Fidesz and Lajos Simicska’s Közgép

Hungarian political life nowadays is full of the suspicion that with the victory of the second Orbán government the “oligarchs” have arrived in Hungary. Until recently we used the term in connection with the fabulously rich businessmen of Russia whose wealth mostly or entirely came from government contracts and whose fortunes were closely tied to the regime of Vladimir Putin. But lately the word “oligarch” appears even in parliamentary debates. For example, Gergely Karácsony accused Viktor Orbán of relying on the favors of the oligarchs who in return have considerable influence on the policies of the government.

Viktor Orbán naturally rejected any such comparison of his own coterie of wealthy businessmen to the Russian oligarchs. According to him, in Hungary there are only wealthy businessmen whom the country badly needs.

It has been patently obvious in the last two years that the Orbán government has greatly favored Hungarian capitalists, often at the expense of multi-national companies. Even if for the consumer the end result was higher prices. But it seems that certain Hungarian companies are more favored than others. The best example is Közgép, a company that I already wrote about a month ago in a post entitled “Where do European Union subsidies land, the role of Lajos Simicska.” I assume that by now no observant reader will be surprised to learn that Lajos Simicska is a very close, practically childhood friend of Viktor Orbán. They attended the same high school and both ended up in the same law school and in the same dormitory.

Viktor Orbán was apparently very impressed with Simicska’s business sense. He called him a financial genius. After 1990 it was Simicska who handled Fidesz’s finances. It was he who decided to invest the money the party accumulated as a result of selling their share of a very valuable piece of property donated by the Antall government for the use of party headquarters. Some of his investments were profitable, and the ones that weren’t were “sold” to bogus buyers who couldn’t be traced. Thus, the debts and taxes these firms owed couldn’t be collected. He is a financial genius all right. Some might call a man like Simicska a crook.

Little is known about the current relationship between Simicska and Fidesz. Simicska doesn’t like the public and especially hates the media. He is camera shy. Newspapers cannot get a recent photo of him. But in the background he is busy, and investigative journalists are diligently trying to collect information about his activities. According to Index, Közgép is actually a conglomerate of nineteen different companies. Magyar Narancs managed to collect a list of contracts the Orbán government signed with Simicska’s firm and came to the conclusion that these jobs exceeded 200 billion forints or 570 million euros. And since then there was another successful bid for 40 billion.

According to János Veres, minister of finance in the Gyurcsány government, such domination by one firm didn’t exist during his tenure. Even if one adds up the contracts of the top eight companies receiving government contracts, altogether they received less than Közgép alone. Apparently, unless an entrepreneur is ready to be subcontractor for Közgép, he can forget about ever receiving a penny’s worth of government contracts. Veres knows people who willingly sell 51% of their business to Közgép or someone close to the Orbán government because otherwise it will go bankrupt.

Ferenc Gyurcsány’s Demokratikus Koalíció decided to act and turned to the European Anti-Fraud Office (OLAF) to call attention to what’s going on in Hungary. In his letter to the director of the office Gyurcsány wrote that “Lajos Simicska is the most notorious and most influential person in Fidesz and the business establishment built around it.”

Gyurcsány also noted that several former high-level employees of Közgép have moved over to government positions from which the firm’s fortunes can be influenced. One man became the head of the Agency of National Development (Nemzeti Fejlesztési Ügynökség) and another is now undersecretary in charge of transport in the Ministry of National Development. It is this ministry, by the way, that is in charge of the distribution of European Union subsidies. László Varju, the party director of DK, in his press conference talked about the need to investigate the possible “role of [Közgép] in the financing of the government party.”

Less than a month after this press conference HVG learned that the European Anti-Fraud Office was already investigating Közgép. Whether their arrival in Hungary had anything to do with Gyurcsány’s letter cannot be ascertained. It is possible that the officials of OLAF found some of Közgép’s projects suspicious on their own. There are a lot of employees at OLAF who keep their eyes on current projects in the European Union. Five hundred all told.

And yet Viktor Orbán doesn’t seem to be a bit worried. It was only three days ago that Simicska’s Közgép received another government job to the tune of 39 billion forints. He doesn’t seem to be worried either about the spreading conviction that a good portion of Közgép’s fabulous profits might actually go to Fidesz. Yesterday he announced to the party’s top leadership that he was thinking about taking away the money each party, depending on its size, receives from the government. After all, the Hungarian economy is in bad straits and everybody must sacrifice. The parties too. Therefore, one ought to consider depriving the parties of the sums they are entitled to by law for the years 2013 and 2014.

If one didn’t have to spend money on parties…
Then one wouldn’t need to on elections either!

This is practically an admission that Fidesz doesn’t need government assistance. It has plenty of money from other sources while those parties not having Simicskas behind them would be financially strapped and unable to carry on with their activities. As a cartoon in today’s Népszava pointed out, taking away the subsidies that even as it stands are not enough for an election campaign would deprive the other parties of having any chance of success whatsoever at the next elections. The caption doesn’t exaggerate when it indicates that this would be the end of free elections in Hungary.

By now opposition politicians openly accuse of Közgép of being a front for Fidesz. Gábor Scheiring (LMP) said that “the essence of Lajos Simicska’s firm … is financing Fidesz from its profits.” The money, Scheiring suspects, doesn’t go directly to the party but to television stations, newspapers, and institutes close to the party. I agree with Scheiring but I think money goes straight to Fidesz as well; it just takes a little detour on its way there.

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Paul
Guest

Well, it certainly looks better than Typepad – hopefully it works better too.

Thanks for your efforts, Éva, they are appreciated.

Guest

For me, the type size was better on Typepad–but what I really like here is the link to comments at the very top.( Easy to fix font size if I wish.) Thanks!

tigerente
Guest

I find WordPress wonderful as a blogging platform. Thanks for everything, Eva.

Guest

Wow!

This looks much nicer than the old format. I think it’s time again to say thank you Eva for all that info you have given us and the chance to discuss the (sometimes really sad) developments in Hungary.

May all of you live long and prosper!

PS and totally OT:

My Hungarian wife is also called Eva and she’s also a wonderful woman/partner …

I still can’t understand how and why so many loonies have entered Hungarian politics – the latest ideas of Fidesz make me think they must be really crazy. The Hungarian people that I meet from day to day are usually very nice and totally different – I don’t get it.

My only hope are the young people – I can’t believe however that so many of them are believed to adhere to the Jobbik mindset – I don’t know anyone like that.

pusztaranger
Guest

Dear Eva, welcome on wordpress.
“figure out the reason why WordPress asked me to “approve” your messages. (…) I have no idea how to fix it.”
It took me a while as well, but it’s just a setting option/check box, see here:
http://en.support.wordpress.com/settings/discussion-settings/#before-a-comment-appears

Paul
Guest

That seems sensible to me, Éva. As you say, it might make controlling the trolls a bit easier.

Paul
Guest

Ah ha! So I CAN be ‘Paul’ and still use my avatar!

I hope everyone recognises who it is, by the way.

GDF
Guest

Paul:”I hope everyone recognises who it is [your avatar], by the way.”

I have no clue…

An
Guest

GDF :
Paul:”I hope everyone recognises who it is [your avatar], by the way.”
I have no clue…

It’s Süsü, the dragon!

http://www.dailymotion.com/video/xjxq9p_susu-the-little-hungarian-dragon_shortfilms

Ron
Guest

Please find a link from a blog (in Hungarian) containing an info-graph of Kozgep situation from a loss situation to a major profit situation.

comment image

I found this via the following website: http://www.infoporn.blog.hu It has some interesting facts about the healthcare in Hungary as well.

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