Tag Archives: Ildikó Vida

Hungarian prosecutors found the lone culprit in the corruption scandal

Between October 17  and November 13, 2014 I wrote four posts on the corruption scandal that beset U.S.-Hungarian relations and contributed to the loss of popularity of Fidesz and the Orbán government a year ago.

It all started with an article that appeared in Napi Gazdaság, precursor of today’s Magyar Idők, then owned by the Századvég Economic Research Group headed by the economist-businessman Péter Heim. The article accused several American companies of tax evasion and fraud and indicated that an investigation into these companies by the National Tax and Customs Office (NAV) was underway. It turned out later that the information, wherever it came from, was wrong. If anything, the opposite was true. American companies found widespread VAT fraud in the food processing industry, where the VAT is exceedingly high (27%). They were the ones who complained in vain at NAV and other government agencies. The Hungarian government did nothing. The complaints of American businessmen eventually reached the U.S. government, which decided to invoke Proclamation 7750, an executive order signed by George W. Bush in 2004 that gives the State Department power to ban corrupt individuals and their families from entering the United States. The U.S. normally keeps such action quiet, but as a result of either Napi Gazdaság‘s or the Hungarian government’s misjudgment of the situation, the decision was made to reveal that six Hungarian citizens had been banned.

Soon enough it became known that Ildikó Vida, head of NAV, was on the list. We also learned that an unnamed businessman, who in total panic ran to ATV to tell his sad story, was among the six. Vida admitted that some of her high-ranking colleagues at NAV were also on the list. Another man whose name was often heard in connection with the infamous list was Péter Heim, owner of Századvég Economic Research. This suspicion found some support when, a month after the the scandal broke, Heim sold his shares in Századvég. My opinion at the time was that, in addition to Vida and the unnamed businessman, two officials of NAV (both women) and Péter Heim were most likely on the list.

The Hungarian government insisted that they could not investigate the cases of these people because the U.S. government refused to release the names of those on the list. Of course, as we learned from some cabinet members, the upper echelon of the Fidesz team knew full well who had been banned.

It turns out that, after all, an investigation of the case began immediately after the scandal broke. And now, after a whole year, the prosecutor’s office of the capital district announced their findings. They didn’t reveal the suspect’s name but gave enough information about him that in no time everybody knew that the man is Viktor Tábor, a successful businessman, the sole proprietor of Advanced Network Technologies (ANT) whose yearly revenue is over a billion forints. ANT has an excellent reputation with a well-known and well-respected clientele. Tábor is being indicted for committing bribery while pretending to have influence over a certain person. And who is this person? Péter Heim, head of Századvég.

According to the story of the prosecutor’s office, Bunge, an American company that produces cooking oil under the name Vénusz, hired a lobbyist to convince the Hungarian government to lower the VAT on cooking oil and other basic foodstuffs from 27% to 5%. The lobbyist turned to Viktor Tábor, whom he knew had many friends in government circles. Tábor informed the lobbyist within a few days that he had approached Péter Heim, head of Századvég. Heim, he said, would be able to help if Bunge deposited two billion forints into the bank account of the Századvég Foundation. (A former employee of Századvég, the well-respected professor of economics Tamás Mellár, described Századvég as a “money laundering operation.”) However, after an investigation that the prosecutor’s office called very thorough, it was determined that Péter Heim didn’t know Tábor and therefore had no role to play in the corruption scandal. The only suspect is thus Viktor Tábor.

Péter Heim of Századvég

Péter Heim of Századvég

444.hu and other media outlets expressed doubts about the accuracy of the prosecutor’s office’s version of the story. They called attention to the fact that Napi Gazdaság, owned by Századvég, was the newspaper that tried to divert attention away any Hungarian involvement in the case by accusing the American companies of wrongdoing. They also found it suspicious that Heim sold his shares in the company within a month after the outbreak of the scandal. And third, they noted that Tábor said he was asked to deposit the money into the Századvég Foundation bank account, not into his own.

Doubts about the veracity of this official story were further heightened by a telephone interview conducted by Antónia Mészáros of ATV with Péter Heim. 444.hu‘s headline read: “Nobody spoke less convincingly about the expulsion case than that.” Heim kept repeating in answer to every question that “he doesn’t pay any attention to such matters.” He knows that he is innocent, and since he didn’t want to travel to the United States, he never inquired from the American Embassy whether he is on the list. He doesn’t know anything about the ban or any corruption cases. Although he is still the CEO of Századvég, he is not involved in the day-to-day running of the business. He has no idea whether lobbyists approach Századvég or not, and he has no idea why his name popped into Tábor’s head in connection with Bunge’s efforts to reduce the VAT on its products.

The most interesting development in the case is an interview with the so-called lobbyist hired by Bunge. His name is Tamás Torba, and he is an economist who has in the past written articles on economic matters for Magyar Nemzet. So, it was not surprising that Torba approached the paper for an interview in connection with the case.

