Fidesz can’t escape from the shadow of the Quaestor scandal

Medián came out with a new poll. This time the company wanted to find out how much Hungarians know about the scandal that followed the collapse of several brokerage firms and what they think about it. One of Medián’s conclusions is that people see a connection between the failures of the brokerage firms and the unpopularity of the government. More failures will only increase people’s distrust of the government. The majority of those questioned, despite the government’s best efforts, think that Fidesz bears a greater responsibility for the lack of proper oversight of these financial institutions than the earlier administrations. It is becoming increasingly difficult to blame the socialists for events that happen after five years of Fidesz governance.

One finding of the poll, which may have important repercussions for the future of the Orbán government, is that the Quaestor affair made the greatest impression on those surveyed. Over 70% of the people asked could name the firm without any help, and another 17% recognized the name from a list of brokerage firms. The other two companies, Buda-Cash and Hungária, are considerably less well known. And this is bad news for the government, because every day, it seems, more details about the close ties between the government and Csaba Tarsoly, CEO of Quaestor, are revealed.

birds

Two recent discoveries further support the suspicion that the Quaestor-Orbán government connection was very close indeed. One of the latest revelations is that the Nemzeti Befektetési Ügynökség, known as HIPA (Hungarian Investment Promotion Agency), which is a government office attached to the ministry of foreign ministry and trade, worked hard to find investors for a Quaestor project called Dunacity. As it turned out, the idea of a “city within the city” was first floated in 2006. It was supposed to be an entirely new building complex in the Soroksár area of Budapest, close to the present National Theater and the Palace of Arts, but not surprisingly, given the 2008 financial crisis, nothing came of it. It seems, however, that in the fall of 2014 HIPA began promoting the idea of Dunacity and published a pamphlet trying to recruit investors for the one billion euro project, along with some other desirable investments. In fact, 444.hu learned that shortly before the March 9 collapse of Quaestor, Levente Magyar, undersecretary in charge of foreign trade, escorted Arab businessmen to the planned future site of Dunacity. The English-language brochure spoke in glowing terms about the “new type of living, where the harmony of apartments, workplace, commerce, entertainment and relaxation is provided.” The government promised a new bridge across the Danube, a free port, and a new metro line. But what was perhaps most telling was that investors were guaranteed a 9-10% return.

The second revelation might be even more damaging, at least indirectly, to the Orbán government. Today János Lázár, who holds lengthy press conferences every Thursday, released the list of 24 municipalities that had purchased Quaestor bonds, which includes the city of Győr, whose football team Csaba Tarsoly owned. Győr’s loss–1,004,505,299 forints–doesn’t top the list. Százhalombatta lost 3,591,830,000 forints. But then why is Győr in the limelight? The reason is that the city of Győr wired this amount to Quaestor’s account on January 16, a day after the National Bank of Switzerland allowed the Swiss franc to strengthen some 20% against the euro. This unexpected currency decision hit large banks and brokerages hard, since most of them were net short the Swiss franc. For instance, Citigroup lost between $150 and $200 million, Interactive Brokers $120 million, and Deutsche Bank $150 million. The Swiss decision also had a negative impact on Hungarian banks, forex dealers, and brokerages. We know that Buda-Cash lost about $22-29 million. Most likely Quaestor was in the same predicament.

It was on April 3 that 444.hu first reported on this “strange coincidence.” Although one of the Győr city officials insisted that the only reason for investing the money with Quaestor was the attractively high yield, the reporter was not convinced. Something was wrong. If Győr purchased government bonds, their yield wouldn’t fluctuate from broker to broker. Therefore, the reporter justifiably suspected that the sudden decision to place that large sum of money with Quaestor, whose owner has invested billions in Győr, was not a coincidence. Moreover, 444.hu checked the city council minutes, where there was no sign of any approval of the money transfer. It was, the reporter concluded, most likely the decision of Győr’s mayor, Zsolt Borkai, a former Olympic champion and currently the president of the Hungarian National Olympic Committee. Let me add that Borkai is a favorite of Viktor Orbán. The prime minister even changed a law to make sure that Borkai could become a member of parliament in 2010. Borkai, before becoming a politician, was the principal of a military school with the rank of colonel. And there was a law on the books that said that a policeman or soldier can become a candidate for or serve as a member of parliament only five years after his departure from the military or the police force. The opposition jokingly called the legislation “Lex Borkai,” something Borkai was actually proud of.

