Tag Archives: Lajos Kósa

Hungary has no secrets from Russia? The strange story of the Yandex capture code

On April 8, 444.hu’s curious and internet savvy journalists, while looking at the government’s website where citizens can fill out the infamous “Stop Brussels” questionnaire, discovered that “personally identifiable information” (PII) is being passed on to Yandex’s Russian servers.

First, a few words about Yandex, a Russian multinational company specializing in internet-related services. It is the largest search engine company in Russia. It also performs services similar to those of Google Analytics, but it can perform certain additional tasks that Google doesn’t (and won’t): with a special setting it can collect “personally identifiable information,” a feature that is described by experts as marking the difference between capture and spying.

Citizens who choose to answer the Orbán government’s moronic questions online must give their full names, e-mail addresses, and age. Although the website assures respondents that their personal information is safe, that it is not given out to a third party, it is clear from the source code that this is not the case. Thus, what Antal Rogán’s propaganda ministry, which runs the website, did was against the law. But that’s only one of the many problems connected to using Yandex.

It is well known in internet technology circles that Yandex passed information to Russia’s state security service, FSB, back in 2011. Yandex also has a service similar to PayPal, which the Russian blogger Alexey Navalny used for donations he collected for an anti-corruption website. Yandex passed the names of the donors on to the FSB. It is also well established that in Russia there is no such thing as data protection. Any information Yandex and other Russian internet service providers collect is readily accessible by the security services. Therefore, Yandex is almost never used in western democratic countries. That the Hungarian government opted for Yandex lends additional credence to the hypothesis that Viktor Orbán, for one reason or another, is beholden to Vladimir Putin. He never misses an opportunity to give preferential treatment to Russian companies.

It didn’t take long after 444.hu made its finding public for the capture code to disappear from the site’s page source code. The discovery of the Yandex connection had to be embarrassing to the Hungarian government. Moreover, the removal of the capture code signaled that this was not just an innocent mistake or an oversight. It took the government a whole day to try to explain away Yandex’s capture code. They didn’t succeed. The statement concentrated on questions that had nothing to do with the problem at hand. For example, it claimed that “personal data and the opinions expressed are stored in a closed and unconnected manner.” In taking the capture code down, the government only wanted to avoid “malicious misinterpretations” in the future.

Source: Index.hu

The conservative mandiner.hu rushed straight to Yandex. Its president, Victor Tarnavski, argued that Yandex is really not a Russian company, a dubious claim considering that the company’s headquarters are in Moscow. He said that the data most likely ended up in Yandex’s data center in Finland. He added that it is “the duty of our clients to check the mode of capture.” The special function that allows the capture of personal data must be set by the user of the code–in this case, the Hungarian government.

Not surprisingly, the opposition parties were up in arms and demanded to know more. Zsolt Molnár (MSZP), chairman of the parliamentary committee on national security, indicated on Sunday, April 9 that he would ask questions about the case from the military and national security experts present at the regular Monday meeting the following day. Bernadett Szél (LMP), a member of the committee, asked the head of the Military National Security Service about the Russian code. He informed her that this is a domestic matter and he has nothing to do with it. Then Szél turned to the head of the Office for the Defense of the Constitution. Before he could answer, the deputy chairman of the committee, Szilárd Németh, abruptly got up and left the room, to be followed by all the Fidesz members of the committee. Thus, the committee no longer had a quorum, and the questioning had to be stopped. Szél was especially outraged. She said “apparently the prime minister of this country is no longer called Viktor, but Vladimir.”

In the wake of the scandal over the Russian code and the subsequent fiasco in the committee, leading Fidesz politicians treated the public to a series of ridiculous pseudo-explanations. Lajos Kósa said that “we don’t want to make a secret of how many people responded. This is not a secret even if Vladimir Putin himself counts them in the loneliness of the Kremlin.” He also expressed his surprise at the outrage of the opposition members of the parliamentary committee, saying that “when we say that the meeting ends we leave, but otherwise the opposition can shoot the breeze as much as they wish.”

As far as the government and Fidesz are concerned, we’ve reached the end of the story. However, Attila Péterfalvi, head of the Authority of National Data Protection and Information, is investigating the case.

