Tag Archives: János Lázár

The Hungarian government’s flouting of European law and human rights

Two weeks ago the European Court of Human Rights (ECHR) handed down a decision that may affect part of Viktor Orbán’s solution to the refugee crisis. He might not be able to continue incarcerating asylum seekers in so-called transit zones.

Hungarian civil rights activists were encouraged by the Court’s decision, especially since the latest amendments to the Law of Asylum, passed not long ago by the parliament, envisaged these container transit zones as the sole means of handling asylum applicants. In fact, it was today that the amended law came into effect.

After ECHR’s ruling, the leaders of the government parties began suggesting in all seriousness that Hungary should simply suspend its adherence to the Convention for the Protection of Human Rights and Fundamental Freedoms, originally adopted in 1950. This is not a joke, just as it is not a joke that Hungary is pursuing the issue of the red star on bottles of Heineken beer. Both are hopeless efforts by a government that is acting even more strangely of late than it normally does.

A week ago Monday, Imre Vejkey (KDNP) began the attack on the Convention: “Now is the time to think about terminating Hungary’s adherence to the Convention or at least suspending some of its provisions.” On Thursday János Lázár said at his press conference that the government considers the verdict “unacceptable and impossible to implement.” Although the decision was unanimous and the Court is unlikely to reverse itself, the Hungarian government insists on appealing the judgment. By Friday Zoltán Kovács, the government spokesman, announced on ATV that “the ministry of justice will have to examine what kinds of obligations” Hungary has under the terms of the Convention. On Sunday Lajos Kósa, the leader of Fidesz’s parliamentary caucus, said that if Strasbourg continues criticizing Hungary’s migrant policies “we must relinquish” our adherence to the treaty. He even accused the Hungarian Helsinki Commission of “profiting from the migrant crisis at the expense of the Hungarian government.” He was alluding to the fact that the Court, in addition to the 5.8 million forints awarded to each of the refugees, granted 2.7 million forints to the Hungarian Helsinki Commission for their work on the case.

Együtt, one of the smaller opposition parties, compiled a list of what Hungarians would be deprived of if Hungary turned its back on the Convention and consequently on the Council of Europe. The list is long: right to equality; freedom from discrimination; right to life, liberty, personal security; freedom from slavery; freedom from torture and degrading treatment; right to remedy by a competent tribunal; freedom from arbitrary arrest and exile; right to a fair public hearing; right to be considered innocent until proven guilty; right of free movement in and out of the country; right to asylum; right to own property; right to education. And we could continue. But Lajos Kósa sees no problem whatsoever with the suspension of the Convention because “in Hungary it is not the legal force of ECHR that guarantees human rights but the Hungarian Constitution and other international treaties.”

This is all just talk. The consequences of such a move would be so severe that no country, especially a member of the European Union, could seriously entertain it. The very first consequence of such folly would be a loss of membership in the Council of Europe. That in turn would result in serious conflict with, or even expulsion from, the European Union. So, Kósa can demand all he wants that the government in the name of Fidesz suspend adherence to the Convention. Nothing of the sort will happen. After all, in Europe there are only three countries that are not signatories: the Vatican, Kosovo, and Belarus.

As for the Hungarian Helsinki Commission, Márta Pardavi, co-chair of the organization, doesn’t seem to be at all frightened by the threats made by the government against the institution as a beneficiary of the migrant business. She reminded Kósa of the kind of business the Hungarian government is conducting via the settlement bonds, sold to thousands of people for 300,000 euros each. So, Kósa should not accuse others of financial gain from the miseries of refugees. (Of course, there are refugees and “refugees,” with staggeringly different levels of misery.) As for the 2.7 million forints for legal fees, she finds the amount perfectly reasonable. Unless she hears something similar from the government itself, she considers Kósa’s semi-incoherent words on the subject mere “political rant.”

The government is remaining quiet for the time being. But its actions show that it was’t impressed with the Court’s verdict or with the Hungarian Helsinki Commission’s repeated assertion that the government’s latest law on asylum is illegal not just according to the Court in Strasbourg but also according to the Hungarian Constitution. The Hungarian Helsinki Commission again had to turn to ECHR on Friday in order to put an immediate stop to moving a pregnant woman from Uganda and eight refugee children who had been housed in Fót to the transit zone near the Serbian border. The woman had been a victim of torture and is currently suffering from psychological trauma. As far as I know, the government refrained from the forcible removal of these people, at least for the time being.

It looks like a lecture to me / Source: Népszava / Photo József Vajda

Meanwhile Dimitris Avramopoulos, EU commissioner for migration, arrived in Budapest to conduct negotiations with Sándor Pintér, minister of the interior, and László Trócsányi, minister of justice. Avramopoulos’s job was to drive home to Budapest that all member states must comply with the Union’s rules and that human rights is one of the basic principles that must be adhered to. At the end of the negotiations it was announced that a working group will be formed to examine whether the Hungarian law infringes on the laws of the European Union. According to legal scholars, it unquestionably does. It would be time for the European Union to put an end to the Hungarian government’s games because nothing good can come of them as far as the future of the Union is concerned.