Győr promptly denied the charge, claiming that they made the decision to transfer the money to Quaestor earlier and signed the papers already on January 13. Since no one had seen the contract that the city signed, suspicion lingered on.

Today there was another twist in the story. János Lázár, during his press conference, talked about municipalities purchasing Quaestor and not government bonds. He specifically pointed to the city of Győr as “one of those municipalities that invested money in unsecured Quaestor bonds.” Borkai, whose nerves must be frayed by now, snapped back. Győr bought government bonds, and anyone who says otherwise is a liar. It is his duty, he said, “to protest in the name of all 130,000 inhabitants of the city.” This time Borkai arrived with the original copy of the January 13 contract and a document that allegedly proved that the city had purchased government bonds.

So, who is telling the truth? Is it possible that Borkai thought he was buying government bonds but that Quaestor, hard pressed by the events of January 15, used the money to fill some holes in its own portfolio? Yes, it is possible.

The constant barrage of Quaestor stories is further damaging the waning reputation of the Orbán government. And the clashes between prominent members of the Fidesz hierarchy, like Borkai and Lázár, don’t help the cause either. One is just waiting for the next bomb to explode.

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exTor
Guest
http://hu.wikipedia.org/wiki/Rákóczi_híd http://en.wikipedia.org/wiki/Rákóczi_Bridge Well, perhaps Duna City was a feasible project had the rest of Fidesz’s house of cards not started to collapse around it. Ten-billion euros? That’s huge money. And for what? A residence for foreigners? I dont see natural-born Hungarians (at least those who still live here, not the Andy Vajnas of the world) going for something like Duna City in a big way. The area in question is my now backyard. There are so many houses for sale in Csepel, where I live. They’re not selling. I presume that the same housing-market scenario exists elsewhere, namely a downmarket. Whatever investors could have been lured in, the Hungarian government would also have had to finance a big portion of Duna City. For Fidesz, dreaming big means dreaming stupid. Why would, for example, another bridge be promised when the Rákóczi Bridge had been completed in 1995? As the southernmost of Budapest’s 7 pedestrian-accessible bridges, it is immediately north of the planned Duna City. Who would need another bridge immediately south of Duna City? In some ways Duna City would have been a good thing. Its building, which would have taken a half decade at least, would have created many jobs.… Read more »
Tyrker
Guest

“I presume that the same housing-market scenario exists elsewhere, namely a downmarket.”

On the contrary, the real estate market is booming. Csepel is a hopeless place, pretty much disconnected from the rest of the city. For a commuter, it must be a nightmare to live there. The situation in Csepel is certainly not representative of what is going on elsewhere in the city.

http://index.hu/gazdasag/2015/04/23/lakasarak_lakaspiac_ingatlan/

HiBoM
Guest

Csepel is not remotely a nightmare from a commuter’s point of view. 10 minutes from Boráros tér by HÉV, it is a lot easier to get to the center than if you live in 2nd district….

LwiiH
Guest

Booming? You are kidding right? There are pockets in budapest where housing seems to be moving a bit but it’s completely stalled in just about every other part of the country. Anything more than 10 mil and it won’t move for years!

exTor
Guest
Thanx for the realestate link, Tyrker. I guess that my mistake was extrapolating from what I see here in Csepel, which is a lot of ELADÓ signs. There is some building [építkezés] happening here and there, but not all that much, mostly because there are not that many empty lots. If the housing market is booming, as you say, then that’s a sign that the economy is doing well (or well enough) in Hungary, which confuses. I was under the impression that Hungary backslid economically and that the unemployment rate was up. What is the Sunday closing about, except a contraction in the number of jobs? The Baumax here in district XXI is closing and my neighbor who works for Baumax at the head office will be out of a job in a few months. These facts contradict a booming realestate market. That said, realestate is contradictory. Canada (where I’m from) has one of the most overheated RE markets in the world. Those who ‘know’ say that it’s way overpriced, that a correction may soon happen, yet it keeps on going. An ex told me that she had sold her house (in Parkdale, Toronto) for more than a million dollars.… Read more »
An
Guest

If you read the article you’ll see that some of the demand is coming from foreigners who are buying real estate in the center, mostly from Russia and the Middle East.
I’d bet the Hungarian buyers are investors too, those who have money to buy real estate as an investment, and not the average Hungarian families buying new homes.

