A small but close circle: the Orbán family and Arab businessmen

The Pharaon affair simply doesn’t want to disappear.

In the first place, it is not an everyday occurrence that the prime minister of a country and his close family are caught doing business with a man, Saudi businessman Ghaith Pharaon, who is being sought by the FBI and Interpol.

Second, once the story broke Viktor Orbán and several high-level members of his government managed to get themselves entangled in a web of contradictory statements. Analyzing and comparing every statement they made has kept reporters and commentators busy for several days.

Third, since the pressure on the government refused to let up, it seems that the decision was made to change tactics. A couple of days ago Magyar Idők, the government’s mouthpiece, began accusing the United States of being responsible for the problems that plague Hungary, and specifically its prime minister, as a result of Pharaon’s presence and business dealings in Hungary. Soon enough, Pharaon was portrayed as an agent of the CIA who tried to blacken the good name of Viktor Orbán. That was bizarre enough, but for good measure Hungarian intelligence sources complicated matters by adding another twist to the Pharaon story: it was Russian and Israeli intelligence agencies that revealed Orbán’s secret dealings with Pharaon and other Arab businessmen. These stories gave rise to a new round of speculative articles in the Hungarian media.

Finally, Csaba Tarsoly, the CEO of Quaestor, the brokerage firm that for at least a decade if not longer was engaged in a Ponzi scheme, gave an interview to Magyar Narancs the other day from which the Hungarian public learned that shortly before the collapse of Quaestor in March 2015 Foreign Minister Szijjártó arranged a meeting between Tarsoly and Pharaon.

Let’s start with the conspiracy theories. “The ugly American” version comes from Magyar Idők, which on November 23 published information that was allegedly obtained from the Hungarian intelligence services. The gist of the story is that, although the Americans consider Pharaon “very dangerous,” they were so careless that they were searching for him under 11 different names, four different birth dates, and two different birthplaces. The Pharaon who entered Hungary was none of those 11 Pharaons, claimed the Hungarian authorities. Surely, the story continues, if Pharaon were so dangerous and the Americans really want to capture him, they wouldn’t be doing business with the man in Georgia, Pakistan, Afghanistan, and elsewhere. As for Pharaon’s fingerprints, the FBI didn’t pass them on to Interpol. “One wonders why,” Magyar Idők adds mysteriously. To add insult to injury, the fingerprints the Hungarians got from the FBI were useless. So clearly, it is not Hungary’s fault that a visa was issued to Pharaon.

pharaon3

Ghaith Pharaon

Armed with the above information, Magyar Idők apparently confronted the U.S. Embassy in Budapest but said they “haven’t received substantive answers” to their questions. On the other hand, the paper received information from “government sources,” according to which “the idea of Pharaon as a national security risk for our country came directly from the United States” because “with this information the U.S. can strike a blow against the Hungarian government.” This story was then embellished by János Lázár, who at one of his press conferences claimed that at the time the visa was issued in October-November 2014 the Hungarian government asked the U.S. Embassy whether there was any objection to allowing Pharaon to enter Hungary. If this is true, says 444.hu, the Americans tricked the Hungarians, knowing full well that greedy Hungarian businessmen with close connections to the government would make sure that the government issued a visa without any vetting. I find this version of the story most unlikely. And I disregard Lázár’s story altogether. I’m sure that his story about getting in touch with the U.S. Embassy is one of his many fabrications.

While some Hungarian intelligence sources were whispering into the ears of the reporters of Magyar Idők, others were busy dropping stories about Russian and Israeli involvement to Hetek, the publication of the Assembly of Faith. According to this version, Israel is concerned about the very large investments by Arab businessmen in Hungary, which they consider to be “indirect Islamization of the region, which is especially dangerous in a country with the largest Jewish population in the region.” And the Russians? They are worried about Hungary’s close relations with Pharaon because of his reputation as a CIA agent. He must be an agent because there is no other explanation for the fact the United States has been unable to arrest him in the last 25 years. I disregard this version as well.

One doesn’t need to concoct stories about intelligence and counterintelligence to understand a simple story that was made purposely complicated by officials of the Hungarian government. Indeed, greedy Hungarian politicians and businessmen would make deals with the devil himself. They cared not who Pharaon was or what the FBI and Interpol thought of him. National security experts whom I trust are certain that the Hungarian intelligence agencies were fully aware of Pharaon’s past and the dangers that close relations with him would pose but that the prime minister of Hungary overruled them. Yes, I think the story is that simple.

