Tag Archives: Gordon Bajnai

Viktor Orbán in Hanoi

Viktor Orbán, accompanied by his wife and a 98-member delegation, visited Vietnam and Singapore between September 22 and 27. Here I will concentrate on the trip to Vietnam.

We know that Orbán is a great admirer of the authoritarian regime of the People’s Action Party in Singapore, which has won every election since the introduction of self-government. The regime is known for its low level of press freedom and restrictions on civil liberties and political rights. So, the affinity Orbán feels toward the city state is genuine. In fact, he alluded to the similarities of the Singaporean and Hungarian political systems in his press conference held after his meeting with Prime Minister Li Hsien Loong. But in Singapore Orbán could only ask the rich businessmen of the Lion City to come and invest in Hungary.

The situation is different in Vietnam, where Hungary would like to sell and invest. This is a far more interesting topic, as far as I’m concerned. Also, I was lucky enough to happen upon a long, detailed description of the trip in an English-language Vietnamese source, which contained information the Hungarian government failed to share with the Hungarian public.

In connection with the Vietnamese trip, the Hungarian media has been preoccupied with two topics. First, the luxury VIP charter plane that the Hungarian delegation used and, second, the construction of a 500-bed hospital for cancer patients in Can Tho, the fourth largest city in Vietnam, with an interest-free Hungarian loan of $60 million. The first was greeted by the public as an unnecessary luxury; the second, with outrage.

After the discovery that the plane used by the Hungarian delegation was an Airbus A340 VIP with 100 lie-flat seats, the non-governmental media took every opportunity to show the luxurious interior of the aircraft. Zoom.hu even provided a brief video of the interior, including the restroom. Of course, the public wanted to know how much this cost the taxpayers, but the figures are not available. Journalists did learn from Bertalan Havasi, press secretary of the prime minister, that the plane was not leased. Rather, the seats were individually purchased. Businessmen who accompany Viktor Orbán and government ministers normally buy their own tickets. This time only four ministers traveled to Hanoi and Singapore, but it is unlikely that the rest of the seats were occupied by paying Hungarian businessmen because from a Vietnamese source I learned that “more than 40 businessmen” accompanied the prime minister and the four cabinet members. That probably means that a lot of lower-ranking members of the government traveled on that plane.

Once the excitement subsided over the luxury plane, people started focusing on the construction of the hospital in Can Tho, a project that, given the state of Hungarian healthcare, elicited some four-letter words from a normally more sanguine blogger, a cancer victim, who told his sad story of what he had to go through in order to receive prompt medical attention in Budapest.

Actually, the story of the Vietnamese hospital is quite curious. Orbán announced the construction of the hospital as a brand new agreement between the two countries, but the truth is that it has been on the back burner for exactly eight years. On September 25, 2009, Prime Minister Gordon Bajnai signed an identical agreement with Prime Minister Nguen Tan Dung during the latter’s visit to Budapest. It was also an interest-free $60 million loan, to be paid back in 18 years. In return, Hungarian businessmen would be the general contractors of the project.

A few months after the agreement was signed, elections were held in Hungary and Viktor Orbán’s Fidesz won. It was during the second Orbán government (2010-2014) that bidding on the project began, a process that was not exactly transparent. As 24.hu found out, the tender, despite its size and international significance, was announced only on the website of the Chamber of Commerce and Industry of Békés County. Only two companies applied. Five years ago the winners, a consortium of Novotrading Medical Kft. and KÉSZ Group, won the tender. The latter advertises itself as “one of Hungary’s largest construction companies,” which “built the Nation’s Main Square.” Novotrading Kft. is a bit more mysterious since it is registered as a wholesaler of pharmaceuticals and medical products.

But something went very wrong. KÉSZ Group might have done a decent enough job on the reconstruction of Kossuth tér, but building a hospital in Can Tho was a very different cup of tea. The city is situated in the Mekong Delta, and it is built on marshy land full of canals. It has even a “floating market” that can be approached only by boat. Structures must be built on piles. Apparently because of a faulty calculation, the strength of the piles was misjudged. Even before the construction began, the mistake was discovered and the tender was cancelled. Although the Vietnamese were still interested, the Orbán government abandoned the project.

Whether Hungarian construction companies are today better equipped to deal with the special project of building a large hospital on piles in the Mekong Delta I have no idea, but the Vietnamese are still enthusiastic about the project, especially since Hungary, in addition to the $60 million, promised a further loan of $300 million, which may be increased in the future.

And finally, a few tidbits that Viktor Orbán and his entourage failed to pass on to the Hungarian people. First, Viktor Orbán’s trip was an important event in Hanoi. At least this is the impression I got from the very enthusiastic description of the visit by vietnamnet.vn. Orbán was received by the president, the president of the national assembly, the prime minister, and the general secretary of the Vietnamese Communist Party, Nguyen Phu Trong. He is the most powerful person in Vietnam since, in addition to being the general secretary of the party, he is also the secretary of the Central Military Commission and the de facto head of the Politburo.

