The Orbán government and corruption

A few days ago the Financial Times came out with an article with the shocking headline “Hungary hit by hotbed of corruption.” The article was inspired by a Transparency International study called “National Integrity Study 2011.” Transparency International, as its name indicates, is pretty much a worldwide organization with chapters in 90 countries. It is an NGO registered in Germany.

The “National Integrity Study” stated that the Hungarian state become the captive of private interest groups. The study claims that “due to the weakening of checks and balances and the inability of the control institutions to limit the power of the government private interests prevail over public interests.” This sounds alarming, but I don’t think that this description by Transparency International is accurate.

No, the situation is much worse. The government itself is part and parcel of a network of oligarchs. They work hand in hand. Transparency International’s summary of their own study entitled “Corruption Risks in Hungary 2011: National Integrity Study” alludes to the connection between government and business interests when it talks about “corruption risks arising from the symbiotic relationship between the political and the business elite.”

CorruptionThe report surveyed the workings of the judiciary, legislature, executive, law enforcement, political parties, and the business sector. Fidesz, the party that verbally fought corruption and always found culprits in the camp of its political opposition, turned out to be characterized by unbridled corruption itself. Fidesz promised clean government and instead became the promoter of the worst kind of corruption.

One of the reasons Fidesz won with such a landslide is that it managed to blacken the name of MSZP politicians. Everywhere one looked there was another MSZP politician charged with pocketing millions if not billions. Most of these cases involved a “breach of fiduciary responsibility.” In plain English, the charge normally was that a piece of property owned by the local or the central government was sold below its fair price and thus the public suffered a financial loss.

Those who expected a corruption-free Hungary from Fidesz have a short memory. Government corruption during the first Orbán government was worse than at any other time in Hungary’s recent history. The Medgyessy government promised a thorough investigation, but all attempts at prosecuting the cases came to naught as a result of Viktor Orbán’s insurance policy: Péter Polt, the party faithful made chief prosecutor of the land. Polt never found any case even worth investigating.

If the first Orbán government was corruption ridden, it was nothing in comparison to the current one where measures easily enacted by a two-thirds parliamentary majority “substantially weakened” the country’s ability to fight corruption. In fact, as I already noted, the report is not hard hitting enough since the corruption is actually led by the government hand in hand with business circles that benefit greatly from government orders.

By the way, there is a new player on the scene. It is a company called Közgép that according to estimates has received 200 billion forints worth of contracts from the government in the last year and a half. Although ferreting out the owners of the company is not exactly easy since those behind Közgép are not willing to divulge the details, investigative newspapermen came to the conclusion that one of the owners is Lajos Simicska, the “financial genius” of Fidesz.

A few days before the report of Transparency International came out HVG had an interview with József Debreczeni. A while back Debreczeni wrote a book called Slough of Politics which I discussed shortly after its appearance. In the interview Debreczeni claims that Fidesz originally learned the ways of political corruption from MSZP. MSZP at the time of the regime change managed to salvage most of its vast wealth and hide it in various private companies. It was at that time that MSZP came up with the new position of treasurer (pénztárnok). Because the treasurer handled the party’s money his power within the party became extraordinary. In fact, the treasurer’s power was greater than that of the party chairman. Ferenc Gyurcsány tried to break the stranglehold of the party treasurer without any success. The only result was that he lost the support of the strongmen of MSZP.

Fidesz decided to imitate MSZP practices. The sole difference was that while in MSZP there was tension between the chairman and the treasurer, in Fidesz all power, political and financial, was concentrated in the hands of Viktor Orbán. The “treasurer,” Lajos Simicska, is practically the alter ego of Viktor Orbán. Simicska only imitated MSZP when huge sums of money the party received from the sale of a very valuable building they got free from the Antall government to use as party headquarters were “invested” in assorted companies that were eventually “sold” to fictitious buyers, leaving billions of forints of unpaid taxes behind.

