An EU prosecutor’s office would be a heavy blow to Viktor Orbán

I don’t think that anyone familiar with the Hungarian situation can doubt the economic ramifications of the institutionalized corruption of the Orbán regime. It retards growth and competitiveness and distorts the market economy.

A significant source for this institutionalized stealing is the EU’s convergence funds. Across the EU approximately 50 billion euros in funds distributed to member states is lost to fraud. The problem is especially acute in the former Soviet satellite countries: Bulgaria, Romania, and Hungary. The European Commission’s European Anti-Fraud Office (OLAF) gathers evidence of financial misconduct and prepares hundreds of judicial recommendations, but the prosecution rate is only about 30%.

If you think that this rate is pitifully low, you should take a look at the Hungarian situation. In 2015 OLAF investigated 17 suspicious cases, of which 14 were deemed serious enough for the organization to suggest that financial penalties be paid by the Hungarian government. As far as I could ascertain, in no case did the Hungarian prosecutors move a finger.

Yet hardly a day goes by without news of corruption. Ákos Hadházy, co-chair of LMP who has done the most to unearth corruption, asked Péter Polt, the chief prosecutor, to reveal the number of cases prosecuted since 2011. The answer was staggering. In only four cases did prosecutors bring charges. In monetary terms, in comparison to the billions most likely stolen, the sums involved were peanuts. According to their findings, the financial loss to the European Union was only 286 million forints, or 917,030 euros. Even though every day Hungary receives about two billion forints in EU convergence funds. Several notorious cases, like the street lighting business of Prime Minister Viktor Orbán’s son-in-law, were simply dropped.

For the EU, setting up a new organization–the European Public Prosecutor’s Office or EPPO–to investigate the fraudulent misuse of EU funds and inter-state or so-called carousel fraud is becoming an urgent task. In December I devoted a post to the subject, in which I reported first the reluctance and later the refusal of the Hungarian government to accept such a supranational body. We heard the old refrain: “the sovereignty of Hungarian prosecution might be undermined.” Moreover, goes the argument, since the Hungarian chief prosecutor is appointed by parliament, there might also be a constitutional problem. The latter excuse is truly laughable: almost never does the need for an amendment to the constitution cause any problem for the Orbán government.

Knowing the government’s heavy reliance on the good offices of the chief prosecutor in fraud cases, it was inevitable that Hungary would fight tooth and nail against EPPO. In the last couple of days the issue emerged again after an informal meeting of the justice ministers in Malta. Seventeen countries indicated they would participate in so-called “enhanced cooperation,” which is a procedure whereby a minimum of nine EU countries are allowed to establish advanced integration or cooperation within EU structures without the other EU countries being involved. Five countries, among them Hungary and Poland, opted out.

Justice Minister László Trócsányi self-righteously announced after the meeting that the Hungarian government’s main concern with setting up an EU public prosecutor’s office is its fear of weakening such institutions as Eurojust and OLAF, neither of which has prosecutorial powers. The former is merely a coordinating body that is supposed to improve the handling of serious cross-border crimes by “stimulating” investigative and prosecutorial coordination among agencies of the member states. OLAF can only make recommendations. Trócsányi had the temerity to claim that “these institutions have achieved remarkable results.” In the statement given to MTI, the Hungarian news agency, Trócsányi left open one possibility: “In case they want to establish a European prosecutor’s office, it should be created on the foundation of Eurojust.” As far as Hungary is concerned, “regulating the competence of such a body should require a unanimous vote.” This is in contrast to other countries “who believe that its establishment is possible by a qualified majority.”

Péter Niedermüller, DK member of the European Parliament, somewhat optimistically predicted that “the establishment of EPPO can be delayed but cannot be prevented.” We do know that the EU is reassessing its convergence program, perhaps as a result of all the fraud. Commissioner Věra Jourová, who is in charge of the project, has already indicated that there might be a modification of the rules governing the assignment of EU convergence funds. In plain language, if a member state receives more funds than it contributes to the common purse, it will get less money in the future. The European Parliament can institute “ex ante conditionalities” that would allow for such modifications. That would be a heavy blow to Poland and Hungary, the largest beneficiaries of the convergence funds.

You may have been wondering why I haven’t written about OLAF’s report on its investigation into fraud in the Budapest Metro 4 project, which was reported by Politico at the end of December 2016. It has been heralded as one of the biggest fraud cases ever in the European Union. OLAF recommended the repayment of €228 million to the EC Department of Regional and Urban Policy and €55 million to the European Investment Bank.

