Tag Archives: István Tiborcz

“The struggling young couple”: István Tiborcz and Ráhel Orbán

I haven’t written anything about the financial affairs of the Orbán family lately, although news of the shady affairs of the father and brother of the prime minister crops up often enough. Today I’ll return to the financial affairs of Viktor Orbán’s son-in-law who, though barely 30 years old, has most likely already amassed a considerable fortune.

István Tiborcz’s first business venture ended rather abruptly when OLAF, the European Commission’s Anti-Fraud Office, announced that it was going to investigate his company, Elios, which had won tenders for the installment of LED lighting in scores of Hungarian cities. The lighting project was largely financed by the European Union. The Tiborcz-Orbán “family firm” realized that, in this instance, the brazen expropriation of EU funds would not be tolerated. So Tiborcz in a great hurry “sold” his firm to a businessman with very strong ties to Fidesz. Tiborcz then went into the real estate business. As he explained to Origo a few days ago, he, as a member of the prime minister’s family, is limited in the kinds of financial activities he can pursue. He claims that for the past two years he has been buying real estate only from private individuals, no state property.

All this sounds innocent enough, but if we take a closer look at Tiborcz’s business dealings it seems that the son-in-law may have received quite a bit of coaching from the master at hiding his wealth, the Hungarian prime minister himself. When Tiborcz established his first real estate firms, he hid behind two friends who were registered as the owners of TRA Real Estate Kft. and BDPST Zrt. By now these two companies own eight high-priced pieces of real estate, among them former aristocratic mansions and valuable commercial property in Budapest and elsewhere. Some of these properties were jointly owned by wealthy Turkish businessmen or sold to characters like Ghaith Pharaon, the now allegedly deceased Saudi businessman of dubious reputation. Tiborcz hid so well that, as far as the Hungarian media was concerned, his ownership of these companies couldn’t be ascertained. Until now.

To the surprise of those who have been trying to find out more about TRA and BDPST, István Tiborcz gave an interview to Origo, which is now owned by the son of György Matolcsy, Orbán’s right hand and president of the Hungarian National Bank. The title of the article is misleading when it claims that “We investigated: István Tiborcz is owner in the real-estate development company.” After reading the article, one can be absolutely certain that the journalists of Origo investigated nothing. For one reason or other, István Tiborcz went to the pro-government internet site to offer the information, which he had tried to hide at least since the summer of 2015.

People who have been following Tiborcz’s business ventures and his secretive behavior as far as his business affairs are concerned couldn’t figure out what got into him. Why did he feel compelled to open up suddenly? On October 30, the very same day the Tiborcz interview appeared, the internet edition of Heti Válasz  came out with an article from which one could learn that András Bódis of Válasz had been pursuing the case of BDPST’s ownership for some time, without much luck. The “CEO” of the company, a certain Judith Tóth, didn’t even bother to answer Bódis’s inquiries. In fact, Tiborcz was so reluctant to divulge his own involvement in the company that BDPST initially gave up the idea of a capital raise when the Registry Court (Cégbíróság) made it clear that it would not register the firm unless the ownership of the company was released. After some hesitation, Tiborcz decided that he needed the stamp of approval of the Registry Court and relented.

It is hard to fathom why Tiborcz felt compelled to give an interview. One reason may have been his fear that Válasz would come out with some juicy story about its efforts to discover more about Tiborcz and his firm. The other reason might have been that, simultaneously with the Válasz project, Átlátszó was digging into the young couple’s purchase of a luxurious eleven-room, three-story house with servant’s quarters and a swimming pool in the most expensive part of the Kútvölgy section of Buda. The listing price of the property was 360 million forints (about $1.35 million). Therefore, in addition to his admission that he is the majority owner (meghatározó tulajdonos) of BDPST, he casually mentioned that he bought a house as a business venture that is in such bad shape that it is practically falling apart. So, before he does anything with it, the house must be completely renovated.

The modest living room

I’m afraid that truthfulness is in short supply in the extended Orbán family. As Antónia Rádai of Átlátszó found out, the purchaser of the property was not BDPST but István Tiborcz. Therefore, it is unlikely that this luxury property was purchased for resale. As for the state of the house, which he described as “life threatening,” I have my doubts after taking a look at some pictures that appeared when the property was being advertised for sale. It is, however, apparently true that men are working furiously on the building, even through part of the recent long weekend. I suspect that it is still not up to the standards of the demanding young couple.

A bathroom in a house which is falling apart and needs immediate propping up

The interview was really touching. Tiborcz spoke about the struggling firm, which is still not quite profitable. Here and there they make money when they manage to sell a piece of property, but the road ahead them is long and the work is hard. This sob story naturally was spread far and wide by the government propaganda outlets. Of course, let’s not fool ourselves. The majority owner of a company that has yet to turn a profit doesn’t buy a house that costs over a million dollars. We don’t know the full story of Tiborcz’s investments, and I doubt that we ever will.