Although while in power between 1998 and 2002 both the Orbán family and Fidesz became considerably richer than before, Viktor Orbán in the summer of 2002 was still complaining to Debreczeni that the party didn’t have strong enough financial backing from rich supporters. Between 2002 and 2010 that problem was solved. Fidesz supporters financed the party’s media empire and helped the party in many other ways as well. In turn, they were assured that once the party wins the elections and occupies all the important positions in the ministries their unwavering support over the last eight years will be amply rewarded.

And the time has arrived. The European Union subsidies are handled by the Ministry of National Development where apparently the former minister, Tamás Fellegi, as well as the new minister, Mrs. Horváth, have close ties to Lajos Simicska and Zsolt Nyerges, a businessman from Szolnok who is allegedly another principal of Közgép. Well, 200 billion forints worth of EU subsidies going to a company whose part owner is Fidesz’s “treasurer” is rather worrisome. Or at least if I were in charge of giving subsidies to Hungary I would be rather worried.

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Petofi
Guest

Two questions:
One, which, if any, of the Hungarian papers or magazines will carry this story?
Two, will Kalman Olga pursue the story by questioning? She didn’t seem to have the stomach to pursue the MOL corruption story…

anecdote
Guest

It’s early morning…my blood’s starting to boil already today after reading this article about corruption. Not that I did not know it …..after 25+ years here I’ve seen all this and been near to it. (On one occasion, totally unwittingly I swear, I really found myself involved in a small-scale … on paper legal..but in reality dishonest theft of money that should have benefited the people.)
There was once an extremely unpleasant, evil man who ranted on about ‘The November Criminals’…I was quite surprised to read recently how many of the subjects of his ire were, sooner or later, assassinated.
Well, different but in some ways ‘parallel’, I’ve been ranting on myself about the ‘Roundtable Criminals’ for a long time. Forget all the blah-blah and ‘duma’ about ‘Negotiated Revolutions’ and ‘bloodless transitions’.
If the mass of the Hungarian people thought they were being cruelly swindled in the past, they certainly should find out about how they have been looked down upon as complete mugs (‘polimadárok’) over the last 20+ years.
(I really apologise to other Spectra if the above seems like nervously spewed-out waffle…but if I don’t cool down I’ll start smashing the furnitue up!)

anecdote
Guest

OT: Comparative Politics — Please read the short article in today’s Guardian newspaper: ‘Eric Joyce resigns from Labour Party’.

Penny Sue Oswalt
Guest

@ anecdote : “Chill out!”We are all upset, but when you hit bottom all you can do is look up. If you think Hungary is in a “pit”at the bottom of the hole. Everyone can just look up and climb out. Not leave but come together as whole. Go jogging or exercise somehow!

Penny Sue Oswalt
Guest

To whom it concerns, plugging the Jobbik Version of the Constituition:
Article F, G, H are missing from the website download. These articles pertain to Hungarian Citizens Rights and priveleges. The Jobbik Version has not been authenticated. Please obtain a copy of the January 2012 Authenticated publication. By current law in Hungary all must abide by it. The Jobbik Version is misleading and manipulative!
Looking out for Hungarians best interests!
Penny Sue

Odin's Lost Eye
Guest

I read somewhere that even charitable gifts ‘disappeared’. If you recall the ‘Red Sludge’ incident at Kolontár. I know that both goods and money were collected for the folks who suffered. I seem to remember that when the folk were given new houses they had to sign away their rights to the charitable ‘goodies’. These goodies then just vanished.
It is also interesting to watch those so called investigations undertaken by Fidesz against Gy and company and how nothing was found.
With a prosecutor like Péter Polt on your side who needs to worry about getting found out. I wonder how much he charges is it a flat rate or a percentage of the gross.
I would love to know where they are putting it all (Zurich or Liechtenstein)

penny sue oswalt
Guest

He is most likely to line his own Pockets!

Living with it in Hungary
Guest
Living with it in Hungary

Odin,
Thailand, Cyprus, and just about every where else. Hungary’s position in 2011 is 54th which iirc means it’s sunk a wee bit.

