Tag Archives: Gordon Bajnai

András Kósa: “The speech of the chief: Őszöd ten years later” Part II

fonok-beszedeAndrás Kósa, a well-known Hungarian journalist, just published a book titled The Speech of the Chief: Őszöd Ten Years Later. It is a collection of interviews with former and current politicians as well as with political commentators. Interest in Ferenc Gyurcsány’s speech and its impact on subsequent political developments doesn’t seem to wane. A reader and friend of Hungarian Spectrum, Steven N., who is also a friend of Kósa, approached me asking whether we would be interested in Kósa’s interview with Ferenc Gyurcsány. If yes, he would translate it for us. I gladly accepted his offer. This is the second part of the interview.

But first, a few words about András Kósa. I remember him from the days when he was writing in the still liberal Magyar Hírlap in the early 2000s. Later he worked for Hírszerző, which was eventually absorbed by HVG. For a short while, he wrote for vs.hu. The website received some bad press when it became known that New Wave Media, the owner of vs.hu, had received 642,255,760 forints from foundations of the Hungarian National Bank. Six of the website’s journalists immediately resigned. András Kósa was one of them.

This June Kósa joined Magyar Nemzet and HírTV. As he said, “I know both editorial teams and I could say yes to both offers in good conscience.”

My heartfelt thanks to “Steven N.” for his work in translating the interview with Ferenc Gyurcsány. This second part is not about the speech but about the current state of Hungarian party politics. I found it fascinating and am looking forward to the third and final installment.

♦ ♦ ♦

András Kósa: Returning to the identity crisis issue: earlier there were serious attempts by you and MSZP to be more open towards young people (which even involved popular entertainment venues) so you could build a network with them. These attempts also failed. What was the reason for this?

Ferenc Gyurcsány: This was successful between 2004 and2006, and of course many things changed after the fall of 2006. This was partly because a credibility crisis arose from Őszöd, and also from social pressure that came about through our austerity program. It wasn’t cool or trendy enough at the time for young people to support the left, and the way it looks now; this basically hasn’t changed since then either.

I suppose it’s little comfort for you that it isn’t that trendy or cool nowadays to be a Fidesz supporter either. These days it really does seem that only Jobbik is able to reach young people.

But based on research that’s available, for the moment we don’t have to ring the alarm bells just yet. I rather fear that younger generations are simply staying out of the political realm, both in their everyday life and also during elections. They simply don’t take part in it. I’m not counting on things to turn for the better anytime soon. It is customary to characterize every left-wing public forum as “an audience predominately made up of retirees.” But if we look at similar forums for Fidesz, older people there also make up most of the attendees. They have much more determination and a greater willingness to vote, and of course, they are basically independent of the state, since they can’t be individually pressured because they receive a pension. Retirees are the strongest and most important demographic of the electorate today.

When you launched the Demokratikus Koalíció, where would you have guessed the party’s position and support in mid-2016?

It’s a good question, as it was very hard for us to be able to estimate at the time how high our support could go. There’s now roughly a consensus among analysts that we may have around half a million stable voters, or 10 percent support, plus or minus 1-2 percent, which is still growing. Some have previously said that we would have trouble getting past even the 5 percent threshold, while others did not rule out us getting as much as 30 percent. I’m not displeased with what we have achieved. In a real electoral situation, on an independent list, we could get roughly 15 percent, and I predict this for 2018 too.

However, there is also consensus among analysts that DK and MSZP are sharing the same “left-wing electoral cake” amongst themselves, and at the same time are unable to reach new groups of voters for now.

I wouldn’t presently be able to either confirm or deny this. All I can say is that based on polling, it is certain that a good number of our supporters have come from Együtt, the former party of [ex-PM] Gordon Bajnai. As they have collapsed, we have started to gain support. It’s also certain that there has been some crossover between the DK and Socialist voting bases. Based on my political experience thus far, I can say that this “communicating vessels” phenomenon will persist. We will be able to reach voters from those who are undecided once we finally have a more united alternative on this side. When there’s a better possibility of believing – which we, of course, have confidence in – that “these guys really can win.” Uncertain voters have no strong party preferences and do not judge ideologically: if they see a force that can unseat the ruling government, then that can be attractive to them, as they want to be part of this success. But for this to happen, many things still have to take shape within the left wing in the upcoming period to create such an alternative.

Could a primary election possibly play a positive role in this?

In any given local voting district, say, in Jász-Nagykun-Szolnok County, no one would give a hoot about a primary. We wouldn’t even have the resources to organize it. Thirdly, knowing our side, a primary process and campaign would only result in leftist candidates bashing each other for weeks during the campaign, and by the time there’s a winner, our only achievement would be that person unable to get the entire left-wing camp behind him. So I don’t consider a primary election a sensible or useful instrument at the local level. If there were a joint alternative who headed the left, meaning a joint candidate for prime minister, I would consider that a good thing. But this entails a serious prerequisite: there should be at least two candidates in the first round. There isn’t even one now. Or rather, there are some techniques that can be applied in certain political situations, but these are not present at the moment. In this regard, the situation is radically different than it was before 2014. Back then, two candidates who were unable to come to an agreement with each other (MSZP Chair Attila Mesterházy and Gordon Bajnai) competed for the nomination. That’s when a primary would have solved the problem. But if there isn’t even one, then how can we call for a primary election?

In retrospect, what would you have done differently in 2014 instead of creating the joint ticket that proved to be a complete failure?

The fundamental error then was committed by Gordon Bajnai, despite all of his good intentions. Launching a political movement with the aim of bringing together democrats against the Orbán regime, without any preparation, without any consultation with the leaders of potential participants, launching this, simply announcing it, then expecting everyone to applaud it the next day and “get behind me” – this was a serious folly. It attests to a certain type of self-confidence that I had after the 2006 election, one of “I will be able to do everything in this country.” This is not a good advisor. And then, launching an independent party when you realize this isn’t working is no less of a serious mistake. Moreover, while Gordon Bajnai had gained very serious credibility following his one year of governing, it’s as if he did not understand that by not running in 2010, and even effectively removing himself from the skirmishes of party politics for two years and not having led a campaign, he was in a completely different situation than a party politician who puts himself to the test during an election. It’s a completely different genre. The mistakes were encoded into the situation. On the other hand, had I been in Attila Mesterházy’s place, especially at the end of 2013 and the beginning of 2014, I would have conceded to Gordon Bajnai the nomination for prime minister. There was a small chance then that this team would win – so let Gordon Bajnai carry this burden. Attila’s insistence on being the nominee was completely senseless and irrational. It even cost him his career, at least for a while.

