Benedek Jávor (PM-Együtt) is the most active Hungarian opposition member of the European parliament and therefore perhaps the most hated by the Orbán government. Being the target of the mafia government carries risks. His office has been broken into and his telephone conversations are being tapped.
Jávor is indeed a dangerous man for the current regime because he is in constant touch with the European Commission’s Anti-Fraud Office, better known as OLAF, which has been investigating a large number of suspicious cases. The investigations sometimes take years, but in several cases OLAF investigations have been concluded and the Hungarian government notified of its findings. Jávor has been following several OLAF investigations. For example, István Tiborcz’s business venture, Elios. Frightened by the prospect of a serious investigation, Viktor Orbán’s son-in-law “sold” his street-lighting firm in a great hurry. Jávor has also kept an eye on the OLAF investigation into Antal Rogán’s pet project, “The heart of Budapest,” an expensive renovation project in downtown Pest.
Here I would like to write about two other grants to which Jávor called attention: first, the fraud that was committed in a project earmarked by the European Union for the more effective oversight of subsidies coming from Brussels and, second, money received to improve the energy efficiency of private homes that is instead being diverted to insulate government buildings.
First, the story of the guardians of public morality who turned out to be common thieves. The case goes back to 2012 when almost a billion forints that were supposed to be spent on hiring extra staff to uncover fraud involving EU subsidies were stolen by a number of men, among whom was a former employee of the government’s Nemzeti Fejlesztési Ügynökség (NFÜ / National Development Agency). OLAF closed its investigation in June 2015, but it was only in October that the case was reported in the Hungarian media. Since OLAF cannot conduct criminal investigations in the member countries, it turns the job over to the local authorities, assuming that they will do a creditable job in going after the guilty ones. After hearing nothing on this front, Jávor turned to Péter Polt, prosecutor-general, and András Tállai, the new chairman of NAV, the Hungarian equivalent of the Internal Revenue Service. Polt claimed that his office is investigating; Tállai seemed blissfully ignorant of the case.
What happened that attracted the attention of OLAF? At that time NFÜ was the highest government authority handling the allocation of EU subsidies. (Now the prime minister’s office decides their fate and, thanks to Ákos Hadházy, we know what a terrific job it does.) A consortium was formed to advise NFÜ on more efficient oversight. Instead of doing the work themselves, the members of the consortium hired subcontractors who received large sums of money for doing nothing. The fraud seemed so serious to OLAF that a team actually went to Budapest to investigate. They found that millions of forints had been paid, in cash, to phony subcontractors. After four years of investigation, OLAF recommended that all the money spent on the project should be paid back by the government.
One would think that after this debacle the members of the consortium would lie low but, according to a recent news story, some of them are now vying for a new job that would bring 5 billion forints of EU money to those who win the tender. As HVG put it, “there are four royal warrant holders and two dark horses competing for the tender.” Warrant holders are companies that can supply goods and services to Elizabeth II, the Duke of Edinburgh, and the Prince of Wales. Of course, in this context the four companies are the ones that are “approved” by the Orbán government. At least two of those described as “royal warrant holders,” CEU Tender and Szilárd Nagy’s law firm, were members of the consortium responsible for the earlier mega-fraud.
The second case is also outrageous. In December 2015 János Lázár announced that the European Union will not allow the Hungarian government to use EU money for the purpose of improving the energy efficiency of private homes during the 2014-2020 budget period. Therefore, the Orbán government will use the subsidies allocated to energy efficiency on public buildings only.
Everyone in the energy sector was stunned because the European Union had specifically urged the member states to support investments in energy efficiency projects for the benefit of the population. As a result, in 2014 the Hungarian government asked the EU for funds to be spent on outright grants to homeowners. Between now and 2020 perhaps as many as three million residences could be insulated from a grant of 150 billion forints. The insulation of 40,000 apartments a year would create several thousand jobs. As the result of such a project, Hungary could save 4% in natural gas consumption by 2020.
Yet the government decided against the project and opted to use the amount granted to ordinary citizens on government and other public buildings. A day after this announcement the government proclaimed that the amount of money designated for improving the heating of TEK’s headquarters was to be raised fourfold. TEK is the infamous anti-terror unit created by Viktor Orbán practically the day after he took office in 2010.
And here comes Benedek Jávor again. He asked the European Commission about its stance on the issue. The answer was clear: the Hungarian government had specifically asked for money for work to be performed on 50,000 private homes to make them energy efficient. If the government cannot show proof of the work done on 50,000 homes, it will have to pay back the money it received for the project.
What can be behind this diversion of EU money from private residences to public buildings? Benedek Jávor is most likely right when he suspects that as long as ordinary citizens apply for individual grants, the homeowner will decide whom he will hire to do the job. With a public building, it will be the government that will pick the winners of the tenders. To make a large building energy sufficient is a huge job, costing billions. It can only be done by large companies, the ones that can be described as “royal warrant holders,” i.e. oligarchs close to Fidesz. (The Orbán government doesn’t hide the fact that one of its goals is to enrich people who can then be used for its own political purposes.) Individuals who would like to improve their houses will turn to some small local business owner outside the reach of the government. Their action will not directly benefit Fidesz. It is not an exaggeration to say that almost every major project in Hungary is undertaken for the enrichment of the present political elite and its business partners. The Hungarian public’s well-being is at the bottom of their priority list.