Lutra lutra
Guest

Another element in Hungary’s Putinisation. With no realistic chance of any party ousting FIDESZ from government for 10 years minimum, the cosy relationships can be institutionalised through service contracts and framework agreements that can’t be challenged through the courts (and wouldn’t be overturned by inexperienced FIDESZ-appointed judges in any case). Outspoken entrepreneurs that refuse to play the game can be attacked in the (Orbán loyalist) press and investigated for “irregularities” until they’re either in jail or have seen their companies collapse around them.
Of course FIDESZ and their voodoo “trickle-down” economists believe that enough crumbs will fall from the table to keep the plebs happy and, if they aren’t, who cares? You can’t go on demonstrations or hunger marches when you have pigs and chickens to feed and care for.

riviera1
Guest

Why is this corruption a surprise? If English speaking Hungarians–presumably a more informed bunch than the Hungarian norm–is surprised by this level of corruption than what can we expect of Hungarians?
The real betrayers of Hungary is the political class and the police and the judiciary that enable them.

Anon (for this one comment)
Guest
Anon (for this one comment)

Anecdotal information: I have friends who work for two local government/önkormányzat offices and the three of them say similar things.
Corruption existed under the MSzP, but like their governance, it was weary, unimaginative and jaded. However, with new Fidesz majorities, and a Fidesz national government, they say there have been real changes. Just like other aspects of Fidesz administration, the corruption is now disciplined, hyperactive, and vengeful. New Fidesz people were hired to do all the tenders, and it is literally a tender factory for local contracts to go to Fidesz-linked companies. Actually one of my “sources” is a Fidesz person who was hired to write these tenders. He says its actually kind of boring because he doesn’t get any cut, he just gets the names and numbers to plug in, and then he types them out. He desperately needs the job.

riviera1
Guest

@ anecdote, “comparative politics”
How far is the Hungarian political behavior from the British norm!?
But it’s precisely this fact that has me so upset. I grew up in Canada and the accepted norms of behavior are so far above Hungarian standards! The case of the LMP guy namesd Karacsony comes to mind, when he back-tracked on an agreement with the MSZP person on the run-off election in the 2nd district. If anyone had done that in Canada, his career would’ve been over. Here, Kalman Olga invites him on her program me for his opinions. What absolute rubbish.
No shame; no dignity.

Paul Agos
Guest

As far as corruption is concerned, why should Hungary be dissimilar from other “marginal” European countries, e.g. Greece, Italy, Bulgaria, Romania, etc.?

An
Guest

@Paul Agos: “As far as corruption is concerned, why should Hungary be dissimilar from other “marginal” European countries, e.g. Greece, Italy, Bulgaria, Romania, etc.?”
In Hungary there has always been corruption, but it didn’t reach the levels as in those countries. Now, corruption is getting worse and institutionalized… it is the trend that is worrying.

GW
Guest

Paul Agos,
Has the best defense of the government against its corrupt practices been lowered to the standard that “it’s the same elsewhere”? Shouldn’t Hungarians aspire to being better than other countries rather than being comfortable with mediocrity or worse?
Transparency is a value in government not for the possibilities it offers an opposition to criticize but simply because by putting more eyes on the policy-making and operations of government allows for oversight and corrections, making government decisions better informed, and operations more appropriate and efficient. Any government which has the hubris to insist that less transparency is required is inviting corruption in the forms of uniformed decision making, incompetence, fraud, waste, theft and other abuse. Hungary can and should aspire to more.

GDF
Guest

Paul Agos:”As far as corruption is concerned, why should Hungary be dissimilar from other “marginal” European countries, e.g. Greece, Italy, Bulgaria, Romania, etc.?”
Hungary always proudly declared that it belonged to Europe and not to the the Balkans. I guess it got balkanized now. And no foreign power can be blamed for this 100 years or 1000 years from now.

GDF
Guest

OT, two headlines today:
The Associated Press:
Hungary’s Inflation Accelerates to EU’s Fastest, Pressuring Central Bank
The Wall Street Journal:
EU Approves Hungary Sanctions

Guest

OT: A friend who works for Gannett News Services just sent me this:
http://www.usatoday.com/money/economy/story/2012-03-13/hungary-financial-crisis-eu/53511592/1
EU funds 2013 frozen, to be reassessed in June.

