Tag Archives: András Tállai

The latest revelations in the Roland Mengyi case

People unfamiliar with Viktor Orbán’s Hungary might think that I’m spending far too much time on the case of Roland Mengyi, a Fidesz MP. So what, they might say. They caught a politician who is a crook. Happens in the best of countries. What’s the big fuss?

Well, that’s not how things work in Hungary. The Orbán government has been in power for more than six years, during which the independent media reported on a raft of suspicious cases. Not once did the “independent” prosecutor’s office ask the president of the parliament to initiate proceedings to suspend a Fidesz MP’s immunity, even when such a request was warranted.

Yes, Hungary’s chief prosecutor is independent in the sense that he and his office are not subordinated to the ministry of justice, unlike in most European countries or the United States. That was not the case between 1867 and 1949. The prosecutor’s office was the judicial arm of the state. After 1990 a restoration of the old system was briefly discussed and rejected, for fear of government interference in the judiciary. Thus, Chief Prosecutor Péter Polt, an important ally of Viktor Orbán, is responsible to no one except, of course unofficially, the prime minister. He is a man of immense responsibility and power. He could theoretically topple Orbán’s corrupt regime or, being a faithful servant, keep it in power by burying all the embarrassing and even politically lethal cases.

Very often the prosecutor’s office doesn’t even start an investigation of cases reported to the police. In a few bigger cases they begin an investigation but the prosecutors find the cases too weak to go any further and drop them. Then, there are those cases when the prosecutor’s allegations are so poorly worded that the judges have no recourse but to acquit the accused.

The Mengyi case is testing the “see no evil” prosecutorial system. Péter Polt was forced to act. He had no choice once 168 Óra released the third installment of the story of Roland Mengyi and his accomplices. It reported that the National Tax and Customs Administration has a video on which one can see two of the accused men handing Mengyi a small plastic bag that might have contained the 5 million forints Mengyi demanded from them. An hour after this information hit the newsstands Polt wrote to László Kövér requesting that Mengyi’s immunity be lifted.

Mama Rosa, Italian restaurant, where the Roland Mengyi allegedly received the money

Mama Rosa, the Italian restaurant in Tiszaújváros, where Roland Mengyi allegedly received 5 million forints in cash

In this post I will concentrate on what we learned from the third installment of Attila Rajnai’s series on the Mengyi case, but before that I will try to clarify why the National Tax and Customs Administration/NAV is involved in this case since it has nothing whatsoever to do with tax fraud.

Initially, NAV was not investigating Mengyi but Márta F. of Tiszaújváros, an accountant whom the NAV investigators suspected of being involved in tax fraud by gaming the special tax status of employees of social cooperatives. These employees, who are disadvantaged, pay lower taxes and have lower social benefits payroll deductions than employees of ordinary businesses. Márta F.’s scheme was to change the status of employees of ordinary businesses to social cooperative employees. The scheme worked this way. The worker was let go by his employer and immediately hired by one of the social cooperatives, but in reality he worked in his old workplace except that his employer now hired him as a social cooperative worker with a reduced tax burden. Márta F. was apparently arranging these switches in status in such huge numbers that NAV investigators became suspicious and began their surveillance of her activities. Mengyi’s bad luck was that Tibor B. and Zsolt E., the two friends who turned to Mengyi for help, got in touch with Márta F., who was known as an expert in setting up social cooperatives. Thus their conversations with Márta F. were also recorded. These conversations prompted a second investigation that led to Mengyi.

So, what did the public learn from 168 Óra’s third installment? Plenty. One important piece of information is that if NAV investigators find a political thread in the course of their investigation, they have to report the case immediately to the prosecutor’s office. The prosecutor’s office can then, if the chief prosecutor so desires, stop the investigation altogether. In fact, Rajnai is aware of an earlier case where an important business partner of one of Viktor Orbán’s oligarchs was in trouble with NAV but the prosecutor’s office stopped the investigation. It is quite possible that the same thing happened in the Mengyi case because just when the investigators were ready to arrest the Fidesz MP, their superiors refused to give them permission to proceed.