November 2, 2017

Hungary as the Orbán family’s private estate

It was almost a year ago that I wrote a post about the then newly launched real estate business of Prime Minister Viktor Orbán’s son-in-law, István Tiborcz.  The young man, when he was barely out of law school, set out to become an entrepreneur. He became part owner of what would soon become a thriving, highly profitable business specializing in LED street lighting technology. His family connection to the prime minister practically ensured his success. One city after the other signed contracts with his firm to modernize its street lighting with funds that came from the European Union. All went well until OLAF, the EU’s anti-fraud office, started to investigate. Tiborcz quickly sold his share in the business and moved on to safer pastures. He and his foreign business partners, like the Saudi Gaith Pharaon and the Turkish Suat Gökhan Karakus, began buying up run-down but valuable pieces of real estate. They especially liked stately mansions.

One of their first purchases was the Schossberger Mansion in Tura, about 50 km from Budapest. Although Tiborcz tried to hide his presence in the company, within a few days 444.hu learned that he was one of the new owners of the mansion. Angelina Jolie so admired the mansion that she used it as one of the sets for her movie “In the Land of Blood and Honey.” Although the purchase price was low (280 million forints), fixing up the place will be a very expensive undertaking. Ten years ago the estimated price was 6 billion forints or $203 million. After seeing a 10-minute video tour of the interior, I’m convinced that the cost of renovating and modernizing the place will be much higher than this old estimate.

Of course, we have no idea of the size of Tiborcz’s stake in this business venture, but it is most likely substantial because sometime in the spring of 2016 Győző Orbán, father of the prime minister, showed up and spent a whole day looking around. As a young man from Tura told the reporter from Bors, “it took a long time because he was shown everything inside.” As far as the locals know, the new owners want to use the former mansion as a luxury hotel.

Work began in March 2016, first on the ten hectare park that surrounds the mansion. By September the workers began refurbishing the interior as well. The mansion, which used to be open to the public as a tourist attraction, had to be closed. Some of the locals were sorry that the castle will be transformed into a luxury hotel, but others were convinced that the Orbán connection will do miracles for the sleepy little town of 8,000 inhabitants.Until now Tura was forgotten by the Orbán government. As a local man told HVG’s reporter: “We will have something here only if Viktor Orbán wants it.”

It looks as if Viktor Orbán, now that his son-in-law is part owner of the Schossberger Mansion, wants it. Tura has hit the jackpot. According to estimates, in the next year or two perhaps as much as 20 billion forints’ worth of investment will arrive in Tura.

In May several online news sites reported that a 2.7 MG geothermal power plant will soon be built. It will produce electricity for 800 houses and will also eventually heat greenhouses on 11 hectares. The water temperature of the geothermal well is 129°C. After this incredibly hot water is used to generate electricity, it cools down to 70°C and will then be used to heat the greenhouses. The water, once it has finished its heating cycle, will be returned underground, an EU requirement. The power plant will cost 5.5 billion forints, half of which will come from the European Union and the rest from a consortium of domestic investors.

Tura until now couldn’t offer much to visitors, but its fortune will soon change thanks to the Orbán family.

By late June work began on the power plant. It is being built by KS Orka Renewables Pte Ltd. of Singapore using technology from Iceland, where 90% of the buildings are heated geothermally. The first greenhouses, which will most likely be ready within a year, will occupy 5.5 hectares at a cost of 2.3 billion forints. Again, half of this sum will come from Brussels. Later, other greenhouses will be built, occupying another 5.5 hectares. Altogether the greenhouse project will cost 4.5 billion forints. The greenhouses are expected to produce 6,300 tons of tomatoes, most of which will be for export. The hope is that the greenhouse businesses will be able to amortize the initial investment over six or seven years. The investors project an eventual annual profit of about seven billion forints. In addition, the greenhouses are expected to employ 170 people. It sounds like a terrific project, assuming the projections are halfway realistic.

But surely, it cannot be a coincidence that Tura suddenly became the recipient of all this largess. The investments were declared to be “priority projects,” meaning urgent and important for the national economy. I should add that most of the money comes from three banks: Eximbank, MKB, and Gránit Bank. The first bank is state owned; MKB is apparently owned by someone close to Fidesz and Orbán; and 49% of Gránit Bank belongs to the Hungarian state. Thus, projects that will make the Schossberger Mansion business venture of Orbán’s son-in-law more viable are being financed mostly by the Hungarian state. It is easy to become a millionaire this way.

January 3, 2017

Viktor Orbán’s new neighbor: Ghaith Pharaon, fugitive from justice

During the summer Viktor Orbán’s son-in-law, István Tiborcz, was searching for new business opportunities. By that time, OLAF, the European Union’s Anti-Fraud Office, was looking into his “super company,” which had received almost all of the contracts for the EU-financed modernization of city lighting in Hungary. The first son-in-law had to find greener pastures, preferably far away from public procurements. The choice, it seems, was real estate. Investigative journalists discovered that Tiborcz was doing lucrative deals with the assistance of a wealthy Turkish businessman. One of their first real estate ventures was the purchase of the building of the defunct Postabank, which soon enough they sold, through an intermediary, to Ghaith Pharaon, a Saudi businessman of dubious repute.

