanctions violations,” the U.S. Treasury said. In addition to the bank’s current and former Russian chairmen, the Treasury sanctioned the bank’s Hungarian Deputy Chairman Imre Laszloczki.

“IIB executives have coordinated with Russian Federation officials on IIB business even after Russia’s further invasion of Ukraine in February 2022,” the Treasury said.

Orban has emphasized that he does not see the conflict as “our war” and has criticized allied efforts to arm Ukraine, accusing the United States of perpetuating the conflict. “The Ukrainians have endless resources because they get all that from the Americans,” he said during a talk in Berlin in October.

Shortly after, he used his veto power to hold hostage a $120 billion European aid package for Ukraine — as he wrangled for the release of E.U. funds for Hungary that have been frozen over rule-of-law concerns. Budapest also dragged its feet on approval of Finland’s accession to NATO and has blocked Ukraine’s closer cooperation with the Western military alliance. Alongside Turkey, it is still blocking Sweden’s bid.

Hungary acts as “someone who is really pouring sand into the engine of the alliance,” Tuma said.

As the rest of Europe weans itself off Russian oil and gas, Hungarian Foreign Minister Peter Szijjarto signed new deals to ensure Budapest’s continued access to Russian energy during a visit to Moscow on Tuesday. Hungary receives about 85 percent of its gas imports from Russia, making little effort to diversify. Instead, Orban has secured exemptions to E.U. embargoes on Russian oil and gas.

During his meeting in Moscow, Szijjarto additionally said Russia’s state-owned nuclear energy company, Rosatom, had agreed to a modified contract for its expansion of Hungary’s Paks nuclear plant, though Hungarian officials did not provide further details.

Orban has said he will veto any European sanctions on Russia’s nuclear energy industry.

The war is not between “the armies of good and evil” but “a war between the troops of two Slavic countries” that would be “limited in time,” he said in his annual state of the nation address last month.

“This is why we are maintaining our economic relations with Russia; and indeed we are advising the whole Western world to do the same,” he said.

“Somehow, in the longer run, he believes it will pay off for him,” said Andras Bozoki, a professor of political science at the Central European University. “He feels more and more close himself to nondemocratic leaders and regimes.”

Orban’s government has not shown much interest in repairing relations with Washington outside a Republican return to office.

“Keep on fighting Mr. President! We are with you,” Orban tweeted last week, sharing a picture of himself shaking hands with Trump.

Pressman, the ambassador, noted that the Orban government had only recently warned against U.S. interference in Hungary’s domestic policy.

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