Guide book to embezzlement of European Union subsidies. Part I

Today and tomorrow I will look at three recent corruption cases in Hungary, all of which involve money received from the European Union.

Two Hungarian politicians are currently spending a lot of energy uncovering corruption cases. One, Benedek Jávor (PM-Együtt), is a member of the European Parliament who sits with the Greens. The other is Ákos Hadházy, a veterinarian from Szekszárd who began his political career as a Fidesz member of the city council. Once the corruption of the Fidesz members of the council became apparent, he resigned his post and quit the party as well. He is now a member of LMP.

Both men are doing a splendid job. Jávor is in an infinitely better position than Hadházy because he receives information from the EU and its anti-corruption arm, OLAF. Jávor has made a real impact, especially concerning the Paks II nuclear power plant and its most likely illegal financing. Hadházy, on the other hand, is at the mercy of the Hungarian authorities or the police who simply ignore his inquiries and/or criminal complaints. Although he has been working tirelessly on dozens of cases, he is unable to show any results. Hadházy is now hoping that if he and his fellow LMP politicians regularly make corruption cases public, they will be more difficult to ignore. Thus, every Thursday he will reveal one case. He claims that he has enough cases to keep “Corruption Info” going for at least a year.

Today I’ll focus on Hadházy’s first case, presented at the launch of “Corruption Info.” I will devote tomorrow’s post to Benedek Jávor’s successful efforts in Brussels.

Ákos Hadházy arrived at the press conference with a recording of a conversation between Rezső Ács, the mayor of Szekszárd, and Péter Máté, a Fidesz member of the city council. The conversation took place in 2012. It was about the decision of the city council to entrust a particular job to a company that charged considerably more than its competitors. Here is a portion of the conversation:

-Eighty-five percent support!

-Yes, yes, but this is a good offer. The price is high, but it can be done in such a way that the person who does it will finance the whole thing and therefore it will not cost us anything.

-Is it overpriced?

-Yes. This is how the tendering procedure works today in Hungary. He comes and tells me that he will do everything. He will win the tender, but he will bring everything. And if not, then he will go to the city next door. Because he has a quota which he can divide. This is how it is behind closed doors.

I’m sure that we all need an explanation of this cryptic description of the process. First of all, the ministry responsible for the tender has a certain number of businesses that have a chance of receiving these EU jobs. Each of them is allotted a quota, so if Szekszárd doesn’t grab the opportunity, the owner of the company will go to the next town. And if Szekszárd makes the mistake of awarding the tender to someone else, they most likely will either get no funding or they will have to put down 15% before the work begins. But one of the privileged companies will promise “to do everything”:  the application as well as the work itself. Only large, well-off companies are able to participate in this game because they have enough capital to wait for payment until the very end of the project, when the money from Brussels arrives. In the case of the project discussed on the tape, the company who did the project charged 115 million forints as opposed to 60 million, which would have been the price without the ruse devised by the Hungarian ministry officials and their corrupt business associates. By the end, with overruns, the cost turned out to be 130 million, paid in full by the European Union.

Ákos Hadházy at his first "Corruption Info"

Ákos Hadházy at his first “Corruption Info”

According to Hadházy, what’s going on are criminal acts of a mafia-like network that reaches and is perhaps even orchestrated by the ministries. He mentioned the prime minister’s office and the ministry of human resources as the main sources of this criminal activity. Apparently, 12 trillion forints worth of tenders subsidized by the European Union are offered by these two ministries.

The reaction of the prime minister’s office was typical. The real culprit is Ákos Hadházy, who sat through this discussion and kept the recording secret instead of going to the police immediately after the discussion took place. Thus, Hadházy is an accessory to a criminal act. According to the spokesman of the prime minister’s office, LMP, instead of holding weekly press conferences, should go to the police immediately and report all suspicious cases they know about.

The prime minister’s office underestimated András Schiffer, co-chair of LMP, who although not my favorite is a very good lawyer. Naturally LMP made sure that everything was professionally prepared. First of all, as soon as the project was finished and paid for, Hadházy filed a criminal complaint concerning the case. That was two months ago. Since then he received a letter from the police saying that they could not find any reason to investigate the Szekszárd case because they found nothing that would indicate abuse of office or misappropriation. However, the police sent the case over to the National Office of Taxation and Customs (NAV). The case bounced back from NAV, which stated that the case has nothing to do with budgetary fraud. It is a case for the police.

Rezső Ács, the Szekszárd mayor, went further. He blamed the socialist-liberal administration for the city council’s decision to offer the job to a company in 2012, two years after Viktor Orbán’s Fidesz won the election.

