Andy Vajna in Budapest

In the summer of 2013 an interview with Andy Vajna appeared in Gentleman Magazine, a Hungarian publication. The young reporter asked Vajna how he copes with the fact that “his life is an open book,” even though the public is normally interested only in directors and famous actors and actresses, not in producers. Vajna attributed the curiosity about his life to Hungarians’ desire to learn how he managed to go from a penniless refugee to a rich, well-connected businessman.

It is true that, in Hungary, the media attention on him is intense, but not because people want to find out how to become a multimillionaire. Vajna is an influential government official who is fast becoming a cog in the mafia state’s corrupt machinery. His business ventures have been so substantially aided by the Orbán government that one cannot help thinking that Vajna plays a critical role in the operation of Orbán’s mafia state.

I recalled a picture that appeared in Origo back in July 2000 when Arnold Schwarzenegger visited his old pal, Vajna. Orbán seemed to be more impressed with the Terminator than Schwarzenegger was with the prime minister of Hungary. How much Orbán knew about Vajna’s shadier side and his troubles with the law at that time is difficult to tell, but I suspect that by now he is fully aware of Vajna’s skill in hiding income in offshore companies. Vajna has had ventures all over the world, and he is a sophisticated international business player. For a country boy from Felcsút Vajna must be a tremendous asset.

Arnold Schwarzenegger and Viktor Orbán, Andy Vajda smiling in the background (July 2000) / Origo

Arnold Schwarzenegger and Viktor Orbán, Vajna smiling in the background (July 2000) / Origo

Perhaps if American investigative journalists had scrutinized Vajna’s financial affairs as thoroughly as Hungarians have in the last four years the IRS would have had an easier time unraveling his “system of byzantine offshore companies.” It was Babett Oroszi of Átlátszó.hu who triumphantly announced in October 2014 that she could chart sixteen different businesses connected in one way or the other to Andy Vajna. Vajna is not listed as an owner of any of these companies but, as the chart attached to the article shows, all of the companies are supervised by Andy Vajna, not as an owner but as “chairman of the board,” “president,” or the beneficiary of a “revocable trust.” Who the actual owner or owners are remains a mystery.

I will not even try to reconstruct this “byzantine system,” which was after all devised to mislead. Instead, I would like to focus on how Andy Vajna managed to get hold of 80% of the value of Hungary’s casino industry, including one very profitable casino which until now was run by the state-owned Szerencsejáték Zrt. Szerencsejáték (Gambling) is the company that is in charge of the state lottery, lottó.

Last year it was announced that there will be eleven casinos in Hungary, five of which will be located in Budapest or in Pest County. These are the most profitable ones. And they are the ones that Andy Vajna will be able to operate for a ten-year period. According to calculations, once all five casinos are in operation Vajna will earn about $30 million a year. As Budapest Beacon rightly noted, “the state appears to have surrendered the whole industry to two or three players” and gave away its most profitable casino, Tropicana, currently operated by the state.

But that’s not all. While every itsy-bitsy store must have its cash registers electronically linked to NAV, the Hungarian tax agency, casinos will be exempt. János Lázár’s explanation for this exemption wasn’t convincing. According to him, casinos are exempt because (1) they don’t have to provide receipts, (2) they pay gambling taxes, and (3) electronic cash registers are supposed to monitor the proper payment of VAT and casinos don’t pay VAT. Well, yes, but these cash registers also monitor revenue. In the case of casinos, therefore, the state will have no way of electronically knowing how much money they take in and pay out. It will have to rely on self-reporting.

And that’s not the only fishy business here. Both the Hungarian state government and local governments are strictly forbidden to deal with any company whose ownership is not transparent or whose headquarters are offshore. And, as Átlátszó.hu showed, all of Andy Vajna’s companies are registered offshore. But the Hungarian government doesn’t seem to be at all bothered by this fact. When confronted with this discrepancy between stated principle and practice, Lázár didn’t even try to explain it away. He offered the feeble explanation that Vajna might pay taxes only in Luxembourg, but he is a Hungarian who spends his net income “at home.” Incredible.

