Category Archives: Hungary

Whither Jobbik?

I have a strong suspicion that Jobbik, Hungary’s extreme right-wing party, which has been experiencing unprecedented growth in the last year or so, may undergo some internal turmoil soon. The reason for a possible palace revolt or an outright split within the party is Chairman Gábor Vona’s turn toward a more moderate political stance. This new ideological shift stemmed from his belief that Jobbik will be successful only if it drops its anti-Semitic, anti-Roma verbiage and offers a political platform that is acceptable to large segments of Hungarian society.

The problem with this new orientation is that perhaps the majority of the party members in leadership positions are dissatisfied with Vona’s strategy even if some of them, like Tamás Sneider, claim that this ideological U-turn is only for show. Or, to use Gábor G. Fodor’s by now famous description, only a “political product.”

The Hungarian far right, ever since its appearance in the 1920s, has shown a tendency to form small parties of short duration which often fell apart only to reunite with other splinter groups. Ferenc Szálasi himself organized several small parties before his last one, the Arrow Cross Party, did exceedingly well in the 1939 elections. But even that party lost its appeal soon after.

As far as the present situation is concerned, the Hungarian far right already consists of three or four groups of various shades of far-right ideology. Since I don’t consider Fidesz a moderate conservative party similar to Christian Democratic parties existing in different European countries I count it among these groups. After all, Zoltán Balog, an important political figure in the Orbán government, looks upon the Hungarian right as one political bloc and considers the growth of Jobbik a plus for the right. To quote him verbatim, so there is no misunderstanding: “If we add Jobbik’s and our results and compare them to what the situation was ten years ago, we can see an incredible change. A real right-wing turn.” The message is clear. Jobbik is one of them, just a little more to the right than Fidesz.

People often compare Jobbik to the French National Front and, on the surface, their histories are similar in many ways. Jean-Marie Le Pen’s party also started as a youth movement, and LePen’s daughter, who took over the leadership of the party a few years ago, just like Vona, is trying to “de-demonize” the National Front. As far as ideology is concerned, the National Front is socially conservative and nationalistic, anti-immigration and anti-euro. But it is not an openly racist, anti-Semitic party like Jobbik is. I don’t think that it is an exaggeration to call Jobbik a neo-Nazi party, as László Karsai, a historian of the Holocaust, referred to it in 2013. Recently a Hungarian political commentator warned about comparing Jobbik to Le Pen’s party because, in his opinion, it is Fidesz that is the Hungarian equivalent of the French National Front.

The attempt to “de-demonize” Jobbik cannot be as successful as Marine Le Pen has been in France, mainly because of its neo-Nazi ideological base. The shift is too sudden and too radical. A large group in the leadership simply doesn’t buy it. When a Jobbik member of parliament is caught spitting into one of the “Shoes on the Bank of the Danube” or when the Jobbik candidate in Tapolca-Ajka tattooed an SS symbol on his body, it is hard for Vona to talk about “society’s need for peace and quiet.” There are “question marks” about his new strategy, as he himself admitted in a recent interview. Members of a party that has for years loudly promoted an anti-Semitic and racist discourse is now supposed to follow Vona’s advice about “sharing the sorrow of everybody, including the Jews.” Moreover, until now the party promoted a turn to the East, but now Vona talks about “a western opening.”

Gergely Kulcsár, Jobbik member of parliament, posing after he spat into one of the shoes

Gergely Kulcsár, Jobbik member of parliament, posing after he spat into one of the shoes

I believe that sooner or later Vona’s new political brand will result in a revolt by the majority of Jobbik political leaders, who joined the party because of its neo-Nazi ideology. This is especially likely if Lajos Rig, the Jobbik candidate in the Tapolca-Ajka by-election on April 12, does not do well. In this case, those Jobbik leaders who were leery of Gábor Vona’s new strategy in the first place might force him to abandon his “moderate course,” claiming that this new approach doesn’t bring tangible results. After all, the Jobbik candidate did poorly in the last by-election in Veszprém. The party may look good in opinion polls, but its candidates cannot win elections.

The outcome of an internal power struggle will depend on whether Vona’s camp is stronger than those who would rather follow Előd Novák, allegedly the editor-in-chief of kuruc.info.hu, where one can read about “holokamu” (the Holocaust swindle), Gypsy crime, and Jewish criminality galore.

The European Union has had enough: No money for a 110 billion project already underway

Not only does Quaestor’s collapse and the government’s involvement in this scandal weigh heavily on the third Orbán government. Viktor Orbán just heard officially that the European Union is refusing to finance a 30 km section of a new Hungarian superhighway, the M4, that would be 230 km long and would lead all the way to the Romanian border just north of Oradea/Nagyvárad. This is a first. And this time there is no possibility of any further negotiations. The project must either be abandoned or be built from purely Hungarian sources. Trying to resubmit the same project based on another, lower bid seems pretty hopeless since the European Union considers the whole project a “luxury item.”