General Secretary Nguyen Phu Trong receives Viktor Orbán / Source: vietnamnet.vn

Thanks to a Vietnamese news site, we know that Nguyen Phu Trong gave him “a warm welcome” and thanked him for “the Hungarian people’s valuable and efficient assistance to Vietnam’s liberation cause and nation building.” The party secretary “showed his support for stepping up the ties between the two governments and the ruling parties.” He also “spoke highly of the recent signing of a memorandum of understanding on cooperation between the two ruling parties and expressed his hope for furthering the ties with the Communist Party of Vietnam and heightening the bilateral relations in the coming time.” Well, well. What a surprise. Viktor Orbán is signing a memorandum of understanding between Fidesz and the Vietnamese Communist Party. The man whose government tried to banish the red star from Heineken’s logo and forced the issue of the red star all the way to the European Court of Human Rights, where his government roundly lost the case. Or, the man who insists that he rebuilt the train between Felcsút and Alcsútdoboz just because “the communists destroyed it.” President Barack Obama received Nguyen Phu Trong in the Oval Office in 2015, but surely he didn’t sign any “memorandum of understanding” with the general party secretary of Vietnam. Hungary’s prime minister didn’t have any such compunctions.

Orbán is at home with the extreme left as well as the extreme right. His sympathies for the extreme right were most likely demonstrated in a message he posted on his Facebook page while still in Hanoi: “Budapest gratulál // Budapest gratuliert!” TASS, the Russian news agency, was so intrigued by this “laconic” message that it devoted a whole article to it. As they wrote, “Viktor Orbán mysteriously congratulated Germany on the last elections to the Bundestag. It remains unknown whom Orbán was congratulating: German Chancellor Angela Merkel … or the right-populist party Alternative for Germany.” I believe that TASS had an idea what the right answer was. So do I.

September 28, 2017

MSZP’s László Botka in Brussels

László Botka has become a superbly self-confident man since he received overwhelming support from MSZP’s delegates to the party congress less than a week ago. At the press conference he gave in Brussels, he identified himself as “Hungary’s candidate for the premiership.” To clarify his status, at the moment at least five politicians are vying to replace Orbán: Gergely Karácsony (Párbeszéd), Lajos Bokros (MoMa), Tamás Lattmann (representative of civic society), Gábor Vona (Jobbik), and László Botka. These are just the declared candidates, but if at the end each opposition party has a separate party list, even Ferenc Gyurcsány, as leader of DK, might be one of the challengers. This, of course, is just an aside to show that MSZP isn’t paying much attention to reality. They are in a state of euphoria, which might not be warranted. In fact, several opinion pieces appeared lately describing Botka as the man who will oversee the total disintegration of the party. Or, a more charitable opinion, in a couple of years no one will remember who László Botka was.

I’m not so pessimistic, but I’m watching with growing concern the MSZP candidate’s moves. For example, I find it an annoying socialist habit to fight Fidesz by trying to appease its voters with the slogans of Fidesz itself. Socialist politicians should have learned by now that this kind of strategy leads nowhere.

Here is one example. The Hungarian public has heard nothing else in the last seven years but that the European Union is on its last legs. And yet we have ample evidence that the great majority of the Hungarian public is still pro-EU, despite the massive anti-EU propaganda. So, it would be logical to have an election campaign resting on the slogan: “Either Europe or Orbán.” To launch such a campaign, however, would require a full embrace of the Union. One shouldn’t be uncritical, of course, but for Botka to say, after arriving in Brussels, that he is “watching the performance of the European Union with apprehensive criticism” is not exactly a good beginning. What followed was no better. Botka announced that a significant number of citizens had lost their trust in the democratic institutions of the EU, which in turn is responsible for the upsurge of populism. I wish politicians would consider the truth of their political rhetoric before they open their mouths. Does Botka really think that a lack of trust in democratic institutions led to the rise of populism? It is enough to look around the world, from Russia to the United States, to know that this assertion simply cannot be true. After that introduction, to say that he is “deeply committed to the European Union” sounds hollow. Moreover, some of his suggestions to “solve” the crisis could have been uttered by Viktor Orbán himself. This is not the way to distinguish yourself from your political opponent.

