The tobacco concessions and their aftermath: Further restrictions on transparency

The tobacco concessions scandal is growing. By now there is even a Google Earth map of the country with a guide to all those places where Fidesz politicians, their close relatives, or known sympathizers received permission to open tobacconist shops. That there were political grounds for these awards is not speculation. János Lázár and Antal Rogán explained to the local Fidesz politicians on what basis the concessions should be awarded. Apparently, anyone with either MSZP or Jobbik ties was out of luck.

When the government first announced the so-called competition for concessions, applicants had to draw up their business plans assuming a 4-5% profit margin. Not exactly a potential goldmine. Yet there were a great number of people who seemed to be interested in this business opportunity. Among them were several who applied for concessions for several stores. The suspicion is that the insiders most likely knew that the government would do something to sweeten the deal. And indeed, after the winners were announced an amendment was tacked on to the bill that suggests a profit margin of at least 10%. A day later Viktor Orbán talked about the desirability of a 12% profit margin. If the amendment is approved, the price of cigarettes will go up.

In one of my earlier posts I mentioned that between the two world wars these concessions were normally given to war widows. This was also the case after World War II. Naturally, even then one had to have “connections” in higher places. Endre Aczél, one of the best journalists of the older generation, recalls that his mother was lucky to be granted one of these concessions in 1948 but only because she was the childhood friend of Júlia Földi, better known as Mrs. László Rajk. As we know, Rajk, after being accused of all sorts of treasonous activities, was executed on October 15, 1949. In 1950 someone discovered that a Rajk-protege still had a tobacconist shop, and she was summarily booted out. But at least, as Aczél says in the article, his mother was a war widow. Fidesz rulers don’t even worry about the stated aims of the legislation. They feel they can do anything. And they are right. They can.

However, now that everybody is up in arms and the media will undoubtedly demand information on the details of the concessions, the government decided in a great hurry to amend a law on data privacy. Here is a quick report from Budapest:

The amendment prevents the FOA (Freedom of Information Act Provisions on Data Privacy) from applying to material that is reviewed by the state audit office and the government accountability office.  The reasoning behind the law is that government agencies are already overburdened and fulfilling data requests would be too strenuous. The amendment also states that if another law already regulates the right to information and to accessing, reviewing or copying the documents then the data privacy law does not apply. [The law seems to] exempt some requests from judicial review by the courts.  Furthermore, the law requests that entities that use public money to provide information to the public. However, the amendment now requires that people turn to the body with legal oversight over the entity with complaints if a data request is rejected. The problem here is that in some cases the legal oversight is practiced by courts specializing in business litigation, which are not equipped to judge matters pertaining to FOA.

www.freedominfo.org

www.freedominfo.org

For one reason or another this tobacco concession business must be very important to Fidesz and Viktor Orbán himself. But I wonder whether the party and the government might be paying too high a political price for material gain. The number of smokers in Hungary is among the highest in Europe. The statistics I checked mentioned 38% in the population as a whole. That is being translated by others as close to 50% of the adult population. The sharply reduced opportunities to buy cigarettes will inconvenience this large group of people who might not care much about democracy and the constitution but will be mighty upset when in the middle of the night they will not be able to buy a pack of cigarettes at the next gas station. And what about those 1,400 small hamlets where most likely there will be no permanent tobacconist shop? And let’s say that the price of cigarettes also goes up as a result of making the sale of tobacco products a state monopoly. All in all, I suspect that Fidesz will lose voters as a result of this move.

Although the Hungarian government inquired in Brussels about the reaction of the European Union to the concession scheme, I consider it possible that, after seeing that currently functioning tobacconists are being deprived of their livelihood, the lawyers of the Union might not find the concession scheme as innocent as it looked a couple of years ago.

It is also possible that the way Fidesz as a party got involved with awarding the concessions might be unconstitutional. I wouldn’t be at all surprised if Máté Szabó, the ombudsman, turned to the Constitutional Court.

In addition, there are signs of possible cracks in Fidesz’s armor. At least one rebel raised his naive voice about the state of the party. He even went so far as to question the benefits of unlimited power. We will see what happens to the good veterinarian who is worried about his party. In the past he would have been dropped immediately, but today he may be left alone. Perhaps Viktor Orbán will decide that chastising him would only add oil to the fire.

