Oily business

In the last few days the whole of Hungary can talk about nothing else but oil. No, not the current price of oil, not Iraq, Nigeria, or Saudi Arabia but an old, very peculiarly Hungarian "oil affair." The beginning of the story goes back to 1990-1991 when the right of center Antall government decided that imported fuel oil would have two different retail prices at home depending on its use. The oil used for heating would be very inexpensive, while the oil used for diesel fuel would be relatively expensive. In order to distinguish between the two uses of the same product, customs officials at the border added red dye to the fuel oil destined to be used for heating. Enter the criminal mind. Bribe the custom officials so that, for a price, they would forget to add the red dye. A simple scam: buy low and sell high, same product, different use. The difference in price was enormous and, of course, the profits also. Or, if these so-called businessmen were not successful at bribing the custom officials, they learned how to bleach the red dye out of the oil. Apparently sulphuric acid and some other chemicals did the trick.

These activities reached their peak around 1993. The methods of the "oil mafia" were varied and imaginative. Bribery, the establishment of fictive companies, forgery, premises for bleaching rented by non-existent persons were just some of the stratagems. All classic "60 Minutes" material.

After about two years of fantastic illegal profit taking, the authorities realized that there was something very wrong here. You cannot have two different price levels for the same oil: dye or no dye. In 1995–this was already during the tenure of Gyula Horn’s socialist-liberal government–the double pricing was abolished. Thus, slowly but surely the illegal activities surrounding oil came to an end. It is estimated that these illegal activities cost Hungary billions of dollars in lost revenues.

One would have thought that setting a uniform price for oil would have put an end to the whole affair. However, in 2000 (by then Viktor Orbán was the prime minister) a naive parliamentary member, a certain Dr. László Pallag (a country veterinarian), got it into his head that a parliamentary committee should be set up to re-investigate the oil scandal. Only 24 people had been prosecuted out of an estimated 4,300 felons. Moreover, there were rumors that politicians were involved. Pallag came up with an alleged witness, a former member of the "oil mafia," who pointed the finger at politicians, high-ranking policemen, customs officials, and so on. Among these were Orbán’s minister of interior, Sándor Pintér, then chief of police; Iván Szabó, former minister of finance; and Sándor Lezsák, former head of the Magyar Demokrata Fórum (MDF). No proof, just accusations. The accused sued Pallag and won. Moreover, Orbán became rather tired of Pallag’s "investigations," closed the whole commitee, and all the material pertaining to the oil affair was made top secret. But not for twenty-five or fifty years, but eighty-five!!!!

So, why all that talk about oil now? Last Friday, an investigative journalist, a woman who actually wrote a book about the "oil mafia," was badly beaten and left tied up alongside the Danube. According to the early reports she was brutally beaten and her condition grave. Considering, she has recovered relatively fast and since then has given several interviews. She also writes, from her hospital bed, a daily blog. In  one of her interviews she sent a rather strong message to the Fidesz and the MDF: "Please do not shed crocodile tears for me now, when you were the ones who wouldn’t allow the Pallag committee to come to the end of this ‘oily’ business."

The current government promised to make the documents public, but it may take some time: they have to look through 80,000 pages. Well, we will see. Will there be consequences this time? Will we learn the truth? A lot of people are doubtful.