Tag Archives: János Lázár

Microsoft had enough: heads rolled

You may recall the huge Romanian corruption scandal that involved large bribes paid to members of the Romanian government in exchange for their approving increases in license fees for Microsoft products. It was in October 2014 that the investigation by the National Anticorruption Directorate began, and soon enough more than 100 persons were identified as being connected to the case. Among them were nine government ministers. Sentencing took place in March and October 2016. Four of the accused are already serving sentences of between two and six years.

There is a good possibility that similar corruption occurred in Hungary, this time involving Microsoft Hungary, a subsidiary of Microsoft Corporation. But the government response couldn’t have been more different.

József Spirk, earlier of Népszabadság and now at 24.hu, broke the news that the parent company had decided to initiate an internal investigation of the business practices of the Hungarian affiliate. In fact, it is likely that the investigation has been going on for some time. Apparently Microsoft headquarters sent a team of investigators to Budapest, perhaps as early as the second half of 2015. The investigators, with the help of a Hungarian law firm, looked into the business practices of Microsoft Hungary, especially during the tenure of István Papp as general manager.

According to Microsoft News, during Papp’s tenure (2011-2015) Microsoft Hungary was recognized as the best-performing Microsoft subsidiary of its size for two years running. In recognition of his achievement, Papp was promoted to the post of vice-president for sales, marketing, and services in the Asia Pacific in August 2015, and he and his family moved to Singapore. But his stay there was short. By March 2016 his employment was most likely terminated. He returned to Hungary, where he became vice president for business development of HIPA (Hungarian Investment Promotion Agency). HIPA is a government organization under the ministry of foreign affairs and trade. It provides professional consulting services to interested companies free of charge, identifying investment possibilities. In brief, he became a civil servant of sorts. After eight months, in August of this year, he decided to establish his own company, called Thriveo. It advertises itself, in its own English, as “No bullshit here. We build or enhance your strategy and engage in execution. We do not apologize for any inconvenience.” Looking at Thriveo’s website, I have my doubts about the future of Papp’s company.

Péter Szijjártó as representative of the government and István Papp as general manager of Microsoft Hungary sign a strategic partnership in December 2012

The other person of interest in this story is Viktor Sagyibó, who spent eight years at Microsoft Hungary between 2008 and January 2016. He started fairly low on the totem pole, but by 2012 he oversaw all sales of Microsoft products to the government. In July 2015 he was promoted again, to supervise the company’s business with large corporations. By April 2016, however, he was no longer at Microsoft. His departure was certainly not advertised. Microsoft simply announced a few months after his departure that his job had been taken over by Gabriella Bábel, who began her career at Microsoft in 2011.

After leaving Microsoft, perhaps under a cloud, Sagyibó became CEO of 4iG Nyrt., a company that designs customized software based on Oracle and Java technology. Its customers are mostly government agencies, like the National Health Insurance Fund, the National Police Headquarters, and the Hungarian Central Statistical Office. His tenure at 4iG, however, was short. Two weeks after getting the job, he resigned “for unforeseeable personal reasons.” Apparently his quick departure from 4iG had something to do with Microsoft’s strong suspicion or perhaps even knowledge that Sagyibó had a role to play in the corruption case Microsoft Corporation was investigating.

Microsoft Hungary doesn’t deal directly with the Hungarian government but uses so-called LAR partners. LAR stands for “large account reseller.” As a result of its investigation, last month Microsoft broke its contracts with three of its largest LAR partners “for ethical reasons.” These companies, as you can well imagine, were on very good terms with the Fidesz government.

The largest company, which was perhaps the busiest business partner of Microsoft, was Humansoft Kft., a company established in 1989. It has business arrangements with Dell, Cisco, Symantec, Fujitsu-Siemens, and many other important companies in addition to Microsoft. Humansoft has a close relationship to important Fidesz figures, and as a result it was the beneficiary of a 1.5 billion forint grant for software development from the European Union in 2015. The second company, Euro One Zrt., is also a well-established firm with 100 employees, while the third one is a much smaller outfit called RacioNet Zrt.

Microsoft’s decision to disrupt the traditional method of doing business with the Hungarian government, going back years, was unexpected and very sudden. It came a few days after János Lázár, head of the prime minister’s office, announced on November 7 that Viktor Sagyibó, the former Microsoft employee, had been hired as “ministerial commissioner” entrusted with the supervision of all domestic and EU projects. He is also in charge of monitoring information technology development within the so-called Public Administration and Civil Service Development Operative Program, a program that is very large. Hungary will invest over 935 million euros, including €795 million from EU funding, under this rubric

Sagyibó’s government appointment must have been the last straw for Microsoft. 24.hu naturally tried to get more information from Microsoft Hungary. It received no confirmation of the investigation, but the company didn’t deny the rumor.

Interestingly, both István Papp and Viktor Sagyibó ended up, at least temporarily, in government employment. Sagyibó came out especially well. It is not an everyday affair that someone who most likely left Microsoft under a cloud ends up being a commissioner who is supposed to make sure that EU grants are well spent.

