It was six years ago that a Ponzi scheme was discovered at K & H Equities Zrt, the brokerage firm of K & H (Kerekedelmi és Hitelbank) Bank, the third largest commercial bank in Hungary. It is owned by KBC Bank and Insurance Group of Belgium. K&H Bank has assets totaling 4.7 billion euros.
I will not go into all the details here because first I would like to read Péter Kende's recent book on the subject: Nesze neked, igazság!: A Kulcsár-ügy. The Kulcsár affair was the talk of the country for months. Attila Kulcsár, a broker whose matriculation certificate and broker's license were both forgeries, was accused of a Ponzi scheme that duped hundreds of unsuspecting investors. Eventually the prosecutors managed to find twenty-four people who were allegedly part of the scheme. The prosecutors and the courts called in 200 witnesses. According to some journalists familiar with the case the material dealing with the investigation and the court proceedings takes up some 140,000 to 150,000 pages! Zoltán Varga, who according to his colleagues is the best in the country, was the presiding judge. Here we can see Zoltán Varga and Attila Kulcsár in court. As is his wont, he accepted the findings of the prosecutor's office. This is what he did in the infamous criminal case, the murder of eight people in a small branch of the Erste Bank in Mór. Fingerprints didn't match, alibis were ignored, false witness testimony was accepted without any corroborating evidence and years later it turned out that the two accused men were innocent.
It seems that in Hungary the judge is often no more than a rubber stamp. As former Chief Justice of the Supreme Court Zoltán Lomnici said when someone complained about Judge Varga's shoddy work in the Mór case: "After all, the judge works from the given material." The original saying is about the tailor and the quality of the suit he makes; it greatly depends on the material the customer brings to him. Péter Kende exclaimed after that: "For Pete's sake. In this case why do we have judges at all?"
It seems that Zoltán Varga in the Kulcsár case again relied entirely on the indictment. In Hungary indictments are often hundreds of pages long. In an indictment the prosecutors put forth their case in great detail, including the results of their interrogations. The indictment reaches the judge some time before the beginning of the trial. Very often the judge himself doesn't read the whole indictment. He asks his clerks to make a précis of it, and of course no one questions the veracity of the document. It is considered to be Holy Writ. So, as Kende says, if the indictment is damning and the prosecutor asks for a certain verdict, the poor accused can be sure that he will be punished according to the prosecutor's wishes. Very often, just as in the Mór case, appeal leads nowhere. In that case, the appellate judge lavishly praised the excellent work of Zoltán Varga.
Well, it seems that the case of Attila Kulcsár and his co-defendants will not even reach the appellate court. The appellate prosecutor's office (feljebbviteli főügyészség) took a look at the case and they practically dropped their teeth. They came to the conclusion, which we ordinary mortals knew all along, that Attila Kulcsár wasn't so much the defendant but rather the accuser in the case. A puppet of the prosecutors. The Budapest Prosecutor's Office headed by Sándor Ihász used Kulcsár to falsely accuse his co-defendants. By now everybody is pretty certain that Ihász and his colleagues promised a very light sentence in return for services rendered. Kulcsár must have been mighty disappointed when he received eight years and a fine of 230 million forints. Not exactly a light sentence by Hungarian standards.
Surely, there had to be some people even within the prosecutor's office who were appalled at the time of the original investigation. Someone smuggled out a video of one of the interrogation sessions with Attila Kulcsár. In no time the video was available on the Internet. On it we could watch with horror as Kulcsár's "testimony" was practically dictated to him by his lawyer and the prosecutor. Moreover, these two men were telling Kulcsár to testify falsely, and when he uttered the lies he looked up the ceiling and said, "It will fall on me!" A saying one utters when one tells a lie. When the video became public Ihász and company tried to explain this exclamation away as a reaction to an overhead airconditioner that was making a racket. Kulcsár was simply talking about the noise. Mind you, no noise could be heard on the tape.
These perjured testimonies often contradicted one another, but it seems that Varga and his clerks didn't worry about such small details. They took Kulcsár's every word as the gospel truth. Given Kulcsár's background and his former lies about his credentials, it is hard to imagine how Varga could possibly believe all his uncorroborated accusations.
When a verdict is set aside and the appellate court orders an entirely new trial that is bad enough. Apparently in Hungary there are about one hundred such cases each year. But that the appellate prosecutor's office finds the work of another prosecutor's office so bad that it is the one to suggest a retrial–well, that's practically unheard of.
And finally, when criticism was levelled against the Hungarian judiciary Zoltán Lomnici, the former chief justice, claimed that Hungarians have the greatest trust in the Hungarian judicial system and its practitioners. According to him "a recent survey proved that more than 70% of the people trust the justice system." Kende was very surprised because he knew nothing about such a survey. He was familiar with a survey done by Szonda Ipsos according to which 68% of the adult population thought that the work of the courts proceeded too slowly and only 29% thought that the courts were independent of political pressure. In another survey done at ELTE the results were no better: 44% didn't trust the courts at all and only 14% had complete trust in the Hungarian justice system. Can one wonder why?