I would be hard pressed to recall all the dates that were mentioned in the press about the imminent beginning of work on the project. It was in 2003 that civil engineers and experts on transportation came up with a 15- and a 30-year plan which included two much-needed superhighways, M8 and M4, that would transverse the country from the Austrian border to Romania. The point was to avoid Budapest, which has for far too long been the epicenter of the Hungarian transportation system. By 2005 it looked as if both M8 and M4 would be built.

In December 2012 Index reported that work on the planned 30 km section of M4 between Abony and Fegyvernek would begin in 2013. At that time people familiar with the price structure of Hungarian highways predicted that it would cost “tens of billions of forints,” but by the end of 2014, when all the bids were in, the cost was 110 billion or almost 4 billion per kilometer. That is four times the price of similar road construction in Western Europe where wages are considerably higher. Such a blatantly overpriced project was too much for the European Union. Moreover, they suspected price fixing. But what is really devastating for the Hungarian government is that the EU didn’t just stop this particular section of M4 but refused to finance the entire 230 km of M4 during the 2014-20 budget period.

An unfulfilled dream: "M4's construction began at Abony / szolnoknaplo.hu

An unfulfilled dream: “M4’s construction began at Abony” / szolnoknaplo.hu

The European Union’s decision about the Abony-Fegyvernek section of M4 couldn’t have come as a surprise to the government. Although by January 2014 all necessary permits were obtained and therefore work could begin, the green light from Brussels wasn’t forthcoming. In December 444.hu learned that in general there are problems with the Hungarian projects waiting for approval in Brussels. “Among other reasons, the European Commission did not pay because the officials consider the prices submitted too high.”

Benedek Jávor (PM MEP) turned to OLAF (European Anti-Fraud Office) to initiate an investigation into the M4 highway project. He wanted to know whether there were any signs of corruption, specifically any possibility of kickbacks to parties by the five firms involved in the construction of the project. Colas USA and the Austrian Swietelsky were to build 13.4 km for 46.76 billion forints. Lajos Simicska’s Közgép together with another Hungarian company, Híd, was entrusted with a short 2.4 km section, but it had three bridges, including a new 756 meter-long bridge across the Tisza River. For this work they signed a contract for 32.5 billion. For the rest Strabag International was to receive 31.5 billion.

The Hungarian government was so eager to launch the project that in January they began construction, which means that about 30% of the project has already started. It is not at all clear what the government will do in light of the EU decision. After all, it is not the fault of the companies involved that the Hungarians decided to begin construction without the final okay of Brussels. If, however, price fixing can be proven, Nándor Csepreghy, assistant undersecretary in charge of communication on matters related to the European Union, said, the construction companies will be responsible to the Hungarian taxpayers for the loss of 110 billion forints.

Although the Hungarian government now echoes the EU and says that the construction costs are too high, back in 2013 when Benedek Jávor first began his investigation of the case neither Mrs. László Németh, then minister of national development, nor János Lázár found anything wrong with the winning bids. In fact, both insisted that they “were not irrationally high.” But now, suddenly they’re talking about price fixing. It is hard to escape the conclusion that Benedek Jávor’s suspicions about possible kickbacks to individuals and perhaps also to Fidesz’s coffers are well founded.

As far as I know, up to this point it was only Simicska’s Közgép that reacted to Csepreghy’s threat of passing the lost EU money on to the companies involved. Közgép published a statement in which they explained that it was Közgép that offered the lowest price in a proper bidding process and that their job was not simple road building but the construction of three bridges. The new Tisza bridge will require 8,500 tons of steel. In addition, two smaller bridges, on either side of the Tisza, must be built over wetlands. Közgép called attention to the fact that the January issue of the Official Gazette announced that the government would finance from domestic sources a road that “connects M5 with M4.”

Indeed, János Lázár only recently reiterated the “government’s long-standing desire to have at least a four-lane highway between M5 and Szolnok.” Apparently, it is for political reasons that the Orbán government wants to make this road a priority. It was in Szolnok last September that Viktor Orbán announced his ambitious plan for building four-lane highways that would connect each county seat to the larger superhighway system of the country. Moreover, he planned this expansion of the roads not from EU money but from domestic resources. Such a road would “bring spectacular economic development to the city,” said Ildikó Bene, a Fidesz member of parliament. Budapest could be reached from Szolnok in less than an hour, she promised.