First, Torba was not employed as a lobbyist. He has been a business partner of Bunge ever since 2012. His job was to try to use communication tools against the widespread fraud in the industry. In early 2013 the Orbán government kept signing “strategic partnership” contracts with different companies, and the idea came up within Bunge’s management that perhaps it might not be a bad idea to see whether such a partnership agreement might help their disadvantaged position vis-à-vis those who cheat on VAT and are therefore able to sell their products cheaper. It was at that time that Torba turned to Tábor, an acquaintance of his. Tábor didn’t think that the government wanted to sign a partnership agreement with Bunge, but perhaps they would be able to achieve a reduction in VAT. The price was 2 billion forints. Bunge immediately distanced itself from such an illegal practice. Instead, Bunge developed its own strategy that involved getting together with all the domestic producers of basic foodstuffs to attack the problem. Torba became the spokesman of this organization.

Torba also talked to important people in NAV about the problem at the request of the American Embassy in Budapest. The diplomats were trying to penetrate the wall of silence in NAV, and they hoped that perhaps Torba could do something. The message Torba delivered was that the U.S. would lend all possible help, including financial and technical, to combat VAT fraud. However, if NAV continues stonewalling, they are ready to use sanctions against those persons they consider culpable.

The prosecutors have made it clear that Ildikó Vida is not a suspect. As they put it, “she is not involved in this case,” which of course doesn’t preclude the possibility that she is involved in some other case. But then, why is she on that infamous list, the reporters asked. The only answer the prosecutor in charge of the case could give was that perhaps the “Americans supposed that no investigation was taking place” and that was the reason Ildikó Vida’s name appeared on the list “when in fact behind the scenes an investigation had been going on ever since the winter of 2013.”

I have my grave doubts about the prosecution’s version of events. I can’t believe that the United States on such flimsy evidence would invoke Proclamation 7750 against these six people. I have the feeling that this will not be the end of the story.

♦ ♦ ♦

Further readings from Hungarian Spectrum:

(1) “Ten Hungarian businessmen and government officials can never enter the United States”

(2) “American-Hungarian relations are crumbling”

(3) “No end to the saga of the Hungarian corruption scandal”

(4) “The tax chief Ilidkó Vida versus the Hungarian government: Who is lying? Most likely both”

The chief of the Hungarian tax office resigns

Today’s been a busy day in Hungarian politics. In the last week or so it was hard to find timely topics, perhaps because Viktor Orbán was on a secret vacation on Croatia’s Mljet Island. He went to the same spot last year, traveling alone and amusing himself by watching football games. But now there is so much news that I don’t know where to start. After some hesitation I decided to write about Ildikó Vida’s departure from the Nemzeti Adó- és Vámhivatal (NAV/National Tax and Customs Office).

Vida was the president of NAV, which turned out to be a hub of government corruption. More than a year ago one of NAV’s employees went public with folders full of documents implicating NAV’s top leadership in tax fraud. I wrote about the case at least twice in November-December 2013: “Tax fraud scandal in Hungary” and “The plight of a Hungarian whistleblower.”

It was not only this brave employee of NAV who noticed that something was amiss in the tax office. Certain American companies also realized that their competitors could undersell them with the effective help of NAV, which “overlooked” their games with value added tax claims. The American businessmen went to the U.S. Embassy to complain. After ascertaining the accuracy of their reports, the U.S. embassy was instructed to call the Hungarian government’s attention to the widespread corruption in NAV as well as in other government and pro-Fidesz institutions. The Hungarian government, despite numerous American complaints, did nothing. It was at that point, in October 2014, that Napi Gazdaság, then owned by Századvég, a political think tank with close ties to Fidesz, revealed that the Americans had informed the Hungarian government that six officials and/or businessmen suspected of corruption had been put on a blacklist of sorts: they were barred from entering the United States. Six of them decided to remain silent, but Ildikó Vida, head of NAV, openly admitted that she was one of them.

NAV

U.S.-American relations hit an all-time low when the Hungarian government demonstrated its unwillingness to cooperate with the Americans in ferreting out corruption. The Hungarians claimed that they couldn’t investigate unless the Americans revealed the seven names, which they knew full well the U.S. authorities were forbidden by law from doing. Viktor Orbán himself got involved when he “instructed” Ildikó Vida to sue André Goodfriend, the U.S. chargé d’affaires in Budapest, threatening to fire her if she didn’t.

But it seems that, despite the belligerence of the Hungarian government, behind the scenes the Állami Számvevőszék (State Accounting Office) quietly began an investigation. They found “serious deficiencies.” That happened in March, and with their revelation the guessing game began. Would Ildikó Vida step down? And if so, when? Well, the guessing game is over. We learned today that Vida gave notice on May 20 and that today was her last day on the job.

She is not going out with a whimper, as her farewell letter to the employees of NAV attests. She talks about “five years of constant struggle” against “ideas entertained by the government concerning the organization and the personnel of NAV.” As usual, the government didn’t bother to discuss these plans with the management. In her opinion, these government plans “endanger the budgetary interests and the functioning of the organization. These were the circumstances that resulted–despite the prime minister’s request to the contrary–in my resignation.” Since in the last two months the government didn’t get around to appointing a new NAV chief, Vida asked one of the deputy chairmen, Árpád Varga, to take over her job as of tomorrow.

The secret of her departure was kept pretty well, except that János Lázár, who doesn’t always know when to keep his mouth shut, two weeks ago talked about a reorganization of NAV for which one needs new leadership. More importantly, from Lázár one learned that the government has far-reaching plans for NAV. These plans are still in a preparatory stage: the government doesn’t know in what ways they will change the method of tax collection; they don’t know what kind of organization will adjudicate tax disputes between taxpayers and NAV–the ministry, an independent organization, or an entirely new office. Everything is up in the air.