December 12, 2017

Financing of Hungarian sports: court rules it must be transparent

Even small victories can lift anti-Orbán hearts nowadays in Hungary. Thanks to the recent decision of the Kúria, Hungary’s highest judicial body, Viktor Orbán was rendered a defeat that must have hit him hard. At risk is what he considers to be one of his greatest achievements, the Felcsút Football Academy.

Transparency International spent a considerable amount of time and energy investigating the government’s lavish support of sports and came to the conclusion that the sports financing system the Orbán government established is rotten to the core. In the course of its investigation Transparency International also ascertained that the “absolute winner of the whole system is the village of Felcsút and its football club.” Felcsút has become the symbol of everything that is wrong in Viktor Orbán’s Hungary. It is a village of 2,000 people with one of the most lavish football stadiums, which can seat 4,500. The club uses all sorts of tricks to entice people to attend the club’s games, usually to no avail. The stadium is practically empty most of the time. In fact, according to those in the know, Hungarian football is dead, and the incredible amount of money that was poured into the game was an utter waste. Hungary’s FIFA standing is the same as it was before.

Over the years people have tried to find out how much money was being spent on sports, mostly football. But the system is intentionally complicated in order to hide the exact amount that comes from two main sources: direct grants allocated for sports in the budget and something called Társasági Adókedvezmény/TAO (Corporation Tax Allowance), introduced in 2011. Corporations can get a tax break if they support one or more of five sports: football, handball, basketball, water polo, and ice hockey. Money allocated to support sports is considered to be part of the tax owed. Thus, all money that is donated to these sports is a direct loss to the central budget. Since 2011, according to the latest estimate, 330 billion forints of corporate tax money was diverted to sports organizations. Or, put another, more shocking way, in the last six years the Hungarian state has given up one out of every nine forints in tax revenue.

From this money 128 billion went to football clubs and 86 billion for handball, while the rest was shared by basketball, water polo, and hockey. Viktor Orbán has been insisting for years that TAO is not public money and therefore no one has the right to learn about the sponsors, the recipients, and the amount of the money donated.

Interest in Hungarian football–Debrecen Stadium, which can seat 20,000. Cost €40 million

Transparency International, being convinced that the tax allowance is public money, asked the ministry of human resources for their allocation figures, which was denied. Transparency at that point sued the ministry. In the first instance, Transparency lost the case. The decision was based on tax secrecy. In addition, the judge didn’t consider the requested data to be of public interest. On appeal, however, the decision was reversed. Tax secrecy as a reason for denying access to the information was discarded, and the court ruled that the TAO monies are, after all, considered to be public funds. The ministry then turned to the Kúria, and on October 25, 2017 the decision of the appellate court was upheld.

Concurrently with Transparency International’s suit against the ministry of human resources, Demokratikus Koalíció (DK) sued Viktor Orbán’s Academy in Felcsút for the release of all contracts for jobs that were financed by TAO money. Felcsút apparently received about 14 billion TAO forints in the last six years. In July 2016 the Székesfehérvár Court ruled in DK’s favor, but Felcsút Academy had no intention of obliging and appealed. In February 2017 the Budapest Appellate Court also ruled in DK’s favor, but for a different reason from the Székesfehérvár Court. While the lower court considered TAO to be public money, the appellate court based its verdict on the non-profit status of Felcsút Academy. Felcsút Academy was obliged to turn over all documents relating to TAO funds within 15 days. Felcsút Academy again appealed the verdict, and thus the case ended up in the Kúria for a final decision. On November 15 the Kúria ruled that Felcsút must provide details of how they spent the enormous amounts of “public” money. The verdict could have been predicted because a month earlier, in connection with the Transparency International case, the Kúria had already declared TAO funds to be a public resource.

Index described the verdict as “the final and humiliating defeat of Orbán’s football academy.” János Lázár’s reaction a day later amply showed what kind of a country Hungary has become in the last six or seven years. During Lázár’s usual press conference on Thursday, when asked his opinion of the Kúria’s decision, he said: “There is a judge in this country who is very angry with Hungary’s government and Fidesz. His name is András Baka. Because of his changed official status, he has been greatly offended, and for some strange reason all TAO cases end up on his desk. I wouldn’t want to suppose that any bias would have influenced the judge, who on numerous occasions publicly criticized Fidesz and the government.”

Let’s stop here for a moment and go back to 2011, when the Hungarian Supreme Court became the Kúria. The chief justice at the time was András Baka who, prior to his appointment in 2008, had been a judge at the European Court of Justice for Human Rights for 17 years. Although he was considered to be a conservative judge, he became worried about Viktor Orbán’s so-called judicial reforms. He objected, for example, to the forced early retirement of judges, which gave the government a free hand to fill about 300 positions that became vacant as a result of the new law on retirement. Orbán desperately wanted to get rid of Baka and eventually came up with a good excuse. Baka hadn’t been a judge in Hungary for five years. His 17 years with the European Court of Justice were not considered relevant. Baka turned to the European Court of Human Rights and eventually was awarded about 100,000 euros, which naturally the Hungarian government, or to be precise Hungarian taxpayers, had to cough up. Baka couldn’t return to his old post, which had been filled by someone else, but he was reinstated, I’m sure grudgingly, as one of the leading judges in the Kúria.

