At this blog we have been following the situation in Hungary closely (this post, this post, and this one). During the last week I have been in touch with various Hungarian philosophers, and I have compiled the following report. I welcome factual corrections and information that may provide more insightful context.
1. There is no doubt that the present Hungarian government (which has a huge parliamentary majority) has illiberal tendencies; for example, its recent media-law is a matter of great concern to its EU partners. My informants include academics that are broadly sympathetic to this new government and folk that are more skeptical about is goals. It is my sense that all have been shocked by how the pro-government side of the press has blown up a pre-existing funding issue (although some have noted that the level of rhetoric is not uncommon in Hungary). Moreover, nobody doubts that politics play some role in the recent government investigation, but all stress that the procedure are part of the normal legal process (more about this below where I comment on this).
2. There was a pre-existing issue. Let me offer a rough outline. The previous government (2002-2010) created an office for technological development. In 2004-2005 this office funded projects by academics (not only philosophers) who were broadly sympathetic to this government. At the time questions were raised about it in the mainstream press and the State Audit Office. The main concern was that the funding process was not transparent and that there may have been favoritism. More recently, the Hungarian Academy noted that there may be administrative/legal problems with one of these projects.
3. Last year the new government set up an office for investigating how public money was spent during the previous government (not uncommon in Hungary), and this office initiated a legal procedure against three of these projects; this set off the aggressive press campaign. All my informants express the hope that a normal, objective legal procedure is still possible in Hungary. Based on assessments like these [thank you Brian Leiter for the pointer], I am less sanguine about this if the public-media atmosphere remains so hot-headed and if judges come to think that certain outcomes will be viewed favorably by the government (which can dispense all kinds of rewards).
4. It also clear to me that in the context of meagre state funding for philosophy -- which (due to recent reforms initiated under the previous government) has plummeting enrollments and very low salaries for junior professors --, Hungarian philosophy is riddled with internal conflicts and lack of collegiality. (There are also generational issues and questions over what counts as an international research profile.) This has prevented a unified reponse to these developments.
UPDATE: There is a petition for the philosophers under investigation here.