Of course, the newly appointed NAV president, András Tállai, might have put an end to the investigation, especially since in one of the conversations Péter K., the middle man between Mengyi and the two applicants for the grant, tries to quell their fears by telling them not to worry because András Tállai and Roland Mengyi are “on very good terms.”

The other revelation of this third installment is that last fall someone in the ministry of human resources told Péter K. that NAV investigators had paid a visit to the ministry and that they should be careful because their telephone calls are being monitored. At the moment we don’t know who that person was, but Rajnai suspects that his name is known to the prosecutors. Because revealing such information to subjects of an investigation is a crime, this person is probably also in trouble.

As the network of corruption expands, another possible culprit is the owner of Public Sector Consulting Kft. (KSC), Sándor Holbok, whom I described earlier as an “ősfideszes” or “primordial member” of the party. Although at the moment only Szilvia B., an employee of the company, is in jail, Holbok was most likely fully aware of what was going on in the firm. In one of the conversations one can hear that Mengyi is in negotiation with the owner of KSC, discussing the financial details, meaning who will receive what portion of the 600 million.

Whoever interfered at the level of the ministry saved Mengyi from a much more serious charge. The tender was rewritten, and therefore the deal couldn’t proceed. As it stands, Mengyi and his co-conspirators are accused only of attempted fraud.

Now it is up to Péter Polt to contain the investigation to the smallest possible circle. If the investigation goes much further, it could reach high officials in the ministry of human resources and perhaps even in the prime minister’s office. After all, there are rumors that even undersecretaries might be part of the conspiracy to illegally acquire EU money. Szilvia B. talked about her close relationship with Nándor Csepreghy, deputy of János Lázár. I’m sure that Polt will do his best as usual. Maybe the whole thing will peter out and Roland Mengyi will be the only one who is charged. And if Mengyi is deemed to be critically important to the party, the prosecutor’s office will probably prepare a case so full of holes that he will get off.

August 20, 2016

Roland Mengyi, the Fidesz Voldemort: from billionaire’s front man to politician

This is the story of Roland Mengyi’s sudden appearance, out of total obscurity, in high politics. The original article titled “Egy milliárdos táskahordójából lett politikus a fideszes Voldemort” (The Fidesz Voldemort went from being the bag carrier of a billionaire to a politician) originally appeared in index.hu and was translated by the staff of The Budapest Sentinel.

Earlier I reported on the findings of Attila Rajnai, an investigative journalist, who in two installments published details of the scandal in the weekly 168 Óra. Since then another installment has appeared, which strongly suggests that officers of the Nemzeti Adó- és Vámhivatal (National Tax and Customs Administration/NAV) were ready to arrest Mengyi when he was negotiating with the two tender applicants from Tiszaújvár about a year ago. The officers’ superior, however, wouldn’t give them permission to act. Rajnai suspects that it was either András Tállai, president of NAV, or Péter Polt, the country’s chief prosecutor, who, for a while at least, saved Mengyi’s skin.

Tállai is a member of parliament, undersecretary in the ministry of interior, and, in his spare time, head of NAV, a huge organization. For one reason or other, Tállai’s appointment was of special importance to Viktor Orbán. But, at the same time, he didn’t want Tállai to relinquish his parliamentary seat in case Fidesz loses a third seat at a by-election. Hence Tállai’s multitasking challenge.

Another development in the case is a unique move by Péter Polt. He asked László Kövér, president of parliament, to initiate proceedings which might lead to the suspension of Ronald Mengyi’s immunity. In the past, the Fidesz majority of the parliamentary committee in charge of immunity cases always denied requests to suspend Fidesz members. This time, I believe, they will oblige. Tomorrow I will outline one possible way Fidesz might handle the case.

