Commissioner in defense of people’s savings: Gabriella Selmeczi

I assume not too many people remember Gabriella Selmeczi’s unfortunate encounter with Lockheed Martin, the defense contractor. I think even fewer remember her trouble with Tesco where she refused to pay for some baked goods she consumed on the spot. The lady, it seems, is accident prone.

Her beginnings were humble. Father finished agricultural “technikum.” Technikums were introduced in the Hungarian school system in 1950 as high schools for professional training. Graduates at the age of eighteen could start careers as technicians. In 1983, however, he decided to launch a business, a fast-food establishment called “Landoló falatozó.” “Landoló,” because it was close to the airport in Budaőrs where planes “land.” Gabi (as she calls herself even today on her website) after finishing high school became a waitress in the family restaurant. Two years later she was admitted to the Kereskedelmi és Vendéglátó Főiskola, a college that is supposed to train people to work in restaurants and hotels as middle managers. Later she finished journalism school in Esztergom and for a short while worked for the local television station in Budaőrs.

Armed with this rather modest academic background she got involved with Fidesz back when Viktor Orbán headed a radical liberal party of young democrats. She organized a Fidesz group in Budaőrs and soon enough caught the attention of “the boys,” as the Fidesz leaders were called in those days. Perhaps they liked her seductiveSelmeczi Gabriella, 1994 blue eyes. (I know that’s catty, but she does look like something straight out of a Tennessee Williams play.) In no time Selmeczi was a member of the party’s steering committee and later one of the vice-chairmen. In 1994 she became a member of parliament and has been an MP ever since. She has been assigned primarily to committees that deal with local government, health, and social issues.

When in 1998 Viktor Orbán won the election and formed a coalition government with the Smallholders, she was picked to be one of the undersecretaries in the prime minister’s office in charge of social security. It was at this time that she ran into trouble. After spending only a few months on the job she, along with István Balsay, another undersecretary, had to resign. Népszava learned in May 1999 that Selmeczi, Balsay, and Béla Gyuricza (an ailing Fidesz member of parliament) sent a letter to Senators Jesse Helms and Joseph Biden. The letter, signed by 31 Fidesz MPs, asked the senators to name Steven M. Jones, a high-ranking financial manager of Lockheed Martin, as the next U.S. ambassador to Hungary.

One could ask: what on earth did Selmeczi have to do with Lockheed Martin? Simple. She had a boyfriend, Gábor Rónai, who was the lobbyist for the firm in Hungary. Lockheed was not only lobbying for Hungary to buy F-16 planes; it was also hoping to receive an order for the computerization of the Hungarian social security system. As it turned out, the IT business didn’t materialize and, as we also know, a couple of years later Orbán against the advice of his military experts decided to buy Gripen instead of F-16 planes. Balsay, who was the mayor of Székesfehérvár at this point, had received assurances from Lockheed that if Hungary purchases their planes the headquarters of the giant firm will be in Székesfehérvár.

This was a scandal that by its very nature didn’t stop at the borders of Hungary. CNN reported on the event, and there was considerable pressure on Viktor Orbán to do something. The scandal even reached the White House and the State Department. Bill Clinton and Madeleine Albright expressed their total confidence in Ambassador Peter Tufo, who still had two years to go. Balsay and Selmeczi resigned, most likely not on their own volition. Gyuricza, who was Orbán’s national security advisor, was already in the hospital dying of cancer.

The Tesco story was also ugly. Selmeczi ate some croissant-like item while shopping and, when she was reminded by an employee that she will have to pay for it at the cash register, she hit the ceiling. She made a scene about her status and about her “diplomatic passport.” Yet Selmeczi remained an important member of Fidesz and its parliamentary faction.

And now what do we see? Selmeczi is returning to her earlier “field of expertise,” social security. The most interesting aspect of her current activity is that while now she is warning people of the pitfalls of private pensions funds, at the time of their introduction in 1997 she was an enthusiastic supporter of the idea. But I guess for some people this kind of double-faced behavior doesn’t cause any heart palpitations.

As for her qualifications, I have my doubts. It seems that while she was an MP and gave birth to two children, she also managed to get a law degree from the Catholic University. No mean feat. She learned another language as well. In 1994 she claimed have a mid-level exam in English and by now she also knows German. The only thing missing from her resume is a stint at Goldman Sachs.

