Tag Archives: Index

Preparations for an assault on the media: Index and the cyber attack on the BKK site

Back when Magyar Nemzet was the Orbán government’s leading propaganda vehicle, it was practically an everyday occurrence that the prosecutor’s office, the police, and the national security offices leaked information to the paper that the government wanted to use against its political opponents. Now that Magyar Nemzet is a respectable newspaper, it is Magyar Idők’s job to indicate the government’s intentions and perhaps even give guidance to all the other government propaganda outlets as to what the official line is.

After two weeks of embarrassment over the irresponsible management of the Budapest Transit Authorities (BKK) and T-Systems’ shoddy e-ticket software, the decision was made to divert attention from this incompetence to an alleged conspiracy that would conveniently involve Index, one of the few quality news sites left in Hungary. This government ruse has the added benefit of being a frontal attack on an independent media outlet that was recently purchased by Viktor Orbán’s domestic archenemy, Lajos Simicska.

To summarize the sequence of events, here are a few facts that are necessary to understand the story. On July 13 BKK made the announcement that at last e-tickets can be purchased on its website. The procedure will be fast and reliable. The purchaser will have a bright green e-ticket on his smart phone that will allow him to use BKK’s transportation system.

Index has a number of journalists who specialize in internet technology. They test new software and report on its reliability and usefulness. As soon as BKK announced the availability of the e-ticket, one of Index’s “tech experts,” Balázs Tóth, purchased a one-day ticket and traveled all over the city, hoping to encounter a ticket controller to see how well the system was prepared for the change. Without going into the details, it turned out that they are not and the whole experiment was a nightmare. The story was told in an article that appeared on July 14 at 12:01.

A few hours later (16:31) Balázs Tóth wrote another article in which he reported that after the appearance of the first article Index received an incredible number of e-mails from people with similar experiences. Among the many such letters was the one from the 18-year-old high school student who became known later as the “ethical hacker.” All the details of his story can be found in my article titled “Another grain of sand on the pile: The e-ticket fiasco,” but here I will focus on this second Index article, which has turned out to be a critical piece of “evidence” according to Magyar Idők, showing Index’s guilt in the massive cyber attack against BKK, intended to create chaos during the World Aquatic Championships.

From this second article we learn that after receiving the ethical hacker’s e-mail, the Index folks got in touch with BKK, telling the company about glitches in the program that allows users to change the price of the tickets. We also learned here that by that time BKK had a chance to read the ethical hacker’s e-mail, his e-ticket had already been deleted. This piece of information will become important later when we try to cast doubt on Magyar Idők’s accusation.

So, let’s move on to the article Magyar Idők published today, which is supposed to expose “an organized cyber attack planned and executed by the ‘ethical hacker’ and Index.” The proof? The timeline prepared most likely by some national security agency attached to the ministry of the interior.

This timeline is as follows. BKK ascertained that the ethical hacker entered its website at 12:49 on July 14–that is, 48 minutes after Index’s first article appeared about the deficiencies of the system. After looking around and discovering the glitch, he bought a ticket at 13:38, which means that it took him one hour and 17 minutes to find the coding error. A little more than an hour later, at 14:49, he sent an e-mail to the wrong address, but soon enough he realized his mistake and sent another e-mail to the proper address at 15:11. I should add something here that the Magyar Idők article omits. Sometime after his first e-mail to BKK, the young man also fired off a letter to Index. At 15:33 Index sent an e-mail to BKK in which Balázs Tóth told the company about the glitch that allows people to buy tickets for practically pennies and asked them a number of questions.

These questions were passed on to Magyar Idők by, I assume, BKK and published verbatim by Zsolt Bayer in an editorial titled “The BKK affair: A bunch of lies,” which appeared in the same issue. Index wanted to know whether the problem was already solved or not, when will the system be secure, will they change the method of password use, and other technical questions. They waited an hour. When the paper still hadn’t received an answer, Balázs Tóth published his article in which he revealed the glitch. He added that Index had contacted BKK but no answer came, but they will “refresh” the article as soon as they hear. And indeed, when the BKK’s meaningless answer arrived, Index updated the article. BKK didn’t answer any of the questions but assured Index that despite extensive internet attacks, the system was working fine and was accessible and usable. BKK claimed from the very beginning that there was an automatic system that precluded any possibility of abuse. BKK also claimed that after the incident further security measures were introduced into the system.

