Tag Archives: Győző Orbán

A new job for OLAF? Győző Orbán, the father of Viktor Orbán

Today’s Financial Times carries a lengthy portrait of Viktor Orbán by Neil Buckley, FT’s East European editor, and Andrew Byrne, the paper’s correspondent for Hungary, Romania, and Western Balkans. In this overview of the political career of Hungary’s maverick prime minister, the authors quote George Soros, who said that Orbán “started really going wrong when he made his father rich by giving him a quasi-monopoly on road-building materials, which was a big source of wealth. That’s when [he] started building a mafia state. It’s really when he actually gained power.”

As a matter of fact, immoral financial dealings have been part and parcel of Orbán’s whole career. In 1990 the new democratic parties were penniless and, in order to conduct their activities, they all received a large amount of seed money. Fidesz’s share was half of a very valuable downtown building, which the party sold for cash. Out of this money, quite fraudulently, a few million forints was given to Viktor Orbán’s father, Győző Orbán, who was short of the cash he needed to purchase a stone quarry owned by the state, of which he was the manager at the time.

As time went by, Orbán’s financial appetite grew. After he became prime minister in 1998, he was in the perfect position to work on fattening himself, his friends, and his family through inside information. He was especially interested in agricultural land because he knew that the landowners would receive considerable EU subsidies in the future.

His father’s quarry, just as George Soros remembered, became practically the sole supplier of crushed stone to state-owned companies involved in government-funded road construction. Once all this was discovered, there was an outcry, especially after the 2000 publication of a book on the shady affairs of the “first family.” Orbán, who in those days was a great deal less brazen, had a talk with his father which, according to the prime minister, wasn’t pleasant. His father couldn’t understand why he couldn’t continue supplying crushed rock for government projects.

Father and son

Although there has been less talk about Győző Orbán’s business activities since his son’s return to power, some investigative journalists are convinced that Orbán’s father still has his finger in the “government project” pie. The journalists who are most curious about the business affairs of the extended Orbán family work for Direkt36. It is a center for investigative journalists who work hand in hand with 444, the internet news site. Direct36 has a separate column called “business concerns of the Orbán family.” Two journalists, András Pethő and Blanka Zöldi, are especially busy collecting data on the elder Győző Orbán and his two sons, Győző, Jr., and Áron. Many of their articles can be found here. (As a point of linguistic and psychological curiosity: Győző is the Hungarian equivalent of Victor/Viktor. So Elder Győző named two of his sons after himself.)

In May of last year the journalists of Direkt36 reported that Győző’s crushed rock and concrete building materials were being transported to government projects, most of which are financed by European Union funds, like sewage systems and railroad construction in Érd, Budapest, Jászberény, and Püspökladány. While visiting these sites, the journalists noticed trucks with the name “Nehéz Kő” (Heavy Stone) delivering large amounts of crushed rock and building materials to the government projects. The journalists found out that the trucking company belonged to Áron Orbán (subsequently, it seems, Győző Orbán became the owner), and they suspected that the material Nehéz Kő was carrying came from Dolomit Kft., Győző Orbán’s company.

Dolomit was active throughout the country, but the journalists were especially interested in a mega-project, the construction of a 53 km  railroad line between Szántód and Balatonszentgyörgy with an estimated cost of 72.4 billion forints. The work is being done by a consortium of three firms: R-Kord Építőipari Kft., V-Híd Zrt., and Swietelsky Vasúttechnikai Kft. R-Kord is owned by (who else?) Lőrinc Mészáros.

Direkt36 suspected that they had just encountered a tightly-knit family business, but the reporters were unable to get hold of the documentation necessary to show that the elder Orbán was actually doing business with the government. Today, after months of litigation, Direkt36 received proof that, despite the denial by the prime minister, Nehéz Kő is one of the subcontractors of this EU-funded government project. By setting up a trucking company that doesn’t display the Dolomit name, the Orbáns presumably wanted to hide the fact that the material comes from the family company.

Last summer Blanka Zöldi of Direct36 confronted the prime minister with her findings that Győző Orbán is the supplier of stone and building material to important government projects. Viktor Orbán, during that Q&A session, made a distinction between general contractors, subcontractors, and suppliers. Hungarian law forbids, he claimed, the participation of close relatives of important political figures from being general and subcontractors, but not from being suppliers. Clearly, he said, his father and brother have no business dealings with the government. They have a contract with one of the general contractors. But the documents received today show that Nehéz Kő was a subcontractor on the southern Balaton railroad project to the tune of 300 million forints or $1.2 million.