Finally, here is the latest development in the career of Pharaon in Hungary. According to Csaba Tarsoly of Quaestor, a few days before the collapse of his brokerage firm he had a chance to meet a wealthy Saudi businessman who was interested in investing some money in a huge project that was extremely important to the firm. Quaestor owned 50% of a large tract of land (33 hectares) on the northern side of Csepel Island. The plan included the erection of a large conference center with a hotel and several apartment houses and commercial buildings. Tarsoly and his business associates needed about 300 billion forints to erect Duna City, as the future project was named. According to Tarsoly, “at the beginning of 2015 the foreign ministry brought a Saudi investor called Ghaith Pharaon to me. There was a big dinner at the Buddha Bar where I was introduced to him and his secretary; later I returned the invitation. It was after these two meetings that the investors met in my office and told me they would be willing to invest in the development of Duna City. I found the amount offered insufficient, and therefore the Saudi investor told me that if I give him 5% he will take care of the financing.”

Foreign Minister Szijjártó readily admitted that the Befektetési Ügynökség (Hungarian Investment Promotion Agency/HIPA) that functions under the aegis of the foreign ministry did suggest Tarsoly’s Duna City project to Pharaon. After all, it is HIPA’s job to encourage foreigners to invest in Hungarian projects, and therefore it was practically the agency’s duty to hook Tarsoly up with Pharaon. When Magyar Narancs asked him outright whether he himself was in any way involved in the negotiations, Szijjártó denied any participation. But again, something is not quite right with the story. The director of HIPA told Hír TV that he had nothing to do with either Ghaith Pharaon or the Duna City project. I suspect that this particular business deal was so important to the circle around Viktor Orbán that they sidestepped HIPA and that the negotiations with Pharaon were conducted at the highest level, with Szijjártó or perhaps even Viktor Orbán.

And here’s an interesting footnote to the story of the meeting of Pharaon and Tarsoly in the Buddha Bar. It was on June 14, 2012 that Budapest’s newest luxury hotel, Buddha Bar Hotel, owned by two Jordanian investors, opened in the Klotild Palace in downtown Budapest. It was no ordinary opening. Almost all the foreign ambassadors attended in addition to former president Pál Schmitt and, of all people, Cardinal Péter Erdős. But the most surprising guest was the prime minister himself. While reading Origo’s description of the opening ceremony a name caught my eye: Zaid Naffa, honorary Jordanian consul in Budapest. Sharp-eyed readers of the Hungarian press or Hungarian Spectrum will immediately recognize the name. He is the man who requested a Hungarian visa for Ghaith Pharaon at the Hungarian consulate in Beirut.

Viktor Orbán was the guest of honor at the opening of the hotel. He delivered a speech which revealed the close ties between the Jordanian businessmen and the Hungarian government. It turned out that the two investors had spent their student days in Hungary and that their company, Mellow Mood Group, owns nine more hotels in Budapest. As usual, Viktor Orbán was expansive in his praise of Hungary’s Arab friends and called attention to the common traits of Arabs and Hungarians. They are both hospitable, open people. And, he said, it is obvious from the example of the owners of the hotel that Arabs understand that “not even profit gives satisfaction if there is no friendship and soul.”  Viktor Orbán was, and I suspect continues to be, friends with this small group of people, to whom, I think, Ghaith Pharaon also belongs.

November 25, 2016
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Guest

OT The Cuban dictator Fidel Castro is no more. He will be remembered for his creation of outstanding public education and health care in Cuba.

bimbi
Guest

No, but the Hungarian dictator lives on. Sad, but predictable, that this story of dirty dealing has received so much attention from the falsehood-generation machinery of Fidesz and the Orban government. Despite all the Lazar-Szijjarto-Orban generated b-s, it was the duty of the Hungarian government to detain Pharaon and hand him over to the US of A. Instead it seems the desperate eagerness of the local potentates to squeeze even more money out of their term as Rulers of Hungary drove them to even more shady “deals” – and all this on top of the Orban insider-trading scandal of Questor.