However, he could rightfully say that since he had undertaken the leadership of MSZP in the midst of a political crisis, when many people hadn’t ruled out even the complete disintegration of the party, and somehow had still continued to manage it until the 2014 elections, then why shouldn’t he be their nominee for prime minister?

Obviously, since he decided to do it the way you said. But this is not ultimately what swept Attila away, but the party’s disastrous results in the subsequent European Parliament elections, when they got 11 percent of the vote.

During the 2014 campaign, you also received quite a lot of criticism. Such things were said about you like, “Ferenc Gyurcsány is unreliable and unpredictable. If there’s a rally, then you can never know what he’s going to say when he steps on stage. He steals the show from others and always draws attention to himself at the worst time.” What do you think of these claims?

They can’t blame me for trying to shape the political relations on the left so that they wouldn’t be allied against us, the DK Party. For me, the strange thing is that this surprises anyone. This has been the preeminent political interest of the Demokratikus Koalíció party. I could not allow the other two actors (Gordon Bajnai and Attila Mesterházy) to push me out. It betrays the underdeveloped political skills of whoever is surprised by this. In any case, once the decision was made to create a broad coalition under Attila’s leadership, I don’t think you could find anyone else who came out more forcefully for Attila Mesterházy and pushed through the campaign without a single political comment about him or about our united efforts. Someone who spoke practically in superlatives about our candidate. I cannot do any more than this. It is true, of course, that I am a guy with personality. But this is valuable in politics. If I use my personality for a joint victory, what would be the problem with that?

Why is it that apart from you, there aren’t any other “guys with personality” on the left today?

I don’t know why. All I see is that many people try to explain their own mediocrity and mediocre performance by saying almost automatically, “It would be so much easier without Gyurcsány!” But it’s not me that’s preventing András Schiffer, Viktor Szigetvári, Gergely Karácsony, or Gábor Fodor from becoming better politicians. Or anyone else who pops up. This is a competitive political world. It is certainly not the case that politicians who call themselves democrats share each other’s’ roles within the remains of an otherwise diminishing political framework. If I have half a million voters (and it’s at least that many) for whom DK is a valuable alternative, why would we take this possibility away from them? Let someone else also get half a million, or a million! If everyone could do this on our side, we would defeat Fidesz in two days.

Don’t you feel that you’ve taken the Hungarian left hostage? The other players can neither swallow you nor spit you out. As long as you’re still here, you are the focus, giving Fidesz a perfect opportunity to “blame Gyurcsány for everything.” And yet, for now, there is no one else besides you.

Is it because of me that József Tóbiás [then MSZP chair – trans.] is not more exciting? It isn’t because of me. The reason isn’t me, but rather him, and his party. You were correct with your comment about Fidesz. It’s a very conscious political strategy on their part to present a clear picture of the enemy to maintain the unifying force of the right wing. In the world of Hungarian politics, anyone who dares to go against Fidesz becomes an enemy. Like Bajnai, George Soros, or Brussels. I have a privileged place in this line. But knowing Fidesz, I don’t believe for a minute that if it wasn’t me but a similar leader with personality who came along and opposed Fidesz in the same way, that person would not become public enemy number one in an instant. All it takes for a world-famous, Kossuth Prize-decorated conductor is to get into an argument with the mayor of Budapest, and he immediately becomes one of Soros’ henchmen.

How long do you think this will continue to work for them? How long will Fidesz be able to blame Gyurcsány for everything?

For an ever-shrinking core group, it will absolutely continue to work for them. The Őszöd story is ten years old – it hardly means anything to those who are now 25. In addition, we can also see that there are a lot of things I said in which the real world seems to have proven me correct. Was I right when I said that running the health care system in its present condition was unsustainable? And so I wanted to shake up my party to dare them to touch it? Yes. Was I right when I said that in the educational system today the disadvantages brought from home were not decreasing but increasing? Yes. Was I right when I said that we didn’t need to be a politician just because we couldn’t go back to polishing cars? But because there has to be some ethos to what we do as politicians? I believe so. Quite a few people over the past few years have shed their previous outrage at me and are now willing to say: maybe this guy was right. Six weeks ago I sat around with a group of people, and a good number of them were center-right leaning. It was awfully exciting when one of them came up to me at the end of the conversation and said, “I was there on October 23, 2006, yelling and honking at you, and now I’m a little ashamed of myself because of it.” I think this is now part of the Őszöd story too.

Hungarian political life – at least in the medium term – will remain three-pronged: along with Fidesz and Jobbik, the Hungarian left-wing will need to attain a majority that can form a government. When do you think this is likely to happen?

What we’ve observed in the past two years is a completely new phenomenon in Hungarian politics: some voters who oppose Fidesz from any political orientation have a greater desire to see the ruling party fall than the attachment they have to their own party. So they are willing to make insanely large moves just to keep the Fidesz candidate from winning the election. We had an unprecedented transfer of votes from the democratic left to the extreme right, and vice versa. A consequence of this could very easily be that Fidesz – even with a relative majority – loses 75-80 out of 106 electoral districts. One possible consequence of this would be that no one will get an absolute majority in 2018, and the chance arises for a minority government to form, or we are forced to have new elections.

Getting back to your chances in 2018 – and the left wing’s identity crisis: earlier I spoke with two MSZP leaders who, independently of each other, both said that the left can win if they find a candidate for Prime Minister who is someone that nobody knows yet, but is otherwise well-known, even a person widely recognized in society; who is both young but already has a large network of connections, who can’t have his financial means taken away from him (which probably means a wealthy businessman), yet no questionable issue can be tied to him, and of course, if possible he shouldn’t even enter politics until 2017, so as not to give Fidesz much time to “mow him down” in a political sense. It would be quite funny if that were your only chance, don’t you think?