But that was not the end of the story. Once the hackers out there in cyberspace suspected that BKK’s site was vulnerable, they bombarded it with thousands of attacks, the result of which was that the whole site had to be shut down. Magyar Idők considers this to be a criminal act, part of a huge conspiracy between the boy, Index, and who knows who else. The proof is the 22 minutes that elapsed between the ethical hacker’s e-mail to BKK and Index’s e-mail to BKK. First of all, since we know that the e-mail Index passed on to BKK was the one ethical hacker wrote to the wrong address at 14:49, the time between the boy’s purchase of an e-ticket and Index’s letter to BKK was not 22 minutes as Zsolt Bayer claims but more like an hour. But even 22 minutes is a very long time in our cyber world. Our sophisticated high school student, after discovering the error, immediately fired off an e-mail (sometime after 14:49) to Index. Once the internet savvy journalists who specialize in information technology checked out the system and found that the information they received was correct, Index immediately wrote to BKK. They waited an hour. No answer came.

Bayer finds Index’s handling of this particular case unethical because in his opinion it was unfair to give BKK “less than an hour to check the information provided by Index to compile the required information.” But Bayer is mistaken. As I pointed out earlier, BKK, by the time it had received Index’s questions, knew about the illegal purchase of an e-ticket and had already deleted the boy’s transaction. BKK didn’t have to spend hours discovering something it already knew. BKK’s eventual answer clearly indicates that the company had no intention of admitting any security problems and wanted to maintain that all was just fine. In brief, they didn’t want any help from anyone because, as far as they were concerned, there was no problem in the first place.

Magyar Nemzet pointed out that today’s world of rapid fire publication of news items online doesn’t allow the luxury of waiting for hours on end or even days with an article that one considers important and newsworthy. Index did what it was supposed to do and what all other internet news sites do. Bayer’s whole conspiracy theory rests on very shaky grounds.

But what is really worrisome is that the Magyar Idők article, based most likely on leaked information from the authority that is working on the case, maintains that the ethical hacker’s individual action was the “introductory act” of the coordinated denial-of-service cyber attack that came a few hours later. Normally there are 300-400 hits per second on that particular site, but that afternoon they numbered 13,000. Within an hour almost 47 million hits were received. As a result the whole system collapsed.

All this indicates to me that both the ethical hacker and Index should look for good lawyers because the cyber security cops will do their best to make them responsible for the subsequent collapse of the system.

July 29, 2017

The state of the Hungarian press on World Press Day

Yesterday was World Press Freedom Day, proclaimed by the UN General Assembly in December 1993 following the recommendation of UNESCO’s General Conference. So, I think it is fitting to devote a post to media freedom in Hungary.

Only a few days ago I took a look at Freedom House’s latest assessment of press freedom in 199 countries, which concluded that Hungarian media freedom has been severely constrained since 2010 when Viktor Orbán’s Fidesz party won the election. Although the Orbán government proclaims that the media enjoys total freedom, the fact is that by now the overwhelming majority of the media outlets in Hungary are either under state control, like the so-called public television and public radio, or have been acquired by Fidesz oligarchs who are willing conduits of government propaganda. Media experts estimate that by now 90% of all media content is in Fidesz hands.

Lőrinc Mészáros, Viktor Orbán’s alter ego and front man, owns, by the latest count, 192 newspapers in Hungary. Most of these are regional papers, which are essential for the Orbán propaganda machine. Relatively few people subscribe to national newspapers anymore. Népszabadság, before it was shut down, had the largest circulation, which by 2016 was only around 40,000. On the other hand, regional papers are sold in great numbers. Propaganda through these newspapers reaches far more people than propaganda placed in the few nationwide dailies.

The real bonus of these papers from the government’s point of view is not so much what they report on but what they leave out. A few days ago I read a fascinating study of a week’s worth of “non-news” in regional papers about the demonstrations in Budapest and some other cities. That’s why I was surprised to learn from Medián’s latest poll that people outside of Budapest were well informed about recent events in connection with the government’s attempt to close Central European University.

