Tag Archives: Gábor Liszkay

The Orbán government in action: graft and fraud

I didn’t think that I would have to return to the topic of the tobacco monopoly and concessions after writing at  least three articles on the subject in 2012 and 2013. The allocation of tobacco shop concessions became such a scandal that I hoped that the Orbán government would leave the tobacco business alone for a while. Obviously, I was wrong. In December, a new bill was submitted to parliament that was designed to eliminate tobacco wholesalers and replace them with one “retail supplier.” The original draft bill provided for two options. Either the government would set up a company for that purpose or it could call for an open tender for a 20-year concession. At this point an individual Fidesz MP introduced an amendment which “allowed the government to appoint a ‘reliable company’ for the task.” This parliamentary procedure was itself highly suspicious and what followed was even more so.

The “reliable company” actually turned out to be two companies that bid for the concession together. The British American Tobacco Hungary  (BAT), which has a factory in Pécs, and the Continental Tobacco Group, “an independent family-owned private company” that, according to its promo, supplies cigarettes and other tobacco products to 25 different countries. That’s all one can learn about this family business online. What one naturally doesn’t learn from its website is that the owner, János Sánta, is a good friend of János Lázár. Sánta’s name surfaced already during the scandal of the tobacco shop concessions when Napi Gazdaság, then still an independent daily, discovered that the final corrections on the proposal the government sent to the European Commission for approval were done by János Sánta. It turned out that Lázár relied heavily on the “advice” of Continental Tobacco all along.

Giving the whole job to a small family business would have been too obvious, so BAT, Hungary was chosen to assist the Hungarian government in this dirty deal. It cannot be a coincidence that Tamás Lánczi of Századvég, who is involved in a business venture of Árpád Habony and Arthur J. Finkelstein called Danube Business Consulting Ltd., became a board member of BAT at the end of March. Lánczi is an avid Fidesz supporter and the son of András Lánczi, an important adviser to Viktor Orbán.

cigarettes

The whole deal was done in such secrecy that the competitors of BAT and Continental were not even aware of the tender before it was a fait accompli. And the competitors can’t turn to the office that is supposed to be the watchdog of fair competition practices because the government designated the arrangement as “of strategic importance to Hungary.” Such projects cannot be questioned or investigated.

Three multinational tobacco companies–Japan Tobacco International, Imperial Tobacco, and Philip Morris–protested the decision and proposed a joint bid that included the amount they were prepared to pay for the concession. Their offer was ten times greater than that of BAT-Continental. Over twenty years, instead of 8.91 billion forints they offered 89 billion. Once the ministry of national development received the counter-offer, government officials had a very hard time explaining themselves, but they eventually settled for “the proposal being invalid and incomprehensible.” They came up with all sorts of excuses why the proposal was invalid and incomprehensible and hence couldn’t be considered, but with the exception of one–that the Hungarian government had already signed a contract with BAT-Continental–they all sounded bogus.

According to Index, the European Commission has been keeping an eye on the Hungarian government’s interference in the tobacco industry for some time. In the spring Elżbieta Bieńkowska, commissioner in charge of internal market, industry, and entrepreneurship, wanted to have details of this latest assault on private enterprise. It seems that the Hungarian government gave some kind of an explanation for what happened, but Bieńkowska and her staff were not satisfied with the answers. Index quoted the commissioner as saying that “there are other tobacco monopolies in Europe, but nowhere is it as obvious as in Hungary that only those can sell tobacco products who have good connections to the government.” She indicated that they “have to investigate the case very thoroughly.” She added that “strictly speaking we still cannot talk about corruption but it is clear that contracts and economic advantages which foreign companies enjoyed earlier now moved elsewhere.” Index had the impression that yet another infringement procedure is in the offing.

The Hungarian government reacted sharply to the Index story. The prime minister’s office released a statement in which they accused Bieńkowska of representing the interests of the multinational tobacco companies. In fact, she did something that was unprecedented: she became “the instrument of political pressure.” The government made it clear that it will fight to the bitter end, all the way to the European Court of Justice in order to win this case. Such a court case would be “a war of the multinational tobacco companies against Hungary, which is fighting against tobacco use” in defense of the public.