If Viktor Orbán is serious about compensating people for their losses because of his decision to withhold payments to the private pension funds, the task before Gabriella Selmeczi will be enormous. As far as I can ascertain, she has no background in finance whatsoever.

Her own website shows a person of rather simple interests who is focused on women’s and self-help issues: health, self-improvement, “inner equilibrium,” “reasons for greater appetite,” “the emotions of babies,” “better use of leisure time than television,” and other such fascinating subjects.

One wonders whether it is really true that Fidesz, in spite of the party’s immense success at the polls, lacks competent experts. Of course, in their eagerness to get rid of everybody who ever held a responsible job in the last few years they fired first-rate people and filled the positions with political appointees or simply with friends. A good example is the newly appointed head of the environmental inspectorate in charge of the area where the red sludge covered acres and acres of land and three villages. The new chief inspector is a former secretary of Zoltán Illés who himself is ill suited for the job. Illés fired practically all the competent staff, from the heads of the national parks to the civil servants dealing with environmental issues.

György Matolcsy’s own expertise is questionable, and now he fired the man who knew everything there was to know about putting together a budget. For the time being, his job has not even been filled. But even the most important decision makers seem to be ignorant of European Union rules. Levying taxes on telecom companies, for example, would seem to show that Matolcsy and Orbán have no idea about the Union’s ban on extra taxation of such firms. (The more callous and yet more intellectually generous suggestion would be that they are simply throwing as many revenue raising schemes as they can against the wall and seeing what sticks–or what the EU is willing to swallow in the interest of Hungarian economic stability.)

So far, their efforts seem to be motivated almost exclusively by political considerations.  Panem et circenses.


  1. Gabor, that interview was a catastrophic sequence of shifty, evasive answers, wasn’t it? I particularly liked the assertion that “transferring” (ie. making a gift of) your accumulated pension assets to the government was tantamount to “placing them in safety”. We all like to entrust our assets to a government that is visibly on the brink of bankruptcy in exchange for a vague promise of some kind of state pension at some point in the future, don’t we? The lie that no west European country has a similar system will come as news to the millions of British, German or Dutch people with mixed private and public pensions.
    Unlike you, though, I don’t think he was convinced of anything. He looked nervous and twitchy. If anything, he appeared to pleading with people to hand over their pension savings. The unspoken question throughout was “what happens if they don’t?” I can’t quite feel sorry for him. He brought it on himself.
    In that context, this piece of nonsense from Hirszerzo is interesting:
    It’s a sequence of leaks from “well-placed Fidesz sources” about the government’s policy-making process.
    From it, we learn basically that OV has a plan, that everything that looks like a policy cobbled together at the last minute by a handful of pot-addled monkeys was in fact carefully thought out – in secret – by OV and his close advisers, and that our impression that policy is being made hastily and on the hoof is just a result of OV’s supreme tactical genius, because he’s timing it all carefully for maximum personal political benefit. The quotes Hirszerzo have given do indeed appear designed to make OV look less hapless gambler and more Lee Kuan Yew. [Thanks, Matt, but don’t you think Mahathir Muhammad slightly further up the peninsular is a more exact parallel? ;)]
    Now, Hirszerzo is, to put it mildly, not on good terms with the government. Well-placed Fidesz sources don’t choose that website to leak to if they haven’t been instructed to do so. What that article, together with the RTL Klub interview Gabor mentioned, suggests to me is that OV has been stung – and not by the catastrophe that his government is turning into, but by the ridicule.
    What he really appears to hate is the suggestion that he’s neither statesman, nor malign genius, but just a self-regarding clown. Now that this is common currency, we’re seeing stories placed in enemy papers telling of his Machiavellian brilliance to counterbalance this growing impression.

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  2. Typepad is sick again. I can write this note but I’m unable to post my blog of today. Let’s hope that I will be more successful tomorrow morning.
    I didn’t see yet Orbán’s interview but I bet that he will be very successful at enticing people to abandon the private funds and move over to the “more secure” state system.
    Meanwhile, I just read a piece of interesting news. Gergely Gulyás, member of the committee entrusted with the writing of a new constitution, announced that they will take out the paragraph that includes permanent residence as a requirement for voting privileges. In my opinion that means that Fidesz will be in power for a very, very long time. Perhaps decades.