As for the charge of cartel activities and price fixing, I’m not sure that this is the real reason for the extraordinarily high prices asked for the job. Colas-Swietelsky bid 3.49 billion/km and Strabag 2 billion/km. Közgép is a different story because their work consists mostly of building bridges. I’m almost sure, however, that officials demanded kickbacks. A conversation between Nándor Csepreghy and Egon Rónay of ATV on Friday morning supports this supposition. When Csepreghy went on and on about the cartel activities of the firms involved, Rónay asked him why Hungary had to wait for the European Union to suggest that price fixing might be behind the high prices. Why didn’t they investigate these suspiciously high prices themselves? Csepreghy refused to answer. He tried every which way to bypass the question until Rónay said, “Well, you just refuse to answer my question.” Probably a wise decision.

A crime in search of a more coherent cover-up

Today being Friday, Prime Minister Viktor Orbán gave another interview on Magyar Rádió’s Kossuth channel. Naturally, the Quaestor scandal was the first topic to be discussed. After a close reading of the text, I decided that it was worth spending a post on how the story line of this whole sordid affair has been changing from day to day.

Last night I watched an interview with László Kéri, a political science professor who has known Viktor Orbán and his friends ever since their college days. He expressed his total disgust that “in three weeks [Viktor Orbán] could only come up with such an infantile, obvious, and slapdash story.” And that interview took place before yet another version of the government’s involvement with Quaestor was presented today.

So, let me try to summarize what kinds of stories were fed to the unsuspecting public in the last two days. You may recall that yesterday morning Viktor Orbán admitted his personal involvement. He was the one who instructed all ministries at one of the cabinet meetings to check whether they had any assets at certain brokerage firms and, if yes, to withdraw them immediately. He didn’t mention the date of the cabinet meeting, but journalists suspected that March 4th was the most likely date, which was indirectly confirmed by János Lázár, who at a press conference yesterday talked about Orbán’s instruction “only at the beginning of March.” But by today the story changed, most likely because the early March date was too close to the collapse of Quaestor and lent credence to the charge of insider trading.

András Giró-Szász and János Lázár at yesterday's press conference

András Giró-Szász and János Lázár at yesterday’s press conference

Therefore, in his interview this morning, again without mentioning an exact date, Orbán said that his decision to withdraw government monies from brokerage firms “was made immediately after the collapse of Buda-Cash, at the time when there was no sign of any other bankruptcies” and not in early March, as János Lázár claimed only yesterday.

At this point, the reporter asked whether it was at a cabinet meeting that “this instruction was uttered,” and more importantly, whether minutes of the meeting are available. The answer to this question was curious. “There must be [biztosan]. We took a look at the situation after the bankruptcy of Buda-Cash and decided that I will call together the leaders of the municipalities, some 60 of them, to the parliament for a meeting. At that [cabinet] meeting we looked at the situation and decided that we couldn’t take such a risk.”

My problems begin with the very first word which, in my opinion, in this context does not carry the meaning of absolute certainty, although the literal English equivalent of “biztosan” is “sure, surely.” I believe that my rendition as “there must be” is more accurate. An unequivocally positive answer in Hungarian would be something like “persze” (of course), or “természeten” (naturally). So, in my interpretation Orbán did not want to give the impression that he could actually come up with a transcript of what took place at this cabinet meeting.

The sentences that I just quoted do not support Viktor Orbán’s assertion that he explicitly instructed the ministers to withdraw government assets from questionable brokerage firms. If you read the text carefully, the only thing that he claims happened at that cabinet meeting was a discussion of the problems of 68 municipalities that kept their assets in one of the four small banks belonging to the Buda-Cash Group. If there is a transcript at all, which I doubt, I suspect one would find a discussion of these municipalities’ plight and absolutely no instructions concerning government assets at Quaestor.

But that was not the only lie that Orbán told in this interview about the Quaestor case. A second concerned the nature of the assets in which the ministry of foreign affairs and trade invested 3.5 billion forints. Again, a word-for-word translation is necessary. “As things stand now, what I know now is that we are talking about government bonds, so it is money that comes from the budget. These state institutions kept their money in government bonds which they purchased from the brokerage firms. So, if I understand it correctly, they didn’t gamble with the money of the taxpayers. They put it into secure paper, but these bonds were at the wrong place.” This story is most likely the brainchild of the last 24 hours because the first time we heard about secure government bonds was at János Lázár’s press conference yesterday afternoon. But then how it is possible that Quaestor didn’t simply return the secure government bonds worth 3.5 billion forints but decided instead to send the 3.5 billion in cash? A reporter actually asked Lázár about the anomaly, but Lázár’s only answer was that the ministry might press charges against the brokerage firm and that this just shows that a bunch of crooks ran Quaestor.