Meanwhile at home, János Lázár tried to explain why Hungary is in trouble in Brussels on account of the tobacco distribution concession. He announced at his press conferences last Thursday that it is Philip Morris that is behind the attacks against Hungary. He revealed that the government is planning to introduce “plain packaging” of cigarettes, as is already done in Australia. Philip Morris, he said, is upset about this change that will be introduced sometime next year. Mind you, no one had ever heard of this plan before. But that wasn’t enough. Lázár also charged Philip Morris with playing a role in anti-government protests.

I left the best to last. A few days ago the Hungarian public learned that János Sánta, the owner of Continental Tobacco Group, became part owner of Napi Gazdaság, the new government organ. The current owner of Napi Gazdaság is Gábor Liszkay, a long-time friend of Simicska and formerly part-owner of Magyar Nemzet. After Liszkay refused to follow Simicska’s demand for a more independent editorial policy, he purchased Napi Gazdaság from Századvég. Sánta apparently now has a 47% stake in the company, for which he paid 70 million forints. I guess this was the price he had to pay for his company to become the co-distributor of tobacco products.

This is how business is being conducted in Hungary. What these kinds of business practices do for Hungarian competitiveness we can only imagine. It’s no wonder that László Seres in an opinion piece expressed his fears that Orbán state capitalism with its mafia-like foundations will bury Hungarian democracy and the country’s economic well-being.

Viktor Orbán explains what went wrong

If I hadn’t already known that Viktor Orbán is in serious political trouble, I would certainly have discovered it last night while watching an interview he gave to Zsolt Bayer, one of the founders of Fidesz and a foul-mouthed racist who thinks he is a journalist. The interview was aired on Echo TV, a far-right television station catering to Jobbik supporters and to those Fidesz voters whose political views are practically indistinguishable from the ideology and racism of Jobbik.

After his falling out with Lajos Simicska, a former friend and financial wizard of Fidesz, Orbán no longer wants to use HírTV, Lánchíd Rádió, or Magyar Nemzet, all Simicska businesses. László Kövér indicated that the party considers these media outlets to be mouthpieces of the opposition. Fidesz politicians have been advised to keep away from them. In the meantime the government, behind the scenes, is creating a new “independent” media empire.

Why did Orbán use the far-right Echo TV instead of the new state television’s news channel, M1? Although M1 is a flop, it still has a wider audience than Echo TV. The only explanation I can think of is that Fidesz is sending a message to Jobbik supporters, who most likely prefer Echo TV above all others, that Fidesz is no less radical than Jobbik is.

It was a long interview, a little over 45 minutes, and a lot of topics were covered, but what I personally found most interesting was the discussion about “the confusion” in the party and the government. I assume Bayer was addressing the party’s lack of direction and the resultant slide in its popularity. He introduced an idea he had written about earlier, that Fidesz has lost its “soul.” Naturally, Viktor Orbán doesn’t believe that there is any intrinsic problem with his leadership. The “confusion” is not in Fidesz or in the government but in the heads of his right-wing supporters. The reason for this confusion is the government’s loss of the media that in the past explained the policies of his administration and directed public opinion in the proper way.

So, if I understand it correctly, Orbán more or less admits here that without a Fidesz-created servile media he and other Fidesz politicians would be nowhere today. They needed Magyar Nemzet, Heti Válasz, and HírTV, which were financed by Fidesz operatives such as Lajos Simicska. Try to imagine a similar situation in a truly democratic country where the president’s or the prime minister’s success depends on the existence of a secretly financed media empire. And once, for one reason or other, something goes wrong and the owner of that media conglomerate withdraws support, the whole government and the government party are suddenly heading toward oblivion. Because this is what seems to have been going on in Hungary for more than a decade. At least since 2002.