Although in the last month the Hungarian media has been full of accusations and counter-accusations, no responsible reporting of the case is possible for the very simple reason that the Hungarian government refuses to make the OLAF document public. As long as we have no idea what is in the document and we have to rely on the interpretations of János Lázár and Nándor Csepreghy, the number one and two men of the Prime Minister’s Office, and Budapest Mayor István Tarlós, who has definite ideas on the subject but admits that he hasn’t seen the report itself, we cannot possibly pass judgment on the case.

The investigation covers the period between 2008 and 2014–that is, two years of the Gyurcsány-Bajnai government and four years of the Orbán administration. The only thing we can say is that it is unlikely that all the fraud took place before 2010 and nothing happened under the new government, which is what the Orbán government claims.

Under the present setup these OLAF reports can be an instrument for political games. The establishment of a supranational European Public Prosecutor’s Office would help prevent the kind of situation that currently exists in Hungary with the latest OLAF report.

January 29, 2017
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Member

What I don’t understand is, instead of dealing with investigating and prosecuting fraud after the fact, or reducing the total amount of convergence funds, why doesn’t the EU just put better accountability procedures into place for the money it disburses? There must be accepted practices for this, so you don’t end up with things like a bunch of tree stumps where there’s supposed to be a “rest area for bicyclists” (http://index.hu/belfold/2009/10/29/2_6_millios_unios_tamogatas_tiz_fatuskora/)

Also, it’s total BS that OLAF doesn’t make its report public. What possible excuse could there be for this?

wrfree
Guest

And regarding bicyclists, nothing like hearing of a Magyar bike maven perfecting hidden motors in the product he makes. (60 Min piece). Great idea for making money for ‘Stefano’. And also for guys allegedly in the Tour de France and in their competitions riding around with them in their bikes. Just waiting for new soccer balls to give advantage to VO teams with the result of exposing a Magyar version of the NE Patriot’s football ‘deflategate’. The EU and sport look to be lovely areas to practice corruption.

Member

OLAF proceeds regarding Hu as it were a democratic state with the rule of law. They just follow the rules.

Ferenc
Guest

Just like ‘shoopy’ states: why not just better accountability procudures? No need for a new (burocratic) institution, just extend and combine (!) exiting ones in such a way that they work ‘full circle’, i.e.no suspection of fraud can go into ‘cold case’ in EU country, but only into closed case in the EU. Some suggestions:
-all cases reported by OLAF to the respective country, MUST BE fully reported back by that country, and the case can only be closed by OLAF (after they agree with it as a whole)
-in case of fraud suspicion for the specific country, the same amount should be frozen in the convergence funds for that country (so not a system of just paying back afterwards, but repercusions during suspicion)
-if the case is closed the amount of the proven fraud (if any) should be taken back from the frozen part of the fund, and the remaining part may be ‘freed’ for the involved country
This is a simple and fair accountable fund system, so should be possible to get through the EU machine.

pappp
Guest
shoopy: Corruption in the EU is nothing new. Well before Hungary’s accession to the EU Greece had been cooking its numbers and everybody knew about it (now Hungary does it too and nobody gives a shit about it, not the EU, not the investors). Southern Italy, Spain etc. stole untold billions of euros (ecu-s in those times). By the mid-2000’s, this had been going on for decades. There’s nothing new about this. This is how the system works and everybody knew. The reason the EU doesn’t do more is because it doesn’t want to. The most powerful member states of the EU don’t want to. Why? For several reasons, but mostly I guess they don’t care. As longs as Greece or Italy or Hungary keep buying German, French, Dutch etc. stuff when upgrading their railways etc. who cares what Italians or Greeks do? The more corrupt they are the better, they will always be underdeveloped and poor and dependent. It’s their problem, not the problem of the rich who will always be rich (richer than the Southern corrupt countries, including Hungary). The EU won’t do shit and it will keep pumping money into the pockets of mafiosi and the Orban-family.… Read more »
Ferenc
Guest

“member states of the EU don’t want to / they don’t care”
Not true, they want to do something about the frauds. Only for them the only possibility seems to do it with another institution, i.e.more burocracy.
The reason for ‘why only now and not earlier’, I see in that the fraud is so huge that it for all Europeans is impossible to not see it. So earlier it was limited and let go, but since the extension from 16 to 28 now, the fraud is just TOO HUGE and NOT FAKE!!
As I stated above, my suggestion is to make a direct relation between serious fraud suspicion (OLAF) and available new funds, by freezing amounts equal to fraud suspicion.

wrfree
Guest

Re: ‘The EU won’t do shit….’