And this was not the end of the lies Viktor Orbán managed to put together for this Friday. The third one concerned a letter that Csaba Tarsoly, CEO of Quaestor, sent to Viktor Orbán. The first story was that Tarsoly’s letter was sent to Péter Szijjártó, Tarsoly’s buddy, with a request for help. He asked Szijjártó to pass the letter on to Orbán. According to Lázár, the letter in which Tarsoly announced the impending bankruptcy of Quaestor reached Orbán “at the beginning of March.” That date sounds plausible because, according to earlier information, it was on March 5th that Péter Szijjártó decided to withdraw the ministry’s money from the firm. But that date is terribly inconvenient for Orbán because it would indicate that he instructed Szijjártó to withdraw the ministry’s assets based on insider information. That must be avoided. So, the letter got postdated to March 9th, the day of Quaestor’s official bankruptcy announcement. Viktor Orbán learned about Tarsoly’s problems on the same day that the Hungarian National Bank was informed of the firm’s collapse.

Today we at last found out that the cabinet meeting at which Orbán allegedly warned the ministers of the impending doom took place on February 25, a day after the collapse of Buda-Cash. But, if this story is true, Szijjártó’s ministry was in no hurry to save the taxpayers’ money. Szijjártó waited nine solid days before he allegedly followed the prime minister’s instructions and demanded a return of their billions. Something doesn’t add up here. But then we know that most crime novelists write several drafts before all the pieces fall into place. Eventually the Orbán government may craft a coherent story.

Gathering clouds: The opposition parties take a common stand

This afternoon the leaders of the democratic opposition parties held talks in the wake of Viktor Orbán’s announcement yesterday that he was the one who ordered the ministers of his cabinet to withdraw all government assets invested in bonds issued by the Quaestor Group. Since the meeting ended only about three hours ago, I could find only one commentary on the event. It was by Dániel Bita of Népszabadság who, if I interpret one of his rather convoluted sentences correctly, found it less than successful. I am, on the other hand, more charitable, especially since András Schiffer, co-chair of LMP who up to now has consistently refused to cooperate with the other opposition parties, decided to attend.

Today’s meeting was called by József Tóbiás, chairman of MSZP, which is in itself fairly remarkable since it was Tóbiás who shortly after the lost 2014 national election declared that “never again” will MSZP cooperate with any of the other parties. The socialists will go it alone and will single handedly win the next election. Of course, since then MSZP was forced several times to accept the assistance of DK which supports, for example, the MSZP-nominated Ferenc Pad in the Tapolca-Ajka election.

Fairly late last night MSZP released a communiqué titled “The government is in crisis, it is time for the opposition” in which Tóbiás called on “the representatives of the opposition parties” to meet at 1:00 p.m. in the parliamentary office building. Jobbik could hardly wait to express its willingness to join the other parties. It took Gábor Vona, the party chairman, no more than half an hour to announce that “naturally they will join the others [but] they expect Fidesz to be represented at the gathering.” He added that they “will also have to discuss the role of the socialist governments in the brokerage scandal.” They want to know about “the business relationships that did exist and perhaps still exist between leftist politicians and the corrupt leaders of the brokerage firms.” Tóbiás goofed. Surely, he didn’t mean to invite Jobbik, but he was sloppy in composing his invitation.

Tóbiás had to get out of this sticky situation. This morning MSZP released an explanation. According to the press release to MTI, the party said that all “democratic parties indicated their willingness to participate” but they didn’t think that Jobbik’s presence at the meeting would be appropriate because “Jobbik at such a gathering would only be a power broker for Fidesz.” According to MSZP, Jobbik, which is financed from abroad, is neither patriotic nor democratic, and it is certainly not an opposition party.

The following people attended the meeting: József Tóbiás (MSZP), Ferenc Gyurcsány (DK), András Schiffer (LMP), Timea Szabó (PM), Viktor Szigetvári (Együtt), and Anett Bősz (LP). The only person who was missing was Lajos Bokros, representing MoMa, a moderate conservative grouping, perhaps because it is “movement,” not a party.

At the meeting there seemed to be unanimity among the politicians that Viktor Orbán should leave Hungarian political life. According to Tóbiás, Viktor Orbán should simply resign. Barring that, at the very least he should ask for a vote of confidence. Tímea Szabó held a similar position, adding that if Orbán does neither then she will submit a declaratory resolution for the dissolution of parliament and for holding early elections. In addition, some of the participants added Péter Szijjártó and György Matolcsy to the list of those who should follow Viktor Orbán as undesirable political figures.