Outside observers might be horrified at the overwhelming presence of pro-government media in Hungary, but the government is still not satisfied. I understand that Mészáros’s company would like to acquire the few remaining regional papers that are owned by companies not connected to the government. Origo, once one of the two best internet news sites, has become a servile mouthpiece of the Orbán government rivaling Magyar Idők. Mária Schmidt’s acquisition of Figyelő is another sign of the insatiable appetite of the Orbán government. They even made an attempt to grab Népszava, which was eventually saved in the last minute by László Puch, the former financial director of MSZP. The government wants to have all the media under its control, just like in the good old days of János Kádár.

Apparently Orbán’s next victim was to be Index, considered by many to be the crown jewel of Hungarian-language internet news sites. But 444.hu reported a few days ago that in February 2014 Lajos Simicska, who became Viktor Orbán’s archenemy after March 2015, signed an agreement with Zoltán Spéder, the owner of Index, which stipulated that in the event Spéder decided to sell the site Simicska would have the right of first refusal. Simicska took advantage of this agreement on April 20, 2017, apparently in the nick of time because Orbán, through Árpád Habony and Mária Schmidt, had for some time been pressuring Spéder to sell Index. Simicska will not personally own Index. He transferred ownership of the site to a newly established foundation called Magyar Fejlődésért Alapítvány (Foundation for Hungarian Development), headed by László Bodolai, lawyer for both Lajos Simicska and Index. Without this move, Index would undoubtedly have been gobbled up by the Orbán government or one of its surrogates.

The reaction in the government media to the sale of Index was predictable. In the last couple of days one article after another has bemoaned the loss of Index. What is especially galling is that it was Simicska who prevented the takeover of the internet site. Well, it’s too late for the government to gain control of Index, but it has many ways of discriminating against the site. Independent organs normally don’t receive any advertising income from the government or from state-owned companies, but papers and television stations owned by Simicska are subject to additional hardships. One standard government ploy is that government officials are forbidden to give interviews to Simicska’s Magyar Nemzet and HírTV. Fidesz did the same thing while in opposition, when its politicians were forbidden to appear on Napkelte (Sunrise), an independently produced program Orbán deemed to be too liberal and antagonistic toward Fidesz.

Zoltán Balog has been leading the troops against Magyar Nemzet and HírTV. Simicska treated his brother-in-arms (bajtárs) shabbily, so Balog first announced that he and his ministry will refuse to have anything to do with Simicska’s media empire. Although Balog was aware that the law on public information forbids such discrimination, that didn’t seem to bother him. Moreover, that wasn’t punitive enough for Balog. By December 2016 all employees of institutions under the ministry of human resources–for example hospitals–had to get written permission from the ministry to give interviews or make statements about simple facts to anyone. For example, on December 6, 2016 a reporter for Magyar Nemzet wanted to write a heartwarming story about patients in a children’s hospital receiving gifts on St. Nicholas Day. Two hours before the event she received a telephone call from the hospital saying that she needs written permission to attend. Permission was denied. Not surprisingly, the reporter for MTI, the official news agency, had no trouble receiving permission. I assume that the legal problem of discriminating against certain media outlets and not others is supposed to be solved by requiring every news organization to obtain the requisite permissions. Meanwhile, the ministry’s boycott of Magyar Nemzet continues. When the paper filed charges against the ministry, Péter Polt’s prosecutor’s office decided that everything was in order.

Now Index has been added to the blacklist. Yesterday Sándor Joób, a well-known reporter at the news site, shared a revealing story. Index has been sending hundreds of requests for information about hospitals, for which the ministry’s permission is required. Joób wanted to talk to an official in charge of the reconstruction of Budapest hospitals. The official was most willing, but he needed permission. By mistake the reporter himself was included among the recipients of the message: “We ask you to refrain from giving this interview.” Magyar Nemzet immediately responded: “Welcome to the Club!”