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Solocroat
Guest
Think about the efficiency. Yesterday various organisations (like Transparancy Intl., Hungarian Civil Liberties Union etc.) moved to request the government data about these tenders and in the afternoon the amendment bill was introduced by Fidesz, the next day approved. I am curious what Áder, the Orbán-loyal president, will do, sends the bill back to Parliament (if it is approved again he will be obligated to sign it) or sends it to the – Fidesz-packed – constitutional court. But the events shows how extremely efficient Fidesz is. In a couple of hours they draft a bill as a response to a development and get it approved the next day. Meanwhile MSZP or Bajnai could not even figure out how to react to one of the most outrageous scandals of the last I don’t know many years. It is really swindle on a grand scale seen maybe in Liberia or Russia or Azerbaidjan with friends, neighbours, and relatives getting a sure money for 20 years (the length of the consessions), I guess legally these agreement will be watertight (especially as Fidesz-packed courts will uphold them in the name of the rule of law). In any case the opposition is sedated by the… Read more »
An
Guest

@Solocroat: As for efficiency…. it is always easier to push things through an autocratic organizational structure than through democratic structures. Efficiency in itself is not the ultimate measure of success. Don’t get me wrong, I understand the impatience with the opposition’s lack of action and strong voice in the matter. The opposition media (what is left of it), however, is doing a great job of running the story.

petofi
Guest

Heaping illegality upon illegality….Is it still not clear that Orban’s aim is to goad the EU to begin action to boot Hungary out?

If it wouldn’t be so painful it would be funny, and ludicrous, to see Orban continually throw dirt in the face of the EU leaders only to have them turn the other cheek. And mark you, it’s not because the EU is dim, unspirited, or slow to action. They just know Orban’s game and refuse to do him the favor of providing the rallying point for Orban’s move to leave the EU.

Orban knows that regardless of the naiveté of Hungarians, they still would not want to leave the Union. So, to effect his escape, he needs the Union
to boot the country. EU leaders refuse to do it.

If Mesterhazy and Bajnai have any smarts, they will make the next election based on Hungary’s desire to stay, or leave, the EU. For surely, they must emphasize, post-election Orban will move to take the country out, with or without EU’s ‘helping hand’.

trudi
Guest

An: You are right, but the lack of media savvyness is a very nice symptom of deeper issues, I am afraid, i.e. lack of strategy, lack of organsation, lack of leadership, lack of political savvyness (e.g. Bajnai recent meeting with top MSZP people where MSZP sources said that he displayed unbelievebale political incompetence, and these sources did not mean the negotiation aspects, but simply how he communicated with MSZP people, he was unprepared by his aidies, mostly smart-ass burgeois guys, who are anyway to weak for a Fidesz, even perhaps for MSZP politcians).

Fidesz owns its own media and uses it as a tool and uses it effectively (at least to maintain the undisturbed world view of the hard core). The left media is – like the left itself – is without a startegy, is diffuse, half-hearted and lacks common anchoring.

Sure, media should be free and independent, but when you have one side that is organsied so effectively and efficiently, the lack of your own similar instrument can hurt you badly.

trudi
Guest

Petőfi: I respectfully disagree. Please read yesterday’s article about Iceland in New York Times.

The Icelanders, pretty educated and open minded, voted back the government that was the perpetrator of Iceland’s financial crises.

The just ousted (leftist) government which more or less stabilised Iceland lost the political discourse completely: it seemed to be preoccupied with two things only: joining the EU and rewriting the constitution.

Icelanders did not care about these (especially as the EU is not such a big attraction when the EU has a lot of problems). As to the constitution, it is even too abstract for educated and pragmatic Icelanders. They cared about the housing loans, the economy and jobs and wanted a government who can at least radiate that they put the problems of avergae joe first.

Orbán feels is correctly that a politician needs to react to basic human and economic needs in order to win and not to abstract issues which are controversial anyway (like the EU, I guess the people are now 50-50% divided on whetr they like the EU or not or the constitution).

petofi
Guest

Trudi:

Bad comparison. I don’t think the former Icelandic government tried to rape its own institutions and constitution. I don’t believe
the Icelanders did anything to make themselves the laughing-stock of the civilized world.

