Campaign financing–not just a Hungarian problem

Just because it is a problem everywhere in the world doesn’t mean that Hungarians are resigned to the corruption that accompanies campaign financing in their own country. As elsewhere, the allocation of funds from the national budget to the parties is not enough to conduct a modern political campaign. But Hungarian politicians can’t pick the pockets of their rich friends to the extent that Western politicans do. So Hungarian political candidates have used all sorts of unsavory tricks to get money into their party coffers from other sources. According to people who are more or less experts on the question, one source is kickbacks from companies involved in road construction. During Viktor Orbán’s tenure there wasn’t even a bidding process: one company got the job and that was the end of it. The road construction’s cost was enormously high. Much more expensive than, for example, in Croatia where (considering the country’s topography) one might think that road construction would be costlier than in Hungary, which is fairly flat. Once the socialists and liberals took over they initiated a bidding process and as the result the expenses are somewhat lower, but apparently they are still suspiciously high.

The other illegal source of funds into party coffers comes from the so-called foundations that are bing set up. The "Live a More Healthful Life," "Get Your Kid Off Drugs, " "Have a More Satisfying Sex Life" (these are fictitious) foundation.These phony foundations are used as conduits of funds from the central budget to the party or parties. Foundations are involved in the current corruption case.

But to go back a bit in time: it all started with the notorious case of Márta Tocsik, a lawyer who acted as an intermediary between local administrations and the central government in settling the transfers of properties. Her efforts bore fruit and, since she was paid a certain percentage of the purchase price and that percentage was extraordinarily high, people started to be suspicious. Soon enough there was a parliamentary committee looking into the transactions. The case pretty well ended the ministerial career of one of Gyula Horn’s favorites. But that was just the beginning; the Tocsik affair was largely responsible for the electoral defeat of Gyula Horn and the MSZP. The suspicion was and still is that Márta Tocsik was offered the deal only if some of the very high fees she received would be turned over to the MSZP coffers. In court the guilt of the party’s financial director, if I recall properly, couldn’t be proven.

And here is now the Zuschlag case. As I mentioned in an earlier post, Viktor Orbán is delighted that János Zuschlag, a young MSZP politician, is in trouble. There are already accusations that the trail will lead to Ferenc Gyurcsány’s office. The connection is fairly tenuous: Gyurcsány, who was for a few months sports minister under Péter Medgyessy, was apparently in office when some of these bogus foundations were received funds. One man who is accusing him of knowledge of the cases is former deputy undersecretary Tamás Ocsovai, whom Gyurcsány inherited and found not quite up to the the job. One can read about this in József Debreczeni’s biography of Gyurcsány (Az új miniszterelnök, p. 235).  Obviously Ocsovai might not be exactly a friend of the prime minister. Besides Zuschlag there are several co-defendants, one of whom is in hiding. The prosecutors asked for pre-trial detention for Zuschlag because they are afraid that he might leave the country and because they have proof that Zuschlag has already tried to influence witnesses. There will be many witnesses, over one hundred. The charge is conspiracy to commit fraud. Maximum twenty years. By Western standards that sentence may not seem harsh. But pitted against sentences in Hungary for murder convictions, it’s stiff. In any case, Zuschlag is in jail facing possibly twenty years in jail. The claim is that he and his cohorts applied for money for several foundations and embezzled the money (presumably into their own pockets as opposed to diverting the money to a political party) to the tune of about 50 million forints ($280,000).

As the largest opposition party may rejoice over the misfortunes of the MSZP, in the town of Mór the Fidesz mayor is in trouble. According to a secretly recorded conversation, the mayor and the town clerk discussed the possibility of ending up in jail because they sold some city property to a friend at well below market price.

Off the topic for today, but a news flash: a couple of hours ago the MSZP and the SZDSZ agreed on health insurance. It seems that it was a good idea for Gyurcsány to tell them that he had had enough. They suddenly agreed within a few hours. Isn’t it interesting?

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[…] journalists are not on the ball. I especially remember two such occasions. One was the so-called Tocsik-affair, an illegal party financing scheme way back in 1997-98, that contributed greatly to the electoral […]