Tag Archives: Andy Vajna

Silencing the media: Hír TV

I have noticed in the last month or so that Fidesz and the Orbán government are paying far too much attention to Hír TV, which has gone through quite a metamorphosis since February 6, 2015, the day known in Hungary as G-Day . It was on that day that Lajos Simicska told the world that Viktor Orbán and he had parted ways. Moreover, he called Orbán “geci,” which I “politely” translated at the time as “prick.” In the original it was much worse. After this day Simicska’s daily paper Magyar Nemzet, his radio station Lánchíd Rádió, and his television station Hír TV, ceased to be government mouthpieces. I must say that, as a result, the quality of Magyar Nemzet and Hír TV has vastly improved. It is another matter that one can only marvel at the “ideological flexibility” of those reporters who remained, because the change from a pro- to an anti-government stance took place practically overnight.

The loss of Hír TV must have been a heavy blow to the Orbán government, which it tried to redress by getting Andy Vajna, the former American-Hungarian movie producer, to purchase TV2, a commercial station that serves the whole country. Although the producers of TV2’s newscast have been doing their best to tarnish the opponents of the government, Viktor Orbán is still not satisfied. At least this is the impression I got when I heard that Gábor Széles, a far-right Fidesz supporter, was ready to sell his Echo TV to Lőrinc Mészáros. With the change of ownership, the work of making Echo TV, a formerly right-radical station, into a replacement for Hír TV began. At the same time, Fidesz is doing its best to squeeze Simicska’s Hír TV financially.

Hír TV was Fidesz’s channel from the moment of its inception in January 2003. The first president of the company was the same Gábor Borókai who had been the government spokesman of the first Orbán government (1998-2002). Many of the channel’s early reporters actually ended up working for the government after 2010. In October 2015 Péter Tarr, deputy CEO of Hír TV, admitted that “members of the government’s communication team visited the station at least once a week in order to give instructions” to those responsible for the ideological content of the station. By 2007 Hír TV could reach 2.1 million households.

After G-Day, many of the top brass both at Magyar Nemzet and HírTV left, among them the staff of “Célpont” (Target), who were investigative journalists. For a while this very popular weekly program was off the air. Now, however, it is back, and rumor has it that considerable effort, financial and otherwise, is being expended to make it HírTV’s flagship program, alongside Olga Kálmán’s forthcoming interview show. Given the incredible corruption surrounding the present government, a program of this sort is certainly a good investment, especially since ATV doesn’t have the financial resources to include such a show in its programming lineup.

Distressed by all these changes at Hír TV, Fidesz and the Orbán government moved into action. Even earlier, the Fidesz leadership had forbidden members of the government and high officials of the party to accept invitations from Hír TV. Now they are putting pressure on cable companies, suggesting that they drop Hír TV from their offerings. One company, PR-Telecom, obliged and announced that as of January 1, they had dropped Hír TV along with six other, mostly foreign-language, channels. At the same time the company announced that 14 new channels will be available, among them six that are owned by Andy Vajna. While they were at it, the company picked up two porn channels as well. The majority stakeholder in PR-Telecom is an off-shore company in Malta, Central Eastern Cable & Media Group Limited, whose owner is the same man in whose yacht Lőrinc Mészáros was seen in the harbor of Zadar last summer. What a coincidence, don’t you think?

Soon enough Magyar Nemzet discovered that PR-Telekom had received state aid to the tune of 3.3 billion forints a couple of months before the cable company informed Hír TV of its decision to break its contract. The grant (and it’s an outright grant, not a loan) for improvements of the company’s network in certain regions of the country came from money Hungary had received from the European Union. This is how the EU is unwittingly aiding the undemocratic policies of the Orbán government. Luckily, not all is lost as far as Hír TV is concerned. Since the cable company’s breach of contract was illegal, those subscribers who would like to switch service providers can do so without any penalty. At least this is what Hír TV claims on its website.

Meanwhile Hír TV has been hiring people right and left. Some of them came from the defunct Népszabadság, others from the state television. The government mouthpiece, Magyar Idők, has been watching all this with a certain amount of apprehension. Its articles talked about the alleged tension within Hír TV because the same Péter Tarr who earlier had complained about government interference in its programming now announced that the channel will be even more “critical of the government.” The newspaper provided a long list of reporters who have already joined or will join Simicska’s cable network.

The government-sponsored Pesti Srácok learned that Simicska’s partner in Közgép Zrt., Zsolt Nyerges, had announced that he is no longer ready to sacrifice his quite significant wealth on Simicska’s “pointless fight” with Viktor Orbán while their business is dying. Apparently the “discussion” was so vehement that it almost turned into a fist fight. Whether such an encounter happened or not (Nyerges denies that it did), Közgép announced Nyerges’s retirement as CEO and the appointment of Ildikó Vida in his stead. Her name ought to be familiar to the readers of Hungarian Spectrum since she used to be head of the Hungarian Internal Revenue Service. She was suspected of corrupt practices and thus barred by the U.S. government from entering the United States.

Viktor Orbán takes the remaining few opposition electronic media outlets deadly seriously. As it stands, by now there are only two government-critical television channels left in the country. Both can be reached only by cable. Hungarian political observers are convinced that 90% of all media today is in government hands. Yet it seems that 90% is still not enough. Viktor Orbán seems set on silencing all voices critical of his regime.