The available English-language information on Ghaith Pharaon is extensive, mostly because of his association with the Bank of Credit and Commerce International (BCCI) back in the 1990s. Secretly acting on behalf of BCCI, Pharaon acquired control of two American banks in violation of federal banking laws. When the fraud was discovered, BCCI was forced to sell the banks, which soon after were shut down by regulators when it was determined they were insolvent. Pharaon was charged with wire fraud and conspiracy to commit racketeering. He has been wanted by the FBI since 1991 for his role in the BCCI fraud and remains a fugitive. In addition, Pharaon was accused in a 2002 French parliamentary report of having financial dealings with hawala, an Islamic financial network which is also used by terrorist organizations. Earlier I wrote in more detail about Pharaon’s business activities in Hungary.

Trouble seems to follow István Tiborcz. Or perhaps it is more accurate to say that he has a penchant for dealing with questionable characters.

It seems that in the last four or five months Pharaon has been busy. He is currently the owner of nine extremely valuable pieces of property in Hungary. His latest purchase is a mansion right across from the house owned by Viktor Orbán and his family. I suspect that the mansion was a state property that earlier was used as a kindergarten. Orbán himself liked the building so much that during his first administration he planned to refurbish it and use it as the official residence of the speaker of the house. The place has been abandoned for almost 20 years and, judging from the photos, it needs extensive repairs. During the summer the property’s listing price was 410 million forints or $1.45 million.

The mansion Pharaon bought

The mansion Ghaith Pharaon bought

Once it became public knowledge that Pharaon is now Orbán’s neighbor, interest in his past spiked even though it has been a well-known fact in Hungary, at least since June 2016, that Pharaon is on the FBI’s wanted list. But the opposition parties finally started asking questions about Pharaon’s close business ties not only with the prime minister’s son-in-law but also with the Hungarian government and MOL, the Hungarian oil company.

Pharaon is not a simple foreign investor wanting to make some money in Hungary. He is in possession of a valid visa issued to him by the Hungarian government. At the time they issued the visa, Hungarian authorities were aware of the fact that Pharaon was being sought not only by the FBI but apparently also by Interpol because of his relations with terrorists, including at one time with Osama bin Laden. Péter Juhász of Együtt got hold of a letter from Sándor Pintér, minister of interior, strangely enough written in Hungarian, to the Saudi ambassador in Budapest confirming their knowledge. Pintér wanted to have the Saudi government’s opinion in the case. The answer had to be reassuring because Pharaon received a visa without any trouble. But why would it not have been reassuring since, according to information that can be found in Stratfor Intelligence Files made public by WikiLeaks, “Ghaith Pharaon is not a genuine businessman … he is nothing more than a front man who does dirty things on behalf of Saudi Arabia.”

All the talk about Pharaon being on the FBI’s most wanted list eventually prompted Hungarian journalists to approach the U.S. Embassy in Budapest, requesting information about Pharaon’s current status. Eric Watnik, counselor for public affairs, who is in charge of the press and information office at the embassy, gave the following information on Pharaon. On November 15, 1991 the District of Columbia court issued an arrest warrant signed by Alan Kay, magistrate judge. “This arrest warrant is still valid,” he added. Since then the charges against Pharaon have multiplied (conspiracy, wire fraud, racketeering conspiracy, aiding and abetting) and by now, if arrested and charged, he could face at least 30 years in jail. In addition, according to Watnik, Interpol issued a Red Notice (A355/8-1992) which, according to Interpol’s website, seeks “the location and arrest of wanted persons with a view to extradition or similar lawful action.” Although the Red Notice has since disappeared from the Interpol website, Watnik noted that Hungary has an extradition treaty with the United States and thus, had it been asked, would have been obliged to agree to the extradition of Pharaon.

Once this letter from Pintér to the Saudi ambassador became public, both Jobbik and MSZP wanted to know more about the case. Jobbik’s Márton Gyöngyösi couldn’t get an answer from Viktor Orbán himself, but Tamás Harangozó of MSZP lucked out. He wanted to know whether the prime minister had ever had a personal meeting with Pharaon. Harangozó said he wanted to have a serious answer because Orbán, instead of giving substantive responses, often cracks jokes or makes ironic remarks. Orbán admitted that he had met “Professor Pharaon” at a banquet, which surely cannot pose a national security risk. Harangozó hit back: in that case, Orbán and the government itself is the national security risk. Eventually, Orbán claimed that “the whole Pharaon affair is an American secret service game.” If the FBI is truly seeking his extradition, how is it possible that Pharaon has remained free for the last 24 years?