But this is how things go in the Orbán government on every level. A month ago Lázár, at a forum for architects, admitted that “the state is in dreadful shape. It is too large. It’s immovable and weighed down.” Confusion reigns on every level of the bureaucracy, mostly because for Orbán loyalty is more important than expertise. They got rid of everybody who served in the administration in the eight years prior to 2010. I suspect that by now Viktor Orbán himself realizes that something must be done and that’s why Lázár announced that far-reaching personnel changes are expected to take place sometime in the fall. Many assistant undersecretaries can say goodbye to their cushy jobs.

We most likely will never know whether Viktor Orbán really entreated Vida to stay, but it is unlikely given the administration’s determination to reorganize NAV. Moreover, Ildikó Vida is a close friend of Lajos Simicska. She followed him as chairman of the tax office after Simicska resigned in August 1999. Given the acrimonious relations between Simicska and Orbán, I suspect that Vida’s days were numbered irrespective of her troubles at NAV. The list of recently sacked friends of Simicska is getting longer and longer.

Hungary as a “field of operation”

Paranoia seems to have swept through the Hungarian government. Fidesz politicians are convinced that the United States wants to remove Viktor Orbán and cause his government’s fall. All this is to be achieved by means of the “phony” charge of corruption.

Recently a journalist working for Hetek, a publication of Hitgyülekezet (Assembly of Faith), managed to induce some high-ranking members of the government to speak about the general mood in Fidesz circles. The very fact that these people spoke, even about sensitive topics, to a reporter of a liberal paper points to tactical shifts that must have occurred within the party.

Their argument runs along the following lines. Until now the Obama administration paid little attention to the region, but this past summer the decision was made to “create a defensive curtain” in Central Europe between Russia and the West. The pretext is the alleged fight against corruption. The Czech Republic, Slovakia, Hungary, and Romania are the targets. Fidesz politicians point to recent Slovak demonstrations against corruption which were “publicly supported” by the U.S. ambassador in Bratislava. Or, they claim, the Americans practically forced the Romanian government to take seriously the widespread corruption in the country. They are certain that the resignation of Petr Nečas, the former Czech prime minister, “under very strange circumstances” was also the work of the CIA.

In its fight against the targeted Central European governments Washington relies heavily on NGOs and investigative journalists specializing in unveiling corruption cases. George Soros’s name must always be invoked in such conspiracy theories. And indeed, Átlátszó.hu, sponsored in part by the Soros Foundation, was specifically mentioned as a tool of American political designs.

To these Fidesz politicians’ way of thinking, all of troubles recently encountered by the government are due solely to American interference. It doesn’t seem to occur to them that the government itself has given plenty of reason for public disenchantment. In fact, the first demonstrations were organized only against the internet tax. Admittedly, over the course of weeks new demands were added, and by now the demonstrators want to get rid of Viktor Orbán’s whole regime.

The Fidesz politicians who expressed an opinion think, I am sure incorrectly, that the Americans have no real evidence against Ildikó Vida and, if they do, they received it illegally. Vida got into the picture only because of the new “cold war” that broke out between the United States and Russia. Hungarian corruption is only an excuse for putting pressure on the Hungarian government because of its Russian policy and Paks.  As for Hungary’s “democracy deficit” and American misgivings about Orbán’s “illiberal state,” Fidesz politicians said that if the United States does not accept Orbán’s system of government as “democratic” and if they want Fidesz to return to the status quo ante, this is a hopeless demand. “Not one Hungarian right-wing politician would lend his name to such ‘retrogression.'”

The latest American “enemy” of the Orbán government is the State Department’s Sarah Sewall, Undersecretary for Civilian Security, Democracy, and Human Rights, who a week ago gave a speech at the Carnegie Endowment for International Peace in which she said that “we [recently] denied visas to six Hungarian officials and their cronies due to their corruption. This action also bolstered public concern, and on November 9th, the streets of Budapest filled with 10,000 protesters who called for the resignation of corrupt public officials.” As soon as Hungarian officials discovered the text of that speech, André Goodfriend, the U.S. chargé in Budapest, was once again called into the Ministry of Foreign Affairs and Trade.

I think it would be a mistake to characterize the American fight against corruption simply as a smokescreen for exerting political pressure on foreign governments. Sewall in that speech explains the potentially dangerous political ramifications of corruption.

Corruption alienates and angers citizens, which can cause them to lose faith in the state, or, worse, fuel insurgencies and violent extremism…. Ukraine …provides [an] illustration of how corruption can both increase instability risks and cripple the state’s ability to respond to those risks. The Maidan Movement was driven in part by resentment of a kleptocratic regime parading around in democratic trappings.

All this makes sense to me, and what Sewall says about Ukraine is to some extent also true about Hungary. But the Fidesz leadership sees no merit in the American argument. In fact, today both Viktor Orbán and Péter Szijjártó used very strong words to accuse the United States of interfering in Hungary’s internal affairs.