This reminds me of an article by Ekaterina Shulman, a Russian political scientist, which I read in a Hungarian summary. She called Putin’s Russia a “hybrid regime,” 80 percent propaganda and 20 percent coercion. This description of the leading illiberal democracy also fits the regime Viktor Orbán has built in the last seven years. Even the arch-conservative Batthyány Circle of Professors, which in the past had found the state of the country to be picture perfect, recently called attention to the gap between “appearance and reality,” the former having the upper hand in today’s Hungary. And to sustain appearance and suppress reality a government needs a full pipeline of propaganda with a healthy dose of coercion.

January 16, 2017

For Viktor Orbán the Hungarian media is still too free

I understand that Viktor Orbán is mighty annoyed with the independent media, which in his opinion remains far too critical of his government. For instance, hard-working journalists have unearthed an incredible number of corruption cases. I know that people like to complain about the quality of Hungarian journalism, and I myself often grouse about articles that are hard to follow or are sloppy. On the whole, however, Hungarian journalists should be commended for working under difficult circumstances for very little money. There are a couple of politicians who decided to specialize in exposing corruption cases, like Ákos Hadházy (LMP), Péter Juhász (Együtt), and lately Bertalan Tóth (MSZP), but the bulk of the corruption cases came to light thanks to the growing number of investigative journalists.

Investigative journalism was a new field in post-communist Hungary. I still recall how feeble the first attempts were in the first half of the 1990s. But by the early 2000s there was a handful of first-rate investigative reporters who were, for example, instrumental in informing the public about the enrichment of Viktor Orbán and his family, which was of course modest in comparison to the situation today. And by now there are at least two NGOs, Direct36.hu and Atlatszo.hu, that are non-profit investigative journalism centers “with the mission to expose wrongdoings and abuse of power through fair but tough reporting.”

Orbán would like to tone down or, better yet, stifle the media’s outcry over what’s going on in government circles. His government’s first move was to transform the public broadcasting system, whose staff even before 2010 had been less than independent from Fidesz influence, into a totally servile government propaganda machine. An incredible amount of money was and continues to be poured into a TV station that practically no one watches. Once the low viewership numbers became obvious, the government started a new channel specializing in sports, which is used as a “pseudo news channel.” Every fifteen minutes or so “government news” is broadcast between sports events. This way there is no escaping the news–news that bears a suspicious resemblance to that broadcast in the Rákosi and the early Kádár regimes. People in the trade swear that by the second half of the 1980s journalists at the state television and radio stations had more freedom than employees of the state television and radio stations do today. Just one example. Journalists stopped people on the street to ask about their reaction to the migrants. When one woman said that she has no problem with them, she was told that they are not interested in what she has to say.

Prior to February 2015 the government had an extensive, loyal media network thanks to Lajos Simicska, Viktor Orbán’s high school friend who owned a TV station, a radio station, a daily newspaper, a free paper distributed at metro stations, and a weekly magazine. The last two publications were also available online. With the fallout between the two old friends, however, Orbán lost Magyar Nemzet and HírTV, both of which were critical for his government, especially since the “state television” (MTV) turned out to be a flop. So, the pro-government gurus moved into high gear and within a year and a half managed to build an even larger network of media outlets. And they haven’t finished their job yet. Friends of the government are buying up popular media properties and transforming them into propaganda machines.

To replace Magyar Nemzet a new pro-government daily was created called Magyar Idők, which is not exactly a favorite of the public. On a list of the fifty most popular online news sites Magyar Idők didn’t make the cut. Mind you, neither did Magyar Nemzet, which in my opinion has become a quite respectable paper in the last year and a half. In addition, several other pro-government internet sites came into being, among them ripost.hu, a tabloid that has a decent-sized readership (179,842/day in July 2016).

chain

The two most popular sites are origo.hu (561,494/day) and index.hu (513,854/day). The former was recently purchased by a cousin of György Matolcsy and has since turned decidedly to the right. Apparently the future of index.hu is not at all assured because the current owner, Zoltán Spéder, is no longer a favorite of the prime minister. There are still a couple of popular independent internet sites like hvg.hu and 444.hu that trounce the official government hirado.hu in readership. Could they be in the government’s crosshairs? Surprisingly, nepszabadsag.hu is not a popular news site, despite the fact that the print version is the most popular nationwide daily paper. But even Népszabadság’s fate is not quite settled yet. There is talk about Vienna Capital Partners selling Népszabadság to the owner of Duna Aszfalt, László Szíjj, who was described by Népszava as a possible front man, along with Lőrinc Mészáros, of Viktor Orbán.

On the television front, government propaganda lost HírTV, but after a lot of finagling Andy Vajna, the former American-Hungarian movie producer who is now the owner of several casinos and a loyal friend of Orbán, purchased the German-owned TV2. Vajna, who is not exactly a poor man, didn’t have enough money for the purchase so the Orbán government gladly lent him 8 billion forints, which most people believe will never be paid back. TV2 was heavily indebted at the time of Vajna’s purchase, and it is unlikely that it will suddenly become wildly popular, surpassing the favorite commercial television station in Hungary, RTL Klub. Only a couple of their shows are attracting a larger audience, while RTL Klub has at least six such favorites.