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Mengyi2

Official résumé: We know almost nothing about what the Fidesz parliamentary representative Roland Mengyi did prior to becoming a politician in 2010. He is not answering any questions about his earlier life. Nor is he talking about an ugly corruption scandal to which he has been connected. For this reason we looked into his past. It turns out that, while it does not appear on his résumé, he worked first for the Republican Guard, later as a driver for the front man of a billionaire entrepreneur.

Apart from his enterprising wife, an influential Fidesz city politician may have played an important part in his suddenly becoming a politician.

A typical political entrepreneur—based on his previous life this would be the best way to characterize Roland Mengyi, although his previous life is the thing about which it is possible to know virtually nothing, at least on the basis of what the politician has disclosed about himself.

When Mengyi became a Fidesz member of parliament in 2009, he wasn’t only completely unknown to voters but also within his party as well. He just appeared out of nowhere. As to what Mengyi did prior to 2010, the only thing appearing on his official résumé uploaded to parlament.hu is that, and we quote, “Public administration, free market. Former president of a public foundation, (sic).

Although we tried to ask Mengyi about the period before his career in politics, he was not willing to say anything. The Fidesz press office wasn’t able to help us learn anything about his past. For this reason we had no choice but to investigate where the Fidesz politician came from and whom he has to thank for his political career. We spoke with those who knew him from the past and had either a business or personal relationship with him. Finally the picture became clear. Mengyi was born in Tiszaújváros in 1975. He was still a child when his parents moved to neighboring Sajóörös. He attended school in Tiszaújváros where he obtained his high school diploma. He liked to do sports and in 1994 placed 10th in the junior body building tournament in the 90 kg category where he represented Tiszaújváros. Later he moved to Budapest.

His résumé doesn’t mention this either, but we know from other sources that at the end of the 1990s during the first Orbán government he worked in parliament as a member of the Republican Guard. Mengyi did not answer questions relating to this. The Ministry of the Interior, on the other hand, indicated that it could not release information about this.

One of his former colleagues told Index that he served as a security guard, and we spoke with another acquaintance of his who said he was a personal bodyguard.

One source close to him told us that he was in fact with the Republican Guard and later became the personal bodyguard of Pál Solt, then president of the Hungarian Supreme Court. At that time he was proud of the fact that he appeared in the background of a photograph of Viktor Orbán and Pál Solt.

How the driver became a lawyer

The turning point in Mengyi’s career came when he got together with the daughter of a famous Budapest veterinarian. His acquaintances at that time believe that through his girlfriend he entered an intellectual world previously unknown to him and that this influenced his future career: the simple, less intellectual, country bumpkin began studying law at the Pázmány Péter Catholic College. However, a terrible tragedy turned his family life upside down. When he was down on his luck, the veterinarian’s cousin, the billionaire entrepreneur István Petrás, took Mengyi under his wing.

Those in the billionaire’s circle say that at the beginning Petrás did not especially like Mengyi. The persons in question recollect that those belonging to the circle felt the guy of humble origins was using the intellectual medical family as a kind of springboard. “Roland was a clever guy, he learned fast, and studied law at night, he was hard working,” says an old acquaintance. Another person says precisely the opposite. A person belonging to Petrás’s circle says he doesn’t remember Mengyi for his brilliant mind.

In any event, in time Mengyi became Petrás’s confidante.

At that time Petrás was doing well. With assets amounting to many billions of forints, he was listed as one of the 100 most affluent Hungarians. There must have been real trust between the two because, between 2006 and 2008, Mengyi was listed as an owner of one of the billionaire’s companies. However, Petrás’ acquaintances believe that the future politician was needed only as a kind of front man (stróman) for the wealthy entrepreneur, who was dealing primarily in real estate and who characteristically avoided the spotlight. In other words, although Petrás paid him well, he used Mengyi as a simple errand boy and bagman. This explains how Mengyi became the chairman of the board of trustees for the Biatorbágy Health House Foundation founded by Petrás in 2006. The foundation was created for a project belonging to a public private partnership (PPP) in which Petrás was interested along with the Biatorbágy local government. The health house was eventually christened in 2009 by Gordon Bajnai’s Minister for Health, Tamás Székely. According to the minutes that can be downloaded over the internet, by then Mengyi was already a Fidesz member of parliament and thus represented the foundation in the negotiations with the local government.