March 28, 2017

Politics and the Hungarian socialists–Not a winning combination

The ineptness of MSZP politicians never ceases to amaze me, but their latest stunt really deserves a booby prize. While their new hope, László Botka, lectures on taking away from the rich and giving to the poor, high-ranking MSZP politicians endorsed a proposal to give away the state-owned Grassalkovich Mansion in Hatvan to the Széchenyi Zsigmond Kárpát-medencei Magyar Vadászati Múzeum (Zsigmond Széchenyi Hungarian Hunting Museum of the Carpathian Basin).

Hunting has become a favorite pastime of Fidesz politicians, who show a great affinity for the lifestyle of the traditional Hungarian landowning class, which included a love of hunting. Even during the Kádár regime high-ranking party functionaries indulged in this aristocratic pursuit. Zsolt Semjén (KDNP), deputy prime minister, and János Lázár, chief of the prime minister’s office, are the best known avid hunters.

First, a few words about the mansion that stands on the main square of Hatvan and that is named for Count Antal Grassalkovich (1694-1771), a wealthy man who owned vast tracks of land around Gödöllő, Hatvan, and Bag. In 1867 the mansion was purchased by the Deutsch-Hatvany family. After the German occupation of Hungary, the Gestapo settled there. It was also used as a military hospital. By 1979 the building was declared to be uninhabitable. After a lengthy reconstruction effort, the mansion’s restoration was more or less finished with the help of 3.15 billion forints provided by the European Union and the Hungarian government. In 2012 the decision was made to house the Hunting Museum, named after Zsigmond Széchenyi (1898-1967), a well-known explorer and writer, in the state-owned mansion.

A nice gift for the Hunting Association

On March 14 eight members of parliament, three from Fidesz-KDNP and five from MSZP, proposed an amendment to a law passed in 2011 that regulates the ways and means of giving away state-owned properties to private persons or private organizations. The three Fidesz-KDNP signatories were Zsolt Semjén, János Lázár, and János Halász, undersecretary for culture in the prime minister’s office. As for five MSZP members, they included well-known, important names: István Hiller, Gergely Bárándy, Dezső Hiszékeny, István Józsa, and Árpád Velez. According to the document, these eight men proposed giving the newly reconstructed Grassalkovich Mansion to the National Hungarian Hunting Association (Országos Magyar Vadászkamara/OMVK). The justification for the move was that this transfer of ownership will offer an opportunity for the museum to function “on a professional basis.” Because, the government politicians argued, at the moment the museum attracts very few visitors. Instead of the expected 100,000 a year, barely 30,000 visitors were registered in the last few years. That shortfall happened because the current management is not doing a professional enough job. Once the Hunting Association owns the mansion outright, however, it will have a more effective way of supervising the museum.

I must say that I do not see the connection between ownership of the building and management of the museum. Anyone with half a brain should have noticed that there is something wrong here. One of the Hungarian papers claimed that “the socialists were misled.” Well, it doesn’t seem to be very difficult to mislead these political geniuses.

There was another reason the MSZP politicians should have been suspicious. The privatization of public property needs a two-thirds majority in parliament. As we know, Fidesz doesn’t have that majority anymore. Most likely, they knew that Jobbik would never agree to cooperate with them on an issue like this. So, they turned to the patsies of MSZP instead. And it very nearly worked.

The reaction from the other parties on the left was swift. As usual, Ferenc Gyurcsány’s Demokratikus Koalíció was the first to respond. Zsolt Gréczy, the spokesman for DK, said: “We always knew that Fidesz politicians steal,” but it is unacceptable for MSZP politicians to assist in this enterprise. According to Gréczy, MSZP must offer some kind of reasonable explanation for lending a helping hand to Fidesz in its quest to steal the country blind. MSZP’s leadership was unmoved. They answered that this is not about hunting but about a museum that serves the public good. Viktor Szigetvári of Együtt was the next to issue a statement. He went so far as to call this cooperation between Fidesz and MSZP “a grand coalition.” Shame, shame, he added.

A day later, on March 17, MSZP published a terse announcement: “MSZP wants to avoid even the appearance of working together with Fidesz in the privatization of state property, and therefore it withdraws its support for the privatization of the property destined for OMVK.” Before this announcement was made, however, Gyula Molnár, chairman of MSZP, had stood by the party’s decision and repeated that cooperation with Fidesz for the sake of the museum was correct and justified. Gergely Bárándy, son of former Minister of Justice Péter Bárándy, accused the DK spokesman of “creating a scandal.” If he hadn’t opened his mouth, the public would have heard nothing about “this noble cause from the point of view of Hungarian culture.”