Tomorrow I will relate stories of criminal activities committed by the Hungarian government in its direct dealings with the European Union.

To be continued

January 29, 2016
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Observer
Guest

What a gall from this bunch of criminals!
Like in the cases of Gyurcsàny or I.Dàvid,/Herényi whoever tries to be/turn honest, to expose the lies and thieving is threatened and attacked.
Accessory to the crime ?! While the Fidesz perpetrators are still sitting there at the crime scene.

Guest

It is patently obvious that corruption in Hungary is systemic, fueled primarily by the funds doled out from Brussels, and driven by deliberate government policy personally pushed and supervised by the prime minister and his closest mafia colleagues in the cabinet.

Guest

The fault lies first and foremost with Brussels, supplier of easy come, easy go money for jam to Balkan-style Hungarian mafia overlords in Budapest, money extracted from hapless taxpayers in the core countries of the EU, money that belongs to no one other than whoever is quickest in stealing it, corrosively corrupting money that in effect no one is held accountable for in any way, shape or form.

This whole heedless money-spewing by Brussels in the direction of so-called “democracies” in the East Block of the EU is an utterly disgraceful and disgusting exercise in fostering bottomless corruption in those miserable countries.

webber
Guest

Wrong. The fault lies first and foremost with Budapest.
Why should Brussels give a dam if a member country wants to ruin its future in this way?

Guest

Tell me webber, would you have the same opinion about a drug addict?

After all, according to your logic, why shouldn’t we just pat the head of the supplier of crack cocaine, and tell her/him “Good girl/boy, you are not the one to blame first and foremost, the blame goes first and foremost to the girl/guy you helped make into a drug addict.”

May take on this is that this would not just be a nonsensical position to take, but a thoroughly evil one too.

In your opinion, however, it would no doubt be the right attitude.

So lets just agree to thoroughly disagree.

Guest

Correction: not “May” but “My”. :-))

Unfortunately I have no access to the edit function.

webber
Guest

If you think a comparison of narcotics with funding for development is legitimate, you’ve totally lost it.

webber
Guest

ambalint
A better analogy would be this:
A (foreign) doctor gives a (Hungarian) patient drugs to treat a chronic illness, and tells the patient which dose to use and when.
The patient uses half the drugs every other day, and sells the other half on the black market.

You blame the doctor.
If nothing else, this shows you are Hungarian of a certain sort – everyone else is to blame for what Hungarians do to themselves.

Guest
Wrong. First, I am not a Hungarian, but a secular Jew living in Australia. My forebears were Jewish immigrants to Hungary in the late 18th and early 19th century from Galicia and Moravia. That I happen to understand Hungarian is an accident of birth. Second, as you might verify from any number of my previous posts, nothing could be further from the truth than me being a party to the Hungarian penchant for blaming others for what they do to themselves. Very much on the contrary, and if you care to look, you will find that I had expressed my position on this numerous times forcefully and even vehemently. I would therefore be thankful if you avoided nonsensical attributions to me. Third, my analogy in no way absolves Hungarians of blame, just as I would not absolve a crack addict from blame. The point I was making is that the ethical thing to do would be to stop supplying the drug, even if the detox process involved a period of painful cold turkey. In the context of the flow of EU cohesion funds to Hungary, given that the Hungarians are never going to change their ingrained corrupt Balkan ways, the… Read more »
webber
Guest

No, the doctor would not be to blame.
Go check up on your medical ethics codexes.
The patient genuinely needs the drugs. What the patient does after s/he gets the drugs is the patient’s responsibility.

Guest

A doctor knowingly supplying drugs going into the black market?

You joking,

Never mind, you can have the last word, I am done.

webber
Guest

I am not joking. Truly – ask a doctor. If a patient NEEDS certain medicines, the doctor has to give them – not doing so would be unethical. The doctor only gives as much as is needed. Never more. What the patient does with the necessary medicines is the patient’s responsibility.
Anyway, it’s all a moot point – because this is FUNDING for development. Your narcotics analogy was insane.
If the Hungarian government wishes to waste the funds, that is Hungary’s problem.
You seem to want an Father figure for the EU – Daddy comes and slaps Hungary’s hand for being bad.

webber
Guest

Now I’ll use your cliché: “you can have the last word, I am done.”

Guest

Brussels is not responsible for the corruption in Orbán’s government.

But what the EU can be massively criticised for is continuing to send funds, in the face of clear evidence of misappropriation.

When will they stop funding Orbán and Co., is the question?

