An interesting article appeared in today's Népszava describing the possibilities for graft in Hungarian state or municipally owned companies. The list was put together on the basis of information provided by Tibor Lengyel, president of the National Association of Hungarian Accountants.
One possibility is overcharging. For little or no work performed an exorbitant amount of money is paid to outside experts. The most common beneficiaries of this form of graft are consulting firms, communication experts or advertising agencies, and law firms. Overcharging has been going on for years, and the authorities are well acquainted with it. The problem is that it is difficult to prove. First of all, how does one ascertain that the company was actually in need of the advice that it paid for? And how can one put a figure on the value of the advice received? Admittedly, sometimes the discrepancy between services rendered and payment received is staggering. For example, Budapesti Közlekedési Vállalat (BKV) fairly recently paid out twenty or thirty million forints to a communications firm for a four-page study! The advice that BKV received included the half-witted suggestion to ask a distinguished professor to announce the rise in the price of tickets and fewer runs because the public would accept this bad news from such a learned man!
A variation on overcharging is changing the price for services rendered after signing the contract (presumably a case of cost overruns). BKV, the current poster child for corruption in publicly owned companies, hired a private company to provide an electronic information service for passengers in one section of town. The original price was 85 million forints. Soon enough the price was raised to 99 million forints that BKV paid. However, the electronic information service hasn't been installed as yet! Moreover, I doubt that it ever will be.
Outside firms are not the only beneficiaries of graft. Within BKV some employees got obscene retirement and "fond farewell" packages; parachutes at BKV were truly golden. The company is currently looking into the cases of 110 former employees but according to the police there might be as many as 700 people involved.
The article doesn't venture into the world of possible kickbacks although it is hard to imagine that the BKV bigwigs did all this from the goodness of their hearts. Surely, for these "favors" they had to be compensated by those at the receiving end.
According to Tibor Lengyel, it is unlikely that this kind of corruption can be completely eliminated but the introduction of an electronic accounting system should help. As it now stands, it takes months of work to find the culprits while if an electronic accounting system were used it would take only minutes to flag the "suspicious" cases. (Well, perhaps, but advice is not a commodity that is easily fairly priced.) He also suggests setting up a central clearing house that would check the contracts of all state and municipally owned companies.
These corruption cases cannot be eliminated completely nor can they be linked to only one party. The party in power, be it in the central or the local government, wants to reward those close to it. It wasn't too difficult for Zoltán Szabó, an MSZP parliamentary member, to find 27 corruption cases in Fidesz-led municipalities. Just as it is relatively easy to blame MSZP-SZDSZ for the corruption cases at BKV in Budapest. It will be very difficult to put an end to this practice because it has a long history in Hungary. In this respect people usually mention the writers Kálmán Mikszáth (1847-1910) and Zsigmond Móricz (1979-1942) who wrote extensively about small town corruption by office holders. Put it this way, I'm not optimistic.