Who was responsible for this politically suicidal act? I’m afraid all the bigwigs of MSZP. I don’t have any knowledge of the interplay between the parliamentary caucus and the leadership of the party, but I would like to believe that the chairman of the party, Gyula Molnár, was informed that cooperation with Fidesz on the issue had been sanctioned by the parliamentary delegation. The leader (or whip) of the MSZP delegation is Bertalan Tóth. He is new at his job, but until now he struck me as an intelligent fellow. Perhaps he didn’t feel secure enough to go against people like Hiller, Bárándy, and Józsa. We know that the Fidesz politicians came to MSZP with the suggestion, which then was discussed at length. At the end, they decided to support the joint proposal. And now, here is this embarrassing retreat which was apparently initiated by László Botka, who must have hit the ceiling upon finding out about it. I don’t blame him. According to Népszava, Botka “specifically requested” the party’s immediate withdrawal from the joint project.

After this fiasco the party leadership is threatening MSZP members of parliament with immediate removal from the caucus if they dare vote for the bill. This indicates to me that some of the original signatories are giving the party leadership a hard time about prohibiting any further cooperation. MSZP, as usual, failed miserably as an effective opposition to the politically savvy Fidesz party machinery.

March 19, 2017

Beer and nationalist madness

I have been sitting here for at least an hour trying to find the right words to describe the madhouse Hungary has become, thanks to Fidesz politicians. This metamorphosis has occurred incrementally, starting in 2002 when Viktor Orbán lost an election he believed was his. Ever since, he has been whipping up prejudices buried deep–or not so deep–in people’s psyches, poisoning the very soul of the population. Wars against the enemies of the country are declared practically every day. Right now the Hungarian government is fighting against Brussels, against the migrants, and, yes, against Heineken, the well-known Dutch brewery. And while they are at it, they are declaring war against all foreign breweries.

Heineken’s encounter with the Orbán government is one of the strangest stories you will run across anywhere because I very much doubt that any government of a western country (probably not even the Trump White House) would engage in such a futile, idiotic fight over an issue which in fact has nothing to do with Hungary.

Heineken moved to Romania in 1998 and five years later bought a run-down brewery in Miercurea Ciuc/Csíkszereda, the county seat of Harghita/Hargita County in an area where the majority of the population is Hungarian. With the brewery came the name of one of the beers brewed in Miercurea Ciuc–Ciuc Premium, or as local Hungarians called it, “csíki sőr.” In 2014 a new, small brewery was set up in Sânsimion/Csíkszentsimon which produced what they called “Igazi Csíki Sőr,” or “Real Csíki Beer.” The company that produces the “real stuff” is owned by András Lénárd, a Romanian-Hungarian businessman, and Lixid Holding BV, a Dutch company. Heineken’s Romanian subsidiary sued for trademark infringement and won.

Soon enough a simple commercial legal case became a national issue. Apparently, the upheaval around the court’s verdict came in handy for the struggling brewery that was producing the Real Csíki Beer. The case was portrayed as a struggle of David against Goliath, a small local company against a heartless, profit-oriented multi-national.

The story is not new. The Transylvanian division of Átlátszó.hu produced a long report on the case already in July 2015, but it was only at the end of January 2017 that the decision was handed down. Real Csíki Beer cannot be produced under this brand name.

The verdict was met with indignation by supporters of the Dutch-Hungarian mini-brewery. They argued that one cannot confuse the names of the two brands since they don’t really resemble one another. One is in Hungarian and the other is in Romanian. However, as locals pointed out, the Hungarians in the area never asked for a bottle of Ciuc but always for a bottle of Csíki sőr. In any event, the case quickly became a national issue: András Lénárd, the co-owner, became a symbol of the oppression of Romania.

In no time the matter became a political football in Hungary. The first party that took up the cause of the brewery was Jobbik. It asked for a boycott of Heineken beer and urged the government to declare Igazi Csíki Sőr a Hungaricum, whose trade name then couldn’t be touched. Fidesz had to move. It couldn’t let Jobbik reap the political benefits of such a potentially inflammatory issue.

By March 13, 2017, Fidesz devised a strategy that could make Heineken’s Hungarian subsidiary miserable in punishment for what Heineken Romania did to the Szeklers of Romania. János Lázár and Zsolt Semjén proposed modifications to the law on the use of totalitarian symbols for commercial purposes. Heineken’s red star, which Hungarian law considers a totalitarian symbol, is the symbol of the company. As of now, the commercial use of such symbols is permitted, but if the Lázár-Semjén modification of the law is passed by parliament (and why shouldn’t it be passed?) Heineken would have to change its logo in Hungary. If not, Lázár announced, the culprit could be jailed for two years for noncompliance. I should add that Heineken’s red star has nothing to do with communism or the Bolshevik revolution. Apparently it was a medieval symbol whose points symbolize water, earth, air, fire, and magic power. Heineken adopted it to highlight the uniqueness of its brew.

The owners of the small brewery in Transylvania invited Lázár to visit the place to see the production of the same beer under a different name: “Tiltott sőr” (forbidden beer). Lázár, who is a busy man, readily agreed. Lázár’s enthusiasm for the tour is amusing since he claims to be completely unfamiliar with the taste of beer.

As far as totalitarian symbols are concerned, one ought to remind Lázár that in the past the Orbán government lost two such cases in the European Court of Human Rights. I somehow doubt that they would fare any better this time. And to compound their potential legal problems, a few days later Semjén came very close to offering financial assistance to the brewery of Real Csíki Sőr, to the chagrin of some internet publications such as Kolozsvári Szalonna.