The Demokratikus Koalíció, which helped call attention to the shady business dealings of Viktor Orbán’s son-in-law, István Tiborcz, is ready to turn to OLAF again. The party’s spokesman declared that “there is no civilized, democratic country where, after such a revelation, the prime minister remains in office. … The money coming from [Brussels] goes toward the enrichment of his family.”

This may be the case (although Trump stretches the limits of what it means to personally benefit from political office), but Hungary at the moment doesn’t belong to the group of civilized and democratic countries. In a mafia state, a designation popularized by Bálint Magyar, earlier minister of education, like-minded people in high political office work together for their own and their families’ enrichment. Here we have the quarry business of Győző Orbán, whose initial capital came from his son’s newly-formed party. His company, Dolomit, supplies stone and cement products to government projects, which are being trucked by his company, Nehéz Kő. The goods are taken to the work site of the firm owned by Lőrinc Mészáros, who is suspected of being the stróman or front man of Viktor Orbán. All in the family.

January 25, 2018

Civic courage is returning to Hungary

There were two noteworthy events during the March 15th celebrations, about which I will write more tomorrow. First, a scuffle broke out between Fidesz loyalists waiting for Viktor Orbán’s speech in front of the National Museum and a handful of demonstrators. It was described by the official Fidesz communiqué as “a clash between far-right and far-left elements.” I guess the government party felt it had to distance itself from Fidesz supporters who physically attacked the demonstrators as well as from those people who screamed “Go to Dohány utca,” the street where the “Great Synagogue,” the largest in Europe, is located. The other event was the large demonstration organized by civic groups but supported by all democratic parties with the exception of LMP. It was especially welcome that the organizers came out with a list of demands they propose to put forth for a popular referendum, which could be the first step toward a change of regime. But more about the national holiday tomorrow.

Today I want to call attention to two incidents which may not be earth shattering in and of themselves but which, I believe, signal a change in public attitude. The Hungarian people are beginning to exhibit civic courage.

The popularity of Viktor Orbán and the government is no longer what it was a year ago. Already last year, for the March 15th celebration, either Fidesz or the government hired university students to stand behind Viktor Orbán during his speech. At that point, I assume, they only wanted young faces. This year, however, there seemed to be genuine worry in government circles that the turnout for Viktor Orbán’s speech might be sparse. Robocalls urged people to attend. In addition, KLIK, the employer of all teachers, sent requests (some people claim that it was more an order than a request) to 375 high school principals all over the country to send one teacher and ten students to Budapest to listen to the prime minister’s speech. All expenses would be paid, and lunch would be included. Well, one high school, the Imre Madách Gymnasium in Vác, decided to announce publicly that they will not oblige because “they don’t support or organize student participation in political events.” Of course, some people might argue that a national holiday celebration is not a political event, but we know that this is not the case. Viktor Orbán’s audience comes from the party faithful and his words are addressed to his followers.

A lot of people welcomed this sign of civic courage, including the journalists of Válasz, which is certainly not an opposition paper. But others feared for the jobs of the principal and the 50 teachers who made that decision. And indeed, there was at least one attempt at intimidation by the Fidesz-KDNP mayor, Attila Fördős. He called the principal and vice-principal into his office and demanded to know what kind of “patriotic education” is going on in the school. He said that if he had the power, which thankfully he doesn’t, he would immediately fire them. As it turned out, although it was only the Imre Madách Gymnasium that had the courage to openly announce their opposition to the government’s crude methods, only 44 high schools obliged. The negative feelings toward this latest government or Fidesz ukase are perfectly understandable. There are far too many people who still remember when it was compulsory for students to attend such national celebrations, which included November 7, the anniversary of the Great Russian Revolution of 1917.

Attila Fördős, Fidesz-KDNP mayor of Vác

Attila Fördős, Fidesz-KDNP mayor of Vác

The other story is from the village of Gánt in Fejér County (pop. 860). To people familiar with Hungarian politics, the name Gánt immediately brings to mind Viktor Orbán’s father and his original business venture, a quarry he managed to buy with some financial help from his eldest son’s party. The quarry by now has been exhausted, and Győző Orbán would like to use the empty pit as a landfill site. His goal is to dispose of some 250,000 tons of refuse there a year, mostly bricks and concrete, which must be broken up by heavy equipment. Apparently about 1,000 tons could arrive daily and be processed on the spot. Many people who bought property nearby, close to a nature preserve, are mighty unhappy about the elder Orbán’s latest business venture.