Plainly said. And the great Russian meister must laugh himself to death to see the chislers chiseling their constituents as the latter suck the EU trough dry. It’s a wonder the graft piled high hasn’t choked them all already. Vlad perhaps has calculated he doesn’t have to run army divisions into Europe to grab some land. The EU’s dissipated and gradual moral dissolution is helping to save him gas, materiel, soldiers, tanks and planes in taking down the West. He laughs when they bring in the moral high ground of being ‘democratic’. He’s already got half of it.

pappp
Guest
The fraud wasn’t much smaller. Fraud (abuse of public procurement procedures) is rampant (and still is) everywhere where there are project based subsidies available whether the project was located in Spain, Portugal, France, Italy or Greece. Maybe less so in the UK (I’m less familiar with the UK’s receipt of EU funds). (And there were different kinds of abuse of automatic subsidies like in agriculture). There was never any secret about this. Hungary is different in that the money is overwhelmingly used for the benefit of an openly anti-EU power structure, that is lead by the Family of the autocrat. But the EU won’t do anything, Ferenc, this isn’t how things work in the EU. There’s no political willingness whatsoever to grant new powers over member states however corrupt or mismanaged those are. The no. 1. goal of any organization (such as the EU) is survival, and new political conflicts won’t help the EU attaining that goal during these turbulent times. So the EU won’t help. Period. (A free trade zone anyway cannot intervene in political matters.) Thus Orban will get richer and more powerful. Get used to it. Either Hungarians will deal with Orban or Orban will remain in… Read more »
Ferenc
Guest

The Hungarians have to deal with OV, the EU can’t and want to do much about the current maffia.
But obvious misuse of EU funds has to be dealt with by the EU. Otherways they will completely lose their credibility in the view of the people in the member states.
And then that could be the end of the EU (and the Euro) as it is now. That still would not have to mean the end of a sort of EU, as free-trade and/or travel-zones might still be kept.

wrfree
Guest

Re: ‘From 2018, the next left-wing government must build a successful and prosperous Hungary on a foundation of justice’

From Mr. Botka’s essay on the challenges ahead to implement change. Really he must argue then for a push to put teeth in the laws and develop individuals to abide and enforce them. A country with an arrogant malfeasance against laws cannot have and develop ‘good’ government.
There will be a reckoning surely because of the turning away.

Member

Especially when Mr. Botka himself has… hmmm… how to say without running into a libel suit… let’s say, “certain people have raised doubts as to Botka’s own ability to stay on the right side of financial ethics.”

When it comes to the party he wishes to lead into next year’s election, the stench of party-finance corruption is palpable. You can’t make a cake out of poop.

Guest

Don’t hold your breath.

BMO
Guest

It is truly and sincerely beside me as to how the EU can let this happen again and again.

Hungary gets funded while the vast majority of these distributions are an ostensible and blatant part of corruption; that is openly and admittedly used to disassemble both the psychical and moral fundamentals of the republic. To top this off, Orban does this in tandem with Vladimir Putin… Is it just me that thinks this is surreal?

I realize it is too late when I expect the constraints to be imposed from the outside not from the inside. The great Hungarian public, shame on you.

Guest
I agree with you BMO, that it is a completely surreal situation that the EU, in full knowledge of the corruption in former bloc countires, just carries on funding mafia states. From the start monitoring offices should have been established in all the accession countries, and in each country regional offices would then be administered from the capital. These auditing offices would administer the EU grants and oversee that they are spent on exactly what they were intended. To do this successfully, only foreign auditors would be located here, as they are less likely to be bought and bribed by local mafia. If the EU loses 50 billion euros through fraud, it could easily afford wages for on-site auditors to prevent fraud on a massive scale. This should be the criteria on which known corrupt countries can continue to receive funds. The men and women in EU offices who dole out the funds to Hungary are on very high salaries themselves. The convergence funds they handle are not their moneys, so there is very little sense that it matters. As a result, corrupt mafia country leaders such as Orbán have become oligarchs on moneys which are meant to help develop… Read more »
Guest

“Is it just me that thinks this is surreal?”