Combing through the available evidence, I’m convinced that the government had a well crafted plan to hand over control of the gaming industry to trusted friends. Their plan started in 2010 when they closed down all small business franchises that operated slot machines. Then they granted the eleven casino concessions to people close to the prime minister and the party. Information coming from Fidesz circles indicates that it was Viktor Orbán and Andy Vajna who together reorganized the gaming industry. According to Heti Válasz‘s revelations, about one billion forints of Vajna’s casino profits have already been moved outside the country. Moreover, the latest reports claim that all of his Hungarian businesses are set up in such a way that their profits could easily be transferred abroad.

I assume that no one believes that all the money that comes from these five lucrative casinos ends up in Andy Vajna’s pocket. A recent article frames the question this way: “We have no information as to where the profit of the casinos after the redistribution will land. Does the profit stay with Vajna or it will flow to companies close to Fidesz or even higher? No other rational explanation can explain why it was Vajna who ‘was given’ the lucrative casino business.” Indeed. As far as the “even higher” is concerned, surely the writer has Viktor Orbán himself in mind.

I would add another possibility in addition to the above theory. Andy Vajna most likely not only provides invaluable information but actively assists Viktor Orbán in creating his own offshore paradise. I’d bet the prime minister has learned a lot from Vajna in the last fifteen years.

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András B. Göllner
Guest

Vajna is one of Orbán’s financial role-models, another is Putin. There is no shortage of advice, from the likes of Dezső Kékessy, Sándor Csányi, Töröcskei István, the ambassador to Switzerland, István Nagy or until recently Lajos Simicska. There are many many more who are ready to help. The safety net of financial well wishers is enormous, the only mystery is, where is all the loot. The Hungarian Godfather should be banned from entering the USA.

Member

comment image

Member

Orna/Vajban mugy shots…

Guest

Wow, 11 casinos to eventually be in Hungary? I guess they’ll be the sponges to soak up all those forints floating around in the pockets of working people in the country. Of all the crazy things to spend money on since the ‘house’ will eventually clean them all out statistically speaking. What a waste feeding the ‘Penz Trolls’.

Latefor
Guest

Eva said: “He is a sophisticated international business player”

Andy Vajna’s Hungarian investment success can be credited to his sensitivity to the Hungarian national pride. Also, he calls himself Hungarian, his wife is a loved Hungarian actress and they live and work in Hungary.

Apostol
Guest

Vajna’s wife is Andrea Vajna (Palacsik) who was Miss Universe Hungary 2014, and who is a minor celeb in Hungary. You are thinking of his former partner actress Kata Dobo

Latefor
Guest

Thanks “apostol”.
He obviously has a great admiration for beauty.

Guest

And Hungarian girls have a great admiration for what ?
Maybe it’s money and power?
When I see pictures of Vajna and his women the first thing that comes to my mind is the expression “Trophy Wife” …

Latefor
Guest

Wolfi,
Are you jelous? Yes, most women like: money & power! He also have a certain irresistible charm, he’s very handsome and he obviously knows how to seduce a woman. 🙂

(If you happen to read this Mr Vajna, and if you have some time, would you please read one of my books, title: ” The Gresham Symphony”- available on Amazon.com.

For “comic relief”: Dearest Eva, this is all your fault for: el huztad a mèzes madzagot az orrom elòtt. 🙂
I couldn’t help myself, I just had to risk it! Now I’m getting prepared for the belting. . .

Kmetty Geza
Guest

Wow!!! I am impressed!!!

Kmetty Geza
Guest

Honi soit qui mal y pense – átkozott legyen, aki rosszra gondol…ez neked is szol!!!!

Latefor
Guest

Én csak szèpre szeretek gondolni. 🙂

Serge
Guest

According to Gábor Török, the well-connected politologist Jobbik and LMP may get closer in the future.

One of the MPs of LMP recently said that he agrees with 70% of what Jobbik says and both are fundamentally anti-capitalist parties so this would make sense.