"We can't pay as much in taxes as you steal"

“We can’t pay as much in taxes as you steal”

Viktor Orbán sent a message from Belgrade. The prime minister does not know why the United States put aside 100 million dollars for “the preparation of an action plan against two dozen Central- and East-European countries in order to put pressure on their governments.” The United States declared Hungary to be a “field of operation,” along with others. Referring to Sewall’s speech, he expressed his dissatisfaction that he has to learn about such plans from a public lecture. “If someone wants to work together with Hungary or with any Central-European government for a good cause, we are open. We don’t have to be pressured, there is no need to spend money behind our backs, there is no necessity of organizing anything against us because we are rational human beings and we are always ready to work for a good cause.” It is better, he continued, to be on the up and up because Hungarians are irritated by slyness, trickery, and diplomatic cunning. They are accustomed to straightforward talk. (He presumably said this with a straight face.)

Viktor Orbán’s reference to the military term “field of operation” captured the imagination of László Földi, a former intelligence officer during the Kádár regime as well as for a while after 1990, who announced that in secret service parlance “field of operation” means that every instrument in the intelligence service can be used to undermine the stability of a country. The Americans’ goal, as Orbán sees it, is the removal of his government.

Meanwhile the staff of the Ministry of Foreign Affairs and Trade who were brought in by Péter Szijjártó are solidly anti-American. They consider the diplomats who served under János Martonyi to be “American agents” because of their alleged trans-atlantic sentiments. So I don’t foresee any improvement in American-Hungarian relations in the near future, unless the economic and political troubles of Putin’s Russia become so crippling that Orbán will have to change his foreign policy orientation. But given the ever shriller condemnations and accusations, it will be difficult to change course.

Viktor Orbán and László Kövér on the warpath against Washington

While we were snooping around in Felcsút and downtown Budapest over the weekend, Viktor Orbán and his old pal from college days, László Kövér, were working hard to make American-Hungarian relations even worse than they already are.

The offensive started with a letter that László Kövér addressed to American Vice President Joe Biden. In it he complained about Senator John McCain’s speech in the Senate, in which McCain called Viktor Orbán “a neo-fascist dictator.” McCain with this unfounded statement “violated the sovereignty of Hungary.” The lack of respect McCain showed toward one of the leaders of the trans-atlantic alliance is unacceptable, said Kövér. But, he continued, McCain’s outburst is not just the single misstep of an ill-informed senator but “a brutal manifestation of a process which is becoming evident by the statements, gestures, behavior of government officials and persons who are in contact with the Hungarian government.” Kövér in the letter asked Biden to use his influence to temper the statements of government officials. In plain English, Kövér demanded a change in U.S. policy toward Hungary.

Kövér’s letter to Biden was followed by a Sunday interview with an MTI reporter in which Kövér expressed the same opinion, but even more forcefully than in his letter. From the Hungarian government’s perspective, American-Hungarian relations can be improved only by a change in U.S. policy. Hungary is an innocent victim, and therefore its government has no intention of changing its current posture in either foreign or domestic affairs. In this interview he actually accused the United States of playing a concerted “geopolitical game”  in which the U.S. “is using us, the Czechs, the Romanians, and the Slovaks for their plans ‘to make order’ in the immediate hinterland of the front line.” In his opinion, the situation is worse than it seems on the surface because “on the intermediate level of the State Department there are people who have been the opponents and enemies not only of Hungary but also of Fidesz-KDNP.” Fidesz politicians are absolutely convinced that Hungary’s bad reputation at the moment is due solely to antagonistic liberal critics of the Orbán regime who influence the middle stratum of government officials in the State Department. His final word on the subject was: “The key to the normalization of the bilateral relations is not in our hands.”

Today, echoing Kövér’s tirade, Viktor Orbán delivered a speech in the Hungarian Academy of Sciences at a conference commemorating the twenty-fifth anniversary of the Timișoara/Temesvár events in December 1989 which eventually led to the fall of Nicolae Ceaușescu. I must say one needs quite a fertile imagination to smuggle an attack on the United States into a speech on such an occasion, but Orbán managed. He quoted László Tőkés, the Calvinist minister who was the hero of the Romanian revolution, who apparently said on some occasion that “words uttered at the right time and place equal in value the Word of the Creator.” From here, with a sharp turn, he got to those “words uttered not at the right place” which produce destruction. Because calling another country a dictatorship, especially when uttered by those who have never in their lives lived in anything resembling a dictatorship, is wanton destruction. “Yet they think they are in possession of a description of a phantom picture of dictatorship, when they don’t see, they don’t know its essence.”

warfare

From here he moved easily to Yalta and Potsdam where “the representatives of the western world were not too worried about checks and balances” and “offered the people of Eastern Europe tyranny on a platter.” In 1989 each of those countries alone had to get rid of the shackles that were put on them in 1944-1945.

Checks and balances had to be on the Hungarian prime minister’s mind throughout the weekend because earlier he gave a very lengthy interview to Zoltán Simon of Bloomberg. Here I will summarize only those parts that have a direct bearing on U.S.-Hungarian relations. According to Orbán,”the U.S. in response to the geopolitical situation, has come up with an action plan, which they recently announced publicly, and it involves two dozen countries. This is fundamentally trying to influence alleged corruption in these two dozen countries.”