Passing TV2 to Vajna was not quite enough for Orbán, who would like to have a quality television channel specializing in news. It looks as if there is an attempt to upgrade Echo TV, which is owned by Gábor Széles, a rich man of extreme right-wing political views. Echo TV’s current audience is very small. However, I just read that Ferenc Szaniszló, who had a weekly program and who belongs to what I call the lunatic fringe, was fired and that Echo TV is being reshaped to be a more respectable outlet of news and political discussions serving the government’s needs.

Apparently, Orbán hoped that Lajos Simicska would give up his losing media outlets. In the past, when the two men were still friends, Magyar Nemzet and HírTV received government ads galore in addition to thousands of subscriptions for government offices. Since the blow-up no government advertising money has come Magyar Nemzet’s way. Moreover, the paper isn’t getting much in the way of ads from the private sector either since rich businessmen who are heavily dependent on government orders are afraid to advertise in opposition papers. This is the way the government ensures that papers they consider to be disloyal will starve to death.

Orbán’s aim was the total destruction of Simicska’s media outlets, but so far he hasn’t succeeded. The only victim was the free newspaper Metropol, which used to be distributed at metro stations. One day the Budapest Transit Authority (BKV) broke its contract with Simicska on the grounds that he had received the right of distribution without a tender. BKV immediately signed a contract with Árpád Habony’s Modern Media Group Zrt., whose new publication, Lokál, took its place. I might add that Modern Media Group also received its contract without any competition. Lokál, being a free paper, depends on advertising, and it is chock full of government ads. The government is keeping it afloat.

The picture is grim and, I’m afraid, it can be grimmer still. One can only hope that Orbán, in his insatiable appetite for a servile media, will not gobble up every important outlet, leaving only crumbs for the opposition. If, for example, pro-government owners were to acquire hvg or index, it would be an irreparable blow to the democratic opposition.

September 22, 2016

The anti-George Soros campaign intensifies in Hungary

A full-fledged witch hunt is taking place in Hungary against a not-at-all favorite son, George Soros. Two weeks ago I already wrote a post on the Orbán government’s reaction to the less than flattering remarks of Bill Clinton about Poland and Hungary, two countries that decided that “democracy is too much trouble [and] they want Putin-like leadership.” It was in this context that George Soros’s name was associated in Hungarian propaganda with Bill Clinton’s statement as well as with Barack Obama’s earlier critical words about Hungary. In the last two weeks, however, the anti-Soros campaign has sunk to new depths of depravity.

For anyone who has followed the escalation of the anti-Soros rhetoric in the last week, it is obvious that the effort is well-coordinated, enlisting the full force of the government propaganda machine. Magyar Idők leads the way in the smear campaign. The government paper published two opinion pieces a day apart which tried to counter the opposition’s description of Soros as a man whose Open Society Foundation works “to build vibrant and tolerant societies whose governments are accountable and open to the participation of all people.” The stated goals of Soros’s philanthropy may be “to strengthen the rule of law, respect for human rights, minorities, and a diversity of opinions, democratically elected governments; and a civil society that helps keep government power in check,” but all this is humbug, according to one of the authors. Soros is a CIA agent whose real objective is the destabilization of East-Central Europe and the Middle East. Operating under the cover of humanitarianism, he faithfully serves the global interests of the United States.

CIA

The second article in Magyar Idők concentrated on the “unfounded and unsubstantiated” accusations against György Matolcsy and the Hungarian National Bank, accusations that are really targeting the Orbán government. According to the author, it is Soros who stands behind the U.S. plans to topple the current Hungarian government, this time through Matolcsy’s alleged corruption. Hungary is not the first country where the United States has used the charge of corruption to try to get rid of governments that are “not friendly enough toward the American government.” A prime example of such U.S. interference in the domestic affairs of a foreign country is Brazil, where President Dilma Rousseff has been suspended. “One of her sins could have been that she rejected U.S. interference” in Brazilian politics. She was removed because the U.S. found “Brazil’s change of foreign policy direction intolerable: good relations with Cuba, Venezuela, Bolivia, and China.” Of course, this charge exists solely in the imagination of the journalist of this pro-government and fiercely anti-American newspaper. Continuing his tirade, he claimed that American capitalists, in cahoots with the U.S. government, have tried several times to topple the Orbán government but have never succeeded. The only hope of these foreign agents is that they will be able to remove György Matolcsy, which would serve the interests of the unscrupulous speculators but would ruin the thriving Hungarian economy, which is the result of the remarkable performance of Matolcsy.

A few days later János Lázár at one of his Thursday press conferences went so far as to claim that the Hungarian government has proof from secret service sources that George Soros is ready “to actively participate against his most dangerous opposition, the Orbán government.” However, when a journalist asked him whether the civic groups financed by Soros had done anything unlawful, Lázár had to admit that they hadn’t. Soros’s sin is that by financing some of the watchdog organizations he has become part of the opposition.

The government-financed internet site 888.hu came out with a “list of pimps of the Soros network.” Members of this network, according to the site, belong to a loud, aggressive minority that has a much greater influence on the media than their numbers would warrant. The list includes 13 civic groups and think tanks and five or six media outlets. Despite 888.hu’s claim, the fact is that most of these organizations receive only a very small portion of their budget from the Open Society Foundation.