More and more people believe that Fidesz skews the opinion polls in its favor, possibly by as much as 4-5 percent. If this is our starting point, then the ruling party’s current share of around 40-45 percent shows that in fact support for Fidesz has dropped below 40 percent. This is more than likely. The combined support of the Socialists and DK is around 30 percent, while the tiny parties (Együtt and Párbeszéd Magyarországért) together have a few percentage points. That is, two years before the election the difference is within 10 points. I don’t consider this dramatic. In 2002 we made up an even greater differential than this by 2004 when I was chosen as prime minister. We had an even bigger disadvantage. In this regard, the race may be even more open. You are correct that our main problem is whether or not we can respond to three major challenges. The first is a lack of credibility – this may be the most difficult to solve. The second is unifying the fragmented democratic side – I consider this a smaller concern at present. And the third is coordinating the party programs, which are quite varied right now – with the appropriate amount of counsel; this is the most easily solvable.

If Fidesz stays in power in 2018, can the current Hungarian left wing hold out for another four years?

I think that we will have a delegation of at least 10-15 members in the new Parliamentary session, even if the left is defeated in the election. I can’t really see into MSZP’s situation, so it is hard to say what will happen with the Hungarian left wing as a whole if we remain in opposition after 2018. The question is whether any of the current political fragments will disappear if the picture clears up, and if some kind of rapprochement begins to form amongst the remaining parties. It’s difficult to say any more about this right now.

Is it worth seriously discussing any kind of electoral cooperation with the Párbeszéd Magyarországért Party, which has 1 percent support, or with Együtt, which has around 2 percent?

I remember very well what it was like when we only had 1-2 percent support, and how others treated us then. I didn’t consider it proper of them, and I would not like to behave now in a way that I didn’t approve of at that time. In 2002, the socialists won by a few ten thousand votes in total: by a couple of tenths of a percent, if you like. So I am more inclined to have as many as possible come on board.

One of the foundations of Fidesz and Viktor Orbán’s strategy for power is nominating as many absolutely loyal supporters as they can to head every public institution (Constitutional Court, Fiscal Council, Media Council, Chief Prosecutor, National Office for the Judiciary, etc.) with a long mandate. If a change of government occurs under these circumstances, how much room will the new cabinet have to maneuver?

Quite a few people in the background are examining these kinds of situations that could be traps, and we do the same in DK as well. There’s a trap which, legally – with a little innovation – can be avoided, and one that will persist. And there’s a trap that can be avoided through political means.

Such as? What kind of things, and how?

I wouldn’t want to say any more about it, of course, since I don’t want to spoil our chances.

According to my sources, Viktor Orbán, speaking even earlier about the possibility of a change in government one day, said in a backroom discussion that they would resist a new government’s efforts to reshape the system, and that the extent of this will depend on how vigorously this particular government attempts to tear down the established order. How far do you think Fidesz can go to maintain its System of National Cooperation?

I don’t think they have any scruples. The “Fidesz of Orbán,” I think, would go very, very far in this area. I can presume anything of a person who is able to let the phrase “any means can be used to make a legitimate government fail” come out of his mouth. The question is not whether Fidesz will have the will, but whether they will still be in a position and have enough public support, credibility, and power to mobilize so that they can realize their will or not.

December 5, 2016

Fidesz as an enabler of financial corruption

It will not be easy to learn the truth in the maze of lies that have been fed to the public about the relationships between prominent politicians of Fidesz and Csaba Tarsoly, owner and CEO of the Quaestor Group.

Here I will concentrate on a single transaction, the loan extended to ETO Park, a subsidiary of the Quaestor Group. On April 4 I wrote a post with the title “The Quaestor scandal and football” in which I expressed my suspicion that Csaba Tarsoly’s ties to the current government had a lot to do with his interest in and support for Viktor Orbán’s mania, football. Today I return to Győr, where the ETO Park and Stadium are located.

Let me stress that the issue of the ETO Park and Stadium is unrelated to the scandal that recently engulfed another Quaestor subsidiary, a brokerage firm. The Orbán government has used ETO Park and Stadium to divert attention from its cozy relationship with Tarsoly. It’s trying to shift the story instead to a loan that was extended to the ETO project during socialist governments.

In my earlier post on the subject I made a fleeting reference to questions about this project that arose in the Magyar Fejlesztési Bank (MFB/Hungarian Development Bank) in 2010, after the newly elected government changed the top management of the bank and ordered an investigation of all loans that had been extended during the socialist period. Today’s post is about this investigation and its aftermath.

Orban hazug

War = Peace; Freedom = Slavery; Ignorance = Strength

On April 8 several papers reported that Kormányellenőrzési Hivatal (KEHI/Government Audit Office), after an investigation, is pressing charges against people involved with the 17 billion forint loan MFB extended to ETO Park in two installments, in 2005 and 2008. The reason for the police action, according to M1 TV, was that KEHI discovered that MFB had accepted a 900 million forint grant as collateral for the loan, which was against the law. We were not told when KEHI found this irregularity. Origo reported earlier that KEHI had already looked into the case back in 2010 and found enough evidence to proceed and that it had asked for a police investigation at the time. So why, then, a second investigation of the same case? And why did neither the Chief Prosecutor’s Office nor the Budapest police know anything about an earlier investigation or police action in the case?

KEHI, which functions under the supervision of the prime minister’s office, has been known to be a willing vehicle of the government’s political interests. It’s enough to think of its move against the Ökotárs Foundation, which is responsible for the distribution of grants from the Norwegian Civic Fund, that resulted in a heavy-handed police action. The police are an equally willing partner when the government wants results, and quickly. So why did the police do nothing after 2010 and swing into action only now? Because this time, in a couple of days the police began hauling in former high officials of MFB as witnesses.

It didn’t take long before an important, new piece of information surfaced regarding the original case. On April 9 Népszava was informed “by certain sources that László Baranyay, the CEO of MFB at the time, wanted to press charges but the Fidesz political leadership prevented him from doing so.” Apparently, the charges included fraud, embezzlement, and breach of fiduciary responsibility.

About a week later, on April 15, Zsolt Gréczy, spokesman of the Demokratikus Koalíció, gave a press conference with two documents in hand which were allegedly proof that KEHI in March 2012 stopped the investigation of the case by the new management of MFB. According to the first document, the investigation was supposed to have been conducted between July and September 2011, after which the MFB management would have gone to Győr to take a look at the project, which at that point wasn’t quite finished. The final report was to be ready by October 31, 2011. Gréczy also had a letter in which KEHI informed Deputy CEO Zoltán Urbán that the office had suspended the investigation into the circumstances of the loan to ETO Park.