Jean P.
Guest

Yes, and on the topmost there is the destruction of public education and health care that will be more damaging in the long run.

2016-i
Guest

Jean P – no, no, no!

We all can be victims of disinformation very easily.

Cubans have access to third rate healthcare and education, and to first rate disinformation, as well as to a worldwide terror system.

Guest

Here is some disdisinformation:

http://www.huffingtonpost.com/salim-lamrani/cubas-health-care-system-_b_5649968.html

A 1998 study by UNESCO reported that Cuban students showed a high level of educational achievement. Cuban third and fourth graders scored 350 points, 100 points above the regional average in tests of basic language and mathematics skills. The report indicated that the test achievement of the lower half of students in Cuba was significantly higher than the test achievement of the upper half of students in other Central and South American countries in the study group. (Wikipedia)

Guest

Just like in the USA – if you have no money …

Please be more careful with generalisations!

2016-i
Guest

Let us be honest.

Cuba has been the greatest disinformation success of Moscow.

I am living luckily in USA, and the disinformation is not fooling me at least.

PS
I have missed the Bach choir performance in the Stiftskirche last week. We went to the Forelle for a goose dinner.

Guest

Good for you, Andy!

Btw, why don’t you keep one nick? It would be much easier for everybody …

Guest

So there are “good Arabs” and “bad Arabs” obviously – it’s just a question of money, not religion or whatever …

The wonderful ways of predatory capitalism – we’re in it only for the money!

Observer
Guest

Wolfi7777

This is not predatory capitalism, the orban clique is a big crime sindicate, which has usurped the state and enjoys the advantages and protection of the latter.
These people are not entrepreneurs, developer, inventors, they are not even real investors as the deal almost exclusively with the state fixing the deals with huge profits gusrateed.
Most projec work is done by subcontractors, the Orbán mafia just ripps the investors/state off.

Istvan
Guest
If you go to https://wikileaks.org/gifiles/docs/11/1135267_re-insight-ghaith-pharaon-.html you can find some interesting descriptions of Mr. Pharaon that Wikileaks acquired. Ghaith Pharoan and other Saudi elites have been directly linked to OsamaBin Laden through banks, holding companies, foundations and charities in a variety of articles. On the other hand there is indeed some circumstantial evidence that the CIA may have used him as an operative, especially when one considers Ghaith Pharoan who was involved with the $1.7 billion savings and loan scandals of Bank of Credit and Commerce International (BCCI) and CenTrust in the 1980s and remains under U.S. indictment. Then a firm he owned was awarded an $80 million contract in 2008 to supply jet fuel to American bases in Afghanistan was awarded to the Attock Refinery Ltd, a Pakistani-based refinery owned by none other than Gaith Pharaon. The CIA has used dark figures for its own purposes for years, I find nothing wrong with that, it is part of the modern great game. I believe that the CIA used international arms traders who were wanted under international warrants when needed. I always had to laugh at US UN Ambassador Power who won the Pulitzer Prize for her book A Problem from… Read more »
Karcsikám
Guest
It’s been long rumored in Budapest that the Mellow Mood company is fronting for the Orban family with Rogan as coinvestor. We also know that Orban’s first born child Rachel is seriously into the hospitability business and most of these hotels owned or managed by MM were purchased from the Fidesz lead municipalities or the state. The Arabic students studying in Hungary during communism (such as the owners of MM on paper) were a strange bunch. It is rumored that many were selected by the intelligence agencies of their home country and they certainly had the attention of the Hungarian agencies which probably coopted some of them. This is especially likely in the cases of those who managed to settle in Hungary during communism (which was the most liberal of the communist states) such as these MM guys. You get the citizenship but we may ask for some favors in the future. As we know Orban likes to employ Strohmen who are absolutely reliable which in his case very often means people with some ties to intelligence agencies that is people who were vetted and tested for trustworthiness. By the way these intriguing stories about Russian, Israeli or US intelligence… Read more »
2016-i
Guest

“Karcsikám” – bravo, this guy could start a valuable blog.

I hope he will stay with us.

Observer
Guest

Kudos.
Orban’s unbridled corruption is the red line throughout all these bits and pieces and you’ve shown it well.
The mafia state par excellence.

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