Andy Vajna’s newly purchased TV2 joined the anti-Soros campaign. Its reconstructed formerly popular “Tények” (Facts) now has a five-minute segment called “Tények Extra” that tells the stories of “Billionaires in Hiding.” Needless to say, the first of these segments was devoted to George Soros. Viewers learned how Soros beat his wives and liked to suffocate his lovers.

All this still wasn’t enough for the Orbán government. Now MTI and other pro-government media outlets are gathering information about possible Soros involvement in opposition movements in other countries. Magyar Idők found an interview with Robert Fico, prime minister of Slovakia, who complained that in the March presidential campaign, which he lost, he had to battle not so much his political opponents but “those civic organizations that are often financed from abroad.” 888.hu joined in with a Macedonian case. The internet site discovered that former Macedonian Prime Minister Nikola Gruevski recently charged that it was George Soros who financed the Macedonian civil groups’ anti-government activities. Just like Fico, Gruevski claimed that he has two oppositions: the Macedonian Social Democratic Association and “the paid opposition.” These groups, when “they are not fighting the government, organize all sorts of training sessions and political debates or show up in the media.” According to the former prime minister, Soros and others are especially active in Eastern Europe and the Balkans.

The younger generation of journalists who were probably unfamiliar with George Soros’s activities in Hungary in the 1980s and early 1990s are especially fascinated by the sizable amount of money Fidesz and Fidesz politicians received from the American financier. They are the ones who keep asking uncomfortable questions about who, when, and for what purpose Soros gave money to those who now find him to be the devil incarnate. As a result of all those uncomfortable questions, Viktor Orbán apparently told János Lázár that he is ready to pay the billionaire back “if Soros needs the money.” That “generous offer” includes the three million forints Fidesz as an organization received from the Soros Foundation. I don’t know whether this amount includes the 400,000 forints received in 1987 to launch the periodical Századvég. Yes, the establishment of this by now notorious Fidesz think tank was made possible through George Soros’s generosity.

I wonder what the next step will be. Will Orbán’s propaganda machine continue its threatening propaganda against civic groups, especially against legal think tanks? Or, after a few weeks of contemptible attacks on Soros, will the government decide to stop this harassment? I think it all depends on whether the government is able to contain the scandal surrounding György Matolcsy’s corruption case. As long as the case remains a hot issue both at home and abroad, the anti-American, anti-Soros campaign will continue. This way the government can argue that antagonistic foreign sources, i.e. the United States, with the assistance of domestic paid agents, are responsible for blackening the good name of a financial genius. All because their real goal is the removal of Viktor Orbán from power.

May 27, 2016

Andy Vajna’s TV station: the government’s attack dog

This afternoon Viktor Orbán was in the uncomfortable position of having to answer questions from members of the opposition parties on the floor of the parliament. The first question, “Let’s show the cards! What is the source of the enrichment of the prime minister’s entourage?” was posed by Gábor Vona, chairman of Jobbik. He complained that he twice suggested setting up a parliamentary committee to investigate the enrichment of certain Fidesz politicians, including the prime minister. He claimed that Fidesz is “full of criminals.” First and foremost, Hungarians must find out who Lőrinc Mészáros really is. Another Jobbik MP, Előd Novák, complained about the enrichment of Andrew G. Vajna, the former Hollywood producer who has built a media empire on public money.

Viktor Orbán’s answer is always the same when he has to field such questions: members of the opposition parties have no right to accuse him of anything. Instead of this kind of provocation they should give an account of their own party’s finances. In the case of Jobbik, Vona should explain, for instance, who “the mysterious man” is who has contributed 520 million forints to Jobbik. As far as his own affairs are concerned, his “life is an open book.” At that point I almost choked on my morning coffee.

Ever since Viktor Orbán foolishly paraded Nárcisz the kuvasz on his Facebook page, interest in Viktor Orbán’s financial affairs has intensified. Particular attention was paid to the Habsburg estate in Alcsút where apparently Viktor Orbán actually lives, especially after it became known that both Lőrinc Mészáros and István Tiborcz, Orbán’s son-in-law, purchased large tracts of land in the vicinity of the Habsburg estate. The extent of the holdings of the Orbán-Tiborcz-Mészáros-Flier families is enormous, as the red area on the map inset below shows. The map was originally published in Népszabadság. This vast piece of real estate will most likely be worth a great deal more when the so-called Talentis program becomes a reality. This particular part of the country is designated to become Hungary’s Silicon Valley.

There are many people, not just members of the media, who are trying to uncover the secrets of Viktor Orbán. Ákos Hadházy of LMP has been diligently working on corruption cases that can be connected to European Union subsidies and the disappearance of billions originally intended for the betterment of the downtrodden Roma population. But Nárcisz the kuvasz aroused his interest in the most likely “fictitious contract” between Lőrinc Mészáros and the real estate company owned by Győző Orbán, father of the prime minister. Aerial photos show no sign of the agricultural equipment Mészáros allegedly stores at the estate for 15.5 million forints a month.

Meszaros foldjei

The other person with an insatiable appetite to learn the truth about corruption cases–in this case in District V, especially during Antal Rogán’s tenure as mayor–is Péter Juhász, co-chair of the opposition party Együtt. Within a few years about 800 valuable pieces of property were sold to loyal Fidesz supporters for a fraction of their real worth. Juhász has been working on this case for years without getting anywhere. The latest is that the CD that allegedly contained the financial information pertaining to these sales “got damaged” in the hands of the police and is now unreadable.