Index on the very same day learned a few more tidbits about the case. During the 2011 investigation KEHI talked to practically all former top officials of the bank, in addition to lower-level officers who had anything to do with the case. There was one man, however, whom they never contacted: Csaba Tarsoly, CEO of Quaestor. One informant told Index that during the procedure “in an informal way Tarsoly was being told about the details of the investigation.”

So far we can piece together a pretty coherent story, but KEHI is working hard to muddle it. When HírTV first asked KEHI about the details of the earlier investigation of MFB and ETO Park, they were told that KEHI had pressed charges on six accounts. Later KEHI changed the story: no, they didn’t do anything except investigate. That investigation had to be darned thorough because they began it in 2010 and only five years later did they have enough evidence to proceed. After Zsolt Gréczy’s revelations, KEHI denied outright that it ever stopped the investigation.

And finally, here is the latest explanation of what happened in 2011 and 2012, this time from János Lázár. As far as he knows, “KEHI didn’t stop the investigation; it only interrupted [megszakította] it.” Moreover, KEHI asked MFB to change the contract with ETO Park in order to safeguard the interests of the bank. But if the government was aware of the precarious state of Tarsoly’s financial empire, why did it make a gift of 250 million forints for the ETO Park project? Lázár’s surprising answer was: “It was not our job to make the loan unpayable.” In brief, the government helped out the ailing Quaestor as early as 2011, hoping to avoid the firm’s collapse.

The bankruptcy of Quaestor’s brokerage firm is a separate issue from the ETO Park project, which admittedly was not exactly a success story but was not responsible for the brokerage firm’s collapse. On the contrary, one can read stories about contractors working on the project in Győr who often didn’t receive payment on time. The management blamed MFB for not releasing the necessary amount of money at specified intervals. As it turned out, this was a lie. Tarsoly was simply using the loan to cover his tracks in his pyramid scheme.

If the Orbán government had wanted to point the finger at Ferenc Gyurcsány and Gordon Bajnai for not properly vetting the loan for the ETO Park project, it could have done so in 2010 or 2011. Instead, it stopped the investigation and kept trying to prop up Quaestor’s business ventures. It became an enabler of financial corruption.

What’s happening at the Buda-Cash Group? No one knows

On the evening of February 22, an entire police squad arrived at the headquarters of the Buda-Cash Group, a financial institution established in 1995. Despite its unfortunate name, it is not a payday lender. Among other things, Buda-Cash (BC) owns a network of eleven brokerage firms with 200 employees and about 20,000 customers and engages in financial advising and portfolio management. It also owns four small banks that formerly functioned as credit unions and that managed to remain independent at the time other credit unions were nationalized in 2013-2014.

The following day, February 23, László Windisch, one of the deputies of György Matolcsy, head of Hungary’s central bank (Magyar Nemzeti Bank), described in dramatic terms what he considers to be the greatest financial scandal in Hungary. The National Bank suspects that over the last fifteen years the top management of BC siphoned off as much as 100 billion forints of its customers’ money.

The National Bank is new to the business of supervision. Until about a year and a half ago a separate governmental body, Pénzügyi Szervezetek Állami Felügyelete (PSZÁF), supervised the financial sector. The last time there was a thorough inspection of BC was in May 2010, when some small irregularities were discovered but nothing substantial. By that time, PSZÁF had a Fidesz-appointed chairman, Károly Szász.

From day one people who know something about the world of finance in general and Hungarian finance in particular had their doubts about some of the details of the case. First of all, it soon became evident that the Hungarian National Bank, into which PSZÁF was incorporated, has not yet done any investigation. The police were gathering documents even as Windisch’s press conference was in progress. The second fact that bothered financial experts was the size of the alleged loss, as much as 100 billion forints. The sum total of securities currently held in Hungary is only 250 billion forints. To steal almost half of this amount without anyone realizing it is hard to imagine. Moreover, there were in Windisch’s announcement several indications that the Hungarian National Bank knows very little about the whole case. He talked about a “suspicion of possible wrong doing.” And when he referred to the size of the loss, he cautiously noted that “it may even be 100 billion.” Clearly, he was groping in the dark.

Buda-cash

The following day came a new announcement. All four small banks owned by the Buda-Cash Group had to be closed. The response to this announcement was understandable panic. After all, the four banks have roughly 120,000 customers, among them about 80 municipalities which now can’t even pay their employees. Eventually, the National Bank decided to reopen some of these banks but limited withdrawals to 60,000 forints. Well, the municipalities won’t be able to do much with that amount of money.

Why were these banks closed? One theory is that the government through the Hungarian National Bank wanted to punish BC for managing to save its four credit unions from nationalization. Those holding this view are convinced that the four banks are in fact in good financial shape. They claim that in the last few months the Hungarian National Bank checked one of these banks at least six times and found everything to be in good order. Others are not so sure. They believe that the banks are in trouble and should be closed after their customers are fully compensated, as guaranteed by the bank law. And since the fund (Országos Betétbiztosítási Alap = OBA) that is supposed to make all depositors whole is financially strapped because of an earlier bank failure, the Hungarian National Bank would most likely have to come to the rescue. Therefore, according to those who dismiss the conspiracy theory, it is not in the interest of the National Bank to create a case out of thin air.

It remains unclear what’s going on with the Buda-Cash Group and its affiliates. Is the scandal real or imagined? The suspicion that it may be imagined was heightened this afternoon when Antal Rogán, head of the Fidesz parliamentary delegation, called the BC case a “socialist brokerage scandal.” Rogán claimed to know the details of the case. According to him, the owners of BC stole the money deposited in its banks by people of modest means. And BC had to be closely linked to the socialist-liberal government because, for example, Gordon Bajnai asked the chairman of BC’s board to become government commissioner in charge of the restructuring of MÁV (Hungarian State Railways). Bajnai also appointed Miklós Andrási, former manager of BC, to be the CEO of MÁV. Rogán added that Andrási was one of the founders of Fidesz, but once they discovered that he was “Bajnai’s man” the party broke all ties to him.