The case was even discussed in the parliamentary committee on national security where Szilárd Németh, the committee’s Fidesz deputy chairman, expressed his belief that Viktor Orbán’s neighbor may be only the namesake of the real Ghaith Pharaon. Of course, a simple fingerprint comparison could put an end to any doubt but, according the U.S. Embassy, the Hungarian authorities refuse to cooperate. In fact, the Hungarian government is actively shielding Pharaon from “harassment.” When Jobbik wanted to place a public announcement in which Pharaon’s name was mentioned, MTI OS (Országos Sajtószolgálat) refused to publish it because “they need to protect the privacy rights of public figures.” Why is Pharaon a public figure? The only thing that comes to my mind is the phrase “public enemy.”

October 29, 2016

Hot topics of the day: Budaházy and Ráhel Orbán

The Hungarian media was preoccupied with two topics today. The first was the reaction to the stiff sentences handed out in the case of György Budaházy and his co-conspirators, who were convicted of terrorist activities. The other was the recent discovery of mysterious “negotiations” undertaken by Ráhel Orbán, eldest child of the prime minister, and her husband, István Tiborcz, in Bahrain.

The day after the trial

As one could anticipate, the Hungarian extreme right is outraged. Jobbik’s official internet news site is full of stories of the “seventeen patriots” who were in the forefront of the “national resistance” against the traitorous Gyurcsány government. What Budaházy and his friends did in 2006-2007 was a historic act. László Toroczkai, an old friend of Budaházy who today is the Jobbik mayor of Ásotthalom at the Serbian-Hungarian border, is demanding that Fidesz take a stand on the issue.

But Fidesz refuses to make any comments on the case. The closest approximation to a comment was an opinion piece by Zsolt Bayer that appeared today in Magyar Hírlap. Bayer’s memories of terrorist acts committed by the Budaházy gang, I suspect, are purposely vague. He remembers “some kind of a video of some kind of an explosion,” but basically he can’t imagine that this gentle man could possibly commit such atrocities. He is just hoping that there is “real evidence.”

In connection with the case, Bayer poses a number of questions: “Were they really the ones who threw Molotov cocktails into the houses of politicians? Were they the ones who beat up Csintalan?” And don’t forget, “the body is missing that lay on the street in Olaszliszka* as well as the one that was lifted from the lake in Kaposvár**.” Finally, Bayer says, comes the most important question: if Budaházy received 13 years, then what about Ferenc Gyurcsány and Péter Gergényi, police chief of Budapest at the time of the 2006 disturbances? After all, they are “the two most notorious miscreants of the age.” This question must be asked because “without Gyurcsány, Gergényi (and Draskovics, Szilvásy, and Bajnai) there is no Budaházy.” In brief, the guilty ones are not Budaházy and his fellow terrorists but the governments of Gyurcsány and Bajnai. I take Bayer’s attitude toward the Budaházy case to be a reasonably close approximation to the views of the Fidesz leadership.

András Schiffer’s Facebook note “Budaházy 13 years, how many for shooting out eyes” drew appreciative comments from the right, including Fidesz sympathizers. Viktor Orbán has been trying for years to implicate Gyurcsány in the “police brutality” during the 2006 street disturbances. Up to now they have been unsuccessful. They couldn’t come up with anything to tie Gyurcsány to the police action at the time. The decision to deal with the situation was entirely in the hands of the police chief and his close associates. And even at that level, although the Orbán government brought charges against Gergényi, they couldn’t prove their case.

According to Jobbik and Fidesz supporters, what happened on the streets in 2006 was “police terror,” pure and simple. They therefore equate the “terrorism” of Gyurcsány with the terrorist acts of Budaházy and his companions. The other side, by contrast, remains convinced that the disturbances were an attempt to overthrow the legitimate government of the country and that Fidesz politicians were in touch with the leaders of the mob that was supposed spark a general revolt in the population. It just didn’t work out. András Schiffer, who is allegedly a democratic politician, sided with the extreme right and Fidesz on this issue. It is no wonder that the liberals and socialists are outraged.

The most eloquent condemnation of Schiffer came from Árpád W. Tóta in HVG, according to whom “András Schiffer took a deep breath and sank to the deep where Krisztina Morvai*** resides.” Schiffer should know the difference between an accident that happens during the dispersion of a crowd and premeditated criminal acts committed in a conspiratorial manner. Tóta admits that he never had a good opinion of Schiffer, but he never thought that Schiffer was wired into the same circuit as Krisztina Morvai. I can only agree with Tóta.

Ráhel Orbán and her husband in Bahrain

I must say that Ráhel Orbán, who by now is 27 years old, gets herself into a lot of trouble, unlike her brother Gáspár and younger sister Sára. One reason is that she appears to be interested in politics. Moreover, it seems that father and daughter work together on projects. As we know, Ráhel is interested in the entertainment and tourist industry. A few months ago there was a lot of talk about the government’s centralization of the industry under an umbrella organization in which Ráhel might play a prominent role. But, and this is yesterday’s scoop, it seems that Ráhel might also have been given an unofficial diplomatic assignment.