Magyar Idők must have thought they were very clever when they ran a short article with the title “444 is spying.” They discovered that 444.hu, the internet news site, uses Google Analytics (just as Hungarian Spectrum does). The government mouthpiece wanted to know why 444.hu can follow its readers with “an American spy program.” This description of Google Analytics came from a right-wing blogger who claimed that Google, Facebook, Yahoo, “and practically all American internet providers report to the CIA, the NSA, etc.” So, what’s the problem?

I have no idea, of course, whether any personal information reached a data collection center in Russia. If it did, what could the Russian government do with such information? One thing that comes to mind is that they could construct a database (or add to a database they already have) that would allow the Russian propaganda machine to target Orbán voters, who are most likely susceptible to pro-Russian disinformation and propaganda. Given Russia’s passion for cyber warfare, disinformation, and propaganda, this hypothesis is within the realm of possibility.

April 14, 2017

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

Gábor Vona and Viktor Orbán: Who will win this political game?

At the end of yesterday’s post I indicated that Gábor Vona, chairman of Jobbik, had just announced his party’s refusal to support the government party’s quest for another round of amendments to the constitution that would introduce a number of changes related to the settlement of foreigners in Hungary. Earlier I wrote an analysis of the notion of constitutional identity, which is the linchpin of the otherwise meaningless constitutional amendments, and published an English translation of the amendments themselves.

The government considers these amendments vital to Viktor Orbán’s impending battle with Brussels over a possibly mandatory distribution of refugees. But changing the constitution requires a two-thirds majority in parliament, which Fidesz-KDNP currently doesn’t have. The government party had been counting on the support of Jobbik, the only opposition party that was wholeheartedly behind the amendments. In fact, it was Jobbik that, from the beginning, championed for constitutional amendments instead of a referendum. Fidesz, however, rejected the proposal and embarked on an expensive, divisive referendum that in the end turned out to be invalid.

What followed was a typical Viktor Orbán move: regardless of the failure of his referendum he decided to go ahead with the amendments to the constitution. But there was a rub. Jobbik demanded a price for its members’ votes, which Gábor Vona set forth early in the game.

For starters, Vona said that he wanted to meet with the prime minister in private. In the last six years, however, it has never happened that the ruler of Hungary sat down alone with an opposition leader. Granting such a privilege to Vona was too demeaning, so Orbán organized a series of “consultations,” starting with Zsolt Semjén of the Christian Democratic Party and his own deputy, which everybody thought was a joke. Then he sent a message to Gyula Molnár, chairman of MSZP, who foolishly accepted the invitation, which he kept secret from the rest of the leading politicians of his party. Once the meeting became known, Molnár tried to explain himself away by saying that the consultation was not about the amendments but about the summit that is taking place at this very moment in Brussels. Since when does Viktor Orbán have consultations with opposition party chiefs about summits?

The long-awaited meeting between Vona and Orbán took place on October 18. In the days leading up to the meeting, Jobbik spokesmen repeatedly indicated that the party would support Orbán and that the Jobbik delegation would cast its votes with Fidesz-KDNP, guaranteeing an easy passage of the amendments. After all, this is what they wanted all along. Yes, but Jobbik was in a perfect position to demand something in exchange for its support of the government party. Vona’s demand was that the government cease selling residency bonds to wealthy Chinese, Russian, and Arab businessmen.

The residency bond sale, which I described as a “colossal swindle,” is the brainchild of Árpád Habony and Antal Rogán. Habony is safely deposited in London. Rogán, on the other hand, has been under incredible pressure, mostly because of Népszabadság’s revelations about his most likely ill-gotten wealth. The residency bond scheme has been severely criticized not only by the opposition but by some higher-up Fidesz leaders as well. In fact, in the last few weeks there were indications that the scheme would be modified. But I very much doubt that Orbán had the total cessation of the program in mind. And this is what Vona demands. If poor immigrants can’t settle in Hungary, rich ones shouldn’t be able to either.

The outcry against the Jobbik demand was not restricted to the government party. Gyula Molnár, chairman of MSZP, also condemned it in almost identical words. Bence Tuzson, one of the many spokesmen of the prime minister’s office, called it “kufárkodás” (profiteering) while Molnár considered it “seftelés” (conducting business in a dishonorable way). The two words are practically synonymous. For good measure Molnár added that Vona’s behavior is “political prostitution” pure and simple.