Unfortunately it is not surreal. It is real.

pappp
Guest
This is real and always has been. There’s nothing surreal about it. This is how the EU works, it’s in its DNA. The EU, let’s repeat, is the Common Market. It is solely about the circulation of capital, services, products and workers. Everything else is bullshit. The subsidies which are duly stolen are given so that those who lose out within this capitalistic zone would keep their mouths shut. In fact, I suspect that Germany etc. are very happy with the current setup. As long as the interests of the Orban family are aligned with that of Germany (in however twisted a way), the EU (its paymasters) remain happy. The EU and its paymasters know full well that many member states like Hungary will stay in the EU only as long as they can receive subsidies. So the Germans believe that as long as Orban is personally interested in receiving the dough (he is in a position to steal EU monies), he will keep doing everything in order to keep Hungary within the EU (which is the EU’s goal, the keep the free trade zone as big as possible aka the network effect). Of course this isn’t so simply because… Read more »
Guest
Pappp, you write that “The subsidies which are duly stolen are given so that those who lose out within this capitalistic zone would keep their mouths shut.” I have a rather different interpretation of the situation. I think that the establishment of the EU was driven by an enormous amount of well-intentioned idealism, rather than some kind of a crude and senseless profit motive. The idea behind the membership of your so-called capitalistic zone was merely to put the horrific internecine wars of their histories behind them and to put the focus of the future on the well-being and welfare of their citizens. The Europeanist idealism however became delusional, self-defeating, and indeed self-destructive upon the emergence of an intent to incorporate the European South and East as well, into an expanded, Pan-European project. The situation was then severely exacerbated by the creation of a purely monetary-driven euro zone, without appropriate regulation and controls over the fiscal policies of the members, and without the huge capital transfers to the economically retarded and corrupt European South that would have been needed to keep the system in balance. Again, the situation was made quite a bit worse by the utter inability of West… Read more »
Guest

I partially agree with you – but this “weakness” of the EU that you all deplore is a general problem of democracy! And in the long run either it survives (and the EU already survived Berlusconi and Haider) or it goes down completely like the Weimar Republic …

Now let’s wait and see what happens here in Europe and in the USA where we have a similar problem.

If the citizens can’t/don’t want to act – well, good bye then, democracy – it was nice while it lasted!

Guest
Wolfi7777, I wouldn’t attribute the issues around the EU to some general problem of democracy. I think that the fundamental problem with the EU is structural, and nothing to do with whether the EU is democratic or not. The structural problem is partly due to the incorporation of Europe East and Europe South, partly to the unresolved issues around the national versus supra-national, and partly to the project being designed, developed and run by an unelected bureaucracy which by definition is “undemocratic.” Notwithstanding the European Parliament, which is hardly more than a debating club, the European Court of Justice, whose rulings are often resented and even rejected within the justice systems of individual members, and the equal voting/veto rights of each member within the councils of the EU, which operate like the “democracy” in the Sejm of a disintegrating Poland in the 17th and 18th century, thus effectively guaranteeing structural paralysis and inaction over the most vital issues, a case of “democracy” morphing into a theatre of the absurd, especially when paired with direction and management by unelected mandarins. The profoundly mistaken switch-over to the euro in much of the EU, the utter inability to integrate massive inflows of people… Read more »
bimbi
Guest

It really is absurd that the EU should still be discussing whether there should be an INDEPENDENT EU prosecutor’s office. That there is not at the moment exactly reflects the state of justice under Orban – the prosecutor’s office is just another branch of government and shows no independence whatever. Hungary’s “Rule of Law”, yuck yuck.

That investigation and prosecution of criminal behavior and theft from the population of each state should be subject to the whim of political decision points to serious structural defects within the EU. Of course, Hungary’s membership of the EPP political grouping (Juncker also belongs) provides bullet-proof cover for the Orban/Fidesz criminality in Hungary – “We can’t face the prospect of prosecuting our friends”.

Polt is clearly merely Orban’s footman – doing what he is told, when he is told. He and his corrupt office must be swept aside as soon as possible – a suppurating sore in the side of Hungary’s poor and struggling population.

Guest
You all expect too much from the EU! If Hungarians (and others too of course) are not willing/able to do anything about the obvious corruption then what can the EU do? You can’t really have foreigners checking everything – if the locals don’t cooperate. I’ve told already the story of my brother in law who worked in Budapest in the 90s as a financial controller for one of the biggest global players – he was so frustrated with the rampant corruption that he swore he would never return to Hungary! The stories he told me – unbelievable but true … So my sister has been visiting us regularly (and also the friends she made in Budapest) but he won’t come! Not too much OT: It has been a bitter cold January in Hungary – many people have run out of firewood … We regularly hear that people only heat one room in their house (usually the kitchen) and in the evening they open the bedroom door and sleep with double pyjamas in a room at 12 degrees Celsius (53 Fahrenheit). For many the connection to the existing gas line is just a dream … A pension of 50 000 HUF… Read more »
Member

An article by Eliot A. Cohen :

[Trump] ” will fail most of all because at the end of the day most Americans, including most of those who voted for him, are decent people who have no desire to live in an American version of Tayyip Erdogan’s Turkey, or Viktor Orban’s Hungary, or Vladimir Putin’s Russia.”

https://www.theatlantic.com/politics/archive/2017/01/a-clarifying-moment-in-american-history/514868/

Istvan
Guest

Here is another perspective http://www.reuters.com/article/us-usa-trump-immigration-supporters-idUSKBN15E0BH Tappanch I can tell you at least from the Trump supporters I know they fully support every one of the President’s executive orders. Some of these supporters have been friends of mine for fifty years, since the Vietnam War.