Juhász also became curious about the real owner of the former Habsburg estate in Alcsút and vowed to take steps toward an official investigation of Viktor Orbán’s finances. But he didn’t get very far with his project before he himself became the subject of a concerted attack, led by members of the news department of TV2, the commercial television channel recently acquired by Andy Vajna. Everybody knew that with the new ownership TV2 news would become a pro-government mouthpiece, but what followed shocked responsible members of the media.

Vivien Szalai, the former editor-in-chief of Story magazine and author of such masterpieces as “False pleasures: Confessions of a luxury prostitute” and “The most famous Hungarian madam: A real story” became news director at TV2. She gained notoriety as a result of a book she wrote about János Zuschlag, a young MSZP politician who embezzled about 40 million forints and who consequently received a stiff jail term. The book was full of wild accusations about his former colleagues in the party.

Kunfalvi

Nóra Kunfalvi

Several members of the team resigned right after Szalai’s appointment and others were immediately hired to replace them, including Nóra Kunfalvi (pictured here). Kunfalvi began her career at HírTV’s “Célpont” (Target), where reporters acted more like KGB interrogators than investigative journalists. After the Orbán-Simicska falling out, she left HírTV with all the Orbán loyalists and moved on to 888.hu, part of the so-called Habony media empire created after the government lost the support of Simicska-financed media outlets. You may recall that the editor-in-chief of 888.hu, Gábor G. Fodor, approved the publication of a highly controversial article about the wife and daughter of the socialist party chairman, József Tóbiás. It was from this rag that Kunfalvi moved over to TV2. By now she is called the “Petra László” of the Hungarian media. Petra László was the Hungarian camera woman who was photographed tripping a Syrian refugee.

Nóra Kunfalvi’s interview with Péter Juhász was an incredible example of unethical journalism. Kunfalvi’s task was to prove somehow that Péter Juhász lives beyond his means, that the rent on his apartment is more than half his income. She wanted to know where the rest of his money is coming from. The questions were posed in such a way that they already contained the accusations: she wondered whether his extra money derived from profits made from selling marijuana. A few years back Juhász was one of the people who argued for the legalization of marijuana, but as far we know he was never involved in selling the stuff.

The larger part of the interview, lasting about 14 minutes, was about the corruption of Fidesz politicians, but what eventually appeared on TV was about 20 seconds of the interview flanked by accusatory commentaries. The whole thing was a disgrace. The uncut interview and TV2’s coverage can be seen here. TV2 naturally sees nothing wrong with Kunfalvi’s line of questioning. According to the station, “the reporter only did her job when asking questions of a public figure.” Péter Juhász is not impressed and is suing Kunfalvi.

Meanwhile one reporter after another is leaving TV2’s news team and moving on to less risky and exposed programs. Several of them told Népszabadság that they don’t want to become Nóra Kunfalvis. Apparently since the arrival of “the blonde cyclone,” as the staff calls Vivien Szalai, about a third of the 30-member team has left TV2.

To keep pressure on the Fidesz critic, Vivien Szalai assigned another reporter the task of further discrediting Juhász, but it seems that he was not game. This morning he also resigned.

Naturally, the government parties also joined the fray. First, KDNP activists showed up at Juhász’s apartment building, holding up signs that read: “From what?” István Hollik, a KDNP member of parliament, held a press conference about Juhász’s “shady financial affairs.” Fidesz was not far behind. Fidesz’s official site demands to know how Juhász can afford a “luxury apartment” in an expensive district of Buda.

Finally, it turns out that Nóra Kunfalvi teaches an “investigative journalism” course at Corvinus. For years the course had been taught by the well-respected veteran journalist István Wisinger, recipient of all the highest prizes a journalist can get in Hungary. About a year ago he was told that unfortunately there is no money to continue the course. It turned out that Wisinger was lied to. He was sacked in order to make room for Nóra Kunfalvi, who even took over Wisinger’s description of the course and his syllabus, including his compulsory and suggested readings.

March 21, 2016

High-stake battle for the ownership of Hungary’s TV2

I have waited more than a week before tackling the extremely complicated, contested sale of TV2, Hungary’s second largest commercial station. Initially there were just too many questions about this bizarre affair, but in the last few days more documents have become available and a more or less comprehensible story has emerged.

People not familiar with the Hungarian political scene could justifiably ask why the sale of a commercial television station, which airs a lot of soap operas, is such a significant, controversial event. The answer, of course, is that the Orbán government considers the mass media to be of the utmost political importance. Ever since 2002, when Viktor Orbán narrowly lost the election, he has been diligently building, through his oligarchs, a network of pro-government media outlets. From the point of view of the government, TV is critical because this is how most people get their news.

The three biggest stations, the only ones that can be received in the whole country without a cable connection, are MTV, RTL Klub, and TV2. After 2010 the state-financed MTV became a government propaganda station, pure and simple. The two commercial stations were initially “persuaded” to provide as little political news as possible and to concentrate instead on tabloid items. But when the Orbán government came out with a steep advertising tax in the summer of 2014, RTL Klub decided not to play ball. Its fairly lengthy evening newscast now devotes more time to political news, including stories critical of the government. Moreover, RTL Klub’s viewership soared. And it has successfully taken up a fight with the government over the advertising tax.