So, the village of Gánt organized a forum to discuss the matter. To their surprise Győző Orbán, in the company of his youngest son Áron, showed up for the meeting. Orbán tried to convince the participants that everything will be fine, but they were adamant. The dust would settle everywhere–on their vegetable gardens, on their vineyards–and the noise eight hours a day would be unbearable. All hell broke loose when Győző Orbán announced that the property is his and he can do whatever he wants on it. After a while Győző Orbán left, followed by his son. He refused to answer questions from “malicious journalists” unless they give two million forints to the old folks home in Gánt.

Orbans departing

Győző and Áron Orbán leaving the Gánt town meeting

But even before the departure of the Orbáns, those present at the meeting pretty well decided to fight the father of the prime minister. One of them already hired a lawyer, and the others put together, right on the spot, a sizable amount of money to cover the initial expenses. They also organized an association to represent their case most forcefully. I am convinced that a year ago such an encounter wouldn’t have happened. I’m also sure that Győző Orbán never in his wildest imagination thought he would be so forcefully opposed and at the end unable to prevent a law suit. Otherwise, he wouldn’t have shown up at the town meeting. It seems that times really are changing in Hungary. The prime minister’s father can no longer ride roughshod over the people, unopposed, to achieve his aim.

The Fidesz robber barons. Part III: The Orbán family’s enrichment 1998-2002

Today I will return to József Debreczeni’s book on “The Fidesz robber barons.” This time the topic will be the enrichment of the Orbán family, which included Viktor Orbán’s father, Győző, between 1998 and 2002–that is, while he was prime minister.

Debreczeni, who for years  taught high school history before he became a politician and subsequently a writer on politics, notes that although political corruption has had a long history in Hungary, the highest political dignitaries did not dirty their hands with money grubbing. Not so Viktor Orbán who, as investigative journalists discovered, systematically exploited his position for financial gain.

Just to put things in perspective, here are a couple of figures. In 1998 Orbán and his wife had 5.5 hectares of agricultural land. Four years later they had 11.5 times more. In 1994 the couple purchased an apartment for 563,000 forints in downtown Budapest. In 2002 they purchased a villa in the most elegant section of Buda for 75 million forints, which they enlarged and renovated to the tune of tens of millions.

Viktor Orbán’s father Győző–which by the way is the Hungarian equivalent of Viktor–had two smallish quarries worth 98 million forints. Four years later, he was worth 666 million forints.

The Orbáns were involved in two separate business ventures. Neither is pretty.

Their first business venture took them to Tokaj. Dezső Kékessy, a wealthy Hungarian businessman from Switzerland who left Hungary after the 1956 revolution but returned to Hungary after 1990, was looking for business opportunities. Tokaj seemed like a good prospect. During the socialist period Tokaj, which had had a very good name before the second world war, lost its luster due to the general deterioration of viticulture in Hungary. The stock was old, so vineyards could be had for relatively little money. Kékessy and Orbán met and became friends and eventually business partners. Well, that’s not quite precise. On paper Kékessy’s business partner was Orbán’s wife, Anikó Lévai. I might add that Orbán eventually named Kékessy ambassador to France.

The Orbáns’ share in the company that Kékessy formed was relatively small, but the Orbáns naturally became key business partners due to Orbán’s position. First, he made sure that the grapes the company produced found a market. There was an ailing state company in Tokaj that was still the major buyer of grapes in the region. Since the head of the state bottling company was appointed by Orbán, they had a ready market for their grapes. In fact, in 2000 the state company bought grapes only from the Orbán-Kékessy vineyard. Orbán also made sure that the state bottling company had money to buy their grapes.  In 2000, the government financially strengthened the ailing company with the injection of 1.5 billion forints. In 2001 another 2.5 billion was invested in the company. And it kept buying the prime minister’s grapes, even though there was a glut in the wine market.

Tokaj wine region / Wikipedia.org

Tokaj wine region / Wikipedia.org

The Fidesz government also offered what amounted to a “friends and family” package. István Stumpf, who headed the prime minister’s office in those days, had a large, extended family in the region, some of whom owned vineyards. In 1998 the Stumpf family managed to sell only 5 million forints worth of grapes, but after cousin István became an important man in the government they did exponentially better. In 2000 their sales were 17.7 million and in 2001 30.6 million. Two Stumpfs were actually employees of the bottling company, and it was their cousin in Budapest who approved pumping billions into the state company.