I am amazed at these reactions. In the world of politics this kind of give and take is perfectly normal. If Viktor Orbán needs the help of Gábor Vona’s party, it is natural that Jobbik will want something in return. After the meeting, Vona talked to the press and announced that Viktor Orbán had rejected his proposal, but a few minutes later Orbán sent a message via Tuzson saying that “he will consider the request of Vona.”

The Hungarian media started speculating about whether Orbán would meet Vona’s demands. Szabolcs Dull of Index simply could not imagine that it will be Viktor Orbán who has to knuckle under. After all, Orbán has convinced the Hungarian public that he is always the one who comes out on top. He is always the winner. In fact, Dull suggested, Orbán wants to get rid of the troublesome residency bonds anyway, and therefore he will readily concede to Vona’s demands. In fact, “he will kill two birds with one stone: he will be able to restructure the residency bond scheme and will receive Jobbik’s endorsement.”

Dull’s theory collapsed less than ten hours later when the government indicated that it has no intention of scrapping the residency bond program. Yesterday, around noon, Lajos Kósa, leader of the Fidesz caucus, announced that in their opinion the two issues, the bonds and the settlement of foreigners, have nothing to do with one another and suggested that Fidesz isn’t counting on the votes of Jobbik. They hope to get the necessary two votes from the “independent” members of parliament. Who these “independent” members would be is not entirely clear, but some Fidesz politicians indicated that they think a few “patriotic” Jobbik members could be found who would turn against Vona. By this afternoon most Hungarian journalists were convinced that Fidesz will put the amendments to a vote on November 8 even if they are not assured of Jobbik’s support.

Antal Rogán, carrying Viktor Orbán's briefcase in Maastricht, October 20, 2016

Antal Rogán, carrying Viktor Orbán’s briefcase in Maastricht today

In trying to win concessions from Orbán, did Vona sow the seeds of his own destruction? Today Magyar Nemzet speculated about why a Fidesz defeat would actually be good for Fidesz and bad for Jobbik. If the amendments are not passed and if Brussels insists on compulsory quotas, Fidesz can blame Jobbik.

Tamás Fábián of Index found this hypothesis compelling, adding that from information he received from people close to Orbán, “Brussels cannot be stopped and within months the compulsory quotas will be forthcoming.” If that is the case, “Jobbik politicians will never be able to get rid of the label of being traitors,” which Lajos Kósa already pinned on them. Fábián is convinced that Vona made a fatal mistake by presenting Orbán with an ultimatum. “He started on a narrow path and will suffer heavy blows along the way.”

Fábián also predicted that the sale of residency bonds will be continued, even if with some adjustments. Although in the last few days Fidesz spokesmen did talk about fundamental changes, two weeks ago Orbán called the program “a successful construction.”

I might add that despite all the dirt that was unearthed about Antal Rogán, he seems to have nothing to fear. Orbán will not let him go. I was astonished to see Rogán in Brussels, walking right behind Orbán. Since when do propaganda ministers go to summits in Brussels? I guess the government is sending a message that he is still under the protection of the prime minister.

October 20, 2016

Harmful politicians in the Hungarian democratic opposition

It’s time to vent my wrath against some of those politicians who allegedly want to win the 2018 election and free the country from a semi-autocratic leader who has introduced an illiberal political system in Hungary.

A couple of days ago György Bolgár invited me to outline my ideas about what the democratic opposition should do to put an end to the rule of Viktor Orbán. Among other things, I emphasized the need for one large opposition party, which would necessarily mean the disappearance of those parties that have only minimal support. As it stands now, none of them would receive 5% of the votes, so any ballots cast for them would not only be a waste but would boost Fidesz’s electoral position.

There are some very good people in these parties. People like Ákos Hadházy (LMP), Gergely Karácsony (PM), Tímea Szabó (PM), and Péter Juhász (Együtt) would be real assets in a large left-of-center party. But others should disappear from the political scene because they are obstacles to any kind of joint action and mutual understanding. The two most prominent people in this latter category are the chairman of Együtt, Viktor Szigetvári, and the co-chairman of LMP, Bernadett Szél. Szigetvári accuses MSZP of being in bed with Fidesz and wanting to lose the election as the result of a secret pact. Szél just assured Fidesz of her party’s support for the anti-refugee referendum and, while she was at it, joined the anti-Soros chorus of Fidesz.

