During the summer Viktor Orbán’s son-in-law, István Tiborcz, was searching for new business opportunities. By that time, OLAF, the European Union’s Anti-Fraud Office, was looking into his “super company,” which had received almost all of the contracts for the EU-financed modernization of city lighting in Hungary. The first son-in-law had to find greener pastures, preferably far away from public procurements. The choice, it seems, was real estate. Investigative journalists discovered that Tiborcz was doing lucrative deals with the assistance of a wealthy Turkish businessman. One of their first real estate ventures was the purchase of the building of the defunct Postabank, which soon enough they sold, through an intermediary, to Ghaith Pharaon, a Saudi businessman of dubious repute.
The available English-language information on Ghaith Pharaon is extensive, mostly because of his association with the Bank of Credit and Commerce International (BCCI) back in the 1990s. Secretly acting on behalf of BCCI, Pharaon acquired control of two American banks in violation of federal banking laws. When the fraud was discovered, BCCI was forced to sell the banks, which soon after were shut down by regulators when it was determined they were insolvent. Pharaon was charged with wire fraud and conspiracy to commit racketeering. He has been wanted by the FBI since 1991 for his role in the BCCI fraud and remains a fugitive. In addition, Pharaon was accused in a 2002 French parliamentary report of having financial dealings with hawala, an Islamic financial network which is also used by terrorist organizations. Earlier I wrote in more detail about Pharaon’s business activities in Hungary.
Trouble seems to follow István Tiborcz. Or perhaps it is more accurate to say that he has a penchant for dealing with questionable characters.
It seems that in the last four or five months Pharaon has been busy. He is currently the owner of nine extremely valuable pieces of property in Hungary. His latest purchase is a mansion right across from the house owned by Viktor Orbán and his family. I suspect that the mansion was a state property that earlier was used as a kindergarten. Orbán himself liked the building so much that during his first administration he planned to refurbish it and use it as the official residence of the speaker of the house. The place has been abandoned for almost 20 years and, judging from the photos, it needs extensive repairs. During the summer the property’s listing price was 410 million forints or $1.45 million.
Once it became public knowledge that Pharaon is now Orbán’s neighbor, interest in his past spiked even though it has been a well-known fact in Hungary, at least since June 2016, that Pharaon is on the FBI’s wanted list. But the opposition parties finally started asking questions about Pharaon’s close business ties not only with the prime minister’s son-in-law but also with the Hungarian government and MOL, the Hungarian oil company.
Pharaon is not a simple foreign investor wanting to make some money in Hungary. He is in possession of a valid visa issued to him by the Hungarian government. At the time they issued the visa, Hungarian authorities were aware of the fact that Pharaon was being sought not only by the FBI but apparently also by Interpol because of his relations with terrorists, including at one time with Osama bin Laden. Péter Juhász of Együtt got hold of a letter from Sándor Pintér, minister of interior, strangely enough written in Hungarian, to the Saudi ambassador in Budapest confirming their knowledge. Pintér wanted to have the Saudi government’s opinion in the case. The answer had to be reassuring because Pharaon received a visa without any trouble. But why would it not have been reassuring since, according to information that can be found in Stratfor Intelligence Files made public by WikiLeaks, “Ghaith Pharaon is not a genuine businessman … he is nothing more than a front man who does dirty things on behalf of Saudi Arabia.”
All the talk about Pharaon being on the FBI’s most wanted list eventually prompted Hungarian journalists to approach the U.S. Embassy in Budapest, requesting information about Pharaon’s current status. Eric Watnik, counselor for public affairs, who is in charge of the press and information office at the embassy, gave the following information on Pharaon. On November 15, 1991 the District of Columbia court issued an arrest warrant signed by Alan Kay, magistrate judge. “This arrest warrant is still valid,” he added. Since then the charges against Pharaon have multiplied (conspiracy, wire fraud, racketeering conspiracy, aiding and abetting) and by now, if arrested and charged, he could face at least 30 years in jail. In addition, according to Watnik, Interpol issued a Red Notice (A355/8-1992) which, according to Interpol’s website, seeks “the location and arrest of wanted persons with a view to extradition or similar lawful action.” Although the Red Notice has since disappeared from the Interpol website, Watnik noted that Hungary has an extradition treaty with the United States and thus, had it been asked, would have been obliged to agree to the extradition of Pharaon.
Once this letter from Pintér to the Saudi ambassador became public, both Jobbik and MSZP wanted to know more about the case. Jobbik’s Márton Gyöngyösi couldn’t get an answer from Viktor Orbán himself, but Tamás Harangozó of MSZP lucked out. He wanted to know whether the prime minister had ever had a personal meeting with Pharaon. Harangozó said he wanted to have a serious answer because Orbán, instead of giving substantive responses, often cracks jokes or makes ironic remarks. Orbán admitted that he had met “Professor Pharaon” at a banquet, which surely cannot pose a national security risk. Harangozó hit back: in that case, Orbán and the government itself is the national security risk. Eventually, Orbán claimed that “the whole Pharaon affair is an American secret service game.” If the FBI is truly seeking his extradition, how is it possible that Pharaon has remained free for the last 24 years?
The case was even discussed in the parliamentary committee on national security where Szilárd Németh, the committee’s Fidesz deputy chairman, expressed his belief that Viktor Orbán’s neighbor may be only the namesake of the real Ghaith Pharaon. Of course, a simple fingerprint comparison could put an end to any doubt but, according the U.S. Embassy, the Hungarian authorities refuse to cooperate. In fact, the Hungarian government is actively shielding Pharaon from “harassment.” When Jobbik wanted to place a public announcement in which Pharaon’s name was mentioned, MTI OS (Országos Sajtószolgálat) refused to publish it because “they need to protect the privacy rights of public figures.” Why is Pharaon a public figure? The only thing that comes to my mind is the phrase “public enemy.”