Gál
Guest
Actually, the poll numbers about the brokerage scandals published in HVG are surprisingly favorable to Fidesz. Interestingly, those who say they don’t have any party preferences (perhaps the biggest group) blame the brokerage scandals solely on Fidesz with the smallest percentage (that is after Fidesz voters of course) and these undecideds tend to blame “all governments” for the scandals in the highest proportion. The undecided (not having any party preferences at the moment) it seems are (A) fed up with the left-wing in general (they still blame the leftists five years after they are out of power) too and (B) Fidesz campaign to blame the Socialists, which was laughed out on many internet sites as ridiculous, was working extremely effectively. So while we may lough at the stupid lies of Janos Lazar or Viktor Orban, they work well on the undecided and Fidesz knows this. (By the way Orban also has the support of the women’s interest/society magazines where a nice article on him and his family was published again (!). It turns out our dear Viktor is a real fickós man who likes housgemachte pálinka and kolbász and cries surprisingly often.This bunch of magazines, including Nők Lapja, is owned… Read more »
Live long and prosper
Guest

He cries often? Oh, poor, poor diddums. He just needs to be loved.

petofi
Guest

Between Orban and the Catholic Church, they’ll eventually blame the Questor thing, and all other financial frauds, on the jews.

HAJRA MAGYAROK!!

Live long and prosper
Guest

Of course! How silly of me not to have realised it sooner. The Jews. Of course!

Live long and prosper
Guest
The government continues to cruise blithley along without being held to account, not only for this odious Quaestor / the general brokerage house scandals (on which BNE have just published this, imo rather gently worded, analysis: http://www.bne.eu/content/story/orban-struggles-defuse-hungarys-bankrupt-brokerage-scandal ), but also for the the plentiful catalogue of issues ranging from cynical cronyism, scandalous corruption, ‘forgetful’ mis-reporting of assets, toadying relationships between members of the government and criminals, undisclosed coldwar secrets, astounding abuse of office, the unreconcilable, extraordinary and unexplained wealth of public officials (not forgetting the unexplained wealth of their parents, wives and children), the absurd wasting of public funds, not least of which is the PM’s precious Felcsut football stadium, and the list just goes on and on. The absence of prosecutions is hardly surprising, given the government appointment of the public prosecutor. But where’s the investigative journalism with its crunchy accusations? Where are the shocking exposures? I had hoped that after OV and SL had their tiff we’d at least see the curtain pulled back by some serious investigative reporting, but no, virtually nothing. Bland news, daily. I did ask one locally resident foreign journalist why there wasn’t more substance in the stories about all these issues, and why… Read more »
petofi
Guest

@ live long and prosper

Of course, you are right.
But there is one little adverb that kinda exposes your lack of true knowledge on Hungary..
The word is ‘now’ and here is the context…”Hungary is now a country…”

Sorry, it’s not ‘now’…it has always been. The depth of guilt and shame of the country
and the society is well nigh unimaginable by those who have not been born in the country
and know the language.

Live long and prosper
Guest

Thank you for the correction.

However, your comment about the depth of Hungarians’ guilt and shame surprised me; Was this ironic, I wonder? What I observe is virtually the opposite: a shocking lack of guilt and shame, an extraordinary indulgence of the mafia, political apathy for all except those benefiting from the current regime, and a level of national pride which borders on the absurd and for which I struggle to understand adequate justification, even given the warped popular version of history.

exTor
Guest

“Hungary is now a country where the journalists have been successfully cowed into silence.”

Your sentence is well-phrased, LLAP, and correctly so. To me, it states that there is a new-found intimidation in Hungary of journalists who may be antiOrbán. This, if it is true, bespeaks stalinist intimidation.