But that wasn’t all. The Orbán-Kékessy company asked for state subsidies for the improvement of their vineyards. The owners got together to discuss business matters, often in Viktor Orbán’s apartment. It was during one of these meetings that Orbán warned his business partners to be cautious about the subsidies: “we shouldn’t be the ones who get the most.” Obviously he was worried about someone discovering his interest in the company. So they didn’t get the most, only the second most. In 2001 570 people received subsidies for vineyard improvements. Only two got over 40 million forints. The first received 44,636 forints, and the second, the Orbán-Kékessy concern, 41,475. In addition, on two other occasions their company received an additional 64.5 million forints in subsidies.

The other setting for the growing Orbán empire was Felcsút, the village where Orbán spent his early childhood. Of course, nowadays we hear mostly about the Puskás Football Academy and the huge stadium for 3,500 in a village of 1,800 inhabitants. But twelve years ago the expansion of Orbán’s holdings was still in its infancy. Here too, the launch of the Orbán empire was shady. In 2001 the Orbáns purchased 54 hectares of agricultural land for half the price of what land sold for in those days in the County of Fehér. Anikó Lévai purchased the land from Sándor Bognár, the head of a large state farm in the vicinity (an Orbán appointee). Two weeks after Bognár sold the land to the Orbáns, the state farm without competitive bidding was privatized. And who became the majority owner of the farm? Sándor Bognár.

But that is not the end of the story. Felcsút and five villages around it received a 2.7 billion forint state subsidy for water control. Apparently flooding is not a problem in the area. In fact, these villages receive less than the average amount of precipitation. The ministry in charge put the Felcsút application in thirtieth place on their list of ranked applications. Sándor Pintér, minister of the interior, stopped the discussion and made the documentation of the parliamentary commission a state secret. Against the recommendations of the ministry he placed the Felcsút project at the head of the list.

After Felcsút received this subsidy, the puzzle of the low price of the land that Sándor Bognár sold to the Orbáns was solved. It turned out that Bognár had purchased the land from two sisters who had additional acreage, which now the local government purchased on the government subsidy for the purpose of building rain collectors. The sisters received 10 million forints for about three hectares, seven times the average price of land in and around Felcsút. This is how the two sisters got compensated for selling their land for half price to the Orbáns and the Hungarian taxpayers footed the bill.

As a result of the large government investments in and around Felcsút, real estate prices have skyrocketed. The land the Orbáns bought for 5 million is today worth 34.4 million. It is also possible that the status of this land might be changed from “agricultural” to “land for development.” In that case it could be worth 400 million forints.

And finally, a few words about Győző Orbán’s business ventures. Dunaferr, a steel plant, was in those days still a state company. After Orbán took office the management of the company was changed. Soon thereafter Dunaferr signed a five-year contract with Győző Orbán’s quarry to supply gravel and concrete for Dunaferr. He was the low bidder but later it turned out that the contract didn’t include transportation costs that were separately billed. These costs had to be considerable because Orbán’s quarry was a great deal farther from Dunaferr than the company that had supplied the materials previously.

It turned out that the elder Orbán also supplied material for road construction as a subcontractor. His son later denied his father’s business connection with Vegyészgép, which received the construction job without competitive bidding. But Viktor Orbán didn’t tell the truth. Győző Orbán, in anticipation of the large order from Vegyépszer, managed to get the rights to quarry rock and gravel. Once his son warned him about the dangers of getting state orders, he passed these rights on to one of his men, who established a new company called Femol Kft.

As the saying goes, the apple doesn’t fall far from the tree.

The Orbán family’s enrichment with a little government help

Today I read an editorial in Magyar Nemzet on the fate of Silvio Berlusconi.  It seems that Anna Szabó, the author, who is a great admirer of Viktor Orbán, forgot that the Hungarian prime minister is a friend of Berlusconi. Because she found Berlusconi’s sentence far too lenient and expressed her utter astonishment that the Italians, although they have long known about Berlusconi’s “dirty affairs,” only now were ready to punish him for his sins.

In the final paragraph of the editorial Szabó bemoans the fact that in Hungary many corruption cases have gone unpunished, pointing the finger at Ferenc Gyurcsány and Gordon Bajnai. She lists among their sins the fate of the Posta Bank, MSZMP’s former retreat in Balatonőszöd, the Budapest Airport, and “stealing parts of Lake Velence’s shores.” In case you draw a blank, it was at Lake Velence that the Israeli businessman Joav Blum and his American partners who included  Ronald S. Lauder hoped to build a luxury hotel and a casino.

