Explaining away EU action

I’m not naïve enough to think that politicians and government spokesmen tell the truth and nothing but the truth, but I don’t expect them to lie through their teeth either. In fact, it is very dangerous to resort to outright lies if you are in politics because the likelihood of being found out is pretty high, and in such cases the political fallout can be devastating. Just think of the fate of Richard Nixon. A skillful politician or spokesman would skirt the issue, reveal only a partial truth, or try to minimize the gravity of the situation. Members of the Hungarian government, however, aren’t skillful in this respect. By now, I think, more than half of those Hungarians who are at all interested in politics are convinced that they cannot believe a word they hear from the representatives of their government. Folksy Viktor Orbán doesn’t seem to take to heart the Hungarian proverb about a liar who can be caught more easily than a lame dog.

Indeed, the Orbán crew gets caught right and left but, unlike in other countries where there would be serious consequences of their dishonesty, in Hungary, “the country without consequences,” everything goes on its merry way. Lately, however, there have been too many scandals that need to be covered up, and therefore the job of lying has become increasingly complicated and intricate. Just in the last two days the Orbán government was found to have lied about two different issues. First, Nándor Csepreghy, undersecretary in charge of communication on economic development, lied about the reasons for the European Commission’s official suspension of 700 billion forints in grants designated for the regional development operational program. A day later it was discovered that the Orbán government was most likely aware of financial irregularities at the Quaestor Group already in 2011 and actually stopped an investigation of the firm. Today I will write about the suspension of the EU funds. Tomorrow I will turn to the Quaestor investigation.

Csepreghy has two degrees, one in communication and the other in public relations. He is articulate and even sounds intelligent. He also talks at quite a clip, which is a useful quality in someone who doesn’t always tell the truth. It can be tough to catch the discrepancies.

So, let’s see how Csepreghy explained the reason for the suspension of 700 billion forints to which Hungary was entitled in the regional development operational program. This particular sum was designated for innovation, purchase of machinery, and business infrastructure. Although the money comes from the EU budget allocated for the 2007-2014 period, regulations allow countries to receive and spend money to the end of 2015.

Csepreghy said that the dispute is only over “accounting practices.” The European Commission has an issue with the system of allocating funds that was devised in 2007 during the second Gyurcsány government when Gordon Bajnai was in charge of the EU monies coming to Hungary. Csepreghy further explained that it was in 2014 that the Commission decided to send auditors to Hungary, who “examined thousands of applications” and found the whole system faulty. It didn’t matter how fast Csepreghy tried to speak and how often he repeated that it was all Gyurcsány’s and Bajnai’s fault, those present couldn’t quite understand why the auditors came to check on the tenders only in November 2014 if the Commission had already been aware of the problem in 2010, as Csepreghy claimed. Yes, we know, the “Brussels bureaucrats” are slow, but that slow?

Csepreghy also somewhat carelessly mentioned that the European Commission specifically criticized the Hungarian government’s dissolution of the Nemzeti Fejlesztési Ügynökség (NFÜ/National Development Agency) established in 2007 under the Gyurcsány government. In January 2014 the office of the prime minister took over its duties. In fact, the EU in April 2014 temporarily suspended payments because of its dissatisfaction with the new arrangement.

It didn’t take long, only a few hours, before the document the Hungarian government received from Brussels was leaked. The Demokratikus Koalíció was among the recipients. László Varju, deputy chairman of the party, called a press conference at which he accused of Csepreghy of lying. According to Varju, all the cases mentioned in the document were decided after 2010. It was not the system the Commission criticized but the specific requirements stated in the tenders. They were formulated in such a way that for all intents and purposes only one company could fulfill all of them. So there was no competition. Moreover, the projects were grossly overpriced, on average by 46%.

444.hu also received a copy of the document and published a lengthy summary of it yesterday. Since then the full Hungarian language version of the document has been available online. Unfortunately it is not yet available in English.

So, here is the real story. The auditors came to Hungary in November and randomly chose not thousands but only 55 applications, out of which they found 16, or 29%, unacceptable. It would take too long to report on all the individual cases, so I chose two I found especially outrageous.

One involves Közgép, Lajos Simicska’s company, that won the tender to build a harbor on Csepel Island for 3.6 billion forints. The tender was written in such a way that only Közgép could compete. The government demanded several previous accomplishments that were totally unnecessary to accomplish the job. It wasn’t enough to show that a company had earlier built at least a 2,000 meter network of street lighting; it had to have been done on an “industrial site.” The same was true about a 5,000 m² basalt-concrete facing. The construction of a three kilometer asphalt road also had to be accomplished in an industrial setting. As if there were any difference between roads or lighting inside or outside of an industrial park. But the best was that, in order to get the job, the company had to have built at least 2,000 m. long railroad tracks. There were no railroads anywhere near the harbor. The fine in this case alone is 633 million forints.