Orban has done all that.

Curiously, (for me, anyway, since I was raised and educated in Canada) Hungarians believe a humungous amount of nonsense simply because Orban cries that the world does not understand the great Hungarian intellect. This from a barn-sweep!

I don’t know: perhaps the cholesterol of ‘libamaj’ is brain-damaging.

oneill
Guest

Initially I was surprised at the blatancy of this grab but thinking about it a bit more, it does follow a previously set pattern.

The regime are constantly pushing the limits to see what the majority of the electorate will tolerate- the theft of the private pensions being a case in point. When it is clear the majority are apathetic on that topic, then they move onto their target. Very occasionally, they realise they have to beat a temporary retreat- President Pal being the best example (but even then you could argue that they won the battle, an illiterate yes-man moron being replaced by a yes-man who can boast of at least a brain cell).

They have done exactly the same here and having seen the potential furore.. they have rushed in the data-protection legisation. They’ll wait a week or so, test the reaction on the ground, if there is still resentment then they’ll change one or two of the higher profile awards and leave the rest.

Those who of you who read Hungarian may be interested in this; the EU is perhaps more fly in its dealings with Orbanistan than we previously guessed?

http://444.hu/2013/04/30/rengeteg-penzen-vitatkozunk-brusszellel/

petofi
Guest

Oneill:

Anyone who thinks that Orban cares a whit about EU objections has not yet cottoned on to the Felcsutian’s game–he cares only to rub EU noses in Hungary’s ever greater Illegalities, “data-protection” being only the latest of Viktor’s offerings in this realm.

oneill
Guest

“Anyone who thinks that Orban cares a whit about EU objections…”

He and his corrupt crew of fascists do care about the EU cash and that, unfortunately, at the moment is thing preventing him from setting up the fully fledged dictatorship he obviously craves. Well, ok that and the fact that his hand-picked lap-dog bureaucrats are completely lazy and incompetent idiots.

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[…] saanut Fideksen tupakkakauppa-suhmurointi (hyvä englanninkielinen selostus löytyy Eva S. Baloghin blogista). Tupakanmyynti julistettiin valtion monopoliksi ja kiintiöityjä myyntilupia piti halukkaiden […]

petofi
Guest

oneill :
“Anyone who thinks that Orban cares a whit about EU objections…”
He and his corrupt crew of fascists do care about the EU cash and that, unfortunately, at the moment is thing preventing him from setting up the fully fledged dictatorship he obviously craves. Well, ok that and the fact that his hand-picked lap-dog bureaucrats are completely lazy and incompetent idiots.

Orban will continue to take EU cash but it really doesn’t matter to HIM: he’s got the country in his pocket. The EU cash makes a difference to certain projects–underground; bridges, roads etc. But for thieving possibilities, the country has already been made an ‘open store’ for the benefit of Orban and his henchmen.

houswife77
Guest

The tobacco-shop story is a minor one, still permits a glance into the basic aims of the governing forces, is to reinstate the post-I.WW Hungary. How far is path leading? How does this go down with the governement supporters who are too young to know the old world? This might decide the next elections, rather than anything the oppostion does. What are the next steps on this path this year, next year?

Kirsten
Guest

“Orban knows that regardless of the naiveté of Hungarians, they still would not want to leave the Union.”

I am happy to read that “Hungarians” do not want to leave the EU. It would be even better to learn that they know how to square what they do want (sovereignty, national self-sufficiency) with their wish not to leave the EU.

cheshire cat
Guest

Eva,

“there are signs of possible cracks in Fidesz’s armo”

Yes, and this is important. Orban can only keep his power if Fidesz is run by him and everybody does what he tells them without any arguing.
The fact that this vet Fidesznik blew the whistle, is a big step, provided it is not to remain an isolated case.
It was interesting to read the interview with him, in which he explains why he decided to speak up and how he sees the party. Very good insight into the minds of the party members.
I have always been of the opinion that there are some very “good faces” (jo arc) in Fidesz, people who are respectable, moral and more or less good-willed towards the country, whose conscience might wake up, especially when Fidesz’s policies don’t turn out to be succesful. .

cheshire cat
Guest
cheshire cat
Guest

Kirsten

“I am happy to read that “Hungarians” do not want to leave the EU. It would be even better to learn that they know how to square what they do want (sovereignty, national self-sufficiency) with their wish not to leave the EU.”