LMP is close to disappearing and Jobbik needs acknowledgment that it’s not extremist (ie. that really it’s a compassionate conservative party).

bimbi
Guest

Orban, Lazar, Fidesz/KDNP…

…Corrupt, corrupt, corrupt.

gamer
Guest
Needless to say the casino business has always had intimate ties to organized crime and has been monitored by the Hungarian secret services. It’s just inconceivable that the services wouldn’t be actively participating in this rearrangement of the entire casino business. If you add that Antal Rogan’s immigration bond racket is also managed by silovik-trype people we talk about tens of billions annually to this circle. I also believe the casinos launder billions and billions for fideszniks who might need a paper about the origins of their wealth – fideszniks smartly prepare the paperwork anticipating even the unlikely events. While all the cashier machines of all shops are now linked to the tax authority via a real-time online connection, the slot machines which were used to wired to the authorities now aren’t any more. But I assume that the illegal tobacco business which currently amounts to some 150bn forints annually (nobody smokes less of course but half of the business disappeared in the last 1-2 years) and which was created by Fidesz from scratch after monopolizing the retail of tobacco also launders its profits in the casinos. Knowing Fidesz I think it’s just inconceivable that if Fidesz allowed people to… Read more »
Latefor
Guest

@gamer – “If this is not a mafia state than I don’t know what is”

You will find out by tomorrow morning. Look for a horse head in your bed. If you’ll find one, then we are talking about a ‘mafia state’. Please let me know.

ToTo
Guest

You underestimate the ability of the mafia to change in order to confirm to new conditions. Just as dictatorships don’t all look like Stalin’s system or that of Kim Jong Un’s the mafia (and the more polished people who took over some of its traditional rackets and became it) now operate in much more sophisticated ways than in Coppola’s movies.

Guest

Nothing to say on the facts themselves?
The tobacco shops, the casinos,the Sunday closing, the special taxes for foreign companies?
Of course these are no problems for you – you don’t live in Hungary and you’re not really interested in the Hungarian people and their problems!
In your silly opinion most Hungarians adore Orbán, don’t they?

Latefor
Guest

Wolfi, here is my input:

Re: foreign companies paying taxes
They invest into Hungary to make money and I’m sure they will survive, taxes or no taxes..

Re: Sunday trading
People only have a certain amount of money to spend. You can drag this shopping time over six or seven days. Even people (shopkeepers ) need to rest. Great idea from the Christian Democrats!

Re: casinos
I’m sure that it was meant to attract high rollers (tourists) just like in Monaco. It wasn’t meant for Pista bacsi to spend his monthly income.

Re: tobacco shops
In my understanding, they were meant to create small businesses, to create employment. I wish they were called something else though. Smocking should be descuraged.

bayou1
Guest

@wolfi,
Don’t waste your time with @latefor.
S/he obviously has no problem with cronyism and nepotism.

Guest

I know – I just wanted to hear it from her directly …
“create small businesses” – usually several of them belong to a Fidesz cronie …

My favourite story:
There’s a young sportsman, son of a Fidesz politician, who got several tobacco shop licences – now he proudly drives around in his 80 000€ sports car. Nominally he’s still a student …

Latefor
Guest

Re: above post
It should be: smoking NOT smocking 🙂
discouraged NOT descuraged.
(my brain stopped and my “tablet” sabotaged me)

exTor
Guest

Re embarrassing spelling mistakes:

Perhaps more appropriately, Latefor, you didn’t bother to proofread your creation before firing it off into the ether. Somehow I doubt that your tablet was nefarious enough to sabo you. You’re probably too smart, Latefor, for that kind of underhandedness.

Oh BTW, has Andy Vajna informed you that he indeed bought your The Gresham Symphony? Just asking. You know, comic relief.

MAGYARKOZÓ

Latefor
Guest

ExTor – He didn’t have to buy it. I sent it to him a few weeks ago with a begging letter. (I’m still waiting on my knees as I’m writing this post) 🙂

exTor
Guest

Cuki poszt, Latefor.

MAGYARKOZÓ

Guest

A bit OT:
http://www.pewglobal.org/2015/08/05/russia-putin-held-in-low-regard-around-the-world/
Especially in countries like Germany Putin’s and Russia’s image has become really negative right now.
Is their a similar survey for Hungary and Orbán?