Prime Minister Candidate of Hungary

Let’s take another example. The government media discovered that not only would László Botka be in Brussels. George Soros also stopped by for a short visit before flying on to Budapest. What a great opportunity for the kind of journalism practiced in Orbán’s Hungary. The M1 TV station announced that “László Botka and George Soros will negotiate on Wednesday.” Magyar Hírlap published as front-page news that “At last Soros and Botka will find each other in Brussels.” Practically all government papers carried the same news, insinuating some secret cooperation between MSZP and George Soros. What does a good politician do in a case like that? Does he keep insisting that he has never in his life met George Soros? Does he excuse himself by emphasizing that he has never been a beneficiary of Soros’s largesse and that MSZP has never received any money from “the financial investor or his circles”? Surely not. In fact, if he were a brave opponent of Viktor Orbán, who has been demonizing George Soros, he would simply brush aside the whole issue as a typical example of primitive Fidesz propaganda and say that whatever dirt they have been throwing at Soros is undeserved and disgusting. But, no, the brave socialist candidate is afraid that perhaps Fidesz-infected citizens who really think that Soros is the devil incarnate will not like him if he defends the founder of Central European University.

The most important meeting that István Ujhelyi, a MSZP member of the European Parliament, secured for Botka was with Frans Timmermans, who is well versed in Hungarian affairs. Timmermans is one of the most resolute critics of the Orbán regime, and therefore I’m sure it was unnecessary to convince him that “the socialist party and the democratic opposition are interested in the restoration of the rule of law.” What is more difficult to decide is what Botka meant by his request that “the Orbán government should be punished and not Hungary.” How can that be achieved? Viktor Orbán and his government represent the country, so whatever “punishment” is meted out to that government for any infraction will unfortunately affect the whole country and its population. Botka’s request was a timid response to the accusation that the opposition is lobbying in Brussels against its own country. Such pious pronouncements will not change the opinion of Fidesz supporters about the opposition’s alleged unpatriotic actions.

In addition to Timmermans, Botka also met with Marita Ulvskog, vice president of the Progressive Alliance of Socialists and Democrats in the European Parliament. She is also the vice-chair of the EP Committee on Employment and Social Affairs. This meeting was logical given Botka’s emphasis on a truly socialist agenda for MSZP, as opposed to the more centrist or even Third Road approach of the party under Ferenc Gyurcsány. The very low wages in Hungary and the lack of employee protection is truly appalling, and since 2010 the situation has only deteriorated. For example, the total destruction of the power of unions is a relatively new development. What I don’t understand, however, is what Botka was driving at by pointing out “the incredible inequality that exists between member states” as far as the level of wages is concerned. Currently, it is Jobbik that is in the midst of a campaign for equal wages for equal work in all member states of the European Union. Anyone with a modicum of knowledge of economics knows that this is utter nonsense. It is one thing to support the creation of a union-wide social network, but complaining about small or medium-size member states “being powerless to defend the interests and wages of employees of multinational companies” is simply unfair, at least as far as Hungary is concerned, where employees working for multinational companies are better off than those who work for the “patriotic” Hungarian oligarchs.

At home Botka stepped on quite a few toes in the last couple of days. I have no idea what he had in mind when he answered the question of whether he would consider placing Gordon Bajnai, an economist and businessman who proved to be a popular and very effective prime minister in 2009 and 2010, on a common list of politicians of the opposition parties. He said: “Under no circumstances would I place Gordon Bajnai, János Kádár, Mátyás Rákosi, or Miklós Horthy on the list.” What on earth prompted Botka to utter this nonsense? Soon enough Bajnai placed this witty retort on his Facebook page: “I would ‘like to reassure the worried public that I have no desire to be placed either on the list of MSZP or on those of MSZMP, MDP, or even the Peyer Pact.” For those unfamiliar with these acronyms, MSZMP was the communist party under János Kádár between 1956 and 1989; MDP was the party of Mátyás Rákosi between 1948 and 1956; the Peyer Pact was a political arrangement between the Bethlen government and the Hungarian Social Democratic Party in 1921.

I don’t know, but Botka’s first few days are not promising. Popular reactions on Klub Rádió, ATV, and Hír TV are mixed, but there are many who don’t like Botka’s attitude. Let’s hope he and his party realize, and quickly, that this is not the best way to win the hearts of voters.

June 1, 2017

Will communist-era internal security files finally be open in Hungary?

At last the archives of the huge internal security network, currently stored in the Alkotmányvédelmi Hivatal or AH (Constitutional Defense Office), an idiotic name for one of the many offices dealing with national security, will be transferred to the Állambiztonsági Szolgálatok Történeti Levéltár/ASzTL (Historical Archives of the National Security Services). On March 6 a lengthy report on the “study of the pre-1990 data preserved on magnetic tapes” was released by a working group of the National Remembrance Committee and the Historical Archives of the National Security Services. Three days later the Hungarian government approved the transfer of the material.

Over the years socialist-liberal governments, at least halfheartedly, supported opening the archives, but right-wing governments categorically rejected the idea. For example, one of the most vociferous opponents of opening the archives of the feared III/III department of Kádár’s ministry of interior was Péter Boross, the arch-conservative interior minister and later prime minister in the early 1990s. As for Fidesz, the Orbán government’s reluctance is demonstrated by the fact that in the last seven years LMP turned in 14 proposals to make all documents pertaining to the workings of the internal security apparatus of the Rákosi and Kádár periods accessible. These proposals never got out of the parliamentary committee on judicial affairs.

