Sebastian Gorka, the Deputy Assistant to President Trump, was forced to deny he was an anti-Semite after making several public appearances wearing the insignia of Vitezi Rend.
He claims the medal was given to his Hungarian-born father, who was a member of the order listed as Nazi collaborators during Second World War, and that he wears it as a tribute to his father.
But a Vitezi Rend spokesperson told NBC: "When he appeared on US television ... with the medal of the Vitez Order ... it made me really proud."
Hungarian campaigners contradicted Mr Gorka's claims to have had no involvement with the group, whose name translates as "Valiant Order".
Erika Laszlo campaigned against Mr Gorka during his failed bid for the mayor's office in a provincial Hungarian town back in 2006.
"It was common knowledge he was a Vitezi [member]," she told NBC, in claims repeated by a politician who ran on Mr Gorka's own ticket.
"And for many people this was a shine on the armor, if you like, because it was the old, golden days before the war."
The controversial orders Donald Trump has already issued
The controversial orders Donald Trump has already issued
1/9 Trump and the media
White House Press Secretary Sean Spicer takes questions during the daily press briefing
2/9 Trump and the Trans-Pacific Partnership
Union leaders applaud US President Donald Trump for signing an executive order withdrawing the US from the Trans-Pacific Partnership negotiations during a meeting in the Roosevelt Room of the White House in Washington DC. Mr Trump issued a presidential memorandum in January announcing that the US would withdraw from the trade deal
3/9 Trump and the Mexico wall
A US Border Patrol vehicle sits waiting for illegal immigrants at a fence opening near the US-Mexico border near McAllen, Texas. The number of incoming immigrants has surged ahead of the upcoming Presidential inauguration of Donald Trump, who has pledged to build a wall along the US-Mexico border. A signature campaign promise, Mr Trump outlined his intention to build a border wall on the US-Mexico border days after taking office
4/9 Trump and abortion
US President Donald Trump signs an executive order as Chief of Staff Reince Priebus looks on in the Oval Office of the White House. Mr Trump reinstated a ban on American financial aide being granted to non-governmental organizations that provide abortion counseling, provide abortion referrals, or advocate for abortion access outside of the United States
5/9 Trump and the Dakota Access pipeline
Opponents of the Keystone XL and Dakota Access pipelines hold a rally as they protest US President Donald Trump's executive orders advancing their construction, at Columbus Circle in New York. US President Donald Trump signed executive orders reviving the construction of two controversial oil pipelines, but said the projects would be subject to renegotiation
6/9 Trump and 'Obamacare'
Nancy Pelosi who is the minority leader of the House of Representatives speaks beside House Democrats at an event to protect the Affordable Care Act in Los Angeles, California. US President Donald Trump's effort to make good on his campaign promise to repeal and replace the healthcare law failed when Republicans failed to get enough votes. Mr Trump has promised to revisit the matter
7/9 Donald Trump and 'sanctuary cities'
US President Donald Trump signed an executive order in January threatening to pull funding for so-called "sanctuary cities" if they do not comply with federal immigration law
8/9 Trump and the travel ban
US President Donald Trump has attempted twice to restrict travel into the United States from several predominantly Muslim countries. The first attempt, in February, was met with swift opposition from protesters who flocked to airports around the country. That travel ban was later blocked by the Ninth Circuit Court of Appeals. The second ban was blocked by a federal judge a day before it was scheduled to be implemented in mid-March
SANDY HUFFAKER/AFP/Getty Images
9/9 Trump and climate change
US President Donald Trump sought to dismantle several of his predecessor's actions on climate change in March. His order instructed the Environmental Protection Agency to reevaluate the Clean Power Plan, which would cap power plant emissions
The order was founded as a state honour for those who fought for Hungary during the First World War by Miklos Horthy, the Hungarian head of state between 1920 and 1944.
In 1940, Horthy wrote: “Concerning the Jewish problem, for all my life I have been an anti-Semite. To replace the Jews, who have everything in their hands… requires a generation at least”.
Many members of the government decorated with his order oversaw the Holocaust in Hungary, and the order was listed as a collaborationist body by the Hungarian government.
After initially refusing to answer questions about the medal, Mr Gorka claimed his father had been tortured and imprisoned by Hungarian communists in the late 1940s after he founded “underground organisations of pro-democracy, anti-Communists to work about the Soviet dictatorship”.
The medal “reminds me of what [my parents] suffered under the Nazis and under the communists”, he said in a video released by Breitbart.
Mr Gorka has also been known to sign his name as “Sebestyen L. v. Gorka”. The initials “L.v” are reportedly used by those granted membership of the order and, when they die, by their oldest sons.
The modern-day Vitezi Rend movement disavows its Nazi past and founder, as Mr Gorka now disavows the order itself.
Video has recently surfaced showing Mr Gorka express his support for another since-banned militia condemned as "essentially racist" by the European Court of Human Rights, and dismissing concerns about anti-Semitism as "the very useful tool of a certain political class".Reuse content