Perhaps I should add here that a large chunk of that money came straight from Brussels. Even during the socialist-liberal period Lajos Simicska’s companies received plenty of government projects. There is also a strong possibility that Simicska was not the only Hungarian CEO who secretly worked for Fidesz. Of course, after 2010 the government coffers were opened wide to Fidesz-supporting entrepreneurs who surely paid the party back for favors received.

At the time of the Simicska-Orbán confrontation the majority of commentators were convinced that Lajos Simicska would come out the loser. After all, the power and purse strings of the state are in Viktor Orbán’s hands. He is the one who can destroy Simicska’s business ventures. In the past, it was Viktor Orbán who made sure that huge government projects landed at Simicska’s concerns, and now those orders will go elsewhere. Of course, this may be true in the short term, but what if the “confusion” in the heads of the Hungarian people remains because there are no longer industrious scribblers who try to point their minds in the “right direction”?

Orbán obviously realizes how important it is to create another servile Fidesz media, and I’m sure they are furiously working on it. Orbán specifically mentioned Gábor Liszkay’s purchase of Napi Gazdaság as a first step toward rebuilding a government-servile media conglomerate, but it will take time, if it’s even possible, to make a second Magyar Nemzet out of what used to be a financial paper. And second, there is a good possibility that by now a lot of Fidesz supporters can no longer be so easily swayed. It is enough to read the comments in Magyar Hírlap following the article that describes the interview. Keep in mind that this is a far-right paper. Here’s a tiny sample. “Something was broken. This is not the same Fidesz any more. There is too much senseless arbitrariness. Too much János Lázár.” This is not a left-wing troll writing here. I’m sure that he used to be a true believer. Another reader realizes that “if there is no media on the right, just on the left, then there will be big trouble. By now all media are anti-Orbán and anti-Fidesz.” Of course, there are still many who are glad that Viktor Orbán explained so clearly what the real trouble is, but another reader suggests that perhaps the prime minister should have mentioned some of the mistakes he and his government made. It will be difficult for the government to pick up where they left off.

Another topic I found fascinating was Viktor Orbán’s evaluation of his tenure as prime minister between 2010 and 2015. There seems to be a new twist in his interpretation of his own role as well as the accomplishments of his government. Until now we have been told that in April 2010 a revolution occurred, a revolution in the voting booths. Now, however, he sees the whole four years following the election of 2010 as a revolution, which he considers a fantastic accomplishment. After all, there have not been too many “victorious” revolutions in Hungarian history. Now the gates to a “polgári Magyarország” (a prosperous Hungary with a well-off middle class) are open. “We just have to enter them.” But one must be vigilant because “the opposition wants [to stage] a counterrevolution,” and therefore they are doing everything in their power to prevent the establishment of that long-sought “polgári Magyarország.” What followed was even more bizarre than his description of the opposition as a bunch of counterrevolutionaries. “We have been victorious and that the opposition is attacking us is an excellent sign. They would like to take our place because now it is good for us and bad for them.” A true democrat is speaking here.

The right-wing media in turmoil

At the moment the government’s only absolutely reliable mouthpieces are Magyar Televízió and Magyar Rádió. Lajos Simicska’s media empire is still in transition, and the government’s new media complex has not yet been launched. So, the media confusion on the right is considerable, which is bad news for a government that thinks that the real key to success is communication. As it stands now, MTV’s new all-news channel is a flop, and Fidesz for all practical purposes is boycotting Hír TV, Simicska’s television station.

After Simicska publicly broke with his old friend Prime Minister Viktor Orbán, the true Orbán loyalists left Magyar Nemzetthe flagship of the pro-government media, most likely knowing that Viktor Orbán was already working on a replacement of the media conglomerate financed by Simicska and that they would have no difficulty finding jobs in the future. Meanwhile, rumor had it that part owner and editor-in-chief of Magyar Nemzet and Hír TV, Gábor Liszkay, might be taking over Napi Gazdaság, a financial paper, transforming it into a full-coverage daily in the spirit of Magyar Nemzet.