Antagonism toward foreign-owned breweries incited by the government is now spreading all over Hungary. The case encouraged the president of the Association of Mini-Breweries to blame the four large multi-national breweries for the difficulties these small companies encounter in the market place. He of course didn’t mention that craft beer is very expensive and that, as a result, demand is low.

Now that Lázár and Semjén have begun a war against foreign-owned breweries it looks as if the government is seriously contemplating giving financial assistance to the mini-breweries. Lázár also announced that regulations governing breweries should be reconsidered, which I assume means passing legislation that would discriminate against the large companies and promote the business interests of small Hungarian firms. The government news site 888.hu went so far as to claim that “there is no good and inexpensive Hungarian beer because of the multi-national companies.”

So, soon enough the four large companies–the U.S.-Canadian Borsodi Brewery, the Austrian Pécs Brewery, the Japanese-owned Dreher, and Heineken–can join the foreign-owned supermarket chains in facing extra taxes and other discriminatory measures. All this because Igazi Csíki Sőr many miles away in a foreign country lost a fight over a trade name. Utter madness.

March 18, 2017

Scandal after scandal: trying to hide the real meaning of “ethnic homogeneity”

It doesn’t happen too often that I have to return to a topic that I thought we had discussed quite thoroughly only yesterday. But this time such a revisit is definitely warranted. Without it, the story is incomplete. Readers would not be able to grasp the extent of the depravity and duplicity of the government that rules Hungary today.

Of course, I’m talking about the controversial speech Viktor Orbán delivered on February 28 at the annual gathering of the Hungarian Chamber of Commerce. When I’m writing about a speech, I normally wait to have the full text in front of me as opposed to relying on summaries that appear right after it is delivered. I consider the written text to be more reliable and more detailed, allowing me greater room for analysis. So, I checked the prime minister’s website several times for the appearance of the complete text.

In my piece I concentrated on two paragraphs. The first was about the “ethnic homogeneity” desired by Orbán, and the second was about “the greatness” of the Hungarian nation. In both cases I translated practically the whole text.

There was one sentence, which happened to be the lead sentence of the paragraph on “ethnic homogeneity,” that after some pondering I decided to leave out. It was jarring. It didn’t make any sense. So I decided that the best solution was simply to omit it, especially since it wasn’t vital to our understanding of Orbán’s message. It read: “First, I find the preservation of cultural homogeneity very important.” This lead sentence was followed by two sentences that I did translate: “By now one can say such things. A few years ago one could be executed for such sentences, but today one can say it because life confirmed that too much mixing brings trouble.” These sentences, coming one after the other, made no sense to me. One may think that “cultural homogeneity” is desirable, but one cannot be branded for life for espousing such a thought. So, as I said, I decided that the best solution was to drop that first sentence.

It now seems that my instinct was correct. We learned today that someone in the prime minister’s office changed the original sentence “I find the preservation of ethnic homogeneity very important” to “I find the preservation of cultural homogeneity very important.” Who ordered the change we don’t know. Was it the prime minister himself who upon reflection decided that such a statement was inappropriate or was it one of his subordinates who concluded that this sentence would cause an uproar? It really doesn’t matter because the falsification of facts is unacceptable, or at least it should be unacceptable. But in Hungary’s case one can say with confidence that there will be no fallout from this latest “editing.”

It is bad enough that high government officials fiddled with the true message of the prime minister, but one would have expected more finesse from them. What good does it do to change the wording in one instance but in four other cases in the same paragraph leave “ethnic homogeneity” unaltered? Moreover, when the video of the speech becomes available on the government website, this tinkering with the transcript will be called out in no time, as it was this afternoon at János Lázár’s Thursday afternoon séance, “government info.”

Faithful readers of Hungarian Spectrum surely remember Ildikó Csuhaj of Népszabadság, who was known for her scoops on the affairs of Fidesz. She was always the first one to come up with breaking news on people close to Viktor Orbán. Now that there is no more Népszabadság, Csuhaj got a job at ATV as a provider of background news. She was the one who brought up the presence of “ethnic homogeneity” in Orbán’s speech at Lázár’s press conference. Lázár and his faithful companion at these occasions, Zoltán Kovács, were outraged: Hungary’s prime minister said nothing of the sort. Lázár even told Csuhaj to stop bothering them with such annoying and obviously nonexistent claims. Kolozsvári Szalonna captured their pique in its headline to the story: “Ildikó, you little goose, don’t bother the gentlemen with your nonsensical questions.”