I suspect that the interview was conducted in English, a language in which the prime minister is no wordsmith, because these two sentences make no sense to me.  Perhaps what he wanted to say was that the United States is using the “fight against corruption” as an excuse to influence other countries’ foreign policies. But “this is the land of freedom fighters. And there’s public feeling in Hungary that sees a sovereignty problem in all of this. It feels that this is an attempt to influence from the outside the sovereign decisions of a freely elected parliament.”

Moving on to the U.S. criticism of Viktor Orbán’s “illiberal democracy,” he delivered the following history lesson to ignorant Americans:

Checks and balances only have meaning in the United States, or in presidential systems, where there are two identical sovereigns, that is a directly elected president and legislature. In Europe, this isn’t the case, there’s only one sovereign, there’s nowhere to “checks it or balance it,” because all of the power is delegated by parliament. In these instances it’s much more appropriate to talk about cooperation rather than checks and balances. Checks and balances is a U.S. invention that for some reason of intellectual mediocrity Europe decided to adopt and use in European politics.

Poor Montesquieu, who coined the term “checks and balances.” Or the ancient Greeks, who are generally credited with having introduced the first system of checks and balances in political life.

As for the American and European criticism of the illiberal state, Orbán’s answer is: “Hungarians welcomed illiberal democracy, the fact that in English it means something else is not my problem.”

Finally, an update on Ildikó Vida, who filed a complaint against an unnamed person who just happens to be M. André Goodfriend, the U.S. chargé d’affaires in Budapest. Everything is proceeding apace. She filed the complaint on Friday, December 12 and by today the prosecutors are already investigating. Magyar Nemzet speculates that the investigators will call in “witnesses,” but the paper admits that it is possible that “Goodfriend will easily get off.” The Hungarian judicial system, which is normally slow as molasses, can be very speedy when Viktor Orbán wants to expedite matters.

The first sign of opposition in the Fidesz parliamentary caucus: No compulsory urine tests

The furor over John McCain’s harsh words about Hungary’s “neo-fascist dictator” and his “illiberal state” hadn’t subsided when a new Hungarian bombshell exploded: Máté Kocsis, a two-bit district mayor in Budapest, had a great idea which he immediately made public on his Facebook page last Friday. Given the widespread use of drugs, it would be a good idea, he claimed, to introduce compulsory yearly drug tests for teenagers between the ages of 12 and 18 as well as for elected politicians and journalists. Why politicians and journalists? Politicians’ decisions have a lasting impact on the citizens while journalists have the power to influence public opinion. He promised that he would suggest to the Fidesz parliamentary delegation that they discuss the idea and prepare a legislative proposal to this end.

From what we have learned about this latest brainstorm of Kocsis, it looks as if the idea did not originate with the mayor of District VIII (at least not in his role as mayor) but with Viktor Orbán’s communication staff. It was, it seems, part of a desperate effort to devise a strategy that could neutralize the growing public dissatisfaction with Viktor Orbán and his government.

Directly after the election Orbán talked about creating a “new communication team” headed by the chief communication adviser, Árpád Habony. I wrote about Habony earlier. He’s a shadowy figure with enormous influence within the party and the government but without an official title or an official salary. This new group apparently meets every Friday to discuss some of the issues that cropped up during the previous week. Máté Kocsis, who is no longer a member of parliament but besides being mayor of District VIII is communication director of Fidesz, is an ex officio member of the staff. So it’s no wonder, claim investigative journalists, that Kocsis’s bright idea was published on Facebook on Friday night.

Reports of this crazy idea spread like wildfire. The Associated Press immediately picked up the story. Scores of newspapers and television stations carried the news because journalists find such bizarre items outright delicious.

By now the general consensus is that, with this whacky idea, communication strategists were trying to divert the public’s attention from the corruption case of Ildikó Vida and five unnamed others. Apparently, Viktor Orbán himself thought that the idea of yearly drug tests was a capital idea and decided to support it. And of course we know from past experience that if the Hungarian prime minister supports something it will be law in no time. The members of the Fidesz parliamentary delegation will automatically vote for it even if some MPs consider the idea to be of dubious value and/or legally questionable. By Monday, the Fidesz parliamentary caucus decided with some major changes to consider the proposal.

The idea of mandating regular drug tests for politicians and journalists was dropped by the caucus because such a law would clearly be unconstitutional. Even the Fidesz-dominated fake “constitutional court” couldn’t close their eyes to such a law. As for children’s screening, the Fidesz legislators opted to support only voluntary tests initiated by the children themselves or by their parents. This is certainly nothing like what the “communication staff” cooked up last Friday.

I wonder how Viktor Orbán will react to this unheard-of “revolt” of the Fidesz caucus. After all, the Sunday closing of stores will most likely be approved unaltered although the Fidesz delegation was deeply split on the issue. But now it looks as if Fidesz MPs finally balked at orders from above. If I were Viktor Orbán I would ponder the significance of this earlier unimaginable event.