Already by 2013 RTL Klub was starting to look like a lost cause, which left only TV2 in play for the government. In 2013 TV2’s German owner, ProSiebenSat.1, decided to sell its Hungarian company, which had accrued heavy losses in the previous few years. To everybody’s amazement the station, at least on paper, was sold in December 2013 to CEO Zsolt János Simon and Yvonne Perla Dederick, the financial director. The two executives announced at the time that ProSiebenSat.1 had given them a loan that they were supposed to pay back in five years. The news of the purchase immediately raised questions. Surely, a loan of about 25 billion forints–that was the estimated price of the station–had to be guaranteed by somebody with deep pockets. Although at the time there was no proof, some people suspected that Lajos Simicska, who was still friends with Viktor Orbán, was behind the deal.

The suspicion was pretty accurate. Károly Fonyó, a close business associate of Simicska and owner of Megapolis Média Zrt., was the one who signed the contract with Zsolt Simon and Yvonne Dederick. One of its clauses stated that Fonyó’s Megapolis Média Zrt. had an option to purchase TV2 at any time Fonyó desired.

At this point Simon and Dederick established two companies of their own: D6D Kft. and CCA Vízió Kft. These two companies then created a third (CCA-D6D Kft), which was supposed to run all companies related to TV2. In March 2014 they decided on a new business model: all these companies were merged into one called TV2 Média Csoport Kft. By the time this new company was registered it was July 2014.

Let’s pause for a second and recall what happened in and around July 2014. This was the beginning of Lajos Simicska’s dispute with his old friend Viktor Orbán over the advertising tax. Critical articles appeared in Magyar Nemzet, Simicska’s paper, and Cink.hu described Magyar Nemzet as the new RTL Klub. Most likely it was at that time that Orbán decided to go after Simicska. He no longer trusted his old friend, and he wanted to make sure that Simicska would not, sometime in the future, be able to do with TV2 what he was doing with Magyar Nemzet.

To achieve his aim, he needed the help of Zsolt Simon and Yvonne Dederick, the nominal owners of the station. In addition, he needed someone willing to buy the television station. His choice was his new friend and confidant, Andy Vajna, the former Hollywood producer. During the summer of 2014 Vajna, who already owned a Budapest casino, was in the process of negotiating with the government concerning the ownership of the largest and most profitable casino in the country, which until then had been owned by the Hungarian state. He didn’t seem to have any difficulty convincing the government to part with its casino. The Orbán government was ready to pass on this business venture to Vajna under the most favorable conditions: unlike other businesses, Vajna’s casino is not wired to the Hungarian Tax Office. The price for this fantastic business opportunity may well have been Vajna’s agreement to purchase TV2.

"Will the real owner of TV2 please stand up?" / Budapest Beacon

“Will the real owner of TV2 please stand up?” / Budapest Beacon

On October 15, 2015 Vajna fulfilled his end of the bargain and purchased TV2 Media Group from Simon and Dederick. Simon and Dederick presumably figured that they had structured the new company in such a way that it had nothing to do with the company that Károly Fonyó had an option to purchase.

The only problem was that Fonyó’s company had already exercised its option on October 13, two days earlier. Fonyó therefore announced that Vajna’s contract was null and void since his company had not authorized Simon and Dederick to sell TV2. He also announced that the two executives had been fired and that he was anticipating lengthy litigation.

Meanwhile the politicians of the opposition don’t seem to realize that the fight over TV2 might have political consequences for them. They look upon the struggle between Orbán and Fonyó/Simicska over the station as irrelevant. Who cares, they said (at least initially), which oligarch becomes the owner of TV2, Simicska or Vajna? But as things stand now, if Simicska wins the fight, TV2’s news will most likely become more like RTL Klub’s. Magyar Nemzet and HírTV have already become much better. They are moderate right-of-center and critical of the government.

By the way, Magyar Idők, the new slavishly pro-government paper, was financed in pretty much the same way that Orbán designed Vajna’s purchase of TV2. First the government gave János Sánta’s Continental Tobacco Co., together with BAT’s Hungarian subsidiary, the exclusive wholesale rights to all tobacco products in the country. Shortly after Sánta received the government’s gift of a very profitable concession, he was “persuaded” to buy a 49% stake in the new pro-government paper.

Orbán’s stranglehold on Hungarian TV seems to be weakening. Although by definition he still has MTV, he has lost RTL Klub and seems to be in the processing of losing TV2. Fonyó’s case looks pretty strong, although it will probably not be decided in his favor in the Hungarian courts.

Andy Vajna in Budapest

In the summer of 2013 an interview with Andy Vajna appeared in Gentleman Magazine, a Hungarian publication. The young reporter asked Vajna how he copes with the fact that “his life is an open book,” even though the public is normally interested only in directors and famous actors and actresses, not in producers. Vajna attributed the curiosity about his life to Hungarians’ desire to learn how he managed to go from a penniless refugee to a rich, well-connected businessman.

It is true that, in Hungary, the media attention on him is intense, but not because people want to find out how to become a multimillionaire. Vajna is an influential government official who is fast becoming a cog in the mafia state’s corrupt machinery. His business ventures have been so substantially aided by the Orbán government that one cannot help thinking that Vajna plays a critical role in the operation of Orbán’s mafia state.