It wasn’t Petrás who played a key role in Mengyi’s political career but his wife, who dealt in real estate in the 2000s and who later developed a close working relationship with Petrás. In fact, the two met through the billionaire businessman. The woman belonged to a group of businessmen whose success was largely due to their political connections. The defining individual of this circle was Róbert Juharos, who had a joint company with Mengyi’s future wife in the 2000s.

Juharos, who at one time worked at the law firm of KDNP MP György Rubovszky, was one of the founders of the Budapest 8th district chapter of Fidesz and was a member of parliament between 1998 and 2002. But his real career took place in the 8th district. Everything having to do with district development or related to property development went through his hands. Many credit him with the fact that over time a rundown district became a more secure place attractive to investors. Mengyi’s wife also benefited from being connected to Juharos, since one of her real estate companies, for example, specialized in the property of the district government. Furthermore, she, alongside her former husband, had a stake in Juharos’ law office.

Mengyi’s wife was not a simple dealer in real estate. Earlier she worked together with her lawyer husband on the sale of industrial property and on re-zoning, and she dealt with municipal properties, including those slated for demolition. That was the time when companies and private individuals of dubious reputation were able to acquire real estate very inexpensively by promising phantom projects and improvements, even guaranteeing them, which never materialized. In many cases the real estate was sold based on loose interpretations of the terms of the public tender. Juharos did so well that, in time, his name was mentioned as one of the future Fidesz hotshots, although he severely jeopardized his party career when in the middle of the 2000s Lajos Simicska became upset with him. Regardless, to this day he has been able to preserve his influence in the district under Máté Kocsis, Fidesz mayor. He is the president of the district chapter of Fidesz, is Kocsis’ adviser, and his law office contracted with the district government between 2011 and 2014.

Took up politics in secrecy

Not long after Mengyi and his future wife got together, Petrás and Mengyi had a falling out. According to acquaintances, Petrás had a very ugly quarrel with Mengyi because Mengyi concealed things from him which the billionaire believed he should have known. For example, that his protégé was getting into big politics. He only found out when Mengyi wanted to quit. “Roland wanted to leave Petrás. He asked from him his money and the promised percentages, to which Petrás reacted by telling him he was not entitled to them because the projects were not yet completed and money had yet to come in. They had an ugly quarrel, but I believe that since then they’ve patched up their relationship,” a source with a vantage point on both individuals told Index.

Those close to Mengyi believe that Juharos did a lot to help him go from being an errand boy to a politician. Many believe it was the president of the District 8 chapter of Fidesz who introduced Mengyi to how things worked in the party, and how to advance. This helped Mengyi obtain a position even though he was completely unknown within Fidesz.

It was not only Juharos who helped him, but also the lawyer who introduced him to Petrás in the first place. The lawyer personally knew one of the leading Fidesz politicians who had the final word on nominating candidates. Suddenly, out of nowhere, Mengyi became the Fidesz candidate for parliament for Tiszaújváros even though he did not reside there and played no role in the life of the party in Borsod County. Apart from the fact that he was born there and went to school there, he had nothing to do with Tiszaújváros. As we wrote in an earlier article, after the 2010 parliamentary elections, the political career of the previously unknown Mengyi began to rise. By summer it was decided that he would be the Fidesz candidate for chairman of the Borsod County Assembly in the autumn election after it was determined that the current president, Ferenc Ódor, was leaving. Mengyi was nominated by the head of the Fidesz delegation, Dezső Török, to be Ódor’s successor. We tried to ask Török about Mengyi, but he was on vacation. At the same time he indicated that, in his opinion, he was not qualified to speak about his fellow politicians.