I know one Chinese American US Army veteran that fully supports the exclusion of all immigrants from the Middle East, his son died fighting in Afghanistan after graduating from West Point. I attended his son’s commissioning ceremony and presented him with a specially engraved Colt 45 semiautomatic sidearm. (This is the ceremony where you take the Oath of Office to be a commissioned officer.) I am trying to maintain my relationships with these long time brothers in arms by simply trying to avoid these discussions, but inevitably because they know I opposed Trump they bring it up. These are not good days for myself and other retired military people who opposed Trump. I am heart broken as a patriotic American.

Member

2017-01-30: Botka & Orban together in Szeged.

comment image

Member

Setting up a European prosecutor’s office:

Against: Hungary, Poland, Sweden, Netherlands, Malta, UK

Undecided: Portugal, Finland

For: [all others = 20] or [all others -3 = 17] ?

http://www.bruxinfo.hu/cikk/20170127-europai-fougyeszseg-magyar-reszvetel-nelkul.html

Member

tappanch, there is a strong argument against: “It would require the modification of the Fundamental Law” 🙂

Member

Is the press now 100% under Orban’s influence?

The chief editor of Vasárnapi Hírek has resigned, because the remaining opposition press, (now owned by the same company) the daily Népszava, the weeklies Vasárnapi Hírek and Szabad Föld plan to coordinate with the Orban government in return for government ads.

http://vasarnapihirek.hu/fokusz/gal_j_zoltan_utolso__szerk_velemeny_2017_04

Member

Editor Zoltán J. Gál suspects a Fidesz – MSzP pact.

pappp
Guest

Good morning to Zoltan J. Gal!

Only an idiot “suspects” a pact. There *is* a deal and there are many other deals too.

This is how politics works on the left-wing and with MSZP this is how it always worked. This is the normal baseline for MSZP. Petty deals with Fidesz.

Member

Zoltan J. Gal? Son of the eponymous MSZMP Central Committee member, MSZP founding member, and speaker of parliament?Zoltan J. Gal, who worked at every MSZP-friendly newspaper known to man? Zoltan J. Gal, who served as an MSZP member of parliament, head of Prime Minister Medgyessy’s communications department, and state secretary under Prime Minister Gyurcsany?

We are talking about that same Zoltan J. Gal? He “SUSPECTS” a Fidesz-MSZP pact?

And then we wonder why the majority of the country refuses to take the Socialists seriously.

Member

“OLAF can only make recommendations”

“OLAF recommended the repayment of €228 million to the EC Department of Regional and Urban Policy and €55 million to the European Investment Bank”

I know, that the “rule of law” also exists in the EU and I understand, that the EU, because of this is not able, just to close the money tap.

What I don´t understand:
The money, that has already been stolen, sometimes has to be repaid.
Sometimes they block the payment of further money.

But they never block it finally.

The question is in the case of Metro 4 is:
“Is it possible for the EU, to follow the recommendations of OLAF, to request the repayment from Hungary in a way, that the money is definetly lost for Hungary and they won’t get it e.g. for other projects ?”

If yes, why don’t they do it ?
(I ask, because, this is MY MONEY, they permanantly steal!)

bimbi
Guest

Winston @ 8:51 a.m.

Well said! Having “Hungary” repay even some of the money stolen by Fideszniks, means, presumably the loss of that amount from tax revenues. So where is the benefit in that? The thieves must be named and their property and bank accounts raided to repay the booty they have stolen – and then with, for instance (off-shore bank account) Rogan, you’d better start hunting right now. Fidesz lawyers have a way of keeping three steps in front of you – after all, they are paid to do just that.

Member

“If yes, why don’t they do it ?”

I mean, there is probably a possiblity to punish Hungary, e.g. to refuse further payments or to request repayment in the case of theft.

But I suspect, the EU is not strict enough, they never do it.

Hungary is a non-democratic Mafia state.
EU should be strict:
No Debates!
No deals with Mafia states!
No appeasement!

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