Journalists at independent or opposition media outlets work under extremely difficult circumstances. For instance, Fidesz members of parliament refuse to answer any of their questions, and just the other day Lajos Kósa, head of the Fidesz parliamentary delegation, called reporters hyenas. Under these circumstances one can only admire the commitment of the journalists working for Magyar Nemzet and Index as well as other outlets like 24.hu, 444.hu, and Népszava. These journalists work for low wages and their job security is nonexistent. I just read about the former editor-in-chief of Dunántúli Napló, a regional paper in Pécs with a large circulation. After Lőrinc Mészáros’s Mediaworks took over the old Pécs standby, he lost his job. Now he is selling sausages as a street vendor.

May 4, 2017

Mária Vásárhelyi on the “media octopus” in Hungary

Yesterday I talked about the state of the Hungarian media. In today’s Galamus, Zsófia Mihancsik, who is a very good journalist, suggested to her colleagues that it would be a good idea if they learned to read. But, as some of you suggested, the slanted reporting on certain “sensitive” topics might be the result not so much of careless reading or writing but of a willful distortion of the facts. This is definitely true about media under the direct or indirect control of the governing party.

So, I think it’s time to look around a little in the world of the Hungarian media. Here I’m relying heavily on Mária Vásárhelyi’s essay “The Workings of the Media Octopus–Brain and Money Laundering” that appeared in the Bálint Magyar-edited volume, The Hungarian Octopus.

According to Vásárhelyi, Viktor Orbán’s psyche was crushed in 1994 when he  managed to lead his party with a 40% chance of winning the election into almost total ruin with 7.7% of the votes. Before that fiasco Orbán was the darling of the press, but subsequently he became the pariah of the then still mostly liberal Hungarian media. He decided right then and there that the goal is not to be liked by the existing media; rather, a smart politician should strive for a loyal media he can easily influence. In Vásárhelyi’s estimate Fidesz had the lion’s share of responsibility for the 1996 media law that turned out to be neither liberal nor democratic.

Once Fidesz won the election in 1998 Viktor Orbán made a concerted effort to build a media empire with the use of private and public money. Billions of public money were spent on establishing Heti Válasz and on the “rescue” of the heavily indebted Magyar Nemzet. And right-wing oligarchs like Gábor Széles, Tamás Vitézy (Orbán’s uncle by marriage), Zoltán Spéder, István Töröcskei, and Lajos Simicska put large sums of their own money into media outlets that were anything but profitable. They were hopeful that their investments would serve them well one day when Viktor Orbán again returned to power.

Between 2002 and 2010 the preponderance of media outlets shifted to the right. Moreover, by 2008 the liberal media’s financial situation was dire. Companies strapped for funds cut their advertising budgets, and the liberal media outlets had no rich oligarchs who could ensure their continued existence during the hard times. Since 2010 the lopsidedness between right and left in the field of media has only become worse. According to Mária Vásárhelyi, “only those messages which the government party wants to deliver reach 80% of the country’s population.”

octopus

Studying the changes in the political orientation of radio stations is perhaps the most fruitful and most telling because it is here that the Media Council, made up entirely of Fidesz appointees, can directly influence the media. It is in charge of allocating radio frequencies. As the result, in the last five years the radio market became unrecognizable. Every time existing radio stations had to reapply for frequencies, the frequencies were given to someone else. The new stations were owned by companies or non-profits preferred by the government party, and in consequence government advertisements immediately poured in. Between 2010 and 2012 some 50 local and regional radio frequencies changed hands. Of these Mária Rádió (Catholic Church) got seven frequencies all over the country and Lánchíd Rádió (also close to the Catholic Church) got five. Európa Rádió, which is close to the Calvinist Church, by now can broadcast on three frequencies. Magyar Katolikus Rádió has two local and two regional frequencies. All these stations are considered to be non-profit and therefore they don’t pay for the use of the frequencies.

Zsolt Nyerges has built a veritable media empire: he is behind “the three most valuable radio frequencies in the country.” During the same time the liberal stations have been disappearing one by one. Radio Café, very popular among Budapest liberals, lost its frequency in 2011. So did another popular liberal station called Radio1. Of course, Klubrádió is the best known victim of Viktor Orbán’s ruthless suppression of media freedom. Klubrádió began broadcasting in 2001 and could be heard in a radius of 70-80 km around Budapest. By 2007 the station had acquired eleven frequencies and could be heard in and around 11 cities. Soon enough Klubrádió was the second most popular radio station in Budapest. Today, Klubrádió after years of litigation moved over to a free but weaker frequency that it already had won before the change of government in 2010. Out of its 11 provincial stations there is only one left, in Debrecen, and we can be pretty sure that as soon as its contract expires Klubrádió will no longer be able to broadcast there either.

