Andy Vajna in Hollywood

When Andy Vajna, the producer of such Hollywood blockbusters as Rambo, Die Hard with a Vengeance, and Terminator, decided to settle in Hungary, he hit the jackpot. In the United States, as a result of his questionable business activities, he had been harassed by the Internal Revenue Service (IRS) for fourteen years and was lucky not to land in jail. In Hungary the Orbán government makes sure that Andy can carry on with his shady activities absolutely undisturbed. In fact, he knows that the boss of the mafia state, which Hungary has become in the last five years, will make sure that his by now numerous business activities will thrive.

For a while, between the late 1980s and 2010, Vajna split his business activities between Los Angeles and Budapest, but then there came a time when he had to realize that his heady days in Hollywood were over. His last hurrah was Terminator 3, which he produced with his old business partner, Mario Kassar. At the time an article appeared in Entertainment which described Vajna and Kassar as has-beens or worse. “A dozen years ago, Kassar and Vajna were names that could open doors. But by 2003 half the town thought they were dead, and the other half figured they were probably in self-imposed exile. That’s the kind of reputation you get when you find yourself at the center of one of the great flameouts in Hollywood history.” The article indicated that the two “spent wildly on unworkable projects and unmentionable extravagances. Soon enough came federal investigations and bankruptcy proceedings.”

Vajna’s and Kassar’s company, Carolco Pictures, did exceedingly well, especially after 1986 when it completed a $50 million debt offering in the junk bond market. Between 1986 and 1989 Carolco’s staff grew from six to 100. The company, however, was being watched by the IRS because Carolco’s finances were anything but transparent. Behind the complicated business setup and clever machinations was a tax lawyer, Peter Hoffman, who soon enough was accused of filing false tax returns for 1989. The prosecution alleged that “Hoffman evaded taxes by tapping into a deferred compensation plan and calling the payments loans while he was chief executive of the film production company Carolco Pictures.” Hoffman’s first trial, held in October 1997, ended in a mistrial. Reporting on the result, the Los Angeles Times wrote that “the government’s failure to convict Hoffman puts a dent in an ongoing larger criminal tax fraud investigation into Hoffman’s former colleagues at Carolco, producers Mario Kassar and Andrew G. Vajna.”  The same article described the business network of Kassar and Vajna as a “system of byzantine offshore companies.”

Andy Vajda and Mario Kassar during their earlier days in Hollywood

Andy Vajna and Mario Kassar during their earlier days in Hollywood

Less than a year later, at a retrial, Hoffman was fined $5 million but avoided jail time. It was a “much watched case, one that federal prosecutors had hoped would assist them in a bigger criminal tax fraud investigation of movie producers Andrew Vajna and Mario Kassar.” But this was not to be. Later Vajna said that Hoffman was a good man who refused to cooperate with the federal investigators and testify against them.

Magyar Narancs, in an article published in 2011, expanded on the “system of byzantine offshore companies.” In 1989, the same year in which Hoffman filed false tax returns, Andy Vajna decided to get out of Carolco Pictures, in which he had a 36% stake, for which he received $100 million. He was supposed to pay $40-50 million in taxes on the sale, but with Hoffman’s help he managed to move his money into shell companies in Panama and the Netherlands Antilles. Of course, in movie land it was not only Vajna and Kassar who went to great lengths to avoid paying the taxes they owed. About this time the IRS set up a special unit to investigate Hollywood moguls it suspected of tax fraud. In fact, the investigation into Carolco had begun even before Vajna decided to leave the company, and it was most likely this investigation that prompted his exit. The “byzantine system” was so complicated that even market analysts were unable to navigate through the maze of companies. As a result of Hoffman’s machinations, the company made barely any money. A few million a year.

The IRS was after Vajna and Kassar for fourteen years. Among other things, the investigators uncovered large interest-free loans from the company to Vajna and Kassar. In 1988 alone, according to Magyar Narancs, they received $8 million, which they spent on art work and real estate, as well as on covering their gambling losses. The IRS alleged that between 1988 and 1990 Vajna and Kassar sold 75% of Corelco’s stock, in the amount of $286 million, through their offshore companies, on which they paid no taxes. Vajna’s share of the loot was $107 million. The tax case was settled out of court. Instead of the $41.1 million the IRS said it was owed, Vajna paid $6.5 million.