I recalled a picture that appeared in Origo back in July 2000 when Arnold Schwarzenegger visited his old pal, Vajna. Orbán seemed to be more impressed with the Terminator than Schwarzenegger was with the prime minister of Hungary. How much Orbán knew about Vajna’s shadier side and his troubles with the law at that time is difficult to tell, but I suspect that by now he is fully aware of Vajna’s skill in hiding income in offshore companies. Vajna has had ventures all over the world, and he is a sophisticated international business player. For a country boy from Felcsút Vajna must be a tremendous asset.

Arnold Schwarzenegger and Viktor Orbán, Andy Vajda smiling in the background (July 2000) / Origo

Arnold Schwarzenegger and Viktor Orbán, Vajna smiling in the background (July 2000) / Origo

Perhaps if American investigative journalists had scrutinized Vajna’s financial affairs as thoroughly as Hungarians have in the last four years the IRS would have had an easier time unraveling his “system of byzantine offshore companies.” It was Babett Oroszi of Átlátszó.hu who triumphantly announced in October 2014 that she could chart sixteen different businesses connected in one way or the other to Andy Vajna. Vajna is not listed as an owner of any of these companies but, as the chart attached to the article shows, all of the companies are supervised by Andy Vajna, not as an owner but as “chairman of the board,” “president,” or the beneficiary of a “revocable trust.” Who the actual owner or owners are remains a mystery.

I will not even try to reconstruct this “byzantine system,” which was after all devised to mislead. Instead, I would like to focus on how Andy Vajna managed to get hold of 80% of the value of Hungary’s casino industry, including one very profitable casino which until now was run by the state-owned Szerencsejáték Zrt. Szerencsejáték (Gambling) is the company that is in charge of the state lottery, lottó.

Last year it was announced that there will be eleven casinos in Hungary, five of which will be located in Budapest or in Pest County. These are the most profitable ones. And they are the ones that Andy Vajna will be able to operate for a ten-year period. According to calculations, once all five casinos are in operation Vajna will earn about $30 million a year. As Budapest Beacon rightly noted, “the state appears to have surrendered the whole industry to two or three players” and gave away its most profitable casino, Tropicana, currently operated by the state.

But that’s not all. While every itsy-bitsy store must have its cash registers electronically linked to NAV, the Hungarian tax agency, casinos will be exempt. János Lázár’s explanation for this exemption wasn’t convincing. According to him, casinos are exempt because (1) they don’t have to provide receipts, (2) they pay gambling taxes, and (3) electronic cash registers are supposed to monitor the proper payment of VAT and casinos don’t pay VAT. Well, yes, but these cash registers also monitor revenue. In the case of casinos, therefore, the state will have no way of electronically knowing how much money they take in and pay out. It will have to rely on self-reporting.

And that’s not the only fishy business here. Both the Hungarian state government and local governments are strictly forbidden to deal with any company whose ownership is not transparent or whose headquarters are offshore. And, as Átlátszó.hu showed, all of Andy Vajna’s companies are registered offshore. But the Hungarian government doesn’t seem to be at all bothered by this fact. When confronted with this discrepancy between stated principle and practice, Lázár didn’t even try to explain it away. He offered the feeble explanation that Vajna might pay taxes only in Luxembourg, but he is a Hungarian who spends his net income “at home.” Incredible.

Combing through the available evidence, I’m convinced that the government had a well crafted plan to hand over control of the gaming industry to trusted friends. Their plan started in 2010 when they closed down all small business franchises that operated slot machines. Then they granted the eleven casino concessions to people close to the prime minister and the party. Information coming from Fidesz circles indicates that it was Viktor Orbán and Andy Vajna who together reorganized the gaming industry. According to Heti Válasz‘s revelations, about one billion forints of Vajna’s casino profits have already been moved outside the country. Moreover, the latest reports claim that all of his Hungarian businesses are set up in such a way that their profits could easily be transferred abroad.

I assume that no one believes that all the money that comes from these five lucrative casinos ends up in Andy Vajna’s pocket. A recent article frames the question this way: “We have no information as to where the profit of the casinos after the redistribution will land. Does the profit stay with Vajna or it will flow to companies close to Fidesz or even higher? No other rational explanation can explain why it was Vajna who ‘was given’ the lucrative casino business.” Indeed. As far as the “even higher” is concerned, surely the writer has Viktor Orbán himself in mind.

I would add another possibility in addition to the above theory. Andy Vajna most likely not only provides invaluable information but actively assists Viktor Orbán in creating his own offshore paradise. I’d bet the prime minister has learned a lot from Vajna in the last fifteen years.

Andy Vajna in Hollywood

When Andy Vajna, the producer of such Hollywood blockbusters as Rambo, Die Hard with a Vengeance, and Terminator, decided to settle in Hungary, he hit the jackpot. In the United States, as a result of his questionable business activities, he had been harassed by the Internal Revenue Service (IRS) for fourteen years and was lucky not to land in jail. In Hungary the Orbán government makes sure that Andy can carry on with his shady activities absolutely undisturbed. In fact, he knows that the boss of the mafia state, which Hungary has become in the last five years, will make sure that his by now numerous business activities will thrive.

