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.”
The 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.