I lowercased the modifier because Stalin is long-dead, though the methodology of that time may still occasionally be manifest.

I hope that your journalist friend is joking. If not, ask your contact for examples, but without specifics, of course. I find this difficult to believe.

MAGYARKOZÓ

didasmaki
Guest

Népszabadsag says that according to Szonda Fidesz apparently hit rock bottom, its popularity didn’t change at all compared to the previous month. (ie. it’s still the most popular party and is twice as popular as MSZP whose voters are concentrated in few urban election districts). LMP has been the most popular since April 2014, polling at 5%, the rest are below margin of error (Együtt, DK).

http://nol.hu/belfold/ki-akarjak-mozditani-orbant-a-holtpontrol-1529963

Gollum
Guest

“A biztos pártválasztók körében a Fidesz 38 százalékkal vezet, mögötte 27 százalékos eredménnyel a Jobbik következik, az MSZP 17 százalékra számíthat. Az LMP-nek 7, a DK-nak 6 százaléka van az aktív szavazói csoportban, az Együtt 2 százalékot kapna itt – közölte az Ipsos.”

Among those who can say they preference and who would also say they would certainly vote if the elections were held this weekend Fidesz leads with 38%, Jobbik 27%, MSZP 17%, LMP 7%, DK 6% and Együtt 2%.

Fidesz has 1.4 million voters who are absolutely satisfied with how things are going in Hungary. They are very active and enthusiastic. Then there’s Jobbik. The left is hopelessly divided and its voters are way less committed. LMP is now more popular than DK is.

Webber
Guest
Folks, people are lying to pollsters. That has been clear since the last two local elections. Why are they lying? Because they may fear that they will be punished if they say they will vote against Fidesz. Some, such as people working in the public sector (incl. schools), or working for certain Fidesz-friendly companies (incl. CBA) know that they might lose their jobs if they are identified as supporting the opposition. Others may be afraid that their relatives will lose their jobs. Nobody feels safe So, they lie. Here’s a special note to Fidesz supporters: that’s what you get if you create a system in which people who oppose government are punished. When people are afraid, they lie. If things are bad enough, you won’t even be able to figure out what it is people dislike most about your party’s policies. They won’t express that openly. And it doesn’t matter if you have the media behind you. Remember the first free elections in Hungary? Before those elections, what sort of media was there? A bit communist-controlled, right? And who won those elections? So, congratulations – you can no longer trust poll data, and people are increasingly not influenced by your… Read more »
jant
Guest

Fidesz-MSZP grand coalition. Always knew it, but at least someone has connected the dots.

http://nyugatifeny.blog.hu/2015/04/20/7_bizonyitek_hogy_mszp_csunyan_lepaktalt_a_fidesszel

buddy
Guest

Quaestor’s website (still up) makes the claim about DunaCity that “the project area covers around 33 hectares in one of the most coveted and fast-developing parts Budapest, to the south of Rákóczi Bridge (formerly called: Lágymányosi Bridge) alongside the Soroksár branch of the Danube River.”

I find this claim highly suspect. I’ve been around there many times in the past and it just seems like a poor, blighted former industrial area to me.

Which doesn’t mean that it won’t change one day, but to call that area “one of the most coveted and fast-developing parts [of] Budapest” seems quite ridiculous to me. Could I be wrong? Is there anyone who knows the local real estate market who could verify or disprove this?

Live long and prosper
Guest

I know the RE market, and you’re absolutely right.

LwiiH
Guest

Try the second district. It is certainly a buyers market as prices are depressed but you have to come in with cash as the banks are still not lending.

Guest

Totally OT:
Every time I access the site I get a warning from facebook about the format of a parameter – can’t copy the text though.
However the link to HS’s facebook page works – so it can’t be too bad …

spectator
Guest

I access the site via web-browser and never had any message from Facebook.

(It might have something to do that I value my privacy and I’m not on Facebook – who knows, if it’ the reason? Don’t use Windows either in the last 22 years, or ’never’ I may say, regularly as a computer of choice, apart from some RIP/print-server use, it may be one of the other reasons.)

Otherwise you can make a screenshot at any time, and if it something long and interesting even OCR it and have it as text.
Just in case.

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