Letting the fox guard the henhouse: Hungarian prosecutors undermine justice

The thread that connects today’s topics is the state of the Hungarian legal system. As it stands, Hungary has a thoroughly corrupt prosecutorial system and a judiciary that at times shows itself to be truly independent despite considerable pressure from the executive branch. All three topics I’m addressing today are in one way or the other connected to these two branches of the legal system.

Let me start with a surprising verdict handed down today by the Budapest Court of Justice. Altus Zrt., Ferenc Gyurcsány’s company, sued Viktor Orbán because in May 2015 Orbán claimed that Altus is a bogus company created for the sole purpose of generating revenue from the European Union to finance Gyurcsány’s party, the Demokratikus Koalíció. Altus is actually managed by Gyurcsány’s wife, Klára Dobrev, an economist and law professor who teaches banking and financial law. The firm received, in an open bid process, a large contract from the European Union to evaluate the use of subsidies by member states and to suggest solutions for their more effective use. Given the political atmosphere in Hungary, Altus, regardless of the quality of its associates, can’t get jobs in the country and must offer its consulting services abroad.

Altus decided to sue Viktor Orbán for slander. Today the Budapest Court of Justice declared that Viktor Orbán’s claim was false and ordered the prime minister to refrain in the future from similar libelous statements. He will have to pay Altus 270,000 forints for court costs. And finally, and this is the one that must hurt Orbán the most, he has to openly express his regret for ever having made such a statement. I don’t know who that brave judge was, but the verdict is simply breathtaking. No one remembers such a verdict against a sitting Hungarian prime minister. Of course, this decision is not final. I’m sure it will be appealed.

Viktor Orbán must be livid. Fidesz immediately released a statement which, in total disregard of the verdict of the court, declared that “even a blind man can see that Ferenc Gyurcsány is financed from Brussels.” Fidesz’s spokesman quickly segued into Péter Medgyessy’s business transaction with Alstom, the French company that provided cars for the new Budapest metro line, the M4. “On the left only the companies and the size of the bribes change, the essence remains. Both Gyurcsány and the other socialist prime minister [meaning Medgyessy] conducted business through their wives. We are looking forward to Gyurcsány’s answer about how much money he received from the bribe of Alstom because, after all, it was during his premiership that the Alstom contract was signed.” Well, it is time for Gyurcsány, who a few years back swore that he would sue anybody who falsely accuses him of anything, to start proceedings again, this time against Fidesz.

That takes us back to the Medgyessy case, which I already mentioned in a post. Since then ten articles dealing with Medgyessy’s involvement with Alstom have appeared in Magyar Idők. The government obviously finds the case extremely useful politically. But how did Magyar Idők get hold of the story in the first place? The articles that appeared in the government paper are based on detailed information, including individual bank transactions. It is unlikely that the source of the information is the Medgyessy couple’s bank. We mustn’t forget that in the last couple of years the Hungarian prosecutor’s office has been investigating Alstom’s possibly illegal activities in Hungary in connection with the metro cars. So it is highly probable that Magyar Idők, just like its predecessor Magyar Nemzet, received the documents directly from the prosecutor’s office, headed by Péter Polt, chief prosecutor of Hungary and an old friend and protector of the prime minister. And this is a crime.

Marianna Polt-Palásthy

Marianna Polt-Palásthy

One cannot overemphasize the importance of Polt to Orbán’s system. It is no exaggeration to say that without Polt, or someone as crooked and loyal as he is, Orbán’s mafia state would have collapsed a long time ago. He is the one who stands between Viktor Orbán and justice and ultimately jail. So, it’s no wonder that Polt receives special treatment. A few months ago we heard that TEK, Orbán’s private bodyguard, will also guard this precious man, who is not entitled to such protection by law. And a few days ago, thanks to the documents released by the Hungarian National Bank’s foundations, we learned that Polt’s wife, Marianna Polt-Palásthy, personnel director of the bank, is also the chair of the board of Pallas Athéné Domus Scientiae, a member of the board of Pallas Athéné Domus Mentis, and a member of the Kecskeméti Duális Oktatás Zrt. She was hired by György Matolcsy in 2013, originally with a salary of 2.3 million a month, but by now she makes five million. Matolcsy’s salary was just raised to five million. So, while the chairman of the bank was making only two million, the director of the personnel department made five million. I wonder why. (Oh, those wives….) We also mustn’t forget about the extra remuneration for her jobs on the foundations’ boards.

And one more story about the Hungarian prosecutor’s office. It has something to do with the Quaestor scandal about which I wrote a year ago. The Quaestor affair is often described as Hungary’s Madoff case, except that here it is likely that the Orbán government itself was involved. Several ministries invested in Csaba Tarsoly’s pyramid scheme, and to the very last minute before the company collapsed Tarsoly was hoping for, and expecting, a government bailout. In brief, a thorough investigation of Csaba Tarsoly’s fraud case is not to the advantage of the Orbán government. And that takes us to our next story.