After becoming a politician, Mengyi’s self-confidence grew. According to his acquaintances, it is entirely believable that Mengyi referred to himself as Lord Voldemort according to the wiretap records leaked by 168 Óra, because at a family event held in Tiszaújváros in 2010 the waiters called him “My Lord Lieutenant” (“Főispán uram”), and those in attendance said that wasn’t supposed to be a joke.

Poor rich people

If we look at Mengyi’s declaration of assets, the politician does not rank among the more affluent Hungarians. According to his 2011 financial statement, he already had HUF 10 million ($40,000) in savings, that is he was able to put aside 9.2 million in under a year, which means that he must have made an average of HUF 760,000 a month at minimum. One year later he inherited a house and a flat (he became the half owner), but he was no longer an owner in his company, and his savings had decreased by half. According to his most recent financial statement (2015), he bought neither a car nor a flat last year, and his savings do not amount to even HUF 4 million ($12,000). His children don’t have their own assets either. Nevertheless, his acquaintances believe that his wife owned many Budapest properties when they met her. Moreover, one of the politician’s previous companies, Park Consulting, lets out property that it owns. According to them, the Mengyi family purchased a number of pieces of property since 2010 that are not registered in the politician’s name.

Scandalous affairs

Since entering politics in 2010, his name has come up in connection with two scandals. The most memorable one was when Blikk published a list of Fidesz politicians who spent a few pleasant days in the Azores on the occasion of the European Regional Assembly. Mengyi’s name appeared on this list. In fact, it turned out that he played a central role in the scandal because the Fidesz politicians taking part in the holiday on the islands justified their trip on the basis of Mengyi’s being the county chairman of the Roma strategy.

He was once again in the spotlight in the fall of 2013 in connection with an unusual matter involving the tendering of state lands, which was uncovered by Népszabadság. The 2011 land tender was interesting because the tender was withdrawn after the deadline due to pressure from above so that the land could be awarded to people close to Fidesz.

At the time Népszabadság wrote that Mengyi played a role in the revocation of the tender. Allegedly, he was the one who ordered the head of the Bükki National Park Directorate to withdraw the tender. Among those who won the land was Mengyi’s former campaign manager, who had absolutely no previous experience cultivating land.

The biggest scandal of Mengyi’s political career, one that might even cost him his freedom, was revealed recently by 168 Óra. The crux of the matter is that social cooperatives wanted to apply last year for EU money. They claim that Mengyi would have helped in the disbursement if they gave back at first 50 percent and finally 90 percent of the money won. Instead of offering to help with an existing tender, a separate HUF 500 million ($1.8 million) tender was written for the cooperative that sought Mengyi’s help. Mengyi asked for a bribe which he referred to as “constitutional costs” (“alkotmányos költségek”) and, according to the wiretape transcripts, received HUF 5 million ($18,000), referring to himself as Lord Voldemort throughout. Roland Mengyi denies the whole Voldemort story and said he is prepared to undergo any investigation. Barnabás Futó, Mengyi’s lawyer, claims that the transcripts only refer to Mengyi, but that he himself never spoke. However, according to 168 Óra’s latest article, Mengyi participated in one of the telephone conversations.

August 18, 2016

No Internet tax but attacks on the United States continue

On Friday Viktor Orbán was still determined that after a national consultation the internet tax would be introduced sometime next year. Today he retreated from this position. He suggested that the internet providers’ unanimous opposition to the tax was the reason for removing the item from the government’s 2015 budget proposal. I very much doubt that the joint letter of the providers addressed to Mihály Varga had anything to do with the decision. Rather, Orbán recognized that his attempt to simply postpone the decision would not appease the multitudes of internet users. There was a very good possibility that the demonstrations would be repeated from time to time, further damaging the reputation of the government and Viktor Orbán personally. Despite this retreat, however, I have the feeling that in one way or the other curtailing internet access will be back on Viktor Orbán’s agenda. He is only too aware that almost all of the large demonstrations against his government were organized on Facebook. Social media is a danger to autocrats.