444.hu discovered an article on the website of Bahrain’s National Oil & Gas Authority (NOGA) with accompanying photos showing the Minister of Energy Abdul Hussain bin Ali Mirza, Ahmed Ali Al Sharyan, the general-secretary of NOGA, Ms. Ráhel Orbán, mistakenly identified as the wife of the prime minister of Hungary, and Balázs Garamvölgyi, the Hungarian consul in Bahrain. István Tiborcz, also in the picture, was not identified in the caption. This visit took place in September 2015. According to the article

They discussed a number of global oil and gas market and energy issues (…) investment opportunities and expanding economic and trade ties between the Kingdom of Bahrain and the Republic of Hungary. They discussed the benefit to the national economy in both friendly countries from improved cooperation.

Ms. Orban and her accompanying delegation expressed their deep appreciation to H.E. Dr. Mirza and thanked him for the warm reception and issues discussed, which were aimed at creating a sustainable business environment and helping build new trade and investment bridges between the two countries that will enhance the economic interests of both. They wished every success to the Kingdom for further development and prosperity.

The press department of the prime minister’s office had no information on Ráhel Orbán’s trip to Bahrain. A few hours later, however, Ráhel Orbán in her usual arrogant style released a statement saying that “between September 17 and 20, 2015 my husband and I paid a private visit to Barhrain [sic]. We paid for all expenses. All other claims are lies,” I guess even NOGA’s press release. Diplomacy is not her strength. Father and daughter express themselves forcefully. Of course, this answer is no answer at all. No one claimed that it was the Hungarian government that paid for their trip. The issue is her involvement in negotiations with Bahrain’s minister of energy.

bahrein1

Panic must have set in government circles after the revelations of 444.hu and word must have reached the politicians in Manama, the capital of Bahrain, because by now the objectionable text about negotiations has disappeared and has been replaced by the following:

Minister of Energy His Excellency Dr. Abdul Hussain bin Ali Mirza received in his office at the National Oil and Gas Authority (NOGA) on a courtesy visit, the daughter of Prime Minister of the Republic of Hungary Ms. Rahel Orban, accompanied by the Honorary Consul of the Republic of Hungary to the Kingdom of Bahrain Mr. Balazs Garamvolgyi, in the presence of Dr. Ahmed Ali Al Sharyan, the NOGA General Secretary.

H.E. Dr. Mirza welcomed the distinguished visitors in the Kingdom of Bahrain and gave a brief overview of the economy of Bahrain.

Ms. Orban and the accompanying guests expressed their deep appreciation for H.E. Dr. Mirza, and thanked him for the warm reception.

They wished every success to the Kingdom for further development and prosperity.

Journalists at Index had a lot of fun with Balázs Garamvölgyi, who gave “probably the best mini-interview of his life” because he conveniently forgot what he was doing in Bahrain. As he said, “it was last September and I really no longer remember.” But one thing HírTV managed to learn: Péter Szijjártó, the foreign minister, had no knowledge of any official trip undertaken by Ráhel and her husband to Bahrain.

István Tiborcz definitely needs a new suit and Ráhel a new dress

István Tiborcz definitely needs a new suit and Ráhel a new dress

The latest piece of news is that one month after Ráhel Orbán’s visit to Bahrain a delegation from MOL, an international oil and gas company headquartered in Budapest, paid a visit to Abdul Hussein bin Ali Mirza, minister and head of the National Oil and Gas Authority. Garamvölgyi, who seems to have miraculously recovered from amnesia, insists that the two visits had absolutely nothing to do with one another. Of course not. The author of the blog “Most és Itt” (Now and Here) told this story in the form of a fairy tale (“The little royal princess Ráhel in Bahrain”). Most adults no longer believe in fairy tales just as we don’t believe that the two events had nothing to do with one another. Let’s finish this story with the customary last line in Hungarian fairy tales: “Itt a vége, fuss el véle.” Here is the end, run with it.

—-

*Olaszliszka was the town where a group of Roma killed a man driving through town because they thought that a little girl had been killed by his car.

**A reference to the brutal murder of a little boy whose body was thrown into a lake near Kaposvár in 2012.

***Krisztina Morvai began her career as a liberal civil rights lawyer but eventually ended up as a fiercely anti-Semitic member of Jobbik. Currently she represents the party in the EU Parliament.

August 31, 2016

Another EU project: Renovation of fortified castles and luxury mansions

It was about a year ago that I first encountered two new programs launched by the Orbán government: the “National Castle Program” and the “National Mansion Program.”