The Kúria’s answer to Lázár was brief and to the point. They will not comment on politicians’ statements concerning their activities, but the spokesman explained that the assignment of cases is determined a year ahead and given to judges according to their professional specialties.

Unfortunately, I’m not at all sure that this is the end of the story because János Lázár intimated at the press conference that it was time “to make order” as far as TAO is concerned. To make order to me means that they will most likely come up with some modification to the law that would prevent the public from learning where that incredible amount of money has gone.

November 17, 2017

Hungarian government warms up an old story: last year’s DCLeaks

Two days ago a garbled, close to incomprehensible, article appeared in Pesti Srácok, perhaps the most right-extremist organ of the Fidesz/Orbán government’s media empire. The article with great fanfare announced that Pesti Srácok had acquired documents about the activities and goals of billionaire George Soros that “surpass one’s wildest expectations.” The article alleges that there are a number of documents in the DCLeaks collection that “prove that the stock market shark has a stake in discrediting the Hungarian government.”

My first reaction was that the staff of Pesti Srácok got mixed up, took out the wrong file, and mistook 2016 for 2017. Because it was a little over a year ago that the Russian cyber-espionage group called Fancy Bear released on its website 2,576 files, mostly related to George Soros’ Open Society Foundation. Fancy Bear is apparently connected to GRU (Glavnoye razvedytel’noye upravleniye), Russia’s Main Intelligence Directorate. Soon afterward, several far-right websites, like tmn.today, zerohedge.com, and newstarget.com worked hard to portray some of these documents as evidence of the “evil plan” of Soros and his organizations to use the refugee crisis as an opportunity to manipulate immigration policies throughout the world.

In fact, most of the information revealed in the current article by Pesti Srácok is a rehash of earlier articles that appeared in right-wing English-language publications. Since the Soros documents are no longer available on the internet, it is hard to fathom why Pesti Srácok bothered to provide two non-functioning URLs as proof.

Why did Pesti Srácok dredge up this old story? My suspicion is that the article was ordered from above because the Orbán government had decided to accelerate the attacks on George Soros and his network. They needed a “reason” to tighten the screws and even go as far as ordering a full-fledged investigation by the ministry of interior, which is in charge of the national security services. So, I was somewhat amused at the naiveté of István Gusztos in Gépnarancs who believed that “the government had to react to this information that had reached the press.” Balázs Hidvéghi, the Fidesz spokesman, and János Lázár, head of the prime minister’s office, “had to join this despicable drivel.” I’m afraid the opposite is true.

One could spend days trying to track down the origins of this cut-and-paste job, and perhaps someone with lots of extra time and curiosity could write an essay on Fidesz’s manipulation of news on the basis of this one article. Practically every sentence, every quotation is suspect. It is hard to describe this hodgepodge of lies, misinformation, and irrelevant information that has nothing to do with Hungary, like the Soros Foundation’s support for the Baltimore Education Research Consortium or its lending a helping hand to the American Journalism Review in connection with the crisis in American journalism.

One section of the article might be of paramount importance as far as the Orbán government’s possible moves against Hungarian and foreign journalists are concerned. The subhead reads: “Bribed journalists and contracts to manipulate the media.” The example given was a contract with an alleged entrepreneur (vállalkozó), actually a research institute, called the Centre d’etudes et de recherches internationales “whose task was to prove ‘contrary opinions’ about French-Ukrainian relations. The contract also stated that the entrepreneur (sic) had to write press reviews.” The text that reads “to provide a brief account of how Russia has tried to influence the French debate on Ukraine through domestic actors and outlets” was interpreted as an instruction regarding the kind of information that should appear in the French press. After the description of the influence allegedly exerted on the French media, the article claims that similar “media purchases” were obtained in Germany, Spain, Italy, and Greece. The article naturally spent quite a bit of time on the Soros Foundation’s list of about 200 EP members who might be sympathetic to some of the ideas of the Open Society. This list, which is still available on the internet, is also old hat.

It was after the appearance of this article that Balázs Hidvéghi, communication director of Fidesz, announced that the government has “concrete proof that Brussels has fallen into the captivity of the Soros network.” Hidvéghi claimed that Soros gave $6 million to 90 different organizations to influence the decision-making process of the European Union. The Soros network specifically targets Hungary by supporting individuals who spread fake news about Hungary.

A few hours later János Lázár, during his regular Thursday afternoon press conference, talked about the same problem. The government wants to clarify whether the attempts by George Soros’s organization in Brussels touched—and if it did, how—the sovereignty of Hungary. The government should initiate an investigation into the “authenticity” of the DCLeaks documents, I can’t fathom why.  Sándor Pintér, minister of interior, is to prepare a memorandum on whether the transportation of migrants to the Hungarian border and the “siege of the Hungarian border” during the fall of 2015 was organized or accidental.