The way Népszava sees Máté Kocsis's proposition

The way Népszava sees Máté Kocsis’s proposition

But let’s go back to the Habony-led communication staff’s activities. It is rumored that leaking the U.S. decision to bar six Hungarian citizens from entering the United States because of charges of corruption was the idea of Árpád Habony. Again, naturally, with Viktor Orbán’s blessing. We who look at events from the outside think that this was a singularly bad idea that created serious tensions between the United States and Hungary. Ever since mid-October major newspapers all over the world have been talking about the Orbán government’s systemic corruption. The leak resulted in massive anti-corruption demonstrations which in turn added to the growing dissatisfaction with the government. A huge drop in popularity followed. In brief, most independent observers would consider this particular idea of Habony outright injurious to Viktor Orbán and his government. Yet not only has Habony not been fired; his position as chief communication adviser has been strengthened. Moreover, his advice about mandatory drug tests was heeded by the prime minister.

How can we explain this seeming contradiction? In my opinion only one way: Viktor Orbán still thinks that leaking the news of the American ban was a good idea. It was a clever communication ploy. Why? Because Hungary’s position in world affairs is a great deal less important to him than his domestic standing with the electorate. And obviously he must think that the contentious American-Hungarian relations actually work in his favor at home. Fidesz supporters who lately have become disenchanted will perhaps return to the flock because of hurt national pride. He thinks that the risk is worth the gamble. After all, it seems to be working in Russia.

So far so good, but there is the growing dissatisfaction of some members of the Fidesz parliamentary delegation as demonstrated during the “stormy debates” that accompanied discussions on the Sunday closing of stores and the compulsory yearly drug test. In yesterday’s debate on drug testing Viktor Orbán came out the loser. What will happen next?

Let me bring up something that might further demonstrate intra-party dissatisfaction with Fidesz directives coming from above. You will recall that the former Fidesz mayor of Ózd, a very poor town in northeastern Hungary, was so unpopular that the citizens went out in hordes to vote for the only electable opponent, a young Jobbik candidate, who was elected with a two-thirds majority. But in the city council Fidesz was in the majority. The members of the caucus were obviously instructed from above to follow the strategy of Fidesz in Esztergom where the Fidesz majority refused to cooperate with the independent mayor and as a result nothing whatsoever could be accomplished for four long years. Within a few days it became obvious that Ózd had become ungovernable due to the refusal of the Fidesz council members to cooperate. But this time some of the Fidesz city fathers revolted. Three of the eight decided to quit the Fidesz caucus and serve as independents. Fidesz’s majority collapsed. I think we can expect more such events to take place on the local level. A certain erosion has begun that will be very difficult to stop.

György Rubovszky, a Christian Democrat member of parliament and a most faithful supporter of the Orbán government, found the drug test proposal “legally indefensible.” But he also had a personal story that he shared with a journalist of Népszabadság. His twelve-year-old granddaughter phoned him crying bitterly. “Grandpa, I must leave this country because I am not willing to pee in front of strangers.” I must say Rubovszky, who is not my favorite, has a smart granddaughter. Válasz, a pro-government site, wrote yesterday that this latest idea of Fidesz is a sure way to lose all the first-time voters in 2018. Even the party faithful recognize that some of these maneuvers may backfire.

Meanwhile those opposing the proposal are busily collecting urine and leaving it in a large bottle outside the city hall of District VIII. One really wonders whether Viktor Orbán has lost his touch–or, as some might claim, whether he is touched.

Is Viktor Orbán playing chicken?

It was only yesterday that a lengthy psychological portrait entitled “The Patient’s Name is Viktor Orbán” appeared in Népszabadság under the pseudonym Iván Mester. The author is an associate professor, I assume of psychology or psychiatry, at an unnamed university. In this article “Mester” states that because of his character traits Orbán “is unable to stop … he is insatiable.” What is going on in front of our eyes is a manifestation of his inability to let go. He has to win against all odds.

This afternoon the latest episode of this “drama” (because I’m convinced that for the prime minister this is a real drama) took place in parliament. According to house rules, Orbán had to appear in parliament to answer questions personally. Gergely Bárándy (MSZP) wanted to know “who is lying” about the corruption case involving six Hungarian citizens, of whom at least three are high officials in the Hungarian equivalent of the Internal Revenue Service. Bárándy wanted to know whether it is true that the Hungarian government knows what these people are accused of by the U.S. government. The exchange can be read in an abbreviated form on the web site of the Prime Minister’s Office.

As Orbán explained, the U.S. chargé d’affaires claims that the president of the Nemzeti Adó- és Vámhivatal (NAV) can be personally tied to corruption involving an American firm doing business in Hungary. “According to Hungarian law, in a case like that one ought to start legal proceedings. This is what I expect from the president of NAV. If she does not do so without delay, I will replace her.” In Hungary a person found guilty of corruption does not get replaced but is locked up, said Orbán. “So, the stakes are high.” If the American diplomat can prove the charge and the court finds her guilty, then the head of NAV will be incarcerated. “But if, on the other hand, the American diplomat’s charges are untrue there will be consequences.”

Viktor Orbán is forging ahead

Viktor Orbán is forging ahead

Bárándy pointed out in his rebuttal that the lawsuit Orbán is recommending cannot take place in Hungary. The only solution is what André Goodfriend, the U.S. chargé, has repeatedly recommended to Ildikó Vida, the head of NAV. She should apply for a visa at the U.S. Embassy in Budapest, whereupon she would be told the reasons for her ban.