The castles we are talking about here are actually late medieval fortified structures, built for the defense of the country. They were especially numerous along the border between Royal Hungary and the Turkish occupied center of the country. The structures in Szigetvár and Eger are perhaps the most famous. It was in Szigetvár that Suleiman the Magnificent died in 1566, as did the captain of the fort, Miklós Zrínyi/Nikola Zrinski, the Croat-Hungarian military leader who led his troops to their death instead of capitulating. Eger, the scene of a Turkish-Hungarian encounter in 1552, was memorialized in the popular novel by Géza Gárdonyi, Eclipse of the Crescent Moon. Both are tourist attractions, so it made sense to put them at the top of the reconstruction list.

The government will salvage 35 fortified castles and renovate 34 mansions. All told, 93 billion forints will be spent on these two projects, “mostly from money coming from the European Union.”

The justification for these two projects is that they will boost tourism. The government estimates that the renovated mansions will attract an extra 800,000 visitors, and an additional 600,000 visitors are expected at the fortified castles. Fifteen billion forints will have to be spent on hotels and services near the structures which, the government hopes, will come from private entrepreneurs. Viktor Orbán assigned János Lázár to supervise these projects. He, in turn, entrusted Undersecretary László L. Simon with the task, but Simon was fired a couple of weeks ago for incompetence.

Most of the fortresses are in terrible shape. Once Hungary reclaimed the Turkish-occupied part of the country at the end of the seventeenth century, the structures no longer had any purpose. They could conceivably have been turned into estates since each of these fortified castles had a so-called “residence tower” (lakótorony), which at one point was occupied by the lord of the castle himself. But these uncomfortable old buildings were eventually abandoned in favor of mansions in the countryside or residences in the capital. And after the soldiers left, the locals pilfered the stones and bricks of the castle to build houses nearby. (This is how most city walls have disappeared over the centuries.)

To what extent should these structures be reconstructed? This question has been the subject of furious debate for a long time between those who consider extensive reconstruction a falsification of history and those who argue for complete reconstruction. The government’s emphasis is on tourism, not the sanctity of architectural history. And visitors are not going to flock to see piles of stones. Therefore, most of these fortresses will be more or less rebuilt. This is certainly true of the fortified castle of Diósgyőr.

Readers who want more information about this government initiative should take a look at an article titled “National Castle Program: Removal of ruins or falsification of history.” Here we learn that at least two of these fortresses will be completely reconstructed and that six will be partially reconstructed. In 17 cases only a section of the former structure will be reconstructed. Nine, most likely buildings too far gone, will receive some treatment to stop further deterioration.

And before

The Diósgyőr Castle after the rebuilding and before Diósgyőr Castle before and after

The reconstruction of the fortified castles may make some sense commercially, but the renovation of the mansions is questionable for several reasons. At the moment these fairly decrepit structures, most of them built in the nineteenth century, are not architectural masterpieces. Most eventually were used as schools or were even cut up into apartments or offices. Something ought to be done with them, but should they be completely renovated on mostly EU money? What does the state intend to do with 34 mansions? I fear that the plan is to sell them at a favorable price to domestic and foreign friends of the Orbán government. We mustn’t forget that István Tiborcz, Orbán’s son-in-law, is now in the real estate business and is involved in the sale of the Schossberger Mansion to a billionaire Turkish businessman.

There is another suspicious aspect of the National Mansion Project. In the last few months the number of officially recognized historic buildings has ballooned. The reason for adding more mansions to the list is simple. A construction company who wins a bid to renovate a historic building can charge up to 400,000 forints per m² both for alteration and construction, while for a non-historic building a company can charge only 320,000 for construction and 220,000 for alteration. In brief, more money can be squeezed out of Brussels if the mansion is of some historic significance or is deemed an architectural masterpiece.

The latest outrage is the government’s change in the payment schedule for construction work on these projects. The original understanding was that for projects designed to stimulate the tourist industry 30% of the amount bid could be received in advance. In April the government changed the regulation. Companies involved in these projects could get 50% of their money up front. On Monday the government decided that, without replacing a single brick, the construction companies could be paid in full. As far as Magyar Nemzet knows, “the European Commission is taking a dim view of this practice,” although at the moment the cost is being borne by the Hungarian taxpayers since Brussels will pay only when all work is finished, which in some cases may be only in 2022.

The Nádasdy Mansion is also the part of the program

The Nádasdy Mansion is also the part of the program

The mansion project may seem lavish, but in fact it is seriously underfunded. It costs an average of 400,000 forints per m² to build an ordinary house in a fashionable section of Budapest. To renovate these residences is extraordinarily expensive. According to the former chief of the office that used to handle issues connected with the country’s cultural heritage, the only sensible move would be to sell these state-owned mansions, as is, to domestic and foreign buyers who would undertake their renovation under strict guidelines. The money allocated for these houses, 1.5 billion per structure, might be enough to guarantee that the roofs don’t leak or perhaps it will cover the cost of an assessment of the physical state of the structures. But if that is the case, what will happen to the money the Hungarian government is giving from its own resources to the construction companies for the renovation of these buildings? A good question.