I’ll bet they were not so happy after the press conference was over

Interestingly, Ildikó Csuhaj’s take on Orbán’s racist remarks came from a vantage point quite different from that of the reports and analyses coming from abroad. Foreign assessments objected to the racism inherent in the concept of “ethnic homogeneity” in general. Ildikó Csuhaj’s probe, on the other hand, centered around Orbán’s attitude toward the introduction of a guaranteed basic income, which had been proposed by László Botka of MSZP and the leadership of Párbeszéd. Orbán, as a believer in a “work-based society,” naturally rejects such a plan out of hand, but he finds its introduction especially problematic in his own country because “ethnic relations in Hungary are complicated.” That was translated to be a specifically racist remark in connection with Hungary’s Roma population. Even if Orbán were in favor of a guaranteed basic income, given the presence of the large Roma population the idea couldn’t be introduced in Hungary because of the enormous unemployment in the Gypsy community. The reasons for this high unemployment? Well, “ethnic relations in Hungary are complicated.”

The Orbán government must have been embarrassed because it moved to salvage what could be salvaged abroad. Zoltán Kovács wrote an opinion piece for a new government propaganda site called About Hungary. Here we learn that it wasn’t the Orbán government that falsified the prime minister’s remarks; the culprit was “the liberal media.” Kovács had the temerity to summarize Orbán’s speech this way: “The prime minister, after delivering a speech at the Hungarian Chamber of Industry and Commerce, was talking about threats to Hungary’s strong economic performance and stability. One of those threats is illegal migration, and he said that preserving the European cultural identity of Hungary is a priority for the well-being of the country.” After these introductory words, he quoted Orbán’s lead sentence correctly but cagily left out all the sentences in which the phrase “ethnic homogeneity” appears. As Kovács put it, “if you’re having trouble seeing why that’s racist, that’s because it’s not. He was talking about preserving the ethnic identity we have, and that’s associated with culture, language, sometimes religion, and so on.” Indeed, in his version it is difficult to find the original meaning of Orbán’s message. According to Kovács, “the loud, ideologically-driven press simply don’t have ears to hear the real meaning of a statement and refuse to report the full picture. Instead, these journalists with an agenda quote out of context.”

I was spared, unlike Lili Bayer, a freelance journalist working out of Budapest, who has written some excellent articles on Hungarian affairs for Politico and lately a piece for The Forward on Sebastian Gorka’s connections with the Hungarian far right. Kovács discovered the following tweet by Bayer: “Today Orban called for ethnic homogeneity in Hungary. 73 years ago my grandma was taken to concentration camp by others making same argument.” Kovács accused her of “manipulative editing” and decried “the rigged media [which] is … blinded by their own bias.”

The Hungarian government works exceedingly hard to massage the news to their political advantage, and domestically they have had significant success with their propaganda campaigns. Internationally, however, as is clear from Kovács’s pitiful attempt to explain away this latest scandal, they are much less successful at pulling the wool over our eyes.

March 2, 2017

Metro 4: The largest case of Hungarian fraud and corruption

Now that the complete OLAF report is available online, we can all settle down and try to read 103 pages of dense prose detailing “irregularities, fraud, corruption, and misappropriation of EU funds.” A five-member OLAF group began their investigation in January 2012 after the Court of Auditors and the Directorate General for Regional and Urban Policy of the European Commission contacted OLAF, asking the office to scrutinize the case. During the investigation, the OLAF staff got in touch with only the City of Budapest and Péter Medgyessy, prime minister of Hungary between 2002 and 2004, whose consulting firm worked for Alstom Transport S.A., one of the firms accused of wrongdoing.

The total cost of the project was €1,747,313,606, of which €696,490,000 came from the Cohesion Fund. According to OLAF’s calculation, “the financial impact on the Cohesion Fund is €227,881,690.”

The release of OLAF’s final report put an end to the political game Fidesz and the Orbán government had been playing with the document. János Lázár, head of the prime minister’s office, and his deputy, the honey-tongued Nándor Csepreghy, did their best to get as much political mileage from the affair as possible. Lázár intimated that an international socialist-liberal conspiracy was behind the corruption that occurred at the Metro 4 project. On another occasion, he claimed to have filed charges against Gábor Demszky, mayor of Budapest between 1990 and 2010, Csaba Horváth, deputy mayor between 2006 and 2009, and János Atkári, an adviser to Demszky. Csepreghy must have known that none of these people was mentioned in the document, but in a long interview at 888.hu he intimated that even Ferenc Gyurcsány, prime minister between 2004 and 2009, may have shared responsibility for the misappropriation of funds. A few days later he claimed that other politicians might also be implicated.

All this is just political fluff. What we know from the OLAF report is that the City of Budapest signed a contract in 2004 with Budapesti Közlekedési Vállalat (BKV), the city-owned transit authority, which was commissioned to implement the project. Most likely that was a major mistake, which led to a lot of difficulties later. Any project, especially such a large one as the construction of a metro, needs a general contractor who oversees the project. BKV’s staff was not equipped to coordinate the work, which led to innumerable hiccups during construction.

Throughout the project the Hungarian media, especially the online site Index, reported many suspicious cases of overspending. But these cases were actually small potatoes, like too many consulting firms and lawyers making millions for very little work. Although several such cases are described in the final report, the bulk of the money OLAF would now like to be returned came from serious irregularities during the acquisition of tenders by huge corporations.