Tímea Szabó, József Tóbiás, Anett Bősz, András Schiffer, Viktor Szigetvári and Ferenc Gyurcsány

Tímea Szabó, József Tóbiás, Anett Bősz, Ferenc Gyurcsány, Viktor Szigetvári, and András Schiffer

Viktor Szigetvári is convinced that Orbán is guilty of insider trading, which is a criminal offense, and therefore he is longer fit to be the prime minister of the country. However, he was pretty vague about what to do if Orbán does not resign, which is all but certain. He came up with the shopworn remedy of creating a parliamentary committee to investigate Viktor Orbán’s role in the Quaestor scandal. Unfortunately, Hungarian investigative committees are not like the Watergate committee whose hearings eventually led to Richard Nixon’s resignation. Orbán will simply not show up and that will be the end of it.

András Schiffer also thinks that Orbán “is morally unfit to be the prime minister,” but he concentrated on amendments to be offered by the opposition parties to a Fidesz draft proposal that is designed to financially assist those who suffered heavy losses as a result of the bankruptcy of Quaestor.

What Gyurcsány said or what kinds of plans he entertains under the present circumstances we don’t know because he was the only politician who gave no interview after the meeting. He said only that the meeting was “pleasant and constructive,” which the reporter of Népszabadság interpreted to mean that DK’s chairman found the gathering pretty useless. Although it is true that no definite road map emerged from this first meeting, the very fact that all the democratic parties were ready to sit down and discuss a common strategy is a step forward. The next few days will tell us whether any concrete steps will be taken after this exchange of ideas.

In my opinion, the most important event of the meeting was the decision to hold a mass rally organized by the democratic parties on April 11, the day before the Tapolca-Ajka by-election. This means that these parties are no longer afraid to show themselves and take a leading role in anti-government demonstrations. At the last big demonstration on March 25, although the parties could show their flags and logos, MSZP did not take advantage of the opportunity. Only MoMa and DK flags could be seen. Now MSZP seems eager to come out with their red carnations. Moreover, the civic organizers, as was demonstrated on March 15, no longer mind the presence of parties. All told, given the public mood, the rally should be a great success.

Fidesz interprets the opposition’s gathering of forces as a “petty power struggle.” The left “acts as if they had absolutely nothing to do with the socialist brokerage scandal although they were the ones who allowed financial corruption to flower in the last decades.” The problem is that this old “socialist brokerage story”–especially in light of the close relationship of the government, Fidesz politicians, and men close to Viktor Orbán with Csaba Tarsoly, CEO of Quaestor–is no longer believable. Fidesz has been in power for the last five years, and it was Fidesz-appointed officials who were supposed to make sure that financial institutions operate in a lawful manner. But the Hungarian National Bank allowed Quaestor, even when it was on its last legs, to issue 60 billion forints worth of bonds.

This morning Gábor Horn, the former SZDSZ member of parliament who was the intermediary between his party and the Gyurcsány government, was interviewed on ATV’s early morning program, Start. He compared the situation of the present government to that of the socialist-liberal government back when it became obvious that the government would not be able to survive much longer. Although, Horn said, Orbán is a “more talented survivor than Gyurcsány,” he now has to admit that Viktor Orbán is in big trouble. A caller to Klubrádió, however, described Orbán as being as slippery as “a soaped dolphin.” It is still quite possible that the great survivor will escape this scandal unscathed.

Demands for Viktor Orbán’s resignation

Today is one of those days that I have no idea what will happen between beginning to write this post and uploading it. One thing, however, I can be pretty sure of: I don’t have to worry that by tomorrow morning Viktor Orbán will not be the prime minister of Hungary. Although that is what the opposition would like to see.

This morning’s editorial in Népszabadság demanded Foreign Minister Péter Szijjártó’s resignation. And, indeed, Szijjártó’s situation was deemed so grave that Prime Minister Viktor Orbán himself came to his rescue. At a press conference in Sopron he said that he was the one who decided that all government money invested in bonds issued by private financial institutions must be withdrawn immediately. He announced his decision at the Thursday, March 4th cabinet meeting. The Hungarian National Trading House subsequently withdrew 3.8 billion forints from Quaestor on Monday, March 9th. That very evening Csaba Tarsoly, CEO of Quaestor, announced his firm’s bankruptcy.

The problem with this story is that it doesn’t jibe with earlier statements of the ministry of foreign affairs and trade that praised the Trading House officials who “acted conscientiously when, observing the market developments,” they opted to withdraw Trading House’s money from Quaestor. Because, according to the letter the ministry sent to cink.hu, there was real panic in the first days of March “when the majority of Quaestor’s clients began withdrawing their assets.” The problem with this explanation is that it is not true. There was no outward sign of trouble at Quaestor at the time. Once Orbán decided to bear the odium of what appeared to be insider trading on the part of government agencies, the ministry discovered that its earlier explanation did not accurately reflect the situation and that in fact the prime minister’s version was the correct one.