July 20, 2016

Turkish and Saudi business ties of Viktor Orbán’s son-in-law

I’m coming to the conclusion that the “first family” of Hungary must have gotten together on several occasions to figure out how to guarantee that their new son-in-law, István Tiborcz, becomes a very rich man. Thanks to the good offices of Viktor Orbán, the young man—he is still not quite thirty years old—made a small fortune in the LED street lighting business. In fact, he was too successful. OLAF, the European Union’s Anti-Fraud Office, wanted to know more about this super company that received almost all of the contracts for EU-financed modernization of city lighting in Hungary.

With a possible investigation on the horizon, Tiborcz had to distance himself from the lighting business. And the head of the family had to find another source of income for Tiborcz that would be less directly involved with public procurements. It looks as if Orbán’s advice was for his son-in-law to try his hand at real estate.

Tiborcz’s first real estate venture was the purchase of the Schossberger Mansion last October. His father-in-law most likely also counselled him to make sure that his name doesn’t appear on the letterhead of companies he owns in full or in part. So, the new real estate company, called BDPST Ingatlanforgalmazó, is on paper owned by two people, apparently friends of Tiborcz. But since he paid the excise tax in connection with the purchase of the mansion, we can be confident that Tiborcz is behind BDPST. I wrote about this deal about half a year ago.

At that time we also learned that Tiborcz may have interests in two other real estate firms, AMX HS and AMX Nador House. The CEO of both companies was a wealthy Turkish businessman, Suat Gökhan Karakus, who lives in Hungary.

In the foreground Adnan Polat / Source: Magyar Narancs

Adnan Polat  / Source: Magyar Narancs

A few months later atlatszo.hu discovered that Tiborcz has other important foreign backers. One of them is the incredibly rich Adnan Polat, a Turkish businessman who is one of the owners of AMX HS and AMX Nador House. He has, as 444.hu learned, many contacts within the Orbán government and is very active in Hungarian-Turkish cultural and business associations. He is involved with the Hungarian Trading House in Istanbul, and the Hungarian Cultural Center set up shop in the offices of Polat Holding.

Another man who is now in Tiborcz’s circle of business associates is Ghaith Pharaon, a Saudi businessman of dubious reputation. AMX Nador House, a joint venture of Polat and Tiborcz, managed to buy from the state the old headquarters of Postabank at József Nádor tér. Soon enough they sold AMX Nador House to a certain Ammar M. A. Abu Namous, who immediately changed the name of the company to Pharaon-Kappa Befektetési és Tanácsadó Kft. The Hungarian internet site Válasz soon found out that Namous is a lawyer who handles Ghaith Pharaon’s business ventures in Hungary. There are already seven such businesses, all of whose names include letters of the Greek alphabet. In addition to extremely valuable Budapest properties, Pharaon through Namous bought the Zichy-Hadik Mansion in Seregélyes and the Hochburg-Lamberg Mansion in Bodajk.

The available English-language information on Ghaith Pharaon is extensive, mostly because of his association with the Bank of Credit and Commerce International (BCCI) back in the 1990s. Secretly acting on behalf of BCCI, Pharaon acquired control of two American banks in violation of federal banking laws. When the fraud was discovered, BCCI was forced to sell the banks, which soon after were shut down by regulators when it was determined that they were insolvent. Pharaon was charged with wire fraud and racketeering conspiracy. He has been wanted by the FBI since 1991 for his role in the fraud involving the financial collapse of BCCI and remains a fugitive. In addition, Pharaon was accused in a 2002 French parliamentary report of having financial dealings with hawala, an Islamic financial network which is also used by terrorist organizations. Currently, he is chairman of Attock Petroleum, CEO of National Refinery, and Director of Pakistan Oilfields, just to mention a few of his business ties. He lives mostly on his super yacht named Le Pharaon.

Pharaon might be wanted by the FBI, but the Orbán government is not fussy. Rumor has it that the state is planning to sell the building next door to the former Postabank building that is already in Pharaon’s possession. The building, which is currently occupied by the ministry of national economy, will soon be available when the ministry moves, along with the prime minister’s office, to the Castle District in Buda. In addition to his various real estate deals, Pharaon is also a business partner of the Hungarian state through the Hungarian National Trading House.

The stories circulating about Pharaon eventually worried opposition politicians. At the end of April the parliamentary committee on national security spent a three-hour session on the relationship between Pharaon and the Orbán government, at the end of which deputy chairman Szilárd Németh (Fidesz) informed reporters that “this Pharaon is not that Pharaon.” Then, on June 6, when János Lázár was testifying before the committee about the work of the secret services in the year 2015, Bernadett Szél (LMP) decided to ask him about the “Pharaon case.” Did the government manage to learn more about Pharaon? Since she didn’t receive a satisfactory answer, Szél is demanding a separate hearing of the case in the near future.