According to OLAF, 96% of the “irregularities” occurred in contracts signed by six large firms: Siemens AG, the largest manufacturing and electronics company in Europe; Swietelsky, an Austrian construction company from Linz; Strabag, the largest construction company in Austria, based in Villach; a Hungarian company called Hídépítő Zrt., which as its name indicates builds bridges and roads; the BAMCO consortium (Vinci CGP, Strabag, Hídépítő Zrt); and Alstom, the French multinational company operating worldwide in rail transport, including the manufacture of metro trains.

I left Alstom to last because it was in regard to Alstom that OLAF got in touch with Péter Medgyessy, who received €600,000 in 2007-2008 from Alstom for two years of consulting. This payment occurred after Alstom had won the tender with apparently the worst offer. Medgyessy naturally claims that his consulting firm had nothing to do with the Alstom case, adding that it is a well-known fact that his relationship with Prime Minister Ferenc Gyurcsány and the liberal SZDSZ leadership of the City of Budapest was strained. What his relationship with Gyurcsány had to do with BKV deciding to purchase overpriced Alstom cars is beyond me. I have no idea whether in a court of law Medgyessy would be found innocent or not, but in ethical terms his behavior was highly suspect.

Siemens, the German company which was in charge of electrical works, received 31.7 billion forints (€102,303,730) for the job. Since OLAF claims that Siemens most likely received inside information during the bidding process, the European Union wants the Hungarian government to pay back the whole amount. The same is true of Alstom’s 22.9 billion forint (€73,892,769) tender. BAMCO also won the tender in an irregular manner, and therefore the European Union demands the return of 8 billion forints (€25,817,360). The EU also demands 7.6 billion forints (€24,523,364) from Swietelsky, which was responsible for the interior of the metro stations. Strabag-Hídépítő, in charge of structural work on the station at Baross Square, received 3.7 billion forints for its work but because of procurement irregularities 2.5 billion forints (€8,067,751) should be returned.

Another politician who, although not mentioned by name, was most likely involved in the metro case is László Puch, former financial director of MSZP, whose company Media Magnet Kft. just purchased the ailing Népszava and Vasárnapi Hírek. Media Magnet, according to the OLAF report, received 331 million forints (€1,068,110) from Siemens for advertising. The report notes that “this company was in charge of the campaign of the political party which was in a decision-making position in the case of Metro 4.” In 2010 Index reported that BKV ordered all sorts of superfluous studies from Media Magnet on such things as, for example, the state of the cable television market. There is a strong suspicion that some of this money ended up in MSZP’s coffers.

The biggest culprits will most likely be found among the representatives of the named companies and those BKV officials who were in contact with them. There’s no question that the guilty parties should be punished, but judging from the outcomes of earlier corruption cases I have my doubts that we will ever hear about all the dirt that OLAF unearthed. I’m also pretty sure that Fidesz will try its darndest to drag high-level politicians into the morass around BKV.

I see that Gábor Demszky will be represented by György Magyar, one of the “star lawyers” in the country. On February 3 Magyar announced on ATV that Demszky had signed only three contracts during the many years of construction. One was the contract between the city and the government in which the parties agreed that 79% of the construction cost would be borne by the government and the rest by the City of Budapest. The second contract dealt with a loan the City had to obtain for the project. The third was the contract that gave full authority to BKV for the implementation of the project.

Fidesz naturally wants to have a parliamentary investigation into the case, which will lead to further accusations on both sides. If Hungary had a decent prosecutor’s office and an independent chief prosecutor, it should undertake a speedy, thorough, unbiased investigation of the case. Unfortunately, this is the last thing we can hope for under the present circumstances.

February 6, 2017

The perils of being an opposition politician in Hungary

I don’t know whether I will be able to make a coherent story out of the mess the Orbán government most likely has purposefully created regarding the report of the European Commission’s European Anti-Fraud Office (OLAF) on irregularities—fraud and possible corruption—in connection with the construction of Budapest’s fourth metro line (M4). The report covered the period between 2006 and 2015.

Although the Hungarian government received the OLAF report—or its English-language summary, the Hungarian public heard about it only from the English-language news site Politico. It didn’t take long before the Fidesz government and the Fidesz-led City of Budapest, on the one hand, and the politicians of the socialist-liberal government of the pre-2010 period, on the other, were at each other’s throats. The government claimed that practically all the financial wrongdoings were committed before 2010 while the opposition politicians accused the Orbán government of making political hay out of the case while refusing to make the report public. The administration claimed that it has no authority to release OLAF’s findings.

Most likely because of the holiday season at the end of the year, for about a month not much happened. Then, on January 16, János Lázár officially announced that he will file a complaint against Gábor Demszky (SZDSZ), mayor of Budapest between 1990 and 2010, Csaba Horváth (MSZP), deputy mayor between 2006 and 2009, and János Atkári, a highly respected economist who for many years served as Gábor Demszky’s financial adviser. That announcement started an avalanche of often conflicting articles in the Hungarian media.

A day after Lázár’s announcement, his deputy Nándor Csepreghy gave a detailed press conference dealing with the Metro4 corruption case. The government found MTI’s report of that press conference so important that it was immediately translated into English. We learned from Csepreghy that the Fidesz government had had its own suspicions of fraud surrounding the project even before. The OLAF report only confirmed these suspicions.