What the Hungarian government is really trying to prove is that the Soros network substantially influenced decision-making on the “forums of the European Union.” All those negative decisions, in the Hungarian government’s opinion, might have been “written on the computers of George Soros’s colleagues.” This could mean either members of the NGOs receiving money from the Soros Foundation or journalists. Here Lázár obliquely referred to the Pesti Srácok article which claimed that “Soros bought journalists and media sites in the interest of spreading his ideas.” As far as Hungary is concerned, Lázár pretty much accused Soros of paying journalists to write articles that show Hungary and the Hungarian government in a negative light.

This morning Viktor Orbán repeated some of the same accusations and gave misleading information about the DCLeaks documents during his regular bi-weekly interview on Magyar Rádió, but that deserves a separate post. For the time being, Hungarian and foreign journalists are not frightened. Both Bloomberg and The Financial Times published reports under the headlines “Hungary orders spies to target Soros ‘Empire’” and “Orban calls for Hungarian spy agencies to probe ‘Soros empire’ of NGOs.” And this is just the beginning.

October 27, 2017

Viktor Orbán is losing his cool

Trump’s uncontrolled outbursts seem to be contagious. While in the past Viktor Orbán showed considerable restraint when giving interviews or answering opposition members of parliament, in the last couple of weeks he has given vent to his frustration and anger.

Friday, during his regular morning radio interview, he lashed out against the European Commission, repeating himself, calling the legal opinion released by the European Commission an object of derision, a document that one cannot discuss without laughing. If Hungary accepted this document, it would become the laughing stock of Europe. He went on and on. Then yesterday, he accused Ákos Hadházy (LMP), who has spent years fighting the endemic corruption of the Orbán regime, of corruption himself. Pressured by the European Commission and by Hadházy’s dogged pursuit of his government’s systemic corruption, Orbán no longer seems capable of exercising self-control.

I have been following Ákos Hadházy’s political career ever since he first appeared on the national scene. He reported on a local corruption case in Szekszárd, a small town, where he was a Fidesz member of the city council. Since then, Hadházy, now co-chair of LMP, has focused on uncovering corruption cases. Just the other day, he said in an interview that he had held more than 80 “corruption infos.” Once a week he stands in front of the cameras and reports on yet another horrendous case. Each of these cases involves millions if not billions of forints. Hadházy estimates that in the last seven years the “Fidesz clientele” stole about three trillion forints of the subsidies Hungary received from the European Union. In his assessment, all work performed is at least 30% overpriced.

Lately, Hadházy has been working on two cases, both involving healthcare. The first one was a program that was supposed to set up “mentor houses” for premature babies and their parents in Szeged, Kecskemét, and Gyula. A foundation was established for the purpose, called “I Arrived Early Foundation,” which received 1.2 billion forints from the European Union. Since it was such a large project, Hadházy asked for details. It turned out that less than half of the money was allocated to the program itself. The rest was designated for the maintenance of the foundation. Money was spent on most likely overpriced rentals, legal advice, laptops, telephones, several printers, and very high salaries for the “coordinators,” while the 40 mentors received only about 50,000 forints a month.

It turned out that two other very similar projects received about half the amount that “I Arrived Early Foundation” got, and they managed quite well. Mind you, they didn’t pay 50 million forints for “legal advice.” In fact, they got along just fine without it. While a methodology study cost the “I Arrived Early Foundation” 50 million, the other foundation managed to get one for 8 million.

Hadházy stirred up a hornet’s nest by investigating this particular foundation. János Lázár’s wife is one of the board members of the foundation, and Hadházy suspected that the unusually generous financial support given to the foundation was not entirely independent of Mrs. Lázár’s presence there. Soon after the “corruption info” in which Hadházy announced the foundation’s suspicious expenditures, he found himself in the crosshairs of Zoltán Balog’s ministry, which awarded the money to the foundation, and the Office of the Prime Minister, headed by János Lázár. Nándor Csepreghy, Lázár’s deputy, assisted by the government paper, Magyar Idők, led the attack. Magyar Idők published several articles accusing Hadházy of being a heartless man who compared these premature babies to newborn puppies. Hadházy, who is a vet in private life, did in fact compare the weights of some of these babies to newborn puppies, and he was quite accurate. A newborn puppy is about 500 grams, just like the smallest premature baby. Csepreghy, in defense of his boss, called Hadházy an “ignorant scoundrel.” Lázár at one point offered his wife’s retirement from the foundation, but as far as I know nothing of the sort happened. Naturally, the foundation explained away all of its expenses.