As for the public radio and television stations, let’s just call them what they are: state radio and television stations as they were during socialist times. But then at least the communist leaders of Hungary didn’t pretend that these media outlets were in any way independent: the institution was called Hungarian State Television and Radio. They were at least honest. The only difference was that in those days state television and radio aired excellent programs, especially high quality theatrical productions and mini-series, all produced in-house. Now I understand the programming is terrible and only about 10% of the population even bothers to watch MTV, and most likely even fewer watch Duna TV. Their news is government propaganda: on MTV more than 70% of the news is about government politicians and the situation is even worse at Magyar Rádió.

These state radios and television stations have a budget of over 70 billion forints, a good portion of which ends up in the hands of Lajos Simicska. How? MTV and Duna TV no longer produce shows in-house but hire outside production companies. Thus, public money is being systematically siphoned through MTV and Duna TV to Fidesz oligarchs. The programs are usually of very low quality and complete flops.

Most Hungarians watch one of the two commercial stations: RTL Klub and TV2. Both are foreign owned but as Orbán said not long ago, “this will not be so for long.” And indeed, a couple of weeks ago TV2 was sold, allegedly to the director of the company. Surely, he is only a front man. An MSZP politician has been trying to find out who the real owner is. Everybody suspects the men behind the deal are Lajos Simicska and Zsolt Nyerges.

And finally, the print media is also dying, which is not surprising given the worldwide trend. But right-wing papers are doing a great deal better than liberal and socialist ones for the simple reason that public money is being funneled into them through advertisements by the government and by state-owned companies. Even free newspapers are being brought into the right-wing fold. There was a very popular free paper called Metro owned by a Swedish company. But Orbán obviously wasn’t satisfied with its content. So, the government severely limited the locations where Metro could be stacked up, free for the taking. Thus squeezed, the Swedish owner decided to sell. And who bought it? A certain Károly Fonyó, who is a business partner of Lajos Simicska. The paper is now called Metropol and, in case you’re wondering, is doing quite well financially.

Napi Gazdaság was sold to Századvég, the think tank that was established by László Kövér and Viktor Orbán when they were still students. As I mentioned earlier, Népszabadság was sold recently to somebody who might be a front man for Tamás Fellegi, former minister of national development who had financial interests in the world of the media before he embarked on a political career. The paper was owned by Ringier, a Swiss company that wanted to merge with the German Axel Springer, which owns a large number of provincial papers in Hungary. Although in many European countries the merger was approved with no strings attached, the Hungarian government set up an obstacle to the merger. The merger could be approved only if Ringier first sells its stake in Népszabadság.

Fidesz hasn’t been so active online. Most of the online newspapers are relatively independent. What keeps the party away from the Internet? Vásárhelyi suspects that it is too free a medium and that it doesn’t comport with Fidesz’s ideas of control. Surely, they don’t want to risk being attacked by hundreds and hundreds of commenters. Index, howeveris owned by Zoltán Spéder, a billionaire with Fidesz sympathies. After 2006 it was Index that led the attack on Ferenc Gyurcsány and the government. Vásárhelyi predicts that Index will turn openly right sometime before the election.

The scene is depressing. There is no way to turn things around without the departure of this government. And even then it will require very strong resolve on the part of the new government to stop the flow of public money to Fidesz media oligarchs. The task seems enormous to me.

What do sugar distribution and drag racing have in common? A lot

Perhaps there is hope yet for investigative journalism in Hungary. When in the mid-1990s I first encountered an article that was supposed to uncover corruption in the police force I was appalled. The author didn’t seem to be aware of the most basic rules of what we used to call expository writing. Moreover, she was so sloppy that she didn’t even bother to learn the simplest facts of the case. I decided to write to her, going through her article practically sentence by sentence. As if she had been a student of mine who wrote a very, very bad essay on some historical topic. After I sent off the e-mail I was sure that I had made an enemy for life. But no, I received a very cordial answer in which she thanked me for my thorough critique of her work. We even stayed in touch for a while: I continued to criticize, and she continued to improve.

