Fidesz as an enabler of financial corruption

It will not be easy to learn the truth in the maze of lies that have been fed to the public about the relationships between prominent politicians of Fidesz and Csaba Tarsoly, owner and CEO of the Quaestor Group.

Here I will concentrate on a single transaction, the loan extended to ETO Park, a subsidiary of the Quaestor Group. On April 4 I wrote a post with the title “The Quaestor scandal and football” in which I expressed my suspicion that Csaba Tarsoly’s ties to the current government had a lot to do with his interest in and support for Viktor Orbán’s mania, football. Today I return to Győr, where the ETO Park and Stadium are located.

Let me stress that the issue of the ETO Park and Stadium is unrelated to the scandal that recently engulfed another Quaestor subsidiary, a brokerage firm. The Orbán government has used ETO Park and Stadium to divert attention from its cozy relationship with Tarsoly. It’s trying to shift the story instead to a loan that was extended to the ETO project during socialist governments.

In my earlier post on the subject I made a fleeting reference to questions about this project that arose in the Magyar Fejlesztési Bank (MFB/Hungarian Development Bank) in 2010, after the newly elected government changed the top management of the bank and ordered an investigation of all loans that had been extended during the socialist period. Today’s post is about this investigation and its aftermath.

Orban hazug

War = Peace; Freedom = Slavery; Ignorance = Strength

On April 8 several papers reported that Kormányellenőrzési Hivatal (KEHI/Government Audit Office), after an investigation, is pressing charges against people involved with the 17 billion forint loan MFB extended to ETO Park in two installments, in 2005 and 2008. The reason for the police action, according to M1 TV, was that KEHI discovered that MFB had accepted a 900 million forint grant as collateral for the loan, which was against the law. We were not told when KEHI found this irregularity. Origo reported earlier that KEHI had already looked into the case back in 2010 and found enough evidence to proceed and that it had asked for a police investigation at the time. So why, then, a second investigation of the same case? And why did neither the Chief Prosecutor’s Office nor the Budapest police know anything about an earlier investigation or police action in the case?

KEHI, which functions under the supervision of the prime minister’s office, has been known to be a willing vehicle of the government’s political interests. It’s enough to think of its move against the Ökotárs Foundation, which is responsible for the distribution of grants from the Norwegian Civic Fund, that resulted in a heavy-handed police action. The police are an equally willing partner when the government wants results, and quickly. So why did the police do nothing after 2010 and swing into action only now? Because this time, in a couple of days the police began hauling in former high officials of MFB as witnesses.

It didn’t take long before an important, new piece of information surfaced regarding the original case. On April 9 Népszava was informed “by certain sources that László Baranyay, the CEO of MFB at the time, wanted to press charges but the Fidesz political leadership prevented him from doing so.” Apparently, the charges included fraud, embezzlement, and breach of fiduciary responsibility.

About a week later, on April 15, Zsolt Gréczy, spokesman of the Demokratikus Koalíció, gave a press conference with two documents in hand which were allegedly proof that KEHI in March 2012 stopped the investigation of the case by the new management of MFB. According to the first document, the investigation was supposed to have been conducted between July and September 2011, after which the MFB management would have gone to Győr to take a look at the project, which at that point wasn’t quite finished. The final report was to be ready by October 31, 2011. Gréczy also had a letter in which KEHI informed Deputy CEO Zoltán Urbán that the office had suspended the investigation into the circumstances of the loan to ETO Park.

Index on the very same day learned a few more tidbits about the case. During the 2011 investigation KEHI talked to practically all former top officials of the bank, in addition to lower-level officers who had anything to do with the case. There was one man, however, whom they never contacted: Csaba Tarsoly, CEO of Quaestor. One informant told Index that during the procedure “in an informal way Tarsoly was being told about the details of the investigation.”

So far we can piece together a pretty coherent story, but KEHI is working hard to muddle it. When HírTV first asked KEHI about the details of the earlier investigation of MFB and ETO Park, they were told that KEHI had pressed charges on six accounts. Later KEHI changed the story: no, they didn’t do anything except investigate. That investigation had to be darned thorough because they began it in 2010 and only five years later did they have enough evidence to proceed. After Zsolt Gréczy’s revelations, KEHI denied outright that it ever stopped the investigation.

And finally, here is the latest explanation of what happened in 2011 and 2012, this time from János Lázár. As far as he knows, “KEHI didn’t stop the investigation; it only interrupted [megszakította] it.” Moreover, KEHI asked MFB to change the contract with ETO Park in order to safeguard the interests of the bank. But if the government was aware of the precarious state of Tarsoly’s financial empire, why did it make a gift of 250 million forints for the ETO Park project? Lázár’s surprising answer was: “It was not our job to make the loan unpayable.” In brief, the government helped out the ailing Quaestor as early as 2011, hoping to avoid the firm’s collapse.