The second case was even more clear cut. The National Healthcare Services Center (Állami Egészségügyi Ellátó Központ/ÁEEK) issued a tender for several ventilators. General Electric and three Hungarian firms submitted bids. The Hungarian firms were actually just wholesalers, and their bids were a great deal higher than General Electric’s. The three Hungarian firms offered to sell the ventilators for a price between 1.7 and 1.9 billion forints as opposed to GE’s offer of 1 billion forints. ÁEEK tailored the tender in such a way that only one bidder could win the tender. Predictably, GE lost the bid, but the company decided not to take the decision lying down. The American firm turned to the Public Procurement Authority (Közbeszerzési Döntőbizottság), which ruled in GE’s favor. ÁEEK had to pay 50 million forints. Bence Rétvári, undersecretary in the ministry of human resources, subsequently denied that the procurement was rigged.

Ákos Hadházy addressing Viktor Orbán in Parliament / Source: ATV

The GE affair was the topic of Ákos Hadházy’s weekly corruption info. János Lázár seemed to agree with Hadházy that those who were involved in the case must be investigated. So, emboldened by Lázár’s reaction, Hadházy brought up the case in parliament yesterday when Viktor Orbán by house rules had to be present and was obliged to answer questions. Hadházy asked the prime minister who was right: János Lázár or Bence Rétvári. Orbán flew off the handle. He accused Hadházy of lobbying for GE. “A representative stands up in the Hungarian Parliament lobbying for a company. How much money did you receive for this? How dare you? How dare you lobby for a company in the Hungarian Parliament during an ongoing public procurement? Especially, on behalf of a foreign company. Now, I have been sitting here for many years, but I have not seen a case more corrupt than this, shame on you!” He also ordered an “investigation” of Hadházy right on the spot.

Hadházy doesn’t seem to be intimidated. He will sue Orbán for slander. Otherwise, he wrote a defiant note on his Facebook page in which he pointed out that Orbán, with his outburst, “kicked a three-meter self-goal” by calling attention to the fact that they want to steal billions from the “dying hospitals.” He said that Orbán’s claim of “an ongoing public procurement” is a lie since the Public Procurement Authority already closed the case. Otherwise, he is looking for the day when Orbán will have to apologize to him. Well, in his place I wouldn’t hold my breath.

October 10, 2017

Will Rosatom have its own airfield in Pécs?

A short while ago I devoted a post to the financial collapse of the City of Pécs, which, after many years as an MSZP stronghold, chose Zsolt Páva as its Fidesz mayor in October 2009. Within weeks it became evident that Viktor Orbán, in anticipation of his electoral victory, was using the city as a political laboratory. It was in Pécs that the new Fidesz leadership tried out the practice of “citywide consultations.” Páva sent questionnaires to the inhabitants, asking them questions to which the answer could only be “yes.” One of his most expensive moves, most likely at the urging of Fidesz, was the forcible takeover of the French share of the water company, which years later cost the city three billion forints in a legal settlement. The city’s attempt to take over the famed Zsolnay porcelain factory ended in failure due to the determination of the Syrian-Hungarian-Swiss owner. This was also a costly affair for Pécs because, in the course of the machinations to ruin Zsolnay, the city set up a rival company called Ledina Kerámia and enticed 150 Zsolnay employees to join the phantom firm. The city had to pay the wages of 150 workers for no work whatsoever.

These two financial ventures by themselves have been very costly, but they were only a small fraction of the enormous debt Zsolt Páva and the city council amassed in the last seven years. According to a new website called Szabad Pécs (Free Pécs), the city owes 7.5 billion forints, which apparently the national government will take over. That’s not all, however. There are several municipal-owned firms that are in the red to the tune of 10 billion forints. This is an enormous amount of money ($29 million) for a city of about 170,000 inhabitants with not much of a tax base. Viktor Orbán, while visiting the city at the end of August for the 650th anniversary of the founding of Hungary’s first university, established in Pécs, asserted that the city’s leadership got itself into this mess and they will have to pay for it.

I don’t think anyone knew at the time just what Orbán meant, but a few days ago local investigative journalists working for Szabad Pécs learned that the government is not planning to bail Pécs out without some kind of compensation. A week ago rumors began circulating in town that the city-owned Pécs-Pogány International Airport will be taken over by the government, which will in turn write off 2.8 billion forints of the city’s debt. On the face of it, such a government purchase wouldn’t be profitable. The number of passengers, which was over 6,000 in 2009, by 2014 had shrunk to 2,500. But the deal might actually be quite lucrative for the Orbán government because the airport will likely be leased to Rosatom, the Russian company that will build the Paks II Nuclear Power Plant. The distance between Paks and Pécs is almost 80 km, but the four-lane M-6 highway is sparsely traveled. Moreover, Mohács along the Danube is only 40 minutes from Pécs. Material could easily reach Paks via Mohács.

Pécs-Pogány International Airport

A few days after the appearance of Szabad Pécs’s article, a Russian delegation led by Alexey Likhachev, the CEO of Rosatom, visited the Pécs airport. He and his fellow Russians were accompanied by members of TEK, Hungary’s Counter Terrorism Center. The delegation first visited Paks. From there they traveled to Pécs to take a look at the airfield. The journalists of Szabad Pécs were on hand and took several photos. I may add that none of the local “government” news outlets said a word about either the government’s takeover of certain municipal assets in Pécs or the possible leasing of the Pécs airport to Rosatom.