In general, however, Hungarian investigative journalism didn’t improve. Investigative articles and even books on the mostly dirty business affairs of Hungarian politicians were still sketchy and largely incomprehensible. One got the impression that the authors had only a vague sense of the complicated legal and business connections they were writing about. Mind you, they were trying to untangle business activities that were intentionally designed to be inscrutable.

So I was happy to read an article in Index by Miklós Jenei the other day that seemed to have uncovered more about a company’s questionable business practices in a couple of weeks than the National Tax and Customs Administration of Hungary (NAV) managed to do in years with its 23,000 employees.

Jenei decided to focus on sugar because András Horváth, the whistleblower at the Hungarian tax authority, mentioned sugar as one of the favorite commodities of the VAT scammers who make millions if not billions by reclaiming their non-existent value added taxes. He visited quite a few large supermarkets and compared prices. He found a Slovak-Hungarian brand called Sovereign which cost 20-30 ft less than the others. This particular brand was produced by Sovereign Slovakia s.r.o. and was sold at Tesco, Lidl, and some other outlets. The price of Sovereign sugar is 229 at Tesco and 200 ft at Lidl.

According to their website, the company was established in 2009 and the owner is Majorbiz Inc. (Seychelle Islands). The CEO is Ilona Ollé Agh. The reporter is fairly certain that the sugar actually comes from Hungary but that for one reason or other it is more profitable for the owners of Sovereign to transport the sugar to Okoč/Ekecs in Slovakia, a village which is almost entirely inhabited by Hungarians, for packaging.

Jenei managed to discover the wholesale price of sugar per ton by posing as a CEO of a sugar distributor. As a result, he came to the conclusion that no one can buy sugar from the factory for less than 185 forints per kilogram. The supermarkets refused to reveal the price they pay for Sovereign sugar, but our investigator figures that Tesco most likely pays 180 and Lidl 173 forints per kilogram. So, something doesn’t add up.

It turns out that over the last few years there were several companies with the name Sovereign. Several of them dealt with sugar packaging. All of them also had business interests in the sale of cars. Almost all of them had their share of trouble with the Hungarian tax authorities. And all of them shared the same address on Farkastorki utca in District III in Budapest. It is a small apartment on the ground floor. These various Sovereign businesses came and went after amassing millions in unpaid taxes. The authorities would regularly shutter the delinquent business, but within a few months a new business with a slightly different name would spring up. The CEOs also appeared and disappeared. One such CEO was Szilvia Marisz who claims that she is a bookkeeper; when Index‘s reporter finally got hold of her he could hear a baby crying in the background. Her successor was a 63-year-old fellow who had interests in thirteen companies of different sorts. Most of them are no longer in existence.

Lately a new company was registered at the same apartment on Farkastorki utca: Tull Trade Kereskedelmi és Szolgáltató Kft. Its owner is Sándor Esztocsák, who had earlier connections with Sovereign. Tull’s business was fabulously profitable. In 2010 it grossed 551 million forints, which is not bad for a company run by one man, Esztocsák, who obviously came cheap: he had the modest salary of 282,000 per year.

What is the connection between Tull and the packaging company in Slovakia? The link seems to be Jenő Rujp, head of the Sovereign Racing Team Kft, a company that also has its headquarters in the ground-floor apartment on Farkastorki utca. The company is involved with drag racing and maintains a sailing team as well as a band. The racers were badly behind with their taxes and therefore their business permit was cancelled. But no problem. They changed the name to Sovereign Sugar Hungary and Rujp ostensibly left the company. This last company with a new CEO is the distributor of Sovereign Sugar.

Sovereign at a drag racing meet

Sovereign at a drag racing meet

Quite a saga! Naturally, Index tried to avoid drawing any conclusions from the findings of Miklós Jenei, but it seems to me that the “sugar business” serves primarily as a vehicle for making enough money–thanks to major funding from the unwitting Hungarian taxpayers–to keep up the expensive habits of some of the characters in the story.