Whether Pharaon is a national security risk or not I have no idea, but Tiborcz’s role as an intermediary between the Hungarian government and foreign businessmen, given Tiborcz’s relation to the prime minister, is troublesome to say the least. It seems that Tiborcz and his father-in-law are unwilling to settle for a role for Ráhel Orbán’s husband that has nothing to do with the Orbán government and the Hungarian state. After all, as long as Orbán is prime minister, the financial benefits of such a relationship are enormous.

June 8, 2016

The latest business venture of Orbán’s son-in-law

István Tiborcz, Viktor Orbán’s son-in-law, pretty well disappeared from the spotlight once OLAF, the European Union’s anti-fraud office, started to investigate his firm, Elios Innovatív Zrt. The firm specialized in LED street lighting technology and practically cornered the market: one city after the other signed contracts with Elios to modernize its street lighting with funds that came from the European Union. With the EU investigation pending, Viktor Orbán and his son-in-law decided that it might be wise for Tiborcz to “sell” his share of the business to Attila Paár, a well-off businessman with excellent connections to the Orbán government.

Only once, in December, did Tiborcz get any media coverage. The story was about Elios’s work in Zalaegerszeg, which seems to have been less than satisfactory. In some parts of the city it is pitch dark, while in others pedestrians have difficulty navigating because the streetlights shine only on the road, leaving the sidewalks practically unlighted. Complaints poured into city hall, which the mayor, naturally a member of Fidesz, “tried to handle discreetly.”

Now the Tiborcz family is back in the news. It seems that István Tiborcz might be one of the investors who purchased the Schossberger Mansion in Tura, which has been described as the most beautiful castle in Hungary, comparable only to the palaces along the Loire River in France.

Who were the Schossbergers? Not much can be learned about them online, but William O. McCagg, Jr.’s Jewish Nobles and Geniuses in Modern Hungary provides quite a bit of information about the family, who were originally from Moravia. The first Hungarian Schossberger who settled in Pest in 1833 was Lázár. His son, Simon Vilmos Schossberg, was the first unconverted Jew to receive nobility from Franz Joseph, in 1863. In 1873 Simon’s son Zsigmond purchased 13,000 hectares from Prince Miklós Esterházy. Ten years later he commissioned a neo-Renaissance mansion based on the plan of Miklós Ybl, one of Europe’s leading architects in the second half of the nineteenth century. Ybl’s best known work is the Hungarian State Opera House (1874-1884).

schossberger

The Schossberger Mansion

After 1944 the mansion was used by the Germans and the Soviet troops. It then became an elementary school. After the regime change it was sold twice, but no one did anything with the building, which would need serious renovation.

Last October a mysterious new buyer showed up: TRA Real Estate Kft., a brand new joint stock company headed by Dr. Judit Tóth. TRA Real Estate Kft. is the parent company of BDPST Ingatlanforgalmazó és Beruházó Zrt., owned by Judith Tóth and Loránd Aurél Szabó, both lawyers. The new buyer wanted to be sure that the city of Tura didn’t have the right of first refusal and therefore sent the law firm of Endre Hamar to approach the city.

It is here that one becomes suspicious. First, Hamar got in touch with the town of Tura on September 7 in the name of TRA, when the firm didn’t yet exist. It was established only a week later. Second, Endre Hamar is a former business partner of István Tiborcz. Third, Hamar’s law firm might exist only on paper. It is ostensibly located in the same building as the headquarters of Elios Zrt. BDPST Ingatlanforgalmazó, which is linked to TRA, also has the same address. As 444.hu notes, Endre Hamar cannot have too many clients, considering that his firm has no website and one cannot even find the firm’s name on the list of businesses renting office space in the building.

Meanwhile, the deal took place. Whoever bought the mansion paid 200 million forints, including a 80 million forint mortgage, to the Széchenyi Bank.

When the the Schossberger Mansion was purchased, the transaction couldn’t be directly linked to István Tiborcz. But three days ago 444.hu found out that it was István Tiborcz himself who paid the 100,000 forint excise tax on August 14, at the time of BDPST’s registration as a new business. What is still a mystery is where TRA Kft. got the millions of forints that it spent on the mansion in Tura. Neither Judith Tóth nor Loránd Aurél Szabó has any other business venture that could fund the purchase.

If Tiborcz is behind BDPST Zrt., he might also have interests in other real estate ventures because BDPST is the part owner of two other businesses dealing with real estate, AMX HS and AMX Nador House. The CEO of both companies is a wealthy Turkish businessman, Suat Gökhan Karakus, who resides in Budapest. The other part owner of these companies is HBRE International Investments B.V. of Amsterdam.

On January 8 Együtt (Together) released a communiqué in which the party asked István Tiborcz and Ráhel Orbán to come forward and explain the source of their wealth. I think Együtt can wait for the day when anyone in the Orbán or, by extension, the Tiborcz family reveals the source of their rapid enrichment. Of course, it would also be nice to know where the 2 million euros came from that Lőrinc Mészáros just invested in the NK Osijek football club. That would be quite a job, not just for an investigative journalist but for a whole slew of the best detectives in Europe and the Americas.