Orbán countered that if an American chargé accuses a Hungarian official of a crime, he cannot “hide behind his diplomatic immunity. He should be a man and accept responsibility for his claims.”

What the official government version of the exchange did not mention but Népszabadság included in its coverage was the following dialogue between Orbán and Bárándy. The MSZP member of parliament asked whether Orbán “can venture to state that the Hungarian government and authorities have no knowledge of the nature of the cases that resulted in barring the president of NAV from the territory of the United States.” Orbán did not answer this question. Instead, he stressed that the solution lies “in the world of the law,” which in my opinion is a confirmation of the government’s knowledge of the American allegations.

André Goodfriend, as usual, responded promptly by posting a short note on Twitter: “US & Hungary have excellent legal cooperation, including a Mutual Legal Assistance Treaty.” And indeed, back in 2009 Secretary of State Hillary Clinton and Hungarian Foreign Minister Péter Balázs signed the Protocols of Exchange of Instruments of Ratification for the 2005 U.S.-Hungary Mutual Legal Assistance Protocols and the U.S.-Hungary Extradition Treaty. Clinton said at the time that “these twin agreements will give our police and prosecutors in both countries state-of-the-art tools to cooperate more effectively in bringing criminals to justice on both sides of the Atlantic. They form part of a network of similar agreements that the United States has reached with all the countries of the European Union.” Balázs, for his part, stressed the close cooperation between the two countries.

In addition to the Mutual Legal Assistance Treaty, Goodfriend called attention to a legal guide for judges written by a lawyer specializing in international litigation. The message is that Hungary should turn to the United States asking for official legal assistance. Apparently, the Hungarian prosecutor’s office did ask for assistance but the request was not official. Details of the differences between the two can be found in an earlier article in 444.hu.

The question is what Viktor Orbán is trying to achieve by this latest move. Among my knowledgeable friends one thinks that the foxy prime minister is trying to find an excuse to fire Ildikó Vida because “he knows that she is guilty.” My answer to this supposition is that of course Viktor Orbán knows full well that she is corrupt because she was put there for the very purpose of running a corrupt organization. That is part of her job description. She is there as the emissary of a corrupt government headed by the prime minister himself. Another friend, following the same line of reasoning, thinks that Vida’s refusal to sue Goodfriend will give Orbán an opportunity to fire Vida in such a way that he will not be seen as bending under U.S. pressure. This way he will save face. I don’t see much merit in that hypothesis either. What prevents Ildikó Vida from bringing charges against Goodfriend? Nothing. She can certainly try. It could happen that the court refuses to hear the case, but this would not be Vida’s fault. She sued, just as Orbán demanded. Another possibility would be if the Hungarian courts decided to hear the case but the United States government forbade Goodfriend from appearing in court. Thus he would be a man who does not accept responsibility for his claims, to use Orbán’s words. In my opinion that would be the best scenario as far as Viktor Orbán is concerned. And, as opposed to my friends, I believe this is exactly what he is planning to do. What do you think?

The Hungarian government under domestic and foreign pressure

As I’m writing this post thousands are again demonstrating against the government. The crowd gathered in front of the parliament, which one of the organizers called “the puppet show,” and then is heading toward the Castle District, where Viktor Orbán is planning to move. The move will cost an incredible amount of money but, as one of the undersecretaries in the prime minister’s office said, the citizens of Hungary will be really happy once the prime minister moves to quarters befitting his position. Given the mood of these crowds, I very much doubt that that will be the case. The good citizens of Hungary who are out on the street actually wish Orbán not to the Castle District but straight to hell.

The demonstration was organized against corruption but, as usually happens at these mass demonstrations, the crowd went beyond the limited goal of the organizers and demanded the resignation of Viktor Orbán and his government. Fidesz politicians, it seems, have been caught flat-footed. They surely believed that these demonstrations would peter out. Winter is approaching and Christmas will soon be upon us. It was hoped that people would be busy shopping and preparing for family gatherings. But this time they were wrong. Suddenly something inexplicable happened: the totally lethargic Hungarian public was awakened. What happened? After all, the misuse of power and the network of corruption have been features of the Orbán regime ever since 2010 and yet the public was not aroused against its unrelenting abuse of power. Most people knew that Fidesz politicians are corrupt and that they stuff their pockets with money stolen from the public, but they felt powerless to do anything about it.

I see a number of reasons for this change in the Hungarian political atmosphere. I would start with the influence of the book Hungarian Octopus: The Post-Communist Mafia State, edited by Bálint Magyar, in which dozens of political scientists, economists, sociologists, and media experts published articles that presented for the first time a comprehensive picture of the institutionalized corruption which is the hallmark of the Fidesz regime. Fairly quickly the terms “mafia state” and “mafia government” became part of everyday vocabulary, and the government’s dealings came to be understood within the context of The Godfather. The sinister nature of the enterprise was slowly grasped.

A second reason for the optimism and activism was the success of the first two mass demonstrations against the “internet tax.” Viktor Orbán had to retreat. If he retreated once, more demonstrations might force him to reverse earlier decisions. The success of the first demonstrations gave impetus to the others.

Last but not least was the Hungarian government’s own stupidity when it decided to leak the news about American dissatisfaction with the National Tax Authority and the corrupt officials who tried extract kickbacks from at least one American company. Hungarians expected their politicians to be corrupt, but the news that high officials at the Hungarian Tax Authority were also on the take was too much for them. Moreover, they felt that they now have an ally, the United States of America.