For a while, between the late 1980s and 2010, Vajna split his business activities between Los Angeles and Budapest, but then there came a time when he had to realize that his heady days in Hollywood were over. His last hurrah was Terminator 3, which he produced with his old business partner, Mario Kassar. At the time an article appeared in Entertainment which described Vajna and Kassar as has-beens or worse. “A dozen years ago, Kassar and Vajna were names that could open doors. But by 2003 half the town thought they were dead, and the other half figured they were probably in self-imposed exile. That’s the kind of reputation you get when you find yourself at the center of one of the great flameouts in Hollywood history.” The article indicated that the two “spent wildly on unworkable projects and unmentionable extravagances. Soon enough came federal investigations and bankruptcy proceedings.”

Vajna’s and Kassar’s company, Carolco Pictures, did exceedingly well, especially after 1986 when it completed a $50 million debt offering in the junk bond market. Between 1986 and 1989 Carolco’s staff grew from six to 100. The company, however, was being watched by the IRS because Carolco’s finances were anything but transparent. Behind the complicated business setup and clever machinations was a tax lawyer, Peter Hoffman, who soon enough was accused of filing false tax returns for 1989. The prosecution alleged that “Hoffman evaded taxes by tapping into a deferred compensation plan and calling the payments loans while he was chief executive of the film production company Carolco Pictures.” Hoffman’s first trial, held in October 1997, ended in a mistrial. Reporting on the result, the Los Angeles Times wrote that “the government’s failure to convict Hoffman puts a dent in an ongoing larger criminal tax fraud investigation into Hoffman’s former colleagues at Carolco, producers Mario Kassar and Andrew G. Vajna.”  The same article described the business network of Kassar and Vajna as a “system of byzantine offshore companies.”

Andy Vajda and Mario Kassar during their earlier days in Hollywood

Andy Vajna and Mario Kassar during their earlier days in Hollywood

Less than a year later, at a retrial, Hoffman was fined $5 million but avoided jail time. It was a “much watched case, one that federal prosecutors had hoped would assist them in a bigger criminal tax fraud investigation of movie producers Andrew Vajna and Mario Kassar.” But this was not to be. Later Vajna said that Hoffman was a good man who refused to cooperate with the federal investigators and testify against them.

Magyar Narancs, in an article published in 2011, expanded on the “system of byzantine offshore companies.” In 1989, the same year in which Hoffman filed false tax returns, Andy Vajna decided to get out of Carolco Pictures, in which he had a 36% stake, for which he received $100 million. He was supposed to pay $40-50 million in taxes on the sale, but with Hoffman’s help he managed to move his money into shell companies in Panama and the Netherlands Antilles. Of course, in movie land it was not only Vajna and Kassar who went to great lengths to avoid paying the taxes they owed. About this time the IRS set up a special unit to investigate Hollywood moguls it suspected of tax fraud. In fact, the investigation into Carolco had begun even before Vajna decided to leave the company, and it was most likely this investigation that prompted his exit. The “byzantine system” was so complicated that even market analysts were unable to navigate through the maze of companies. As a result of Hoffman’s machinations, the company made barely any money. A few million a year.

The IRS was after Vajna and Kassar for fourteen years. Among other things, the investigators uncovered large interest-free loans from the company to Vajna and Kassar. In 1988 alone, according to Magyar Narancs, they received $8 million, which they spent on art work and real estate, as well as on covering their gambling losses. The IRS alleged that between 1988 and 1990 Vajna and Kassar sold 75% of Corelco’s stock, in the amount of $286 million, through their offshore companies, on which they paid no taxes. Vajna’s share of the loot was $107 million. The tax case was settled out of court. Instead of the $41.1 million the IRS said it was owed, Vajna paid $6.5 million.

Vajna’s next business venture in the United States, Cinergi Pictures Entertainment, wasn’t exactly a success story. It was established in 1990. By 1993 it lost $4.2 and in the following year, $16.1 million. By April 1997 it was announced that “the troubled independent film company, hammered by losses from such films as ‘The Scarlet Letter,’ ‘Judge Dredd’ and ‘Nixon,’ will pass virtually all of its library over to Walt Disney Co. in lieu of paying Disney $38.4 million advanced to Cinergi to make movies.” Cinergi IPO’d at $14.50 a share in 1992. By 1997 its stock price was just a little over $1. The Los Angeles Times reported that “the company has said it has not been identified by the U.S. attorney as a target of the probe,” although Vajna himself was “the subject of a federal grand jury investigation involving his personal tax returns.”

Five months later, in September 1997, Cinergi’s fate as a public company was sealed. It agreed to a management buyout offer of $2.30 per share, or about $31 million. “Under the deal, Cinergi would merge with CPEI Acquisition Inc., a company formed for the buyout by Andrew Vajna, Cinergi’s president and chief executive, and Valdina Corp.” CPEI Acquisitions, registered in Delaware, still exists on paper, but there is no information about it online. Valdina Corp. is an even more mysterious entity. Bloomberg Business couldn’t identify any of its key executives, but it did learn that Valdina has a P.O. Box in Castorweg in the Netherlands Antilles.

Vajna and Karras got together again after 2000 and produced a number of films, the best known of which was Terminator 3, which was a financial success. Sometime before 2010 Vajna decided to give up his career in Hollywood to become Viktor Orbán’s commissioner in charge of the Hungarian film industry. And to start his shady business dealings all over again, this time in a more congenial environment.