Many political reporters were stunned when they heard that Orbán had decided to be the fall guy in this scandal. “In the first moment I didn’t understand how [Orbán] could do something like that,” László Szily of cink.hu saidM. Kasnyk of 444.hu at first couldn’t believe that the story was true. After all, with this admission Orbán threw himself into a quagmire of monumental proportions with a possibly serious political fallout. But it seems that Viktor Orbán is confident about his invincibility. He thinks that his position is secure and that he has nothing to fear. Given the Hungarian parliamentary rules he is probably right, although the opposition parties appear to be united in demanding his resignation.

As we learn more about the events leading up to the collapse of Quaestor, it seems that the Fidesz political leadership had been aware that Csaba Tarsoly’s financial empire was in serious trouble for some time. A high-ranking member of the Fidesz parliamentary caucus told an Index reporter that it was likely after Buda-Cash’s collapse that there would be other bankruptcies. He specifically mentioned Hungaria Értékpapír and Quaestor, both of which subsequently failed.

But let’s return to why Viktor Orbán decided to speak up. Most likely because he realized that Péter Szijjártó was in big trouble. He had illegally invested government assets in a shaky private business venture and then, presumably equally illegally, had withdrawn 3.8 billion forints just before Quaestor’s collapse. Orbán gave this young man a critically important position, one that he was not prepared for. But Orbán is not the kind of man who would ever admit that he made a wrong decision, and therefore it would never occur to him to remove Szijjártó from his position. Also, Szijjártó served him with undivided loyalty for such a long time that perhaps Orbán feels obliged to defend him.

Viktor Orbán announcing that it was him who ordered the withdrawal of government assets from Quaestor

Viktor Orbán announcing his decision to withdraw government assets from Quaestor

Let’s take a quick look at the opposition parties’ reaction to Viktor Orbán’s announcement. Párbeszéd Magyarországért/Dialogue for Hungary (PM) was the first to announce their decision to press charges against government officials who, they believe, are guilty of insider trading. Tímea Szabó, co-chair of the party, naively said that they will demand the audiotape of the March 4th cabinet meeting. Good luck! As far as I know, no records of Orbán’s cabinet meetings are kept in any shape or form. Orbán made that decision already in 1998 when he first became prime minister. He didn’t want to become a second Nixon.

Együtt/Together decided that, while they were at it, they might as well send Péter Polt, the chief prosecutor, into retirement alongside his old friend, the prime minister. DK is also pressing charges, and they “would like it if the prime minister would assume financial responsibility with his own assets” for the losses at Quaestor. LMP’s spokesman, a practicing lawyer, talked about insider trading, which is a serious crime and for which long jail terms are normally handed down. He even offered an explanation of what might have happened. In his opinion, it was through the close relationship between Szijjártó and Tarsoly that the information leaked out and spread within the Orbán administration. He also raised the possibility that with the ministry withdrawing about 20 billion forints, Szijjártó may have been partially responsible for the collapse of Quaestor. Gábor Fodor of the Liberális Párt (LP) wrote a letter to the prime minister which Orbán will have to answer at the latest in three weeks’ time. Fodor wants to know exactly how Orbán ordered the ministers to withdraw government assets from private firms. Was it in a letter and, if yes, who were the addressees?

Modern Magyarország Mozgalom (MoMa), the party of Lajos Bokros, called the Hungarian state under Victor Orbán a “den of criminals.” He called attention to the seriousness of insider trading for which “in the United States and in Great Britain people receive very long jail sentences.” In Hungary, he claimed, important government officials are involved in such practices. Bokros also wanted to know “how the ministry of foreign affairs and trade has extra money to invest.”

Several MSZP politicians talked about the case and they all called for Viktor Orbán’s resignation. Jobbik’s János Volner, chairman of the parliamentary committee on promoting entrepreneurial activities, plans to convene a meeting where he expects Péter Szijjártó and the leading official of the Hungarian National Bank to answer the committee’s questions. If they don’t get satisfactory answers, they are ready to go as far as the European Union.

Fidesz is stonewalling. The party “doesn’t fall for the socialists’ provocations because after all it was the left that in the socialist broker scandal [i.e., the Buda-Cash collapse] abandoned the Hungarian people.” And in any case, “it is MSZP, Gyurcsány and Bajnai who are involved in the network of brokerages.” I have no idea what the Fidesz spokesman is talking about here.

The last piece of news I read before sitting down to write this post said that MSZP is inviting all other opposition parties to a meeting tomorrow. We will see what the reaction to this call is. If they manage to form a common front, it will be a first.