The bankruptcy of Quaestor’s brokerage firm is a separate issue from the ETO Park project, which admittedly was not exactly a success story but was not responsible for the brokerage firm’s collapse. On the contrary, one can read stories about contractors working on the project in Győr who often didn’t receive payment on time. The management blamed MFB for not releasing the necessary amount of money at specified intervals. As it turned out, this was a lie. Tarsoly was simply using the loan to cover his tracks in his pyramid scheme.

If the Orbán government had wanted to point the finger at Ferenc Gyurcsány and Gordon Bajnai for not properly vetting the loan for the ETO Park project, it could have done so in 2010 or 2011. Instead, it stopped the investigation and kept trying to prop up Quaestor’s business ventures. It became an enabler of financial corruption.

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April 17, 2015 10:29 pm

Football is a very useful sport. If spectacle is not good enough, box seats are optimal places for friendly conversations. And we still did not mention home dinner tables.

April 18, 2015 1:21 am

Hungarians are the dumbest of the dumb.
After being sheared twice by Malev before being put under in the most shameful manner ever heard of, Hungarians still believe that because they vote politicians into power, that makes the politicos beholden to them.
It’s to laugh…

Of course, Hungarians wouldn’t know this but the Fourth Estate is intrinsic to the maintenance of a Democracy. People here laud Kalman Olga’s show but its mock-seriousness is laughable. She wouldn’t know what in-depth questioning is if it hit her in the face. But then again, the climate of fear is all over the top of her head…

April 18, 2015 6:50 am

I agree with you!

It must be Christmas Eve, or simply a boring subject. Nobody seems to be interested.

April 18, 2015 7:02 am


Unfortunately, even foreign Hungarians suffer from this insane Pride of being Hungarian, and all it means…

April 18, 2015 4:02 pm

It is not the time to be pride of being hungarian. The image is destroyed in the most effektive way by the hungarians themselv.

April 18, 2015 8:27 am
Viktor Orban is a good man and he is the prime minister of Hungary. I meat him and he is sincere and nice. He is also determined as all good leaders should be. How dare people imply or even state that he is corrupt? He won the last elections by 2/3s. Why should he suffer baseless criticism when the campaign is over? The opposition lost. The leftists, liberals should prepare for 2018 and stop barking. Viktor Orban works tirelessly day after day for the benefit of hard-working Hungarians. Not for the benefit of foreigners, jews, multinational corporations, communists of course, but for the good of real Hungarians. No surprise that liberals and foreigners are wailing. I guess if they are hysteric then this means that Mr. Prime Minister is doing everything right. Good. Unfortunately his heart is too big. The government is still full of lurking communists who sabotage his plans and the media is completely dominated by leftist-liberal journalists. Or rather who call themselves journalists, because they are nothing more than leftists party activists. There is a war going on behind the scenes, the leftists can’t accept that they lost so they want to stage a coup. Mr. Orban… Read more »
April 18, 2015 12:43 pm

Dear Ákos, when you’ll pass the ripe age of twelve, you will most certainly realise that not everything is the same in reality as you’ve been told during those bedtime tales.
I sad to say that Santa Claus only a fiction, and the Easter Bunny never really handled those eggs either.
Yes, as one getting nearer to adulthood, one must face with the harsh realities of life, sooner or later. I really hate break this to you now, but you better be prepared, otherwise the disappointment will be overwhelming..!

Fortunately, as your comment clearly indicates it, there’s still years what you can spend in blissful ignorance before the time comes, but it will certainly come, so don’t be surprised when Orbán will be taken into custody and must face justice for deeds you arn’t even aware today.

Believe me, you’ll miss the Easter Bunny much more!
Unlike your hero it didn’t took things, but brought eggs to you too – a significant difference, you’ll certainly realise in a few years too, doubtless.

April 18, 2015 4:09 pm

Who is a real hungarian? By the way I’m staging a coup, so you’d better warning ov.

April 18, 2015 5:09 pm

akos “kgb” kovacs…

So, you ‘meat’ with him did you? Was that a chopped liver or a minced meat?’

I never witnessed so hard-working a member of any government in the world who, magically, could (at the same time) amass the greatest fortune in his land.
What a lucky man!

April 18, 2015 8:46 am

It is not enough to be honest, you must not look or behave like a maffia chieftain!

I understand it is kind of a “subjetcitve” thing to judge a person’s honesty, for me he still looks like a Godfather.
I do not believe a single word he is saying.
I knew the person, who prepared Viktor with his first communication skills (unfortunately departed several years ago) but I still remember his stance.
Let him rest in peace!

April 18, 2015 9:22 am

Thanks for your really brilliant satirical piece!