Fidesz is trying to make political capital out of a case we know practically nothing about. Understandably so. The top leadership of Fidesz was badly shaken by the loss the party suffered in Veszprém, a defeat that came less than two months before another by-election will be held in the same county. Moreover, there is the rapid loss in popularity of Viktor Orbán, his government, and his party. Orbán’s attack on refugees and migrants was allegedly devised to counter this trend. Some people are convinced that the idea came straight from the most important spin doctor of Fidesz, the American Arthur J. Finkelstein. Admittedly, it’s a clever move since Hungarians are not at all keen on immigrants. If the government can also show that its opponents are linked to an egregious financial scandal, so much the better.

Late this evening the Budapest Stock Exchange restored Buda-Cash’s right to continue its activities, admittedly with major restrictions. They can trade only in derivatives (currencies), not stocks, and can only close out positions they hold, not initiate new positions. This might be intended to be an orderly liquidation of the firm or simply a way to buy time for the investigation to play out. We’ll have to wait to see what the National Bank comes up with. I don’t expect any quick answers. As we know, the Orbán government is skilled in dragging things out.

The European Anti-Fraud Office is a bit slow: The case of the Heart of Budapest project

Well, we are back in Budapest’s District V, which is known by many names: Lipótváros (Leopoldstadt), Belváros (Downtown), or lately for a little political propaganda “The Heart of Budapest.” At least this was the name of the mega-project undertaken within the boundaries of the district that made the historic district mostly traffic-free and repaved the streets between Kálvin tér and Szabadság tér, stretching 1.7 km, with fancy cobble stones. Like everything else, the project was largely financed by the European Union.

It was Antal Rogán, the newly elected mayor of the district, who came up with the idea of revamping downtown Pest shortly after the municipal election of 2006. He convinced the City Council of Greater Budapest to apply to Brussels for a grant, and it seemed that at least on the surface the SZDSZ-MSZP city and the Fidesz district were of one mind. We mustn’t forget that at this time Antal Rogán was considered to be a moderate and reasonable man. Later the Fidesz media praised him as a truly remarkable Fidesz mayor who managed, despite the fact that the city of Budapest and the government were in SZDSZ-MSZP hands, to receive a huge sum of money for the development of his district. Well, the Heart of Budapest project really was impressive. A good portion of District V became something of a showcase.

The renovated Károly körút - Photo András Földes

The renovated Károly körút – Photo András Földes

As we know, Antal Rogán has had his share of his political trouble ever since Péter Juhász, who was Együtt’s candidate for mayor last October, decided to investigate shady real estate deals during Rogán’s tenure. I wrote about corruption in the district in December and again in January. Juhász, unlike most Hungarian politicians, doesn’t give up. Whether he will succeed in putting Rogán in jail remains to be seen.

What Rogán did not need was another scandal. But he’s under attack yet again, this time in connection with the Heart of Budapest project. The internet site vs.hu reported yesterday that OLAF, the European Anti-Fraud Office working under the aegis of the European Commission, found serious irregularities in connection with Rogán’s project. According to vs.hu, OLAF finished its investigation at the end of last year and called upon the Hungarian Chief Prosecutor’s Office to begin an investigation of the case. Naturally, OLAF’s findings were also sent to the European Commission. The Chief Prosecutor’s Office admitted that they received the documentation that supports OLAF’s case but said that “currently work is being done on the translation of the material.” Knowing the Chief Prosecutor’s Office, they will work on that translation for months if not years. Moreover, some opposition politicians learned that in the last few years the Chief Prosecutor’s Office received several dozen such complaints, but as far as we know Chief Prosecutor Péter Polt’s crew did nothing about them.

This is not the first time that questions have been raised about the project. At the end of 2012 OLAF found that not everything was in order. There was a good possibility that both District V and the city of Budapest would have to pay sizable fines: about 900 million forints each. The charge? The officials of the district and the city who were handling the bidding process demanded such unnecessary qualifications from the applicants that only one combined firm, Reneszánsz Kőfaragó Zrt and Bau Holding 2000, forming the Heart of Budapest Consortium, could possibly undertake the work. The bidding was theoretically open to foreign firms as well, but I doubt that much effort was put into finding non-Hungarian companies for the job.

What kinds of unreasonable demands did the authorities insist on? To qualify, a company had to have references for 1.2 billion forints worth of work on historic buildings even though the new project focused on repaving streets. There was absolutely no restoration of historic buildings. This ploy is commonly used in Hungary to make sure that the “right” company is the successful bidder. In Hungary 40% of all projects end up with a single bidder. Every time such a thing happens we can be pretty sure that corruption is not far away.

In 2012, when this story broke, Rogán and his deputy András Puskás, who has since left the district under the cloud of possible corruption, argued that there was nothing wrong with the project. It was done properly. The problem, they countered, was that the European Commission didn’t like the Orbán government and concocted this case to attack Viktor Orbán and his politics.

Now that OLAF finally got to the point of calling on the Chief Prosecutor, the district is trying to shift the blame to the current opposition. After all, the argument goes, the first phase of the project was finished in 2009 when Gordon Bajnai was prime minister. And Gordon Bajnai was present at the official opening. I guess that, according to the brilliant logic of the editorial offices of Magyar Nemzet, Bajnai had something to do with passing on the job to an earlier designated firm just because he cut the tricolor ribbon at the opening ceremony. For good measure, Magyar Nemzet added that Viktor Szigetvári, co-chair of Együtt and then Bajnai’s chief-of-staff, participated in the negotiations. Szigetvári calls the accusation a lie.

In addition, Magyar Nemzet blames the SZDSZ-MSZP administration of the city of Budapest. “All this happened during the era of Demszky-Hagyó-Steiner.” Pál Steiner was the whip of the MSZP caucus on the city council while Miklós Hagyó was the MSZP deputy mayor. Hagyó was later accused in a vast corruption case, which is still pending. The lurid details of the case tarnished MSZP and helped Fidesz coast to an overwhelming victory, resulting in a two-thirds majority in 2010.

OLAF has been investigating for the last six years. Right now, the Chief Prosecutor’s office is busily, or not so busily, translating. When do you think we will know exactly what happened? If you ask me, never.