The Quaestor scandal

I have been remiss in the last few weeks in not following up on the collapse of a number of Hungarian financial institutions. I did write about the bankruptcy of the Buda-Cash Group, which owned several credit unions that were shuttered as well as a brokerage firm. But I said nothing about Hungaria Értékpapír (Hungaria Securities), which declared bankruptcy soon after Buda-Cash’s announcement. And then on March 9 came the collapse of the Quaestor Group. In the case of Buda-Cash, Fidesz politicians and officials of the Hungarian National Bank claimed that its problems started at least fifteen years ago and therefore the socialists were responsible for its financial demise. The same trick couldn’t be used to explain away Quaestor’s problems because the CEO of the Quaestor Group, Csaba Tarsoly, had for years worked closely with the Fidesz government and people close to Viktor Orbán himself. Tarsoly also had a role to play in the government’s “eastern opening” and all the corruption cases that surfaced there.

I’m not even going to try to map out the complicated business arrangement that will most likely enable Tarsoly to save his skin and keep the money he stole from his unsuspecting customers. After all, the Quaestor Group had 68 affiliated companies, among which large sums of money changed hands.

At the center of the current controversy is the sale of billions of forints worth of Quaestor bonds. Hrurira, one of the Quaestor Group companies, handled the issuance–60 billion of bonds that were approved by the National Bank and 150 billion that were “fictive.” Quaestor Értékpapír Zrt. sold the bonds to unsuspecting clients. The money that came from the sale of the bonds was transferred to Quaestor Pénzügyi Tanácsadó/Quaestor Financial Consulting, the parent company, in the form of a loan. The company that is now under scrutiny, Quaestor Hrurira, has no assets. It could repay the customers that bought bonds from Quaestor Értékpapír Zrt. only if it could collect money from the Quaestor Pénzügyi Tanácsadó, from which Csaba Tarsoly departed. On March 16 he named a new CEO–Béla Orgován, a penniless, unemployed man with a prison record. Déjà vu all over again. Josip Tot, Kaya Ibrahim, and the halcyon days of Fidesz.

There is a strong indication that the Hungarian government has been lending a helping hand to Tarsoly so he can keep at least part of his ill-gotten money. While business associates of Buda-Cash and Hungaria are in custody, Csaba Tarsoly is free and, according to neighbors, is in the process of packing. Over the last few days we kept hearing that he will be arrested soon, but he hasn’t even been questioned by the police.

And who is Béla Orgován? 444.hu found the man who will have to face the music when Quaestor’s customers demand their nonexistent money. And, according to some sources, a lot is at stake: 150 billion forints, presumably the amount earned from the sale of the “fictive” bonds, disappeared on Csaba Tarsoly’s watch. Orgován is a 38-year-old unemployed man who lives in the village of Tápióság in Pest county. He apparently has been in jail several times, mostly for robbery but once for attempted murder. His children are already grown, and he and his wife have several grandchildren. I would say he is a perfect person for the job. In the last twenty some years there have been several down-and-out, often homeless people who for a few thousand forints were tapped to serve as CEOs of bankrupt companies.

The Hungarian government’s less than rigorous pursuit of the Quaestor case and its generosity toward Tarsoly most likely has something to do with the fact that the government and Quaestor had some joint business deals. As we just found out yesterday, the Hungarian National Trading House that functions under the ministry of foreign affairs and trade had an account at Quaestor. (In Hungary, where hometowns often matter, it may not have been irrelevant that both Foreign Minister Péter Szijjártó and Csaba Tarsoly are from Győr. Moreover, until March 9, 2015, Tarsoly was the owner of the Győr ETO FC team, which is a good recommendation in today’s Hungary.) For the Trading House to have money invested with Quaestor or any other brokerage firm is against the law. All state money must be kept in treasury bonds. The amount of money involved is unclear. Some people talk about 25 billion forints. According to Tamás Katona, former undersecretary of the ministry of finance, for such a large amount of money to have landed at Quaestor must have had the blessing of Szijjártó himself.

Csaba Tarsoly and Péter Szijjártó at the opening of the Moscow Trading House in 2013

Csaba Tarsoly and Péter Szijjártó at the opening of the Moscow Trading House in 2013

So, we have the illegal deposit of a large amount of government money at a private firm, which is bad enough, but what follows is truly outrageous. A day before the collapse of the firm an official of the Trading House decided to take out its money, thereby saving the taxpayers’ money. What a coincidence! What fantastic financial acumen! It will be hard to deny the likelihood of insider information.

Apparently, the Trading House was not the only one that had large amounts of money at Tarsoly’s firm. There were other state companies as well, and it seems that they were all affiliated with Szijjártó’s ministry. We don’t know whether they suffered losses or whether Tarsoly warned his friend from Győr ahead of time, thereby protecting the accounts of such institutions as the Hungarian Export-Import Bank and Hungarian Export Credit Insurance.