If I were Anna Szabó I wouldn’t mention these cases right now because practically all the accusations she hurls at the former prime ministers are without foundation. On the other hand, in recent days Hungarian newspapers have been full of descriptions of certain business activities of members of the Orbán family that are suspect.

I am not an overly suspicious person. In fact, I can even be called naive when it comes to questionable business deals. On the one hand, I’m inept in business matters and, on the other, since I’m not in the habit of cheating or stealing from others I find it very difficult to imagine people whose daily activities include such shady activities.

I have encountered people over the last twenty years who have floated fanciful stories about Fidesz and the “boys.” I know a woman who to this day is convinced that a group of MSZMP leaders allowed the formation of Bibó College, the dormitory where Fidesz was born, in order to develop “trustworthy cadres” who would eventually be entrusted with salvaging the Kádár regime’s essential features. Well, I think this is madness.

On the other hand, I take much more seriously the persistent allegations that seem to be well founded about the money Fidesz got from the sale of the building the party received from the Hungarian state in 1992. Here only one thing is not entirely clear. How much of the 750,000 million (in 1992!!!) remained in the party coffers and how much disappeared into private pockets. We know only that László Kövér didn’t allow top party officials to take notes while Viktor Orbán tried to explain the distribution of the money among various Fidesz companies. But Klára Ungár, who was by that time highly suspicious of the activities of Lajos Simicska, László Kövér, and Viktor Orbán, tried to keep the figures in her head. She found that at least 170 million was missing from the total. We also don’t know what happened to the rest of the money that was invested in several companies that were eventually liquidated under very suspicious circumstances.

It is also another fairly well established fact that some of the money went to help Viktor Orbán’s father, Győző, purchase the state quarry he ran before the change of regime. It was this quarry in the village of Gánt that established the Orbán family’s fortune. Since then Győző Orbán has been able to add various enterprises to his original business and has become very rich indeed. According to Krisztina Ferenczi’s calculation, two of the businesses in which the older Orbán has a majority share (the quarry in Gánt and a company that produces peat) netted 2,192 billion forints last year. In addition to these two companies, there is another one that is owned exclusively by Viktor Orbán’s father and his two young brothers. That company was also profitable, bringing in an additional 400 million.

The Orbán Quarry in Gánt

The Orbán Quarry in Gánt

Győző Orbán also owns land in Felcsút adjacent to a parcel of land owned by Viktor Orbán. The VIP parking area of the Aranycsapat Stadium will be located on this piece of land. (Aranycsapat means Golden Team, the nickname of the Hungarian team that became world famous in the mid-1950s and on which Ferenc Puskás played before he left Hungary after the 1956 Hungarian revolution.)

The prime minister’s father also purchased part of the former estate of Archduke József of Habsburg. The summer palace of the Hungarian Habsburg family was destroyed during the war and the 7,000 acres that went with it was distributed among the local landless peasants. Only the manor house and 13 hectares were retained by the Hungarian state. Perhaps we shouldn’t be terribly surprised that both the manor house and the 13 acres ended up in Győző Orbán’s hands. As far as I know, the manor house is under renovation. Rumor has it that it is being converted into a luxury hotel.

And then there is the Orbán family’s controversial peat business. The first mention I found of the marshlands that are necessary for peat production was in the March 5 issue of HVG. Bernadette Szél (LMP) discovered that Fidesz was preparing a bill that would lift the protection of marshlands and allow the mining of peat.  By July it became public knowledge that the prime minister’s father and two brothers already owned about 200 acres of marshland in the County of Zala. Győző Orbán purchased the land in 1999 during the premiership of his son. The head of the Mining Authority was for a while a silent partner in this peat business. They and others purchased the land for practically nothing. In 2003 the area was declared to be protected, destined to be converted into a national park. All of the landowners were forced to sell their land to the state, with the exception of the Orbáns.

Bernadette Szél went to look at this land, which consists of several thousands of contiguous hectares of marshland. The Orbáns’ 200 acres that presumably were so different from all the others lie in the middle of this large area. It seems that the Orbán company will have a peat mining monopoly in these parts. At the moment the company, in addition to mining, is building a helicopter pad. Business is good. In 2012 there was half a billion forint profit.

And, as people say, “if we just knew the whole truth.” I think we would be astonished at the depth of corruption of the man who is currently the prime minister of Hungary.