The first issue of Napi Gazdaság under the editorship of Gábor Liszkay

The first issue of Napi Gazdaság under the editorship of Gábor Liszkay

The recent history of Napi Gazdaság is intriguing. It shows how easily Viktor Orbán can pull strings with allegedly independent enterprises if and when he needs their cooperation. In 2013 Századvég Intézet purchased Napi Gazdaság, which until then had been an independent organ. Now that the government and Fidesz need a daily paper, it was enough for Viktor Orbán to call on Századvég and ask the management to sell the paper to Gábor Liszkay and Árpád Habony, about whom I’ve written earlier. Indeed, as of yesterday Napi Gazdaság belongs to Liszkay, and the group of people who left Magyar Nemzet have followed him to his new venture. I understand that even the typesetters and the proofreaders are from Simicska’s paper. At Napi Gazdaság changes have already taken place. For example, the paper became two pages longer. After a few months its name will also be changed.

While preparations for the establishment of genuine pro-government media have been underway, Fidesz was also working on punishing Simicska for his disloyalty. It wasn’t enough to entice Magyar Nemzet‘s and Hír TV’s staff. There was also talk in town about Fidesz politicians boycotting Hír TV. Fidesz denied the charges. As a result, there was quite an exchange between János Lázár and one of the editors of Hír TV, in which the editor called Lázár a liar. Well, the truth is that Antal Rogán didn’t use the word “boycott,” but his words strongly indicated that it would not be advisable for a Fidesz politician to accept an invitation from Hír TV. In the past, Rogán said in his interview on M1, there were “compulsory appearances” on Hír TV and “mandatory interviews” in Magyar Nemzet. From here on Fidesz politicians “can go if they want.” It will be their personal decision. Boycott or no boycott, if I were a Fidesz politician I wouldn’t rush to accept an invitation from Hír TV or Magyar Nemzet.

László Kövér, right after the falling out between Orbán and Simicska, declared in an interview with Magyar Hírlap, a paper that espouses Jobbik ideology and that lately has become a favorite organ of Fidesz politicians who can’t or don’t want to have any dealings with Hír TV, that Magyar Nemzet and Hír TV are “opposition organs.” What does “opposition” mean here? In my reading, Kövér thought that the paper moved too far to the left and often “criticized the government unjustly.” But lately, especially after the Tapolca by-election when Fidesz at last realized that Jobbik is a threat, the party line changed. Now the charge is that Lajos Simicska is moving over to Jobbik and is offering his services to this neo-Nazi party. Surely, this is another Fidesz lie. I have been diligently reading Magyar Nemzet‘s op-ed pages and there is not a morsel of truth in this allegation.

Sándor Csintalan, who works for Lánchíd Rádió, another Simicska concern, in a Facebook note accused Rogán of losing touch with reality. Csintalan himself has quite a past, and he has few if any friends among politicians and commentators on the left, but this time I think he is right. Csintalan pointed out that “when Jobbik wins, an event you do a lot for, then thank your pals, Habony and Vajna, and look into the mirror. Stop and think a little before it’s too late.” Even if one doesn’t believe Csintalan, one should read László Seres’s short piece in HVG. He quotes Rogán as saying that “one must be blind not to see that Magyar Nemzet, Hír TV, and Lánchíd Rádió are getting closer and closer to the extreme right.” Seres responded: “We must be blind because we don’t see it.”

Yes, Magyar Nemzet became critical of the Orbán government, but it is not the only right-wing organ that carries such opinion pieces. Even such old loyalists as András Bencsik or Zsolt Bayer, the organizers of the Peace Marches, have become disillusioned. Their articles in Demokrata and Magyar Hírlap criticize Fidesz because it has abandoned its ideals. They are disappointed, but they still talk longingly of old Fidesz, especially during the period between 1998 and 2002 when Fidesz had a mission: to create a “bourgeois democracy,” a “polgári Magyarország.”

Now that the shackles of party restraints have been removed, the more talented members of Magyar Nemzet are putting out a good right-of-center paper. If it finds an audience, it will provide some real competition to papers on the left. Tomorrow I will sample some op-ed pages I especially found revealing, offering insights into the mood of former Orbán loyalists.