The present report focuses on one aspect of the vast archival collection of the secret services: “the study of the magnetic tapes.” The existence of these tapes first came to light in 1995, although the initial reaction was one of denial. At that point I belonged to an internet political discussion group in which one of our members, who had been employed by the ministry of interior, had first-hand knowledge of the existence of such tapes. Once their existence could no longer be denied, those who didn’t want the content of these tapes to be revealed announced that they could no longer be read because the recording was done on by now obsolete equipment. Of course, this was just a diversionary tactic. Years later, in 2007, it was Prime Minister Ferenc Gyurcsán who at last set up the so-called Kenedi Commission, a group of researchers familiar with the history of the internal security apparatus. It was that commission which asked a group of IT experts to find a way to make the tapes readable. One of these tech gurus gave a fascinating description of how they managed to accomplish the task. By the way, I should mention that the material on these tapes was made secret until 2060. I don’t know which so-called democratic government decided that the “secrets” of the Kádár regime must be preserved until 2060 (when, presumably, everybody who’s implicated will be dead), but I will note that the Kenedi Commission was promptly dismantled by the Orbán government.

As opposed to other post-communist countries, Hungary allows only extremely limited access to communist-era documents. The East German archives were opened immediately after the regime change. Somewhat later both the Czechs and the Slovaks put all their material online, and anyone can comb through it to his heart’s content. Knowing the “enthusiasm” of the Fidesz government for transparency, I doubt that such a situation will exist in Hungary as long as Viktor Orbán is prime minister.

The present system is quite restrictive. Individuals can ask for their own file if such a file exists. If in that folder he finds a cover name, he can ask for the informer’s real name. But an ordinary mortal can conduct “research” only if he can prove that the person he is researching is a public figure. And only approved historians who can demonstrate a real need to do research in this field are allowed to use the stored archival material. Details of the procedure and the appropriate sections of the 2003 law are given on ASzTL’s website.

Even if one gets permission to do research on public figures to find out whether they were informers, the 2003 law governing accessibility to this material was written in such a way that even if it is perfectly obvious that X or Y was an informer, it is almost impossible to prove it. The law demands supportive material that more often than not is simply not available. For example, the law requires a signed agreement between the security services and the informer or a handwritten report from the agent. It has often happened in the past that the “maligned victim” dragged the historian to court and won because these demands were not met. Historian Krisztián Ungváry claims that as long as the 2003 law is in force nothing will change. For the time being all public figures can rest easy: their “sterling reputations” are being protected by the Hungarian government.

The procedure a historian must go through at ASzTL reminds me of my own experience in the Hungarian National Archives in the 1960s. One had to define one’s research topic quite narrowly–in my case, the foreign policy of the Friedrich government in 1919. I wanted to look at the transcripts of the cabinet meetings. Instead of giving me the full transcripts, the staff extracted only those parts that dealt with foreign policy. One was at their mercy. I assume the situation is similar at ASzTL. Let’s assume that in order to get a full picture of a specific case one needs to look at files on others. Surely, according to the present rules, this is not allowed.

Some people claim that nobody is interested in the issue. Who cares? people say. It was a long time ago. Why disturb the past? It is over with. At one point Bence Rétvári (KDNP), at the time the political undersecretary of the justice department, came up with the brilliant idea that the whole archives should be dismantled and that anyone who has a file should just pick it up and take it home. This kind of talk totally disregards the fact that the history of those 40 years requires an understanding of the enormous network which over the years might have had about 200,000 members. Ever since 1990 the issue has been discussed back and forth, committees have been formed, but governments made sure that the public would know as little as possible about the potentially checkered past of present-day politicians.

In 2002, after the public learned that Prime Minister Péter Medgyessy had been a paid officer of the counter-intelligence unit of the ministry of interior, a committee was set up that became known as the Mécs Committee after Imre Mécs (SZDSZ), its chairman. The commission, because of Fidesz’s obstruction, got nowhere. But apparently those members of the commission who had access to the files found at least ten politicians from the post-1990 period who had worked for the internal security forces.

In fact, as far back as 1990 Miklós Németh, the last prime minister of the old regime, was said to have handed over a long list of former informers who had important positions in the newly formed parties and later became members of parliament or members of the Antall government. This list of informers was leaked by someone called “Szakértő 90” in 2005 and is still available on the internet. In the interim historians have published several articles about the shady past of public figures–for example, János Martonyi, foreign minister in the first and second Orbán governments. He was one of the people who successfully sued Krisztián Ungváry.

It would be high time to set the record straight, but I have my doubts.

March 12, 2017

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.