Csepreghy disclosed a few relevant facts that might help our understanding of the case. For example, he revealed that the investigators of OLAF conducted interviews with 50 individuals, “including the competent executives and managers” of the Budapest Transit Authority (BKV) and the City of Budapest. In addition, Csepreghy named a few companies that had been involved in the construction of the metro line as possible culprits. He also gave the initials of certain individuals heading large public and private companies. Finally, he said that “there are dozens of actors mentioned in the report who were politicians, were associated with the realm of politics, or operated as semi-public actors.” Finally, he told the press that the “government’s legal advisers are currently looking into the possibility of disclosing the OLAF report to the public in its entirety, to which the Government is fully committed.”

Nándor Csepreghy at the press conference / Photo: Tamás Kovács (MTI)

Although the government filed a complaint against Demszky, Horváth, and Atkári, they weren’t among the individuals Csepreghy referred to by their initials. A Magyar Idők editorial found Demszky’s absence from the list especially regrettable. The former mayor will get off scot-free because “according to rumors, his name doesn’t appear to be in the report.” Only the CEOs of large companies will be prosecuted. But what will happen if they reveal “the name of the chief coordinator”? In brief, the journalist responsible for this editorial accuses Gábor Demszky of being the head of a conspiracy to commit fraud.

Meanwhile Hungarian members of the European Parliament decided to look into the question of whether the Hungarian government told the truth when it claimed that it needed the approval of OLAF to release the report and that it was waiting for OLAF’s response to its request. All three opposition MEPs–Csaba Molnár (DK), Benedek Jávor (Párbeszéd), and István Ujhelyi (MSZP)–asked the head of OLAF, Giovanni Kessler, about OLAF’s position. All three claimed that, according to the information they received, it was up to the Hungarian government whether to release the document or not. Since there is a controversy over the meaning of the information received, I will rely on Ujhelyi’s statement, which includes the original English-language letter he received from OLAF. Here is the crucial passage:

In response to your question, since the OLAF final report has now reached its intended recipients, the Office is not in a position to decide on the possible release of the report. Such a decision belongs in the first place to the national authorities to which the report was addressed. It is for these authorities to assess the impact of a possible release of the report and to ensure compliance with the relevant legal obligations on judicial secrecy, data protection and procedural rights, including the right of access to file.

It is hard to fathom why the Orbán government again resorted to lying instead of appealing to the possible legal problems that could stem from the release of the report. Since then, Attila Péterfalvi, president of the National Authority for Data Protection and Freedom of Information, personally asked István Tarlós, who by now has a copy of the document, not to make the OLAF report public. It looks as if Péterfalvi, before making this request, consulted with János Lázár of the Prime Minister’s Office and Péter Polt, the chief prosecutor, who are both against the release. Although there might be compelling legal reasons not to allow the publication of the OLAF report, given the reputation of Péter Polt’s prosecutor’s office one cannot help being skeptical about the real reasons for the secrecy.

Over the weekend Gábor Demszky gave an interview to Vasárnapi Hírek in which he detailed his position on the case. Demszky said that, according to the rules of the Council of Europe and the European Parliament, OLAF must give anyone mentioned in their investigative reports the opportunity to respond. Since no one contacted Demszky, Horváth or Atkári, it is probably safe to assume that they are not the subjects of the investigation. Even so, the Orbán government filed complaints against them. Demszky also said that because OLAF conducted its investigation between 2012 and 2016, “most of their information came from the offices of the Fidesz government.” OLAF, Demszky added, most likely accepted the information in good faith because its investigators don’t expect these offices to be swayed by political pressure.

I might add that one has to be very careful when assessing the veracity of witness testimony. We know from other politically motivated trials that witnesses often give false testimony. The most infamous was that of Zsolt Balogh, head of BKV. In order to save himself months of pre-trial custody, he invented the story that Miklós Hagyó (MSZP), one of the deputy mayors, demanded 40 million forints, to be delivered in a Nokia box.

The opposition parties are truly worried about the prospect of years of investigation by politically motivated Hungarian prosecutors. Even though in the past most defendants were eventually exonerated, they remained in limbo for years and their careers were ruined. We must also keep in mind that although OLAF has filed scores of such reports on cases involving fraudulent procurement practices, only four guilty verdicts have been handed down in the last almost seven years. Some cases, like that involving Orbán’s son-in-law, were unceremoniously dropped. The prosecutors’ sudden interest in this case indicates to me that they think they can use it to do damage to the opposition, one way or another. Evidence of culpability has never been the litmus test for deciding which cases to pursue.

January 30, 2017

An EU prosecutor’s office would be a heavy blow to Viktor Orbán

I don’t think that anyone familiar with the Hungarian situation can doubt the economic ramifications of the institutionalized corruption of the Orbán regime. It retards growth and competitiveness and distorts the market economy.