Istvan
Guest
As I have explained repeatedly there is money to be made on multiple levels for the core EU nations in relationship to cohesion funds going to Central Europe. Inclusive of Eurobonds and rapid transport to the developed nations of parts and completed products along with argricultural products. A great deal of the payments for the Eurobonds that directly fund this development aid payments come not directly from individual taxes paid by EU citizens in the core nations but rather by indirect taxation, which affects free movement of goods and the freedom to provide services in the single market. These are a percentage of value-added tax (VAT) and a part of excise duties on the sale or use of specific products in all EU states, including Hungary itself. If one goes to this page http://ec.europa.eu/taxation_customs/resources/documents/taxation/excise_duties/alcoholic_beverages/rates/excise_duties_alcohol_en.pdf one can look up the excise revenues paid by Hungary some of which pay off the very Eurobonds used to fund development aid going to Hungary. We all know corruption is happening in numerous countries, Bulgarians believe it is the worst there while Hungarians believe their country is the most corrupt. Even with the attempts in Romania by Raluca Prună to curb corruption of the 588… Read more »
petofi
Guest

There’s an easy solution: the EU should send a team to assess a budget for any project that it is asked to send money for. Thus the EU sets
the value of the project, and ships money with a top end limit.

petofi
Guest

To continue…the Hungaricoes will no doubt bitch about sovereignty and such crap, but the EU will not be picking the firm to do the job–they only determine the value of the job in the Hungarian market and how much funds they will send to complete it. No cost overrun of more than 10% would be accepted. That’s the ticket!

Guest
London Calling! This corruption is at its worst with the grants given to the churches for renovations of the fabric. A similar mechanism is in place which enables them to keep it all at arms’ length – and the resulting mandatory EU sign is just one big lie – the amount mentioned bares no relation to the money used for renovations. A big whopper of a lie outside the supposed institution of integrity. There are very few run down Catholic Churches. The Roman Catholic Unchristian Church is a knowing accessory after – and before – the fact. In our village they received monies to improve the road – to improve the transit through the village. However the money was used to install (you could hardly call the dirt road a road) a new road where the most wealthy residents lived – greatly improving the value of the houses. The specification of the road is so high – I’ve seen no other roads with perfect kerbs and over-engineered drainage – that it’s an embarrassment and unused. Just an access road for the houses. It stops and starts between two very poor dirt roads. The main trunk dirt road is well used… Read more »
pete
Guest

It’s all legal. Nobody cares.

Fidesz is corrupt, we all knew that. The left-wing too (the proverbial Nokia box Socialists…).

The people still very much like Orban and prefer him better 100x more than the commies because he cares about the average joes, while the left-wing only about the urban liberals.

Orban wins.

tappanch
Guest

“he cares about the average joes” – you must be joking… he cares about his friends and family, 0.1% of the country – see below.

Member

They just spread that propaganda (being on the side of average joes) so loudly and with such a confidence that blinds a lot of people. A wide fideszian supporter group gets its good share of their national robbery and will be loyal to the bitter end. Beyond that their “greatest” political achievement is the ceaseless intimidation of all those who are against this running amok or who can’t defend themselves.

Guest

Pete: “..he cares about the average joes-..”

He cares about the average Joe
by giving him gifts that will have to be paid later through taxes.
by letting him pay for his own brain washing through taxes.
by making quality health care unavailable to him.
by making quality education unavailable to his children.
by making the truth unavailable to him and everybody he knows.
by making him a public work slave.
and so on.
He cares for his dog by feeding it its tail and the dog is wagging the stump.

Guest

@Jean P
January 30, 2016 6:52 am

Yes, but in fairness, I don’t think that pete would dispute any of your points. He is merely pointing out some distasteful facts of life in regard to Hungarian politics. I think that you are barging in on an open door.

Observer
Guest

Orban wins billions from the dupes like you, unless you earn as single more than 380 000 Ft or as a family more than 520 000. And this is only the monetary position – the quality of education, healthcare and living environment is not included. E.g. the Czech disposable income is 60% higher now.
Capisi paesano?

Guest

@Observer
January 30, 2016 9:56 am

As I pointed out to Jean P above, in all fairness, I don’t think that pete would dispute any of your points. He is merely pointing out some distasteful facts of life in regard to Hungarian politics. I think that you too are barging in on an open door.

Guest

One wonders if Messrs Javor and Hadhazy are simply shoveling s@@@ against the tide. Their job is difficult but yet if must be done. Why? Just to make it absolutely certain to all that those who are in the highest echelons of power are out and out thieves in their ‘fiscal’ arrangements and are destroying their ‘capital’ as it impacts the economic development of the country. Plain to me why they look to Mongolia now. Any who plan ‘investment’ in Hungary today better be careful. Making ‘deals’ can kill you and you never know when you have to pay up again. It’s a real bad game. And I don’t think the phones are ringing.