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  3. No, I wouldn’t worry about that. The Slovak elections have shown that Budapest tends to misread sentiment in the neighbouring countries. It turned out that Hungarians in Slovakia didn’t want theatrical provocation, and they turned out the Fidesz-aligned MKP.
    I don’t think the situation is much different in Transylvania.
    In my experience, Transylvanians look towards Cluj far more than they look towards Budapest, and there are plenty of Hungarians in both countries who start snarling at the news that OV has turned up to give yet another speech. It’s self-interest, partly: if you’re an ambitious 20-year-old, Cluj and Bucharest look a lot more exciting right now than Budapest.
    Another commenter on this group has mentioned surveys that suggest Romanian/Slovak-Hungarian identities are far more complex than the standard picture you get in Budapest.
    My guess is that very few would vote in a Hungarian election, and that those votes would be pretty evenly divided between the parties on offer.
    Of course, if your experience of Transylvania involves going to Tusnadfurdo and addressing your fawning admirers, you wouldn’t know this.

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  4. Alias3T, we agree the Hirszerző piece you mentioned is obviously from the spin-doctors workshop, it was my very first thought after reading. However, my instinct tells even if you can see a lot of signs of desperations in the Fidesz (at least at government level) I think Orbán is driven by his firm belief of bringign the (only possible) redemption to his suffering people. Anyway, if someone would organize a demonstration against the daylight robbery commited by the government I will attend.

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  5. Eva, I’m not sure regarding people’s willingness to hand over accumulated savings in the private pensions system. I’m also not convinced of the usefulness of the fearmongering they are doing. (A’ propos, isn’t it possible tu sue Orbán and his government as they are deliberately discrediting companies who rely on the trust of the public?) But anyway, the managers of the pension funds has to wake up it is not just the usual Eastern European trick, it is full-scale war and they won’t get away with tolerable losses. It is a life or death struggle for them.

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  6. Pete: “.. the Perspective Institute seems to lack a disinterested perspective when it comes to Fidesz.”
    Over the past years, the Perspective Institute was the think tank of Fidesz caucus leader Tibor Navracsics, so it had never ever anything to do with independent thinking. Some of their analysts have now, of course, gotten government jobs. I have dealt with them a lot and always found that – although they were always and definitely towing the party line – they were reasonable people one could have a real discussion with, even though we hardly ever agreed. That, among others, led me to believe that maybe something reasonable could come out of a Fidesz government.
    But it seems I was wrong. The reasonable people are probably still there, but they don’t have much say in shaping the policies of Fidesz, which is done by OV and his inner circle only. There seems to be a growing unease about this even among Fidesz supporters and some people are complaining that the oligarchs are too much in the front row (literally when Orbán speeches)and that the mighty one is loosing touch with reality. But surely they know at which side their bread is buttered, so don’t count on serious rifts for a long time to come.

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  7. Hank you mention the “Perspective Institute”. From my distant view of Budapest (and even the local Polagemeister’s outfit) it seems that the administration has become one huge ‘Ant Heap’ where all think like and obey the centre (the Queen). The problem is that the ‘Queen’ has no idea as to what to do. It is very good at political manipulation but does not realise (and perhaps it does not care) that its total debts are somewhere about 110% of its GDP. It is trying to rob people of their private (funded) pensions and put their pennies into the Government’s unfunded scheme. To my knowledge most government pension schemes are infact ‘Ponzi Schemes’ where the contributors of today are paying the pensions of todays pensioners and not buying ‘investments’ which will pay their pensions in the future. If you or I tried to do that we would be in gaol for quite a long time.
    Can you picture O.V. as a Queen? I wonder is he would need to wear a set of ‘stays’ etc under his Dior gown? Are my seams straight Semjen? And what about those heels?

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  8. Alias3T: “No, I wouldn’t worry about that. The Slovak elections have shown that Budapest tends to misread sentiment in the neighbouring countries.”
    I’m not worried about Slovakia. It is Romania I’m worried about.