😀
Totally agree.

(Sometimes I wonder what your job is, are you German? Or Chech?)

Kirsten
Guest
oneill: “thinking about it a bit more, it does follow a previously set pattern.” I am afraid you are spot on. And it will work as long as people believe that their own grievance should not be seen as having “political” implications, and is not related to the injustice inflicted on others. This move is not more arrogant than the one with the private pensions, the forced labour, reduction of university autonomy and everything else. I read here that people are more concerned about their livelihood than about the constitution and other “abstract” political rights. So that now (finally) this might be enough. After some years of monitoring Hungary under Fidesz, I am sceptical about what might be a breaking point. In particular as people do not believe in that “abstract political issues” and their living standards cannot be separated. Perhaps people could start to believe that unless they see the connection between these issues, there might be some small riots or rebellions, but certainly nor orderly change towards a system that is better able to protect their economic livings standards THROUGH the protection of their political rights. The ineptness of MSzP, spoken about in yesterday’s thread by Kumba, has… Read more »
Kirsten
Guest

Cheshire cat, I am both, German through my father and Czech through my mother. I work for some government agency, quite concerned with European issues. If Eva does not mind, perhaps she could kindly send you my contacts.

cheshire cat
Guest

about this

http://444.hu/2013/04/30/titkos-haboru-dul-budapest-es-brusszel-kozott/

To those who don’t understand Hungarian:

It seems that after OLAF (the anti-fraud organization of the EU) raided Simicska’s computers last summer, they found enough evidence of fraud to suspend the cohesion funds for a couple of ongoing projects. The spokeswoman of the commissioner for regional development has confirmed it. They found some evidence of discriminatory practice. They are still negotiating with the Hungarians (Lazar eg saw the Commissioner last week) but they are at a stage when the money is being withheld. We are talking about money not much less than the private pension funds were.
The commission and the member states don’t usually make these negotiations public, unless a solution is not found and the suspension becomes final.

So although the economic and monetary affairs commission decided not to suspend the cohesion funds: Hungary is still not receiving some of them.
The problem is that the state has to loan the money to the suppliers while the funds are being withheld, and that must be drying the budget out.

cheshire cat
Guest

thanks Kirsten, that would be nice 🙂

Member

Quick report from the Liget.

I was late from Gyurcsany – his was the only passionate speech. There were about three thousand people watching Mesterhazy’s speech, and roughly three hundred watching Bajnai’s on-stage conversation. I estimated about twenty thousand people in the Liget altogether, eating big bowls of “paprikaskrumpli” for $1, or other food stuff for less generous sums. Quite a few people wore red shirts to show their political affiliation. I missed Moldova – is he still in hospital?

Member

One thing that puzzles me is how is this government different from the former “bad-old” communist one? They are nationalizing industries like tobacco, giving shop licenses on the basis of political support, suppressing the media and on and on. It begins to remind me of the Hungary I first visited in 1977 and stories my wife told me of the times in the 50’s and 60’s.

gdfxx
Guest

stemcellres :
One thing that puzzles me is how is this government different from the former “bad-old” communist one? They are nationalizing industries like tobacco, giving shop licenses on the basis of political support, suppressing the media and on and on. It begins to remind me of the Hungary I first visited in 1977 and stories my wife told me of the times in the 50′s and 60′s.

The difference is that in the 50s, 60s, 70s most of the population was complaining about this, they looked at it as a foreign power imposed regime. Today, it seems that a large portion of the population is tolerating or even supporting this government because they like its nationalistic populist demagoguery, its quasi-support of the neo-Nazis.

Guest

Today we found the latest Jobbik “newspaper” in our letterbox. My wife will not read it for me or even touch it but I looked at the headline on the tobacco scandal:

Mutyfilter …

I couldn’t find “muty”in my regular dictionary – but found it in my German “dictionary of Hungarian slang”: közösködés

Mutyiban means something like fifty/fifty …

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