PS Maybe one day the crooks will lose it all after their deeds are shown to be what they are…reprehensible. But a point. Don’t be surprised if there’s only 20 forints in the Treasury. For there’s a price when you let
‘businesses’ fly high on corruption out of control.

tappanch
Guest

The result of the hasty privatization of agricultural land.

A maximum of 20% of the land was obtained by small farmers (the officially targeted group). Associates, friends and family of the ruling party received the majority of the land.

https://www.facebook.com/sallairobertbenedek/posts/516548748505778:0

http://nol.hu/belfold/elvitte-a-fidesz-vilag-a-fold-ketharmadat-1598951

Guest

The Prime Minister blaming Hadházy, the whistle-blower, for the misappropriation of funds which he himself orchestrates, is priceless.

Some time ago I worked as a teacher in a UK prison. Some inmates were actually very nice but had made unfortunate mistakes and decisions in the their life and were truly remorseful and paying for their crimes.

The more hardened types though felt nothing for the vicitms of their crimes, were unable to take responsibilty for their actions, had an immature and childishly selfish attitude, and blamed everyone else.

One such chap, a house burglar, said that if he stole, it was the fault of the homeowners for making it possible for him to break in.

As with the inmates at HM Pentonville Prison, so it is with the Fidesz criminals in charge of allocating EU moneys. Thus, in accusing \”Hadházy [as] an accessory to a criminal act\”, there is no difference between the criminal mentality of those serving time in Pentonville, and our illustrious, ever-so -grown up Prime Minister and his family and friends.

A pox on their houses.

Observer
Guest

Re hapless @pete here.

Again, assuming our hero doesn’t share in the spoils with the big gogs, why such dupes cheer for Orban while being screwed by him? Are their complexes so deep to justify such a high price? If so we, “there’ll be blood” in the next crisis or people will starve.

Member

pete\’s a plant — it\’s so obvious. It\’s all diversionary double-talk. Don\’t reward it by responding!
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Guest

Stevan, come on!
Pete succinctly describes Hungarian reality! It’s what we call in German “Realsatire”.
(Many …) Hungarians don’t care for the truth.
Orbán can do what he likes – the stupid sheeple will always love him, until something happens maybe …

Guest

pete…..Pete……PETE
Are you a troll?

Member

Nope, the give-away is always when the fork-tongued Orbanian troll, trying to sound sympathetic about the undeniable (illiberality, corruption), keeps on harping on the socialists and the opposition as being at least as bad, while at the same time matter-of-factly mentioning that as a consequence Orban is too clever to be beaten, and in any case has the support of the people. A mixture of half-truths and lies designed (for this particular constituency, i.e., Éva’s progressive blog) to distract and discourage. (I am always surprised that the veterans just keep falling for it. Sometimes I think it’s just because they can’t resist commenting on everything, and sometimes, more sinisterly, I think that this kind of smoke-making strategy is effective, if it works even with this population.)

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Guest

We are facing a problem that will never go away. Some comments are written in such a way that it is impossible to discern whether they are sincerely meant or mockery, sarcasm, Realsatire or whatnot. Some people have their fun with deceptions. If a commenter is stating in clear language as a fact that Orban is caring about the average Joe my assumption is that this commenter is working in accordance with the Goebbels principle that repeating a lie sufficiently many times makes it a truth. Hence I contradict him. It doesn’t matter to me whether he is a troll or only pretending to be one.

Orsi
Guest

Jean P: Like it or not among average joes Orban does have an image of caring about the average joe (despite his corruption, but all politicians are assumed to be corrupt).

Also , average people feel more comfortable thinking about him (who’s an overweight man crazy about football, likes pálinka, and pig meat etc.) than about Gyurcsany (who is an effeminate “gizda” in the eyes of rural people).

It’s not that Orban really cares about them, of course not, but average joes still feel that he does because his policies do preferred them (cutting utility prices, forcing banks to swallow losses to prefer debtors, giving free money to families purchasing real estate etc.).

The left does not have a comparable image, like it or not. The left only has an image of being corrupt, having been caught time and again (tocsik, hagyo, Zuschlag etc.) , but (other than the Bokros csomag etc. which isn’t exactly the symbol of goodness) voters cannot associate anything good with the leftists. You better face this reality.

webber
Guest

Let’s be a bit more honest here. The “average Joe” HATES all Hungarian politicians, including Orban.

col
Guest

but this is irrelevant because people vote and so eventually they must prefer one over the other even if they hate them all.

Member

see below

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