The Csepel Harbor

The Csepel Harbor

Even more bizarre was the office furniture ordered for a government government office under the supervision of the ministry of administration and justice to the tune of 4.1 billion forints. What did an applicant have to show to be eligible to compete? The company had to have furnished an office where the project was worth at least 400 million forints. Since the office in question was an area for meeting clients, the company also had to have furnished such an office for 300 million forints. Among these jobs there had to be one with at least 50 workstations. The auditors rightly pointed out that the quality of the furniture to be supplied has nothing to do with the size of earlier orders. The requirements were such that a consortium of seven different companies had to be formed to fulfill all the requirements. The fine here is 1.6 billion forints.

Apparently since November the Hungarian government has been trying to explain the “discrepancies” away, but the Commission wasn’t moved. Once it became clear that the EU could not be persuaded that all was in order, János Lázár decided to be more humble than usual. He is now asking the Commission to help Hungary devise a better method for writing tender requirements. Well, he could start by being honest, but I guess that doesn’t occur to him right off the bat. Honesty, I’m afraid, cannot be learned by basically dishonest people.

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Lutra lutra
Guest

Absurd. Consultants offering their services to companies wanting to bid for EU tenders are a dime a dozen (and have been for the past decade) but the Hungarian government claims only now that it needs EU help on how to write requests for proposals. Maybe none of these companies was pro-Fidesz enough.

petofi
Guest

I would’ve done better than the Csepreg. I would’ve said, ‘that the rules for tenders were sent out to the EU to be checked that they adhered to EU regulations. The EU translated them. When the corrections were sent back, they were in a bad Hungarian and totally misunderstood.’

So you see, it’s not Hungary’s fault: it just tried to get the official EU version. The EU misrepresented the Hungarian rules!

Oh to be a Hungarian!

HAJRA MAGYAROK!!!!

Kmetty Geza
Guest
Eva, I am attaching the Press Summary of the NFU that may be of some interest among the Hungarian linguistically capable readers, regarding Csepreghy’s role in the EU Fund issues I was supposed to be involved with, ala US Public Fund policies. Sajtófigyelés a 2012.08.29-ei értékelemzés megbeszélés kapcsán Megjelent médiumok Megjelenés Cím Index 2012.08.30 Okosabban osztanák az uniós pénzeket Napi Gazdaság 2012.08.30 Kötelező értékelemzést vezetne be az NFÜ Világgazdaság (online) 2012.08.29 16:51 Amerikai modellt vezetne be az NFÜ Világgazdaság (írott) 2012. 08. 30. (5.oldal) Gazdasági Rádió péntek reggel Közlekedésbiztonság szept. 20-ai lapban HírTV Rájátszás 2012.08.29 Az értékelemzés bővebb körű bevezetését tervezi Magyarország nagy infrastrukturális fejlesztések esetében Egyéb médiumok Megjelenés Cím hirado.hu 2012.08.30 Kötelező értékelemzést vezetne be az NFÜ mno.hu 2012.08.29 Értékelemzés hvg.hu 2012.08.30 Új szempontok alapján döntene az állam a beruházásokról Hírek részletesen: Index – Okosabban osztanák az uniós pénzeket 2012.08.30. http://index.hu/gazdasag/magyar/2012/08/30/ertekelemezes_nfu/ Okosabban osztanák az uniós pénzeket Bevezetné a magyar államigazgatás is az értékelemzés módszertanát, hogy olcsóbban és hatékonyabban tudja végrehajtani az egyes projektjeit. Az eljárás számos országban régóta bevett gyakorlat, mi amerikai szakértőket hívtunk most, mivel az ottani finanszírozás hasonlít az unióshoz. Legalább 8-10 százalékos spórolást várnak tőle a nagyberuházásokon 2014-től. Az értékelemzési eljárás lényege, hogy az itthon megszokottól… Read more »
Webber
Guest

Kmetty Géza –
Do I understand the point of all the above to be:
1. That the Hungarian government understood back in 2012 that there were problems with the (then new) tender process, and;
2. That the Hungarian government had a plan to make that process more transparent and fair, and;
3. That the Hungarian government didn’t do a thing other than say it had a plan and the plan was a good one, and would eventually be implemented?

Nicu
Guest

International relations as a BA program is dead in Hungary. It’s too controversial and pro-Western, kids should study something else, like “political science” with madly loyal fidesznik professors like Andras and Tamas Lanczi, GFG etc.

This “Liberal nest” at ELTE is successfully executed.

Communications is – it seems – is spared, but only for the moment.

http://tatk.elte.hu/dynpage6.exe?f=tatk&p1=m:FomenuH,EntryF5&p2=m:FomenuA5,EntryA5F2&p3=x:FomenuA5V2,Entry-325&p4=p:8201&id=CMORG-25

Webber
Guest

That’s a link to European Studies, not International Relations, and some people in that dept. have been decidedly pro-Fidesz. Where did you get the bad news about IR?

beta
Guest

It’s kind of misleading but I think IR was taught by that department at ELTE. I wonder who will be fired, i.e the master’s level courses may remain but of course those would require a fraction of the current teachers.

Webber
Guest
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