Naturally, the ministry spokesman denies any wrongdoing. First of all, he claims that these state companies had a right to place their capital with an outside firm. The spokesman also claims that they chose Quaestor because it was the only firm that provided its services without any charge whatsoever. Well, yes, I scratch your back, you scratch mine. We all know how it goes. And if there’s a problem, Quaestor may offer a lifeboat to the government while individual bondholders are left to sink.

Campaign strategies against Jobbik: Tapolca-Ajka

Now that the by-election in Tapolca-Ajka is approaching, it is time to think about how the candidate of MSZP-DK, Ferenc Pad, could defeat his two opponents. Just the other day he announced that he will not conduct a negative campaign. As I indicated earlier, Fidesz has already mounted a two-pronged attack. It called attention to Pad’s alleged wealth, accumulated when he was a trade union leader who acted as if he truly cared about the well-being of hard-working people. At the same time the Fidesz publication, pestisrácok.hu, began an attack on the Jobbik candidate, Lajos Rig, by calling attention to his alleged tattoo depicting the Nazi SS’s slogan “My Honor Is Loyalty.” Should the MSZP-DK candidate remain quiet or should he try to undermine the credibility of his opponents?

Admittedly, it is not an easy task to devise an effective campaign in a three-way race, but I still think that a totally defensive campaign from Ferenc Pad would be a mistake, especially since in the past two weeks Jobbik’s newly created and carefully nurtured reputation has suffered several setbacks. The party’s strategists decided that if Jobbik wants to become a force that could one day gain the confidence of the majority of the voters, it must conceal its true nature. After all, all experts say that one can win an election only from the middle. If Jobbik brands itself as an extremist racist party, it will always remain on the fringe. So came what Hungarians call the “cuki” campaign. A charm offensive. Sweetness and light. Instead of spewing anti-Roma and anti-Semitic remarks, Gábor Vona, the party chairman, posed with vizsla puppies to promote the humane treatment of animals.

The problem with these phony metamorphoses is that sooner or later the truth usually emerges. This is what has been happening lately to Jobbik.

On March 5 vigyazo.blog.hu released an audio tape on which Tamás Sneider, the Jobbik deputy president of parliament, can be heard telling his audience that the “cuki campaign” isn’t real. The party hasn’t changed, but they had to temper their message because they don’t want to frighten away the more moderate voters, especially the large crowd of pensioners. However, the Betyársereg (The Army of Outlaws), a group of extremists, since they are not a parliamentary party, can deliver the real message of Jobbik. The two groups complement each other well and have developed a working relationship based on a division of labor. The Betyársereg is an outright Nazi party, which I wrote about in an earlier post. In addition, Sneider talked at some length about “Islam being the last hope of mankind.” He described Islamic extremism as “anti-Western feelings for which the West is responsible.” Sneider has a personal secretary who became a Muslim which, according to his boss, “is much better than if he had converted to Judaism.” The personal secretary is a full-fledged member of Betyársereg, an organization Sneider claimed to know nothing about in a later interview with Olga Kálmán on ATV.

Party chief Gábor Vona with members of Betyársereg / http://betyarsereg.hu/

Party chief Gábor Vona with members of Betyársereg / betyarsereg.hu

Surely, given these embarrassing revelations, those who oppose Lajos Rig, the Jobbik candidate in the Tapolca-Ajka by-election, should concentrate on the duplicity of the “cuki campaign” instead of wasting their time on the man’s tattoos. And yes, even the MSZP-DK candidate should call attention to the real nature of Jobbik, as former MSZP chairman Ildikó Lendvai suggests in an opinion piece that appeared in Népszava. But instead of giving history lessons about events that took place more than 80 years ago in Germany, about which ordinary folks know darned little, she argues that MSZP-DK should talk about those Islamic extremists who burn people alive. After all, people see atrocities committed by these people practically every day on their television screens and they’re horrified. In her opinion, that would bring home the danger of Jobbik’s racist, extremist message much more effectively than anything else.

But if the MSZP-DK candidate confronts Jobbik openly and discredits its candidate, wouldn’t such a strategy only strengthen the other opponent, Fidesz? Let’s assume that large numbers of would-be Jobbik voters see the light and decide that after all they don’t want to vote for such an extremist party. Wouldn’t they embrace Fidesz as the lesser evil? Perhaps not–if a sophisticated strategy could be devised that would, on the one hand, emphasize the incompetence and corruption of the present government and, on the other, stress that Fidesz and Jobbik are kindred ideological souls.

I doubt that any serious strategy has been worked out so far. And yet this is an important election. If Jobbik wins, it will give an incredible boost to this extremist party that has been steadily gaining adherents. Moreover, until now Jobbik was not strong enough in any electoral district to win a seat outright. If this barely literate Lajos Rig manages to gain a seat on his own, it would be a first. I do hope that the MSZP-DK candidate and the people around him realize the importance of this election and act accordingly.