Rather OT, but maybe funny for those who can read German:
This reminds me of some article I saw more than a year ago in the German on line satirical site Postillon:
“Fidesz forbids Hungarians to live with lesse than half of the average income – everybody who does not conform will be punished severely …”

April 18, 2015 9:39 am
Clash of Freed-Fighter Stereotypes I strongly recommend Christopher Adam’s The Hungarian right’s new “Common Sense” voice: Orbán in English translation in Hungarian Free Press. Orban’s slick new cadre of besuited pseudo-yuppies, groomed to woo Hungarian expats and US Tea-Party partisans alike all look like caricatures of the caricature that Michael J Fox played when he was young (“Alex P. Keaton”. But everyone knew that was a spoof. These polyester patriots are trying to play it with a straight face. Some of them may even be true-believers — though most of them,exactly like their role models and handlers, are no doubt shallow and cynical opportunists. (It will be especially interesting to see how their Putinism plays with their global constituency… The strategy for unmasking their shameless cant is a relentless, evidence-based exposé of both Orban’s Putinism (which is so starkly at odds with the stereotyped biasses of the patriotic expats he is wooing) and his gob-smackingly gluttonous corruption. The nonstop flow of symptoms of his ruinous misgovernment will just keep growing too, despite the misinformation with which he will keep trying, increasingly unsuccessfully, to mask it. (If and when Jobbik’s time comes, its Putinism will do them in… Read more »
April 19, 2015 9:33 am
Steve I don’t see the young English speaking Fidesz supporters portrayed in Christopher Adam’s essay as having much of an appeal to the Tea Party supporters I know who are former Army NCOs. A very common characteristic is fervent nativist Americanism. There is little tolerance for immigrants of any type including Central Europeans regardless of their right wing ideology. Another characteristic is a deep and abiding belief in the right to armed insurrection to rid people of oppressive governments that tax for virtually any purpose. The actual religious outlook many of them espouse—whether they are conservative fundamentalist Protestants or neo-ultramontane Catholics—has imported secular political perspectives into their faith. They’ve managed to identify obedience to God with the restoration of pre-mid-twentieth-century culture and economics, and consequently, tend to look at themselves as the contemporary equivalents of the Old Testament prophets calling a wicked society to account before all hell literally breaks loose. Second amendment gun rights are critical to Tea Party supporters, Hungary’s restrictions on gun ownership and the lack of legal entitlement to private gun ownership immediately will alienate Tea Party supporters. The yuppie Fidesz portrayed in the essay might have an appeal to some collegian young American Republicans, but… Read more »
April 18, 2015 10:00 am

I didn’t know but Szilard Borbely’s book Nincstelenek was published already in October 2014 in German titled Die Mittellosen. I only read the original version, but it’s an extremely important book so I certainly recommend it to those who can access it.

I guess some of the reviews mention that the general tone of the story is extremely bleak. The book – despite the bleak rural, peripheral world it depicts – is not a downer and it’s hard to put it down. Hopefully the English version will be available soon too.

April 18, 2015 10:46 am
Read the very enlightening piece by Adam. Some I have to say are on the ball. I have the feeling those ‘youngsters’ haven’t lived and no sense of history.. They have nice degrees but I’m wondering if they are now using their heads simply as hat racks for their shift to a ‘Putinization’ and ‘Orbanization’ of Magyar society. Going with the ‘slickness’, their apparent rationales for ‘alternate political models’ arguably may perhaps one day be looked at as nailing jello to a wall if Hungary continues on its supposedly ‘democratic’ course.. They kind of remind me of those earlier and young foreign business entrepreneurs who, when seeing an opened-up Hungary after the dreadful communist years, came in and boldly took the country into new directions. Why not? The country had nothing to lose, It was wide open for a ‘new’ way. We see the same old same old in principle. Never could get my head around ‘illiberal democracy.But Putin’s doing it, and so Orban thinks, yes, it must be good for Hungary. It’s too bad Mr. Orban can’t look to a better model though in his seemingly tailor-made ‘construction’ of a new Hungary. I mean it’s bad enough to have… Read more »
April 18, 2015 1:13 pm

I rather reluctant to use the term ‘illiberal democracy’ – in my world there isn’t such thing.
I am absolutely certain that there is no democracy without liberalism, so ‘illiberal state’ may cover better the general Putinist/Orbanist idea.

As we are at it – I am pretty sure that Orbán intentionally mixing up the ‘neoliberal economics’ – which is an economic philosophy – with ‘liberalism’ in order to discredit the classical meaning of the expression which originates from ‘liberty’, ‘freedom’, so he can bash the liberalism and the liberals all over.
After all, it can be expected that he familiar with the word at some extent – once upon a time he was the vice chairman of the Liberal International, I hope, he can also remember that!

April 18, 2015 1:22 pm


This is an intentional double-decker or even triple-decker communication. Fits well OV.
You must be living in the same world as me.

April 19, 2015 12:43 pm

Of course, I do, its the only one I know!
By the way, is there any other one for civilised, sane and sober people?
(In case I have missed, want to be sure..)