Guest

You know the ref to ‘Coppola’s movies’ kind of reminded me of the fact that while we’re in the year 2015 Hungary might as well be stuck in a time warp which harks back to those days of ‘film noir’ in the 40’s.

Hungary I’d suggest has the same environment today namely shady, corrupt, bleak, a society of ambiguities, fearful, corrupt, paranoid, alienated, dark, obsessive , apparently a country of spiritual and moral darkness and one more time corrupt.

The ‘movie’ going on in real life over there sure looks popular and getting an extended run considering its subject matter. The state sure keeps selling tickets to the great film noir show going on. Such a road to possible disaster. I’d like to be like Rick in …Casablanca…misinformed.

spectator
Guest

Its yearning for the next great venture: Time Travel!

“Come to Hungary, and you’ll be immediately flung back in time, straight into those glorious ‘30s!” – or thereabout…

I’m sure that Vajna’s expertise to milk the people and the opportunities alike won’t be wasted once again! Coupled with just the right person, who not only ready and willing, but even capable to recreate the real-life feelings of those times, he can’t lose!
Better than any movie ever!

And there is the person right now, who already done a great part of the job, nearly all by himself, so they are almost there: Viktor, the greatest!

Be honest people, it took some doing, but he managed, excellently so far, and no sign at all of him leaving the well proven path!
Yes, here and there needs some more work done, uprooting weeds like ‘liberalism’, ‘freedom’, ‘compassion’, ‘humanism’, and the like, what grew over in those eighty years, but he’s doing just great!

Really impressive, ladies and gentlemen!
Congratulations!

Bitstream Fractalized
Guest

Proper christians don’t go to casinos.

Guest

Of course!
Then who are these hundreds of thousands visitors in the Hungarian casinos?
http://www.portfolio.hu/en/tax/gamblers_spend_huf_88_bn_in_hungarian_casinos_in_h1.30046.html
Vajna must make a nice amount of money …

Rikard
Guest

“Re: casinos
I’m sure that it was meant to attract high rollers (tourists) just like in Monaco. It wasn’t meant for Pista bacsi to spend his monthly income”

Probably not in theory but I’d bet some Pistas and his friends are getting ripped off anyway. No upside there. There’s a proportion of the population who are in the casino halls and they should rather be a thousand miles away from it. At bottom the players who play those games are the least who can afford it. And the ones who gain are simply filling their own gilded coffers in their own selfish conception of a golden and gilded Hungary. The ‘robber barons’ are alive and well…;-)…

Guest

Just look here:
http://bbj.hu/economy/report-slot-machines-restricted-to-casinos-lift-visitor-numbers_102104
Slot machines formerly known as one armed bandits which used to be in many bars in Hungary now are only allowed in casinos – they are for the Pistis and Csabas, while the poker and roulette tables are for the richer people.

Guest

Holy money! With casino visitors jumping almost 300% in 3 years that says something about the run for the gelt, eh? Lots of Pistas and I’ll add ‘Nenis’ too apparently looking for the moneyed land of flowin’ milk and honey. It sure looks like gambling seems to be the way to perhaps get ahead in that Hungarian economy.

I figure this is a ‘bizness’ sideshow picked up and learned from Vladdy’s burgeoning kleptocracy over there in the east. Hungarian bizness sure is learning much from those Russian guys. Like those ever sunlit and ever smiling Beach Boys they sure know how to ‘get around’ and never to fail to do their ‘work-a rounds’.

Ron
Guest

No it was not only the slot machines in the pubs that was forbidden, also other casino’s were closed, such as Senator Casino. A few years ago they were the largest player, but due to new regulation had to close down.

http://www.senatorcasino.hu/

Their website (translated from google translation states:

“During the conversion page
The senator once more casino hall operated in Hungary. Currently there is only one casino either, because after changing the relevant part of the Gambling Act could not continue further activities. It is worth to try the online casino world. Online casino”

I assume that due to Online Casino that was one of the reasonsVO wanted to introduce internet tax.

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