The victim's of Tarsoly's pyramid game The sign reads: "Orbán get lost and take your cronies along"

The victims of Tarsoly’s pyramid game
The sign reads: “Orbán get lost and take your cronies along”

It is becoming an everyday occurrence that the prosecution’s cases are so poorly prepared that cases that seem very strong even to outsiders are lost time and again. One of the worst offenders is Budapest Chief Prosecutor Tibor Ibolya who, contrary to his family name, is anything but a “violet.” In fact, he has gotten into all sorts of trouble with the courts and judges for speaking in ways the judges found unacceptable. In the Quaestor case Ibolya’s office dumped thousands of documents, absolutely unsorted, into the lap of the judge, not even indicating which documents supported what charge. Among the documents the judges found music, private documents, and photos that had nothing to do with the case. The court sent the whole mess back, asking Ibolya’s office to put their case together in a proper manner because what the court received was useless. Thus far Ibolya refuses to oblige. But the court isn’t budging either. If there is no action by May 31, the whole case against Tarsoly will be dropped. The suspicion is that this is exactly what the prosecutor’s office, with the active encouragement of the Orbán government, wants.

And one final word. It is Péter Polt’s office that is supposed to investigate the legality of the establishment of the Hungarian National Bank’s foundations even as his wife is deeply involved in and profits from the whole illegal scheme.

April 29, 2016
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April 30, 2016 1:39 am

“One cannot overemphasize the importance of Polt to Orbán’s system. It is no exaggeration to say that without Polt, or someone as crooked and loyal as he is, Orbán’s mafia state would have collapsed a long time ago.”

That is why he will be the first to be handcuffed post-Orban.

April 30, 2016 6:59 am
On Medgyessy – Fidesz press is just riding this to try to distract attention from the revelations that Fidesz’s Hungarian National Bank governor, Matolcsy, distributed nearly $1 bn. (yes, billion: precisely 260 bn forints) to foundations run by his relatives and Polt’s wife. The accusation against Medgyessy is that his company took 597,000 Euros (yes, thousand), which is about 180 m. forints at today’s rate. This happened well after he was Prime Minister – after he had retired from politics. Medgyessy fully admits this and says his company paid full tax on that income, which was used to pay the salary of 9 people over several years. Presumably he can prove that. Fidesz press is acting as if this were impossible – as if this amount of money is some outrageous sum. So, let’s do the math. Say each employee earned, pre-tax, something like 1,000 Euros, or 300,000 forints per month. That’ s not a high salary in Hungary – it would be under the poverty level in many Western countries. So, 12,000 Euros per year per employee. 12,000×9 employees = 108,000 Euros per year. It would take just over five years to spend the entire sum on that small… Read more »
April 30, 2016 9:03 am

Polt’s wife is paid about 16,000 euros/month or 192,000 euros/year + more money from other government sources. Her 16,000 euros salary/month would take only 3 years to deplete the money Medgyessy received to spend on wages for many people. Poll’s wife on the other hand is receiving her money from Hungarian taxpayers!

April 30, 2016 9:49 am

These people like Polt etc are unbelievable – an obvious mafia-like structured system. They must be very sure of themselves and have a deep feeling of hate, contempt or whatever re the Hungarian people!
Or again as Lázár said:
If you have nothing then you are nothing!

April 30, 2016 9:00 am

With a name appropriated like Pallas Athene one would expect a vision of exemplary ethics girding the study of economics and finance. Maybe but maybe not with PADMA.

Looking ahead to elections later on, the same question as Fidesz campaigns to ‘usher in a new Periclean age’. Surely the irony won’t be lost on those ‘in the know’ as Fidesz continuously cloaks itself in ill-fitting appellations.

April 30, 2016 3:04 pm

Népszabadság today has a story by Andras Boda that cleverly links the Fidesz government crisis of the central bank and its centralized education system called for short KLIK. To read the article in Hungarian go to http://nol.hu/belfold/klik-volt-menedzsmentkozpont-lesz-1613571

The article describes in some detail the plan Fidesz puts forward yesterday to supposedly de-centralize KLIK into “sixty or seventy smaller units.” Clearly this will be a disaster, but in my opinion it will be a disaster with a possible pot of gold for Fidesz. It could create the possibility of even more Fidesz controlled jobs to pass out to its supporters across the country. The plan was denounced by both of the major teachers unions and interestingly also by the president of the Association of Hungarian Local Governments.

April 30, 2016 6:21 pm
Looking back to the year 2000 the pattern is perfectly clear – Mr. Polt is a criminal Looking back to 2000 the patterns emerge clear – Mr. Polt is a criminal of the most dangerous kind, he is corrupting or disabling the justice system itself sending a green line signal for the wholesale robbery we witness. In the rare case of some outrageous embezzlement, misappropriation or like hitting the fan, Mr. Polt is there as a last blocking post. In Hungary the Prosecution Service (PS), headed by the Chief Prosecutor (CP) is an independent institution, nominally accountable only to the Parliament. Nominally because the P. can not actually take action against the CP. The PS has a hierarchical system where the CP can take any case from the police or from any prosecutor and act on it as he sees fit. Many important crimes (e.g. those committed by high public servants, MPs, justice or police officers can be investigated only by the PS, meaning the CP has exclusive control over such cases from day one. By statute and implication the CP should be an independent professional. In the Orban regime it is exactly the opposite (remember “unorthodox”) – the PC… Read more »