 

The world according to László Kövér

Just when I think that Viktor Orbán and his fellow politicians must have exhausted their inventory of outrageous pronouncements comes another shocker. This time László Kövér, president of the Hungarian parliament and the third most important dignitary of the country after the president and the prime minister, decided to share his grievances and accusations. His message was intended for the Fidesz faithful, but soon it will reach Hungary’s allies from Washington to Brussels. I don’t think they will be pleased.

I guess the Fidesz leadership wants to make sure that everybody understands the Hungarian position, and therefore they must repeat their shrill message at least three times: first János Lázár, then Viktor Orbán, and now László Kövér. Although the underlying message remains the same, each repetition reflects the personality of the speaker. Kövér is perhaps our best source on the thinking of Viktor Orbán and the members of his closest circle. And what we find there is frightening–a completely distorted view of the world and Hungary’s place in it.

The basic outline is old hat by now: the United States wants to rule the European Union and is currently trying to teach Putin’s Russia a thing or two. Hungary is only a pawn in this game, but the United States is still trying to influence political developments in the country. Therefore, the most urgent task of the Orbán government is to retain the sovereignty of the Hungarian state. Also they “must assure the nation’s survival.” Their paranoia, they would argue, is grounded in reality.

The charge of American interference is based on a speech by Sarah Sewell, U.S. undersecretary for civilian security, democracy, and human rights, in which she stated that “addressing corruption is tough, but we are using a range of tools – and often working with other states and international institutions – to encourage and assist anti-corruption activity. At the State Department, our Bureau of International Narcotics and Law Enforcement works on corruption along with our bureaus that handle economics, energy, and human rights, and together State collaborates with USAID, Treasury, the Department of Justice, Interior, and Commerce – each of which brings specialized tools to the table.” For the Fidesz leaders this means direct interference in the internal affairs of East European countries. Kövér even suspects that the Americans had a hand in the recent election of Klaus Johannis as Romania’s president.

As far as U.S.-Hungarian relations are concerned, Hungary shouldn’t even try “to make the Americans love [them].” They must find other allies in the countries of Central Europe. The Slovaks and the Romanians shouldn’t put “the Hungarian question,” which for Kövér means “their phobia,” at the top of their agenda. They should think about their common fate. “Our goal should be emancipation within the framework of the European Union.”

Source: Magyar Hírlap / Photo Péter Gyula Horváth

Source: Magyar Hírlap / Photo: Péter Gyula Horváth

According to Kövér, the United States was always partial to the left. In 1990 U.S. Ambassador Mark Palmer ( 1986-1990) “favored the SZDSZ politicians” while Donald Blinken (1994-1997) during the Horn-Kuncze administration “sent exclusively negative information home about the activities of all the opposition parties.” He didn’t even want to meet the opposition leaders because he didn’t consider them to be human beings. To be fair, Kövér mentioned a few “good ambassadors.” For example, Charles Thomas (1990-1994), Peter Tufo (1997-2001), George H. Walker (2003-2006), April Foley (2006 and 2009), and Eleni Tsakopoulos Kounalakis (2010-2013) “at least as long as the State Department didn’t discipline her.” Every time there was a right-wing government the United States found “problems that should be solved.”

Until recently the Americans only wanted a simple change of government if they were dissatisfied with the one in power. But lately they have been thinking of “a complete elite change.” Their favorite was always the liberal SZDSZ and when it ceased to exist they supported LMP (Lehet Más a Politika/Politics Can Be Different). Then the U.S. supported Gordon Bajnai, who “became the Americans’ new favorite.” Now that Bajnai is gone “the new season of the soap opera will open.”

According to Kövér, the U.S. at the moment is looking for new faces in the crowd of “hired demonstrators” or perhaps they just want to maintain the constant tension so that “at the appropriate moment they can come up with a new Bajnai.” But surely, he continued, sane advisers to the U.S. government cannot possibly think that a new political elite can be created by 2018 that will be capable of governance. Perhaps their goal is to fill the place of the defunct SZDSZ with a new party that would be able to tip the balance of power in favor of the minority. This worked very well in the past when a small party, SZDSZ, managed to pursue a policy that was to the liking of the United States by blackmailing MSZP.

At this point the reporter interjected an observation: “But Jobbik did not exist then.” Yes, that’s true, Kövér answered, but the alleged American scheme would still work. Jobbik has gained some ground lately, but when Jobbik is stronger, more and more unacceptable, more and more considered to be anti-Semitic and racist and therefore cannot be considered to be a coalition partner, “it will be easy to patch together a coalition government on the other side in which perhaps Fidesz could also participate with its own weight. The important thing is that no government could be formed without the post-SZDSZ against Jobbik.”

I think this paragraph deserves closer scrutiny. As I read it, the most important consideration of the United States, according to Kövér, is to smuggle back a post-SZDSZ that would be, as SZDSZ was, a liberal party. To this end, the U.S. would make sure that Jobbik will grow and will be such an extremist party that Fidesz couldn’t possibly pick it as a coalition partner. Therefore, Fidesz would be forced to join MSZP and a second SZDSZ in an unnatural cooperation with the left. This post-SZDSZ would shape government policy to the great satisfaction of the United States of America. Although I don’t think it was Kövér’s intention, he unwittingly revealed in this statement that Fidesz might be so weakened in the coming years that it would have to resort to a coalition government with Jobbik.

Finally, a side issue that has only domestic significance. Here I would like to return to Kövér’s accusation of American manipulation in the formation of LMP. The party, currently led by András Schiffer and Bernadett Szél, has steadfastly refused any cooperation with the other democratic opposition parties. Therefore, the party’s leadership has been accused of working on some level with Fidesz because their “independence” was beneficial only to Viktor Orbán. András Schiffer’s refusal to have anything to do with the other opposition parties led to a split in the party in November 2012. Out of the sixteen LMP parliamentary members only seven remained faithful to Schiffer; the others joined Gordon Bajnai’s “Together” party. According to house rules at the time, a party needed twelve seats to form a caucus. The Fidesz majority was most obliging and changed the rules. LMP could have its own caucus with only seven members. The nine who left, on the other hand, had to be satisfied with the status of independents.