The private plane of Alexey Likhachev, CEO of Rosatom, at the Pécs Airport

Despite the visit of Rosatom’s CEO to Pécs, János Lázár denied any knowledge of a deal that might exist between Rosatom and the Hungarian government. As he said, “this topic was not discussed at the cabinet meeting. We did talk about the situation in Pécs, but nothing was said about the exchange of property. As far as the airport is concerned, I read about it in the media.” Of course, the lack of discussion of the matter at a cabinet meeting doesn’t necessarily mean that such negotiations didn’t take place. But Lázár, as usual, went further. He claimed that “if that is important to Rosatom, it has to talk to the municipality. The government has no information, no knowledge of such negotiations. They didn’t approach us with such a proposal.”

Well, as far as we know, the CEO of Rosatom didn’t visit Pécs to talk to the city fathers about leasing the Pécs-Pogány Airport. Moreover, as far as the journalists of Szabad Pécs know, the transfer of certain properties to the government is still on the table.

Today Attila Babos, the local journalist at Szabad Pécs, was invited to publish a longer article in Magyar Nemzet on the possible Rosatom takeover of the Pécs Airport. He claims that it is also likely that, in addition to the airport, the government will take over two city-owned companies: Pétáv Kft., the local district-heating company, and Tettye Forrásház Zrt., the city water company. The latter is the company the city established to take over the functions of the water company operated and partially owned by the French Suez Company. The city promised lower rates, which didn’t materialize, but at least the company is now profitable. Pétáv Kft. is also in the black. But, given the size of the debt, the fear in town is that several other pieces of property might end up in government hands. No one knows whether the city will have any say in what properties it is willing to part with.

Not surprisingly, Fidesz’s name is mud in Pécs. Páva and his coterie of Fidesz politicians, including the two Fidesz members of parliament representing the city, are blamed for the present state of affairs. As Attila Babos said in his article, “not even within Fidesz does anyone seriously think that the government parties [Fidesz-KDNP] can possible win in the city in the spring of 2018.” Still, Viktor Orbán cannot leave the city in the lurch. At the same time, the government feels that it has to make “the city pay” in order to show that such irresponsible behavior cannot be tolerated.

Finally, a few words about Szabad Pécs. On March 22 several internet news sites reported that three former employees of Dunántúli Napló who lost their jobs when Lőrinc Mészáros bought the last eight of the 109 regional papers not yet in government hands, including Dunántúli Napló which has been in continuous existence since 1946, decided to start an online paper, concentrating on Pécs and Baranya County. Without them we would know next to nothing about Rosatom’s interest in the Pécs airport or the quick visit of Alexey Likhachev. That tells us a lot about the state of the Hungarian media outside of Budapest.

September 21, 2017

Felcsút: The forbidden village for EP “bureaucrats”

Let’s return to Viktor Orbán’s choo-choo train, which runs between the two villages where the Hungarian prime minister spent his first 14 years. In his childhood this narrow-gauge railroad was still functioning, but because of insufficient traffic MÁV, the state railway company, scrapped the line sometime in the 1970s. Apparently Viktor Orbán had fond memories of that train, and once he had the opportunity he decided to revive it. His own Puskás Academy Foundation launched the project. It purchased and renovated the old run-down train station and bought newly refurbished cars and an engine. The project was declared to be of premier importance as far as Hungary’s economy was concerned. This designation was necessary in order to skip the otherwise requisite public tender procedures. It was supposed to be a great tourist attraction, with thousands of passengers.

By the time it was finished the train project had cost 3 million euros, 2 million of which was provided by the European Union as part of a 652.5 million euro package given for the development of the counties of Veszprém, Komárom-Esztergom, and Fejér. In June 2016 The Telegraph reported that OLAF, EU’s anti-fraud agency, was investigating the train, but that turned out to be a false alarm. Still, the Felcsút complex with its 3,500-seat soccer stadium only yards from Orbán’s weekend house and now a railroad going from nowhere to nowhere raised eyebrows in Brussels.

All that didn’t deter Viktor Orbán, who reportedly planned to extend the 5.7 km line, perhaps hoping that the number of passengers could be increased this way. The Hungarian government had promised between 2,500 and 7,000 passengers daily to justify the investment, but according to 444.hu, in its first month of operation Orbán’s choo-choo train attracted only 900 passengers–that is, only 30 a day. By October 2016 there were days when the train had no passengers at all. A few days ago atlatszo.hu published figures it acquired from the Puskás Academy. Since its first run on April 30, 2016, the academy reported, 48,533 people used the train. Last year 30,219, and so far this year 18,314. During that period, the railroad accumulated a 4.1 million forint loss. These dismal figures didn’t seem to bother János Lázár. In his opinion, if 20,000 people use the train, it is a profitable undertaking. Strange accounting, I must say.