Vajna’s next business venture in the United States, Cinergi Pictures Entertainment, wasn’t exactly a success story. It was established in 1990. By 1993 it lost $4.2 and in the following year, $16.1 million. By April 1997 it was announced that “the troubled independent film company, hammered by losses from such films as ‘The Scarlet Letter,’ ‘Judge Dredd’ and ‘Nixon,’ will pass virtually all of its library over to Walt Disney Co. in lieu of paying Disney $38.4 million advanced to Cinergi to make movies.” Cinergi IPO’d at $14.50 a share in 1992. By 1997 its stock price was just a little over $1. The Los Angeles Times reported that “the company has said it has not been identified by the U.S. attorney as a target of the probe,” although Vajna himself was “the subject of a federal grand jury investigation involving his personal tax returns.”

Five months later, in September 1997, Cinergi’s fate as a public company was sealed. It agreed to a management buyout offer of $2.30 per share, or about $31 million. “Under the deal, Cinergi would merge with CPEI Acquisition Inc., a company formed for the buyout by Andrew Vajna, Cinergi’s president and chief executive, and Valdina Corp.” CPEI Acquisitions, registered in Delaware, still exists on paper, but there is no information about it online. Valdina Corp. is an even more mysterious entity. Bloomberg Business couldn’t identify any of its key executives, but it did learn that Valdina has a P.O. Box in Castorweg in the Netherlands Antilles.

Vajna and Karras got together again after 2000 and produced a number of films, the best known of which was Terminator 3, which was a financial success. Sometime before 2010 Vajna decided to give up his career in Hollywood to become Viktor Orbán’s commissioner in charge of the Hungarian film industry. And to start his shady business dealings all over again, this time in a more congenial environment.

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Kmetty Geza
Guest

Too bad that…he just cant resist his DNA instincts…

Member

What is this supposed to mean?

tappanch
Guest

This is covert anti-Semitic parlance. Kmetty assumes that
1- Vajna is Jewish,
2- Vajna is a bad guy, BECAUSE he is Jewish..

Kmetty cannot imagine that a
1- non-Jewish person can also be successful, and that
2 – a Jew can be an honest, decent fellow.

Member

Thank you Tappanch, I did understand what Geza meant, but I really want to read it spelled out by him.

exTor
Guest

Maybe not, Éva. The DNA comment by KG is plenty ambiguous and he needs to do some explaining here to clear his name. Until that happens, I’m on the side of Some1. Kmetty Geza could have used the Kövér/Orbán talk “about the DNA of liberals and socialists” to springboard his apparently antisemitic allusion to Andy Vajna.

MAGYARKOZÓ

exTor
Guest

No idea what Kövér said. Éva. I was just following your lead WRT “Orbán and Kövér … talking about … liberals and socialists”.

Irony is not universal, Éva. Quite often it is highly personal. Too much uncertainty here. Kmetty Geza needs to explain himself on this one.

Off to the gym . . . again.

MAGYARKOZÓ

exTor
Guest
http://hungarianspectrum.org/2015/06/19/a-compulsory-course-on-the-holocaust-at-the-hungarian-catholic-university/comment-page-1/#comment-98697 … [exTor] http://hungarianspectrum.org/2015/06/19/a-compulsory-course-on-the-holocaust-at-the-hungarian-catholic-university/comment-page-1/#comment-98627 … [Kovacs] Good read, Some1. I wonder if Kmetty Geza will respond to you and tappanch. Likely not. Given what KG just wrote, I linked to a few recent KG posts, however I could not find anything morally untoward by KG. This reminds me of a recent bunch of posts by the dubious Rev AW Kovacs, who spated Éva’s June 19th article. I finally called him out [top link] on his 10th post [2nd link] out of his 15 dumped on the article. To my knowledge, Rev AW has never responded to my determination that he is a closet racist. He probably will not do so. He may never refrequent this website, which will not be a bad thing. It seems that Kmetty Geza is also a closet racist, notwithstanding the fact that KG seems to be on the right [read: left of Fidesz] side. Blips happen. Yesterday, during the course of hitting the iron at my local gym (where I put in a good 150-minute workout) I got into a brief chat with János, who is retired from 30 years in the Hungarian army. After his comment that his army pension is being docked 16%… Read more »
Templar2
Guest
FYI: Orban is widely held – by Jobbik supporters and leftists alike – to be of Roma extraction. In general, according to several polls the Hungarian leftist voters are no less racist than the right wing voters. Andy Vajna’s religious/family background does not to have be emphasized overtly, he may not even be jewish under any definition for all we know. His picture however is more than enough for anti-semites to evoke the desired emotions. He was specially chosen by Fidesz to be such a lightning rod: most people who are overtly or subconsciously anti-semites just look at him and immediately forget about Fidesz, Antal Rogan, Arpad Habony, they just see a jewish-looking wheeler-dealer (on the cover of last week’s Heti Válasz for example). [Vajna is not a jewish-looking farmer or carpenter, but a wheeler-dealer, which is what an anti-Semite “expects” from a jew. Luckily for Fidesz Vajna doesn’t shun the limelight, his willing to perform. He may understand his assigned role, but he just doesn’t care. “See Orbán really wants good for the Hungarian people, it’s the people around him who cause all the problems, if only Viktor could get rid of them things would be so much better.… Read more »
exTor
Guest