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  9. “that everything that looks like a policy cobbled together at the last minute by a handful of pot-addled monkeys”
    Excellent! If you aren’t English, you should be!
    Odin, can you PLEASE use paragraphs more AND put blank lines between your paras? I want to read your posts, but I feel exhausted just looking at them!

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  10. Gabor: What is going on with Hirszerzo?
    It is spin, and pretty incompetent spin at that. Appropriately parsed, that carefully drip-fed story says: “Eight years ago, Orban was unable to get his Swedish pension model introduced openly, so now the Genius of the Carpathians is lying about it to sneak it in by the back door.” That’s not a good message.
    I guess we have to see it in terms of Fidesz’s concerns about its support base: they’re trying to shore up the support they’re losing among the well-paid, young financial professionals who have just dumped the party.
    There’s a problem with the Swedish model, actually. For it to work, people have to have confidence that Hungarian governments aren’t the kind to use deceit and manipulation to introduce controversial and unpopular reforms to the pension system at the drop of a hat. If your savings account is virtual, you need to trust that the government isn’t suddenly going to abolish or revalue it. Since last week, it’s impossible to have that kind of trust in the Hungarian pension system.

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  11. It’s quite Straussian actually.
    “Orban is lying to the uneducated, but you, clever Fidesz-voting bankers, know what’s really going on, and you’ll nod in approval.”
    The problem is, once you need to tell people that you’re playing a Straussian game via a widely-read news portal, the game’s up.

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  12. Alias3T, actually it is not really novelty, Hírszerző and Index was frequently used by spin-doctors the websites happily joining this game. Socialist politicians played it in a very rude style, Imre Szekeres’ sign was immediately detectable. But in some cases I felt these guys are not really noticing what’s going on and what they are used for. For example Péter Heim was an idol of their “expert” journalists even if he was speaking of nonsenses like the Danube is flowing from the Balck See to the Black Forest. Ok, I have my prejudices, and it is clear journalists in many cases have to accept this role in order to get information, but I’m not really surprised. Especially as recently Origo seemed to be the main channel of insider informations so they can be a bit desperate to catch up with them.

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  13. Paul I am very sorry about the missing paragraphs and blank lines etc. It is caused by the interaction between the clip board of Windows Word 2007 and Typepad. I normally write in MS Word so as to use the spell checker. I am afraid that I have a dyslexic key broad and tend to skip to re-formatting the result.
    I am sorry for this but reason is that when I finish my post. I have to go and cook food for my step family.
    I am sick and tired of hearing the shouts of ‘Slabber de Gullion’! Then having to spend my afternoons to deal with ‘Keel Hauling of the cook’.
    It is not so much the ‘Keel Hauling’ that annoys me it as the drying, coiling and stowing the rope used and prising the knives out of the table top afterwards. Which I find very tiresome.
    Unfortunately Hungarians have not yet realised that a good ‘Keel Hauling’ is supposed to improve the cuisine and not just to half drowning the cook.

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  14. @ Paul 4.23 pm
    I dunno. I guess my impression of Viktor Orban is that he is more of a campaigner and less of a manager. What I’ve read about Lee is that he was much more of a manager/ technocrat. He implemented policies first and it took him awhile to build the message of authoritarian/Confucian capitalism.
    It seems to me that Fidesz and OV always start with the message and then cut the policies to fit later. Thats not necessarily bad, or unique to Fidesz. But I think it runs the risk of confusion and dissipating the actual efforts at implementing policy.
    For example, the bank tax did not seem particularly well thought out. Its not clear they have gone beyond robbing Peter to pay Paul. But it fits nicely with the right-populist message. The bank tax could still work, provided OV and Fidesz actually implement some real reforms in the income tax and in the structure of government finances. They might do this, but I’m not holding my breath. I think Fidesz just kind of makes stuff up as they go along.

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  15. Cheers Matt. I must Google Lee and find out more about him.
    From what little I know, it seems that the pavements in Singapore are in much better condition than the one outside my flat – which has been in that state for the whole of the last two parliaments! Viktor, I am watching your pavement mending promises…
    As for Fidesz starting with the message, I think that they start and finish with the message. It’s odd that after all these years of so desperately engineering their rise to power, they don’t seem to know what to do now they’ve got it.
    Reminds me of George W Bush’s ‘strategy’ on Iraq.

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