A significant source for this institutionalized stealing is the EU’s convergence funds. Across the EU approximately 50 billion euros in funds distributed to member states is lost to fraud. The problem is especially acute in the former Soviet satellite countries: Bulgaria, Romania, and Hungary. The European Commission’s European Anti-Fraud Office (OLAF) gathers evidence of financial misconduct and prepares hundreds of judicial recommendations, but the prosecution rate is only about 30%.

If you think that this rate is pitifully low, you should take a look at the Hungarian situation. In 2015 OLAF investigated 17 suspicious cases, of which 14 were deemed serious enough for the organization to suggest that financial penalties be paid by the Hungarian government. As far as I could ascertain, in no case did the Hungarian prosecutors move a finger.

Yet hardly a day goes by without news of corruption. Ákos Hadházy, co-chair of LMP who has done the most to unearth corruption, asked Péter Polt, the chief prosecutor, to reveal the number of cases prosecuted since 2011. The answer was staggering. In only four cases did prosecutors bring charges. In monetary terms, in comparison to the billions most likely stolen, the sums involved were peanuts. According to their findings, the financial loss to the European Union was only 286 million forints, or 917,030 euros. Even though every day Hungary receives about two billion forints in EU convergence funds. Several notorious cases, like the street lighting business of Prime Minister Viktor Orbán’s son-in-law, were simply dropped.

For the EU, setting up a new organization–the European Public Prosecutor’s Office or EPPO–to investigate the fraudulent misuse of EU funds and inter-state or so-called carousel fraud is becoming an urgent task. In December I devoted a post to the subject, in which I reported first the reluctance and later the refusal of the Hungarian government to accept such a supranational body. We heard the old refrain: “the sovereignty of Hungarian prosecution might be undermined.” Moreover, goes the argument, since the Hungarian chief prosecutor is appointed by parliament, there might also be a constitutional problem. The latter excuse is truly laughable: almost never does the need for an amendment to the constitution cause any problem for the Orbán government.

Knowing the government’s heavy reliance on the good offices of the chief prosecutor in fraud cases, it was inevitable that Hungary would fight tooth and nail against EPPO. In the last couple of days the issue emerged again after an informal meeting of the justice ministers in Malta. Seventeen countries indicated they would participate in so-called “enhanced cooperation,” which is a procedure whereby a minimum of nine EU countries are allowed to establish advanced integration or cooperation within EU structures without the other EU countries being involved. Five countries, among them Hungary and Poland, opted out.

Justice Minister László Trócsányi self-righteously announced after the meeting that the Hungarian government’s main concern with setting up an EU public prosecutor’s office is its fear of weakening such institutions as Eurojust and OLAF, neither of which has prosecutorial powers. The former is merely a coordinating body that is supposed to improve the handling of serious cross-border crimes by “stimulating” investigative and prosecutorial coordination among agencies of the member states. OLAF can only make recommendations. Trócsányi had the temerity to claim that “these institutions have achieved remarkable results.” In the statement given to MTI, the Hungarian news agency, Trócsányi left open one possibility: “In case they want to establish a European prosecutor’s office, it should be created on the foundation of Eurojust.” As far as Hungary is concerned, “regulating the competence of such a body should require a unanimous vote.” This is in contrast to other countries “who believe that its establishment is possible by a qualified majority.”

Péter Niedermüller, DK member of the European Parliament, somewhat optimistically predicted that “the establishment of EPPO can be delayed but cannot be prevented.” We do know that the EU is reassessing its convergence program, perhaps as a result of all the fraud. Commissioner Věra Jourová, who is in charge of the project, has already indicated that there might be a modification of the rules governing the assignment of EU convergence funds. In plain language, if a member state receives more funds than it contributes to the common purse, it will get less money in the future. The European Parliament can institute “ex ante conditionalities” that would allow for such modifications. That would be a heavy blow to Poland and Hungary, the largest beneficiaries of the convergence funds.

You may have been wondering why I haven’t written about OLAF’s report on its investigation into fraud in the Budapest Metro 4 project, which was reported by Politico at the end of December 2016. It has been heralded as one of the biggest fraud cases ever in the European Union. OLAF recommended the repayment of €228 million to the EC Department of Regional and Urban Policy and €55 million to the European Investment Bank.

Although in the last month the Hungarian media has been full of accusations and counter-accusations, no responsible reporting of the case is possible for the very simple reason that the Hungarian government refuses to make the OLAF document public. As long as we have no idea what is in the document and we have to rely on the interpretations of János Lázár and Nándor Csepreghy, the number one and two men of the Prime Minister’s Office, and Budapest Mayor István Tarlós, who has definite ideas on the subject but admits that he hasn’t seen the report itself, we cannot possibly pass judgment on the case.

The investigation covers the period between 2008 and 2014–that is, two years of the Gyurcsány-Bajnai government and four years of the Orbán administration. The only thing we can say is that it is unlikely that all the fraud took place before 2010 and nothing happened under the new government, which is what the Orbán government claims.

Under the present setup these OLAF reports can be an instrument for political games. The establishment of a supranational European Public Prosecutor’s Office would help prevent the kind of situation that currently exists in Hungary with the latest OLAF report.

January 29, 2017