Templar2: Interesting take on two major Magyar bugbears: Romaness and Jewishness. Not sure how widespread amongst Hungarians is the notion that Viktor Orbán has Roma blood in him. I’ve heard it said too.

Vajna and Jewishness? I think that it’s a bit cynical to believe that Andy Vajna was chosen to lightningrod antisemitic sentiment. In the complex that is Fidesz, the fact that Vajna is famous, is rich, has connections and has the United States (as a dual citizen) is enough to bring him onboard.

Fidesz needs all the help it can get.

MAGYARKOZÓ

tschardas
Guest

Andrew G. Vajna is a very useful symbolic figure and he is apparently happy to perform. His role (beside of course arranging billions into Fidesz coffers) is exactly to evoke such sentences from people like Geza Kmetty.

berger
Guest

I wondered if Vajna was still a US citizen. See, just because he lives in Hungary and is apparently protected by Fidesz he is not immune from US laws. Having read only about the public portion of the ‘deals’ he was involved in with chief fideszniks Vajna could realistically be put into jail for life (or at least for several decades which for him is the same). Given the harsh US criminal laws it’s hard to imagine a US citizen as conscious about US laws as he could be (see the post about his tax issues) ignoring such a threat. The fact that he seems to absolutely ignore such threat – assuming he is still a US citizen – could mean that he is also protected by the US government possibly in exchange for information about fideszniks. Of course as an increasing number of Americans renounce their US citizenships for tax reasons he could be one of those, though I expect that he also holds at least one other valuable citizenship just in case.

Live long and prosper
Guest

He is an egotistical philistine – his massive box-like studio near Etyek has blighted a once-beautiful, uninterrupted view of gently rolling hills. It used to be that you could look across 30km of pristine Hungarian countryside. Now you can’t avoid to see his monstrous edifice to his own corruption.

Off topic, I just saw this interview with Peter Juhasz via Budapest Beacon’s post on FB: https://www.facebook.com/BudapestBeacon/videos/1148519521831286/
I was impressed.

Choi
Guest

Do your homework, the Korda studios at Etyek don’t belong to Vajna.

Live long and prosper
Guest

I understood that the hideous project was realised according to his leadership. I didn’t write that he owned them. What are you saying, that he is not responsible?

Choi
Guest

Why would he be responsible for the construction and degradation of the environment? He didn’t put any money into it as far as I know (it was originally a Demján project who has personal connections to Etyek), it was financed mostly by OTP, why would you blame Vajna for the Korda studios? It’s unfair. You can dislike Vajna for a lot of things but the Korda studios isn’t one of them.

Live long and prosper
Guest

You seem to know the project. Was Vajna uninvolved? And if he was involved, what was his involvement? If he wasn’t involved, then I have been misinformed.

Guest

I also.

ER1956
Guest

It would be good to refrain from attacking Geza Kmetty.

I know him well, and his metaphoric DNA description may refer specifically to Vajna.

The article says clearly that Vajna’s business practices are rather confusing.

Once again, I think that Geza Kmetty deserves our respect, and I will cherish our mutual good friendship.

His 1956 acts alone assure him a place among our Hungarian heroes, like Eva Balogh, herself.