From the start questions were raised both at home and in Brussels about the efficacy of this project, and therefore it was not entirely unexpected that the Budgetary Control Committee (CONT) of the European Parliament, whose fact-finding delegation will be visiting Hungary between September 18 and 20, put the Felcsút train on its agenda, alongside the huge Metro 4 construction project. Once János Lázár learned that the delegation would like to see Felcsút in all its glory, he hit the ceiling. Or, to be more precise, it was most likely Viktor Orbán who hit the ceiling. Lázár was just assigned the dirty work of fighting it out with the chair of the committee, Ingeborg Gräßle.

I have the feeling that Lázár/Orbán made a huge mistake when they decided to take on Grässle. She has been a member of the European Parliament since 2004 and is considered to be especially influential. She is known as a strong advocate of increased transparency and accountability. And, as we will see, she is no pushover. Occasionally one has the feeling that Fidesz politicians think they can intimidate foreigners as easily as they do their “subjects.” But Grässle is an especially forbidding opponent.

In any case, Lázár wrote a letter to the chair of CONT on August 9. In it, he complained that the committee was not following Hungary’s suggested list of projects and accused the committee of setting up a program of its own, which is “strongly politically motivated.” Politico quoted the following passages from his August 9 letter: “I found it outrageous that a committee of the European parliament systematically ignores and rejects a notable amount of suggestions of the Hungarian government, thus significantly interferes in the Hungarian [election] campaign.” He especially criticized the committee’s decision to include a trip to “the home village of the Prime Minister Viktor Orbán.” Grässle wasn’t impressed. She refused to change the fact-finding mission’s travel plans and politely assured Lázár that “there is no bias either behind the choice of the date of our mission or of the projects. The Budgetary Control Committee will conduct its visit in a politically neutral way, as we always do.”

Perhaps if at that point Lázár had just backed off he wouldn’t have gotten himself and the government he represents into hot water, as he ultimately did. On September 4 he wrote another letter, in the same manner as the first. Both letters struck some members of CONT as uncouth. And, further pressing their case, the Hungarian government instructed the Hungarian ambassador to the European Union to plead with Grässle to change the list of projects to be visited, or to postpone the whole visit until after the election in 2018. Grässle apparently told the ambassador that the budgetary control committee “does not accept political interference in the way it organizes its work of controlling the implementation of the budget.”

Ingeborg Grässle subsequently fired off two letters: one to Antonio Tajani, president of the European Union, and another to Jean-Claude Juncker, president of the European Commission. In her letter to Tajani she wrote: “I disapprove of the attitude to exert pressure on an EP parliamentary body with regard to the organization of a mission as well as with regards to its content.” She added that Lázár’s choice not to cooperate means that he does not comply—”in political or in legal terms”—with the requirements of mutual sincere cooperation, which is a basic rule among the institutions and member states. She considered the case so serious that she suggested to Tajani that he raise the issue with Juncker.

There is no question in my mind that it was Viktor Orbán who found the visit to Felcsút a personal attack on him by an EU body and tried to use next spring’s election as an excuse. But it backfired. As Grässle put it: “We are important but not that important.” Surely, it wasn’t the election that bothered the Lord of Felcsút. He simply didn’t want anyone from Brussels to see the place. As we know, anyone who tries to take pictures anywhere near the stadium is usually met with scores of policemen. And this case is more than the usual curious journalists trying to get close to his little empire. It is a group of European politicians who will see that whole grotesque scene Orbán managed to create in that “miserable village,” as Tamás Deutsch called it.

Orbán, with the assistance of Lázár, cast his regime in the worst possible light. One’s first response, which Grässle most likely shares, is: “These guys must have something to hide.” By the way, I wonder what the plans are for the day when the mission visits Felcsút. Will the Hungarian government order out thousands of people to ride their choo-choo train? Anything is possible in that Potemkin village called Hungary.

September 9, 2017

Another peacock dance: Orbán’s reversal on the verdict of the European Court of Justice

Yesterday I dealt with the exchange of letters between Jean-Claude Junker and Viktor Orbán concerning Orbán’s demand for EU reimbursement of half the cost of the fence the Hungarian government erected along the Serbian-Hungarian border. The Hungarian demand raised eyebrows in Europe and elsewhere, so Hungary was again in the international news.

The other reason for the preoccupation of the international media with Hungary was the long-awaited verdict of the European Court of Justice on the legality of the EU decision on the relocation of 120,000 asylum seekers. Slovakia and Hungary claimed that the decision-making process was illegal. Two days ago, on September 6, the Union’s top court dismissed the complaints of the two countries, dealing a blow to Viktor Orbán.

Slovak Prime Minister Robert Fico immediately reacted to the verdict, saying that “we fully respect the verdict of the European Court of Justice,” adding, however, that his government’s view on the relocation plan “has not changed at all.” Viktor Orbán, on the other hand, remained silent. In his place, Péter Szijjártó, minister of foreign affairs and trade, and László Trócsányi, minister of justice, gave a joint press conference, where the foreign minister vented. He called the ruling “outrageous and irresponsible.” In his opinion, the verdict endangers the security and future of Europe and is contrary to the interest of the countries of the Union, including Hungary. “Politics raped the European law and European values,” he claimed. He announced that “the real battle begins only now,” and he promised that the Hungarian government “will use all the remedies available at its disposal” to prevent similar central decision-making for Hungary.