Eva S. Balogh
Guest

The decision is a victory for Viktor Orbán.

riviera1
Guest

A victory?
Perhaps, but I think they’re just giving him a bit of slack.
No point in fueling the March 15th celebrations with fire-brand declarations by Napoli-Orban. He might be constrained now.
There will be plenty of defeats down the road. Let’s see what the judicial decisions will be.

Kingfisher
Guest

Given that it is next year’s money that is being frozen, it doesn’t seem unreasonable that Hungary is being given a deadline to do something to remedy the situation.

Guest

London Calling!
Yes corruption in Hungary does seem to be a worry – mainly it seems because of lack of transparency.
In England all expenditure above £500 at council level and £25,000 at government level has to be published on a website. Although it doesn’t necessarily indicate contractor details – it keeps democracy on its toes.
Have a look: http://data.gov.uk/
The USA has something similar.
Jimmy Wales of Wikipedia is helping us in England present the information in a more structured and understandable way.
In preparation for Hungary’s next election – and something the opposition could build – you should set one up unofficially. A sort of Hungary spending wiki.
If a public spirited person set the website up – you would receive lots of anonymous information which could be included from whistleblowers and it could include any published information too.
As the information becomes more reliable it could become official by being adopted by the next government.
Don’t get depressed – get even!
Transparency is all!
Regards
Charlie

Penny Sue Oswalt
Guest

The monetary freeze is just a normal process. They did this to Greece, it was a year and half process. SEVERE austerity measure steps had to be taken, whittling away at the deficit to meet the target deficit zone. Expect more austerity measures before they unfreeze the money.

Member

Let me advertise again the atlatszo.hu (atlatszo=transparent), a non-profit organization, who’s mission is to fight for transparency in Hungary. They also have a service called “MagyarLeaks” if you have a whistle to blow.
http://www.atlatszo.hu
Click on the “ENGLISH” link on the top. Many of the articles are translated. Lot’s of good examples – all relevant to this post.
You can also donate by PayPal!

enuff
Guest

the following link is a comic strip illustrating the state of freedom of press (in Hungarian).. I had a good laugh!
comment image

Member

1.
“Hey, Bunny I know a mighty good joke!”
“Let’s hear it! Let’s hear it!”
2.
“Why is our economy in ruins?”
“Why?”
3.
(The header says: “Government Communication Center”)
“Because it isn’t in ruins. It’s flying high!”
“Haha! Awesome! Then I have calmed down then!”

Paul
Guest

“Hungary always proudly declared that it belonged to Europe and not to the the Balkans. I guess it got balkanized now.”
Very astute point.
Charlie – I think we all know you’re in London by now!

Guest

London Calling!
Hey Mutt! Damn good idea then!
Your last reference was very low key so my post has given it a new prominence.
I didn’t look it up when you posted it because I can’t speak Hungarian – If I can’t make myself understood, I just shout a bit louder!
Regards
Charlie

Paul
Guest

Completely OT, but it amused me:
“Hungary deputy PM Semjén appalled at British gov’t position on Christian cross”
You what?? I had absoutely NO idea what this was about! Turns out it’s not really about anything. Your country’s economy is teetering on the edge, a paranoid, vengeful loony is your PM, but worry about that? NO. Let’s worry about another country, 1,000 miles away, having a little domestic spat about so-called Christians wearing crosses at work.
http://www.politics.hu/20120313/hungary-deputy-pm-semjen-appalled-at-british-govt-position-on-christian-cross/#comment-91312
Remind me again – who elected the KDNP?
They are apparently the only people OV listens to, and yet NO ONE voted for them.
Fidesz-Jobbik ‘democracy’, eh? Don’tcha just love it!

Member

“Charlie – I think we all know you’re in London by now!”
I second that. No need for you to continue the Lord Haw-Haw pastiche…

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