Let me start with Viktor Szigetvári. Back in March 2014, just before the election, I wrote a critical article about him. For years, ever since he graduated from college, he was affiliated with MSZP in one capacity or another. He served under Péter Medgyessy, Ferenc Gyurcsány, and Gordon Bajnai. Because he was one of the organizers of the 2006 MSZP election campaign, he acquired the reputation of being an election guru with a magic touch. But, as his efforts in the 2014 election campaign showed, a magic touch was not enough. In 2013, after he left MSZP, he became co-chairman of Bajnai’s Együtt-PM which, despite promising beginnings, today has the support of only 1% of the electorate.

I freely admit that I have been following Viktor Szigetvári’s political career with growing concern. He appears on ATV frequently, and each time he lessens the chances of a unified democratic opposition. He tries to discredit and undermine the two larger parties, MSZP and DK, and puts himself forth as the only man who could engineer a democratic opposition victory in 2018.

Szigetvári’s latest foray into backbiting was an interview with András Hont of HVG where he said that “Együtt has an existing hinterland and an intellectual radiance which might not be as large as that of a party with 40% support” but the party isn’t tainted by those who were discredited in the days before 2010. Of course, Szigetvári conveniently forgets about the large role he played in the service of that “rotten regime,” whose other participants should be banished from political life.

Behind Viktor Szigetv'ari: "For Hungary"

Behind Viktor Szigetvári: “For Hungary”

The whole interview was full of contradictions. On the one hand, Szigetvári is convinced that only someone who had nothing to do with political life prior to 1990 can unseat Viktor Orbán. On the other, he indicated in the interview that his great hope for the premiership would be László Botka (MSZP), who came from exactly the kind of family Szigetvári talks about so scornfully. Both parents were MSZMP members; Botka’s mother was one of the founders of MSZP, mayor of Szolnok, and a member of parliament. And surely László, given his family background, was a member of KISZ. He became a member of MSZP at the tender age of eighteen.

László Botka is Szigetvári’s hero. The most popular MSZP politician who, due to some mysterious internal party conspiracy, was prevented from setting the agenda of MSZP for the next two years. Since MSZP blackballed Botka, the only conclusion one can draw is that the socialists don’t want to win the election, Szigetvári insists. Well, in my opinion, there is a more plausible explanation for Botka’s failure at the last party congress. It was well known inside and outside the party that Botka wouldn’t be willing to cooperate with anyone, especially not with Ferenc Gyurcsány, whose party, the Demokratikus Koalíció, cannot be ignored as a factor in the present political constellation. My take is that the representatives who voted for Hiller instead of Botka were thinking in terms of the inevitable electoral failure if MSZP tries to run its own slate in the 2018 election.

Szigetvári himself also wants to meet Fidesz head-on, and it was at this point that he revealed his true position. “We will not sacrifice our community on the altar of ‘Down with Orbán!’” This is as clear as it can be. It doesn’t matter what Viktor Szigetvári says, it is not the politicians of MSZP and DK who want to lose the election for some unfathomable reason. It is Szigetvári’s politics that will weaken the forces of the democratic opposition and help Viktor Orbán remain in power, perhaps for decades.

The interview stirred up quite a controversy, but Szigetvári is not the kind of man to back down in the face of criticism. He accepted an invitation from Olga Kálmán of ATV to elaborate on the accusations he had made in his earlier interview. There he tried to explain the inexplicable with miserable results. Those who know the language should take a look at that encounter.

And now let me turn to Bernadett Szél’s performance at the 27th gathering of the Fidesz-inspired Bálványosi Nyári Szabadegyetem (Bálványos Summer Free University). It is no longer held in Bálványos/Cetățile Păgânilor. It moved to the larger Tusnádfűrdő/Băile Tușnad, so nowadays they call the event Tusványos. Every year Fidesz invites the leaders of the parliamentary caucuses of the opposition parties for a friendly chat with the Fidesz top brass, but last year only András Schiffer of LMP showed up. This year his former co-chairman, Bernadett Szél, also accepted the invitation. Neither Jobbik nor MSZP went.

Bernadett Szél and Lajos Kósa discussing the migrant issue

Yesterday morning I read an MTI news item from Tusványos. Lajos Kósa (Fidesz), Péter Harrach (KDNP), and Bernadett Szél (LMP) were having a friendly chat, mostly about the refugee crisis and the referendum. Kósa went on and on as is his wont about Hungarian sovereignty and that only the citizens of Hungary can decide who can settle in the country. No one from the outside can force Hungary to do anything. “I can invite anyone into my house but I won’t allow my neighbor to make such a decision.” Pope Francis is correct that we have to help our brethren, but “we should be the ones who decide the form of assistance.”