Trócsányi was no less belligerent when he announced that the Hungarian government will start a new legal debate. Since he liked the phrase “the real battle begins only now,” he repeated it. He didn’t go so far as to accuse his fellow judges of acting politically, but he charged that they were preoccupied with the case’s formal aspects and neglected its contextual qualities. The case was thrown out in its entirety, but Trócsányi still praised the excellent legal work of his team. The legal arguments presented to the court were outstanding, and therefore he was quite surprised by the outcome. Trócsányi also indicated that Hungary will not have to take the 1,294 migrants because the case was only about the legality of the decision-making process.

Péter Szijjártó and László Trócsányi / MTI-MTVA / Photo Szilárd Koszticsek

In brief, it looked as if the Orbán government was prepared to go against the ruling and suffer the consequences. A day later, on September 7, this impression was reinforced by János Lázár at his regular “government info” press conference where he interpreted the decision of the European Court of Justice as an opportunity for the European Commission to allow “Brussels” to meddle in Hungary’s internal affairs. “We will use every legal instrument to preserve the independence of the country.” Zoltán Balog, minister of human resources, also chimed in and, in an interview with Deutschlandfunk, repeated Szijjártó’s accusation of a politically motivated and irresponsible decision on the part of the European Court of Justice. Everybody suspected, including naturally Viktor Orbán, that Slovakia and Hungary would lose the case, and therefore the word probably came down from above some time ago about what the proper reaction to the verdict should be.

After two days of criticism of the court and its verdict, Viktor Orbán came out with an entirely different approach to the question. In his Friday morning “interview” on Magyar Rádió he said: “Hungary is a member of the European Union. The affairs of the Union, its internal power relations are settled by the Treaty, so contracts have to be respected. Consequently, one must take cognizance of the verdicts of the courts. Hungarian is a sophisticated, refined language and therefore it does matter with what kind of word we react to a verdict, especially when we are functioning in a hostile Europe. I decided to use the word “tudomásul venni” which I took over from Slovak Prime Minister Fico.” Unfortunately, I don’t know what Slovak word Fico used when talking about his reaction to the verdict. English translations of Fico’s press conference use the verb “to respect” which, unfortunately, is not the equivalent of “tudomásul venni,” which might be better translated as “to take cognizance of.” However, I’m sure that some readers of Hungarian Spectrum will provide us with the the Slovak word that Fico used as well as with the best translation of the Slovak equivalent of “tudomásul venni.” Then we will be able to see whether Orbán and Fico are talking about the same thing or not.

Orbán’s interview was long, during the course of which he said many uncomplimentary things about the European Union, but at the end he came up with some startling statements. The interviewer reminded him that the politicians of the European Union consider the Polish refusal to abide by a court verdict as preparation for the country’s exit from the Union. If Orbán keeps talking about his “fight,” this communication may lead to the interpretation that Hungary is also planning to leave the Union behind. Here is Orbán’s answer: “Communication is interesting and in politics is often important, but it does not replace reality…. Hungarian reality is that the Hungarian people decided after a referendum to join the European Union. That decision was a correct one. No political decision can overwrite that decision. A popular referendum was held, and therefore no government action can reverse that determination. It was the Hungarian people’s choice, and that’s right and well.”

Although Szijjártó, who is in Tallin at the moment, expressed his trust in the unity of the Visegrád Four, there are signs that Slovakia and the Czech Republic are not ready to sacrifice themselves for Poland and Hungary. The weak link, I believe, is Slovakia. I heard an interview with Pál Csáky, a Slovak member of the European Parliament, who surprised me to no end with his condemnation of the Orbán government’s attitude toward the European Union. The reason for my surprise was that Csáky was Fidesz’s favorite among Hungarian ethnic politicians in Slovakia back in 2010. Lots of money was poured into Csáky’s party, the Magyar Koalíció Pártja (MKP), against Béla Bugár of Híd/Most. Despite the funding, MKP didn’t even manage to get enough votes to become a parliamentary party. Csáky at this point resigned. Today he made it clear that Slovakia will not follow Orbán’s suicidal strategy. Slovakia is all for the European Union.

There is another reason that Orbán may have changed his mind. The spokesman of the European People’s Party delivered a message to Viktor Orbán: don’t go against the ruling of the court because this verdict gives an opportunity to heal the wounds caused by the recent conflict between the member states. “The unanimous opinion of the party is that Slovakia and Hungary comply with the rules.”

Otherwise, Jean-Claude Juncker is ready to have a chat with Viktor Orbán, but his spokesman reminded his audience as well as Viktor Orbán that the position of the European Commission is explained in Juncker’s letter to Orbán. It is available for everybody to read and, in any case, the Commission is not in habit of verbal ping pong. Given Juncker’s firmness as expressed in his letter, I would not advise Orbán to continue to press his case.

September 8, 2017