Tag Archives: conspiracy

The chairman of the Hungarian central bank discovered a U.S. plot to topple the Orbán government

The independent media outlets have a jolly good time every time György Matolcsy, the chairman of Hungary’s Central Bank, opens his mouth. Well, he spoke again today. By now even usually polite politicians have gotten to the point that they openly say that Matolcsy is not quite of sound mind and suggest that the chairman of the National Bank seek medical help.

So what happened to prompt such a response? The bank chairman delivered his report to parliament on the performance of the Hungarian National Bank in the last two years. As expected, he said that the institution under his direction had performed superbly. Under his excellent stewardship the bank’s monetary strategy added at least 1.5 percentage points to Hungary’s already respectable economic growth.

Not too many members of parliament were interested in Matolcsy’s self-praise. Only four or five MPs, just those who had to attend, were sitting in the huge chamber. I must say that those who were absent missed a great performance and a by and large incoherent speech about “a very grave shadow, a very dark shadow, a deep grey shadow” that darkened the otherwise sparklingly sunny Hungarian sky. This shadow was a treacherous ally’s attempt to topple the Orbán government with the help—you won’t believe it—of Hungary’s National Bank. But thanks to Matolcsy’s vigilance, the coup was averted.

I believe that for readers to truly appreciate Matolcsy’s muddled, rambling speech I must translate the relevant passages:

Here we should stop for a minute because there was a shadow on the year 2015, right at the beginning, in the first four months. That shadow had been visible already from August 2014 on. In 2015 one brokerage firm after another went belly up. First it was the deceitful Buda-Cash, then the deceitful Hungária Insurance Company, and finally the even more deceitful Quaestor failed; it failed because the central bank with its new methods of investigation found all the tricks this company had used in the last 10-15 years.

However, this shadow was actually good tidings. It was a good piece of news, something the whole country can be happy about, because we cleansed the Hungarian financial system by removing these robber barons. . . . But this good news was overshadowed by the fact that a large country which is a NATO ally via its embassy in Budapest began activities aimed at toppling the government and the central bank in the fall of 2014. . . . The central bank naturally would have found the deceitful brokerage firms, but it mattered when we found them: in January, February, and March. Why did we find them in January, February, and March?

Because some people wanted to use the Hungarian National Bank to create a bank panic in Hungary in April. And this bank panic actually occurred. It lasted for four hours in four different cities. We could say that this isn’t much. But it was shocking that some people, our allies and friends, wanted to use the Hungarian National Bank to topple the government by methods using the military and intelligence services.

This is a very grave shadow, a very dark shadow, a deep grey shadow. It has no different shades: it is just dark.

The few people in the chamber were stunned. It was immediately clear to everybody that Matolcsy was talking about the United States.

This muddle is full of unanswered questions. In what way did the United States want to influence either the brokerage firms or the central bank? Why was the so-called coup timed for April? How did Matolcsy manage to foil the Americans’ plans?

Source: 444.hu

The opposition politicians who had gathered to engage in the usual parliamentary debate after such a report were stunned. They were simply not prepared for such astonishing nonsense and concentrated instead on refuting the glowing report presented to them by the chairman of the central bank. János Volner of Jobbik pointed out that the bank did nothing until Quaestor actually went under although it had been known ever since April 2010 that Quaestor was misleading its customers. LMP’s Erzsébet Schmuck also questioned the success story reported by Matolcsy and commented on the unorthodox way the central bank operates nowadays. It was only Attila Mesterházy who had recovered enough from the shock to question Matolcsy’s accusations against the United States. He even managed to inquire whether the bank chairman had reported his knowledge of a foreign power’s meddling in Hungary’s internal affairs to the competent authorities. He called on the appropriate politicians to convene the parliamentary committee on national security to ask the Hungarian intelligence services to clarify the situation.

Well, I have a few questions of my own. My very first one would be whether Matolcsy shared the information he received about this alleged American plot with Viktor Orbán. I suspect he did and that, for one reason or another, Orbán decided that the so-called revelation was useful at this time. I wouldn’t be surprised if Orbán, banking on Donald Trump’s extremely low opinion of his predecessor’s “democracy export,” thinks that this kind of news, coming from the chairman of the Hungarian National Bank, will float in Donald Trump’s Washington.

The U.S. Embassy rarely gets engaged in arguments with the Hungarian government, but Matolcsy’s accusation was too much even for the normally calm American diplomats in Budapest. Both Népszava and Index wanted to know the U.S. reaction to Matolcsy’s garbled nonsense. The Embassy spokesman, Richard Damstra, released the following statement: “Hungary and the United States are partners and NATO allies. The United States didn’t attempt to overthrow the Hungarian government either in 2014 or at any other time and we can’t find it credible that any other NATO member state would attempt such a move.” Perhaps this will convince the Hungarian government that American diplomacy, at least for the time being, hasn’t changed all that much and that even the Trump State Department, such as it is, won’t believe that the Obama administration was planning to stage a coup in Hungary.

February 23, 2017

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