From the very beginning, the suspicion has lingered that Fidesz might have been involved in some way in the formation of LMP as a separate party. Now we learn from Kövér’s indiscretion that “the current politicians of LMP, until the split in the party, wouldn’t believe us when we explained to them why the Americans were supporting them. Then they suddenly realized how those who left the party in 2012–who were sent there in the first place–interpreted the phrase ‘politics can be different.’ They stood by Gordon Bajnai, who was the favorite of the Americans.” Thus Fidesz was in close contact with András Schiffer and warned him that his party was being infiltrated by “American agents.”

Kövér admits in this interview that “we, Hungarians, have never been any good when it came to diplomacy,” but now the Hungarian leadership thinks that their foreign policy strategy will be successful. They should make no overtures to the United States, in fact, they should turn sharply against Washington and instead rely on Germany. After all, Kövér is convinced that U.S.-German relations are very bad as a result of American spying on German politicians, including Angela Merkel. If Hungary keeps courting the Germans, perhaps Berlin will take Hungary’s side on the Russian question. Some friends think that Viktor Orbán may just be successful in pitting Germany against the United States. I, on the other hand, doubt such an outcome despite the fact that at the moment the European Union is very restrained in its criticism of Hungary.

The state of the Hungarian left and Ferenc Gyurcsány

I think it is time to return to the affairs of the opposition parties, which are in bad shape.You may recall that at the European parliamentary election it became clear that the strength of MSZP was nowhere near what the party leaders believed or wanted to believe. But Attila Mesterházy, who is considered to be a less than an inspiring leader, was a skillful negotiator. He managed to negotiate a joint party list for the national election of the three parties–MSZP, DK, and Együtt 2014-PM–that greatly favored MSZP. Currently, MSZP has 28 seats in parliament while the other two parties have only four each when in the EU election MSZP received 10.9% of the votes cast against DK’s 9.75% and Együtt 2014-PM’s 7.25%. Since then, according to Ipsos, MSZP lost a couple more percentage points while DK gained the same amount. Együtt 2014-PM’s support is unchanged.

Attila Mesterházy is gone as party chairman, but in parliament MSZP has a relatively large delegation with a party that currently has only about an 8% share of the electorate. Meanwhile the other two parties are deprived of the minimum number of members that would allow them to have their own parliamentary caucuses. They therefore have very limited opportunities to play an active role in parliament. They cannot have representation on parliamentary committees and their ability to speak or ask questions is greatly restricted. As Ferenc Gyurcsány admitted, DK “was too generous in its negotiations with MSZP.”

It is not only Mesterházy who has more or less disappeared from the political scene. I strongly suspect that Gordon Bajnai, despite his protestations to the contrary, will not be around for long. The party will be headed by a troika–Péter Juhász (Milla), Sándor Székely (Solidarity), and Viktor Szigetvári (Együtt 2014). Nobody from the Párbeszéd Magyarországért (PM) seems to be represented. With this leadership, I have the feeling, Együtt 2014 will not be able to develop a large base and, in fact, might not last longer than its name implies.

As for MSZP, the leadership is searching for a new leader, and it looks as if József Tóbiás will be the man to succeed Mesterházy. Tóbiás might be a perfectly capable man, but charismatic he is not. Tabloids often talk about his wife who, as the second-runner-up in the Miss Hungary pageant, is well known, especially since she often makes appearances in soaps on RTL Klub. Maybe Tóbiás has some secret medicine for the ills of MSZP, but I will be most surprised if thanks to his activities the socialists double their popularity any time soon.

That leaves DK and Ferenc Gyurcsány. The party’s success in the EP election surprised everybody, perhaps even its leaders. Of course, before the election Gyurcsány gave the impression of great confidence. He went so far as to announce that if DK does not reach the 5% that would qualify the party to send at least one delegate to Brussels, he would resign. The reaction from the anti-Gyurcsány camp was derision. He? He will never resign. Luckily for him, he did not have to contemplate a move that would have destroyed DK which is, just like Fidesz, a one-man party though without the kind of undemocratic, centralized organization that is characteristic of Viktor Orbán’s party.

DK-logo2Success breeds success, as the saying goes. A couple of weeks after the election DK’s spokesman, Zsolt Gréczy, announced that DK had received applications for membership from over 860 people. MSZP politicians charged that Ferenc Gyurcsány had been phoning local MSZP leaders, trying to entice them to join DK. Gyurcsány’s answer to that was that “they come without asking.” One thing is sure, Gyurcsány has been even more active than he normally is. He is in the middle of organizing an anti-government demonstration. He also made several appearances on ATV and gave two long interviews, one to Origo and another to Index. Both are long and cover a lot of ground. Here I will concentrate on only two themes: the municipal elections and his views on the possible course of Hungarian politics in the future. Both were discussed in the Origo interview.

Although it was obvious that Gyurcsány had struck a bad bargain with MSZP before the national election, he, unlike Együtt-2014, still thinks that the three parties must run again under a common umbrella organization in the municipal elections. Otherwise, they have no chance against Fidesz. It is especially true after the government changed the rules of the game in Budapest. Until now all the inhabitants of the capital city voted for a lord mayor (főpolgármester) while inhabitants of each of the twenty-three districts voted for their own candidates for district mayor. At the same time all voters cast their votes for party lists. The composition of the city council was decided on the basis of the number of votes each party received. Now, there will no longer be party lists. The district mayors will make up the city council. János Áder signed the bill into law, although it is most likely unconstitutional. The population of the districts varies greatly, so it can easily happen that one member of the council will be elected by 90,000 people while another by only 30,000. But János Áder, just like his predecessor, has no problems signing anything his party and his friend, Viktor Orbán, find important. And he did find this bill important because without it there might have been a Fidesz defeat in Budapest. And that cannot be allowed. It is for this reason that Gyurcsány is such a champion of another “unity alliance.”

As for the possibilities for the future. Gyurcsány thinks that the changes on the left will be the result of “a long, organic development with different possible outcomes.” The simplest would be that each party goes its own way and sometime in 2017 they put together an “electoral coalition.” The second possibility is closer cooperation among the three parties. The third, which Gyurcsány described as a “dream,” is that “one day the voters and the party leaders decide that these three parties and perhaps some others should create one large democratic party.” But, he added, for the time being he does not see the slightest chance of such a development; perhaps “one day such an idea might become a reality.”