Now that this issue is behind us, I would like to return to the Orbán government’s relations with two of its adversaries at the moment: the United States and Norway. You may recall that János Lázár invited the “appropriate Norwegian minister” to meet with him either in Budapest or in Brussels. I predicted that Vidar Helgesen, the minister in question, would not oblige. And indeed, Tove Skarstein, Norwegian ambassador in Budapest, held a press conference today where she announced that Norway does not recognize the right of the Hungarian government to investigate the Ökotárs Foundation. Norway is in the middle of conducting its own probe, which will be ready by the end of November. Until then, the monies of the Norway Civic Fund will continue to be distributed through Ökotárs. It is unlikely that the Hungarian government will be the winner of this dispute. So far the Orbán government has been left holding the short end of the stick: the Norwegian Funds suspended payment of some 40 billion forints that the Hungarian government was supposed to distribute for various projects.

After the meeting of the Fidesz parliamentary caucus a journalist asked Viktor Orbán about the U.S. travel ban on the six Hungarian officials and businessmen. As we know, the reason for the ban is not just simple corruption but also American fear that the reported cases would not be investigated by the police and the prosecutor’s office. In plain English, there is a well-founded suspicion that the government is complicit in the crime itself.

Viktor Orbán does not like to talk about this sensitive topic, and apparently the subject did not come up at today’s meeting of the parliamentarians. Of course it didn’t because it was not on the agenda. When asked whether he knows the names of the six people in question, Orbán’s answer was: “if the Americans tell me, then I will be glad to tell.” The game Orbán is playing is rather simple-minded. He would gladly investigate and if necessary bring the culprits to justice, but the Americans with their stupid laws prevent him from doing so. One has to be very naive to think that Orbán does not know the names or that the prosecutor’s office could not investigate their cases.

It seems to me that there is still a huge confusion about how to deal with the frayed American-Hungarian relations. On the one hand, Viktor Orbán at least twice tried to discourage the far-right leaders of the Peace Marches from organizing an anti-American rally. On the other hand, members of his government are accusing Bunge, the American agribusiness corporation, of corruption. Bunge is most likely the company that reported the corrupt tax authority officials to the American embassy. A few days ago Magyar Nemzet accused Bunge of corruption in Argentina, and today András Tállai, undersecretary in the Ministry of National Economy, went further. According to him, “it is a very interesting situation that in the final analysis it is possible, nay it is certain, that the informer itself is involved with the fraud.” That is, Bunge is being accused of tax fraud. And that’s not all. Magyar Hírlap learned that Carol Browner, Barack Obama’s adviser on environmental matters, recently became a member of Bunge’s board of directors. And, the paper added, Browner was also a member of the Clinton administration. The headline reads: “The threads may lead all the way to Barack Obama.” Wow!  Magyar Hírlap is a big game hunter.

Bunge says it is not under VAT fraud investigation Source: www.bbj.hu

Bunge says it is not under VAT fraud investigation
Source: www.bbj.hu

János Lázár also made it clear how he feels about the United States’ role in shining a light on corruption in the Hungarian tax authority. When an MSZP member of parliament inquired about Ildikó Vida, the head of the office, Lázár retorted: “How do you know that she is involved? For an answer it would be enough to bring the flag of the United States and put it between the European and the Hungarian flags because then we would understand that behind the MSZP caucus there is the Budapest chargé of the United States.” He also suggested to Bernadett Szél (LMP) that she go to the United States embassy and ask them why they intimate that part of Hungarian officialdom is corrupt.

Meanwhile the right and far-right media are full of attacks on the stupid, ignorant and boorish Americans and their representative, M. André Goodfriend, as opposed to the Russians of Tolstoy, Chekhov, and Dostoevsky. Since we all know that a single word from Viktor Orbán would be enough to silence these hacks, we can safely assume that the rants from the staff of Magyar Nemzet and Magyar Hírlap are not against the wishes of the Orbán government.