Member

I am happy that you know him. I do not, and many who read this blog don’t k ow him. He did not “establish” his sense of humour on this blog. I have no idea if he is a funny man or not. People who come on this blog and read a comment on the top of the comment section will draw their own conlusion, you like it or not. If you wish to shadow Geza around to defend his sense of humour after each of his comment, you are welcome too. Until than I would prefer if Mr Kmetty would stay away from such ambiguous jokes that offends half dozen readers.

Kmetty Geza
Guest

Honi soit qui mal y pense – átkozott legyen, aki rosszra gondol…ez neked is szol!!!!
Egy szoval sem voltam antiszemita, csak utalom a hazugsagot es a kapzsisagot! Ennyi!
Isten veled kedves hinfitarsam!

Member

Now, you are just playing plain silly. I still do not understand what Vajna’s DNA has to do with his possible “gangster ways”? What DNA are you referred to? What is your DNA? What is Orban’s DNA? God bless you too!

exTor
Guest

Honi soit qui mal y pense?

I am not impressed, Kmetty Geza. I studied French for 4 years in Toronto, so the words are quite familiar to me. For a while during highschool, I was a part of the Royal Regiment of Canada, which has the above as its motto.

You need to know, Kmetty Geza, that you can not hide behind French and behind Hungarian. You need to know that there are some (including me) who believe that your post, which is in English and which leads this parade, is problematic [read: ambiguous].

You need to know, Kmetty Geza, that you need to explain yourself in English, for Hungarian Spectrum is an English-language forum and not everybody speaks Hungarian, either as a second language or even at all.

You profess NOT to be antisemitic. Fine. I will accept your sayso, however you still need to explain IN ENGLISH your post at the top. Thanx honfitárs.

MAGYARKOZÓ

István
Guest

Given that the PBS program was aired here in the USA it might have been nice for it to note that the fence built between Mexico and California has been a failure. There are so many tunnels that building them has become a source of employment in Mexico. What has slowed down illegal crossings has been tightened actions against those here who employ undocumented workers below the minimum wage.

Ron
Guest

I have many questions, and one of them is: Why is Andy Vajna so important to Viktor Orban? Did he invest? Did he get investors to Hungary? Why?

LwiiH
Guest

OV’s henchman destroyed the historical value of the armory in Buda castle by renovating over the shell marks on the building. And now, Andy Vajna is doing the same to the citadel first by turning the properly into a casino and “renovating” it in the process.

BTW, on the wall of the citadel is a plaque explaining the history of the building including how the Hungarians and Soviets expelled the Germans from the site during the great breakout. I guess the Hungarians were rewarded for helping by being buried in a separate mass grave after being executed by the Soviets… very kind of them to not mix them with the Germans and horses.

LwiiH
Guest

I was editing to add but the update period ended, suddenly and without warning. Anyways, my encounters with Mr. Vajna had left me less than impressed. Lets just say I’ll not be in Nobu or any of his casinos (not that I frequent casinos anyways) any time soon.

MusicLover
Guest

I can’t see that Vajna’s business affairs are any more obscure than Gyurcsány’s, or Simicska’s, or Nyerges’s, or indeed, virtually anyone known in Hungary as a “businessman” with political connections. In Vajna’s defense, he has actually been successful in the private sector with his films, even though they aren’t things I’d willing sit through. What is disgusting is that he is another example of how success or failure in business is decided by the corrupt state. His Hungarian successes with casino’s etc are the result of laws being changed in his favour. Quite why he is so powerful or influential is a mystery.

One reason why the Kmettys of this world revile him though, is because he supported and nurtured the Holocaust film “Saul fia” which won accolades at Cannes and is a hot tip for an Oscar next year. So he is not without virtues.

spectator
Guest

“I can’t see that Vajna’s business affairs are any more obscure than Gyurcsány’s, or Simicska’s, or Nyerges’s, or indeed, virtually anyone known in Hungary as a “businessman” with political connections.”

One distinguishing feature here: with the exception of Gyurcsány all the others were actively supported by the government in power.

Oh, but its the same government..! Furthermore, since it running a “one man show” its inevitably coming down to one single person!
Again!

So, let spell it out, why don’t we: Vajna, Simicska, Nyerges are just as well Orbán’s silent partners as they are “businessmen” in the limelight, while Gyurcsány doing business to Gyurcsány, and not being actively supported by the government.
Oh, and I don’t remember any offshore business ever been mentioned as associated with him, but hey, I’m getting old and forgetting things.

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