There is no question that Gyurcsány hopes that a large, powerful party on the left will materialize. Although at the end of the interview he denied the possibility that he would be the one to head such a unity party, one has the feeling that deep down that is exactly what he would like to achieve. And, looking around, I see no one else at the moment who could possibly fill the bill. Of course, someone may show up in the next few years who could have a real chance against Viktor Orbán, especially if he continues his irresponsible economic policies. Yes, I know, lately the GDP numbers look good, but every responsible economist claims that they are not sustainable. Moreover, another 100-150 billion forints are missing from the budget and that means yet another austerity program. A few more stories about János Lázár’s trips to the Riviera and his extravagant hotel bills might change the mood of the electorate. Gyurcsány at least thinks that Orbán might not last until 2018–but then he’s something of a cockeyed optimist.

Regrouping on the left: MSZP on the brink

In the wake of the EU parliamentary election the non-Hungarian media will undoubtedly be preoccupied with the fact that the second largest party in Hungary is an extreme-right, racist, anti-Semitic party. But in the domestic press the “demise” of the Hungarian Socialist Party and the surprisingly good showing of Ferenc Gyurcsány’s Demokratikus Koalíció is the chief topic. After all, Fidesz’s large victory was a foregone conclusion, and the Hungarian media had speculated for some time that Jobbik would surpass MSZP. But no one predicted that DK would almost catch up with MSZP.

DK’s performance was especially unexpected because most opinion polls predicted that DK had no chance of sending delegates to the European Parliament. Medián, normally a very reliable polling firm, forecast a large Fidesz victory, Jobbik as the second-place winner, and MSZP in third place. As far as E14-PM and LMP were concerned, their chances were slim, teetering around the 5% mark. The party that, in Medián’s opinion, had no chance whatsoever was the Demokratikus Koalíció.

As it turned out, the predictions were off rather badly in the case of the smaller parties. As it stands now, all three–E14-PM, LMP, and DK–will be able to take part in the work of the European Parliament. The largest discrepancy between the predictions and the actual results was in the case of DK, which with its 9.76% will have two MEPs in Strasbourg.

The talking heads were stunned, especially those who have been absolutely certain that Ferenc Gyurcsány’s name is so tainted that there was no way he could ever again be a major player in Hungarian politics. Even those who sympathized with him felt that he returned to politics too early and by this impatience jeopardized his own political future.

The very poor showing of MSZP had a shocking effect on the Hungarian public as well as on commentators. No one was expecting a large win, but Medián, for example, predicted at least 14%. Instead, the final result was 10.92%.  A devastating blow. On her Facebook page Ildikó Lendvai, former whip and chairman of the party, described MSZP as being asleep or perhaps even dead. Slapping around a dead man, she wrote, is a waste of time. The governing body (elnökség) of the party has already resigned en bloc, and Saturday we will find out whether Attila Mesterházy will have to step down. Some well-known blog writers suggested that he should leave politics altogether and find a nice civilian job.

Let’s take a closer look at what happened to the three parties that constituted the United Alliance in the April 5 national election. The supposition that MSZP did all the heavy lifting for the combined ticket turned out to be false, at least based on the new returns. DK and E14-PM together garnered 18% of the votes as opposed to MSZP’s 10.92%. A rather substantial difference. EP-valasztas 2014-2It is also clear that the relatively good showing of the United Alliance in Budapest was due to the two smaller parties. This time around DK and E14-PM received 26% of the votes as opposed to MSZP’s 11.5%. DK ran second behind Fidesz in the capital (13.1o%), very closely followed by E14-PM (13.07%). Which party won in which district? It seems that Gordon Bajnai’s party was strong in the more elegant districts of Pest and Buda: the Castle district, Rózsadomb, downtown Pest, and Óbuda. Gyurcsány’s party won in less affluent districts: Köbánya, Újpalota, Csepel. Altogether DK won in nine outlying districts.

DK also did better than MSZP in several larger cities: Debrecen, Győr, Nagykanizsa, Kaposvár, Érd, Kecskemét, Pécs, and Székesfehérvár. In addition, there were two counties, Fejér and Pest, where DK beat the socialists. I should add that Fidesz lost only one city, Nyírbátor, where MSZP received 41.12% of the votes to Fidesz’s 32.35%.

As I predicted, very few Hungarians voted. In 2004 the figure was 38.50%, in 2009 36.31%, and this year only 28.92%. There might be several reasons for the low participation. For starters, people took a large Fidesz victory for granted. They did not think their votes could make a difference. Moreover, it was less than two months since the last election, and only the very committed took the trouble to make another trip to the polling station.

As far as the composition of the European Parliament is concerned, it looks as if EPP will have 212 members and S&D 186. So, the candidate for the post of the president of the European Commission will most likely be Jean-Claude Juncker, the man Viktor Orbán would not vote for in the European Council. What is wrong with Juncker? One very big problem is his country of origin: Luxembourg. Justice Commissioner Viviane Reding is also a Luxembourger, and she was very tough on the Orbán government. As Orbán put it: “the commissioner from Luxembourg has only hurt Hungary in the past. So, Hungarians cannot support a Luxembourger.” And Redding was not alone. There was another Luxembourger, Jean Asselborn, foreign minister in Juncker’s government, who criticized Hungary’s media law. It seems that Orbán developed a general dislike of Luxembourgers.

Orbán might not be alone in the European Council in his opposition to Juncker because it looks as if  David Cameron will also oppose him. Mind you, he also has problems with Martin Schulz. I doubt that the anti-Juncker forces will succeed, however, because Angela Merkel has thrown her weight behind him.

As for Juncker, naturally he was asked about his reaction to Orbán’s opposition to his nomination at his press conference today. Juncker started off by keeping the topic away from his own person, saying that “this is a problem that exists between Fidesz and EPP,” but then he told the journalists what was on his mind. “I cannot accept that just because a former minister from Luxembourg got into an argument with the Hungarian government it is en0ugh reason to exclude another Luxembourger from the post of president of the European Council. This is not elegant reasoning.”

Elegant reasoning and Orbán? In his fairly lengthy and exuberant victory speech, the prime minister called the Hungarian MEPs the “advanced garrison of Hungarians who defend the homeland abroad.” He sent them off with these words: “Greetings to the soldiers entering the battlefield!”