According to most observers, U.S.-Hungarian relations are at their lowest point since the post-1956 period. U.S. policy toward Hungary seems to me at least to be finely calibrated. At the beginning we were told about the six unnamed people who were barred from entering the United States. A few days later we learned that the president of the Tax Authority was definitely on the list. A few more days and we were told that the president is not the only person on the list, there are a couple more. Another week went by and André Goodfriend, U.S. chargé d’affaires, indicated that there might be more Hungarians who would face the same fate as the six already on the list. Another few days and we learned from the American chargé that he had given the Hungarian government all the information necessary for investigating the cases. And it was not the “useless scrap of paper” Viktor Orbán pointed to. In plain language, we found out once again that the Hungarian government lies. And yesterday we learned from an interview with Goodfriend that the sin of Tax Office Chief Ildikó Vida goes beyond not investigating obvious corruption cases within her office; she herself was an active participant in the corruption scheme at her office. Of course, Vida is outraged, but she cannot do more than write an open letter to Goodfriend claiming innocence. As time goes by the Hungarian government is increasingly embroiled in a web of lies and Orbán’s regime comes to resemble ever more closely the government of a third-rate banana republic.

The good old days: George W. Bush in Budapest, June 22, 2006

The good old days: George W. Bush in Budapest, June 22, 2006

While the State Department is using the corruption cases as a club, Senator John McCain is pursuing his own individual crusade. The senator, who is no friend of Putin, has been keeping an eye on Viktor Orbán’s illiberal state and found it to be troubling. What we saw two days ago was his frustration that Hungary will again have a political appointee as an ambassador. As he emphasized over and over, Hungary is a very important country that deserves a professional diplomat. His outburst about Orbán as a “neo-fascist dictator” was a bit strong, although Orbán’s system does have features in common with some of the fascist regimes of the past. But the Hungarian charge that McCain is ignorant of the Hungarian political situation is entirely baseless. Once he calmed down, he put it into writing what he finds objectionable about Orbán’s illiberal state. At the time of the release of his statement on Hungary he wrote a brief tweet saying, “Deeply concerned by PM Orban eroding democracy, rule of law, civil society & free press in Hungary.”

Below I republish Senator McCain’s statement on Hungary because I find it important and because it proves that, regardless of what the Hungarian government says, McCain (undoubtedly with the help of his staff) knows what he is talking about.

Since Prime Minister Viktor Orban came to power in 2010, antidemocratic constitutional changes have been enacted, the independence of Hungary’s courts have been restricted, nongovernmental organizations raided and civil society prosecuted, the freedom of the press curtailed, and much more. These actions threaten the principles of institutional independence and checks and balances that are the hallmark of democratic governance and have left me deeply concerned about the erosion of democratic norms in Hungary.

These concerns are shared by many. A ruling by the Venice Commission in 2013 found that Prime Minister Orban’s constitutional changes threaten democracy and rule of law in Hungary, stating that the amendments ‘contradict principles of the Fundamental Law and European standards,’ and ‘leads to a risk that it may negatively affect all three pillars of the Council of Europe: the separation of powers as an essential tenet of democracy, the protection of human rights and the rule of law.’

The Organization for Security and Cooperation in Europe (OSCE) and the Committee to Protect Journalists have condemned Hungary’s media laws, saying that they create a climate of fear and media self-censorship, even after critical changes were made to account for previous complaints from the European Commission. ‘The changes to the Hungarian media law only add to the existing concerns over the curbing of critical or differing views in the country,’ said Dunja Mijatovic, OSCE’s representative on Freedom of the Media.

The European Central Bank has repeatedly warned that Prime Minister Orban’s government is encroaching on the independence of its central bank, calling for him to respect the independence of monetary policymakers and condemning attempts by the government to threaten central bankers with dismissal if they oppose government policy.

And just last month, six Hungarians were banned from entering the United States over alleged corruption. U.S. Chargé d’Affaires André Goodfriend reportedly called the ban a warning to reverse policies that threaten democratic values, citing ‘negative disappointing trends’ in Hungary and a ‘weakening of rule of law, attacks on civil society, [and] a lack of transparency.’

Democracy without respect for rule of law, separation of powers, and the protection of economic, civil, and religious liberties is not only inadequate, it is dangerous. It brings with it the erosion of liberty, the abuse of power, ethnic divisions, and economic restrictions – all of which we have witnessed in Hungary since Prime Minister Orban took power. Prime Minister Orban has justified his actions by calling for a new state model based on ‘illiberal democracy,’ but his vision defies the core values of the European Union and NATO. These alliances are founded not only on the principle of democracy, but also rule of law and the protection of individual liberty and fundamental freedoms. All members must remain committed to these values.

Meanwhile both Hungarian and foreign newspapers are full of stories about the demonstrations and about McCain’s characterization of Orbán as a “neo-fascist dictator.” As the Hungarian prime minister continues to come under attack, both from within and from without, it’s unclear how he will fight back and how effective his counterattack will be. If the proposed Sunday store closings are any indication of the government’s new game plan, the counterattack will be a colossal failure.