Bernadett Szél chimed in. According to her, “migration and immigration have always been within the competence of the member nations in the European Union and they must remain there. No nation must succumb to blackmail.” Therefore, Hungarians must vote “no” at the October 2 referendum. As you know, MSZP, DK, Együtt, and PM have urged their followers to boycott the referendum while Gábor Fodor recommended that the followers of his liberal party vote “yes.” Until now, LMP had said nothing. Szél finally clarified what most people had already suspected: that despite all the noise they make in parliament on other matters, LMP is not a serious opponent of Fidesz. In fact, LMP, with its refusal to cooperate with others, is an enabler of Fidesz’s political agenda.

And if that wasn’t enough, she decided to say a few ugly words about George Soros. LMP rejects Soros’s meddling in Hungarian affairs. It is unacceptable that some influential person from the outside tells us what the right attitude or position is in certain matters. He should be spending his time in other endeavors instead of giving advice in the matter of immigration. The Pope couldn’t be left out either. According to her, politicians misinterpret the Holy Father’s words.

Ákos Hadházy, who replaced András Schiffer as co-chairman of LMP and member of parliament, is an excellent man. Just like Péter Juhász of Együtt, he is doing a tremendous job unveiling government corruption involving EU funds. Quietly but fairly persistently he has talked about the necessity of “common thinking” and “discussion” among the democratic parties. But Bernadett Szél intervened and said there is no change in policy: LMP will go against Fidesz alone in 2018.

Gyula Molnár, after learning about Bernadett Szél’s shameful performance, announced that MSZP will have nothing to do with LMP. Szél won’t be upset. She has more powerful frenemies on the right.

July 23, 2016

Viktor Orbán’s interpretation of the Brexit referendum

In the wake of the stunning Brexit referendum outcome, pro-government papers wisely waited for word from the boss before they dared express any opinion on the subject. They didn’t have to wait long. At 8:00 a.m. Viktor Orbán began his regular fortnightly Friday morning interview on the state radio station.

The first topic was of course the British referendum, something the Hungarian prime minister was not at all eager to talk about. The little he said had more to do with his own referendum, to be held sometime in the fall, on the European Union’s right to set “compulsory quotas” of asylum seekers in Hungary. One could ask what these two referendums have to do with one other.  Of course, nothing. What is important for him is his own referendum, and he exploits the opportunity presented by the Brexit referendum.

Brexit1

Source: spectator.co.uk

According to his own version of the story, the whole unfortunate referendum on Brexit was largely the result of the refugee crisis that hit Europe in the last year and a half. He claims that the British people revolted against Brussels because the European Union couldn’t handle the migration crisis. They punished Brussels for its incompetence. Orbán as usual is twisting the truth to fit his own agenda. What the majority of British voters were worried about, in addition to being subordinated to an outside power, was not so much the refugees and migrants who have reached the Continent but those “economic migrants” from East Central Europe who have settled in the British Isles in the last few years.  The 350,000 Poles and the 150,000 Hungarians, for example. At least these are the official figures, though most likely the real numbers are higher.

He was particularly unwilling to talk about the future except to state that “Hungary is in the European Union because we believe in a strong Europe,” a totally meaningless statement, only to return to his main message –the immigration issue. “But Europe can be strong only if it finds answers to such important questions as immigration. Many people, in the case of Great Britain the majority, consider the decisions [on the refugee issue] to be creating not a stronger but a weaker Europe.” So this, in his opinion, is what led to the “leave” vote.

Orbán indicated that he had been in touch with the prime ministers of the Visegrád countries. Robert Fico’s interpretation of the referendum result is almost identical to that of Orbán: “Great numbers of EU citizens reject the migrant policy,” which should obviously be changed. Jarosław Kaczyński went further. He would like to see an entirely new EU constitution which would include “reforms,” after which the EU “could make an offer” to Great Britain. What would these “reforms” include? Among other things, a new definition of the relationship between the EU and the member states, naturally in favor of the nation states. I’m certain that for the Euroskeptic Visegrád countries Kaczyński’s scheme would be a bonanza. Loosen European integration and keep a strong ally, the also Euroskeptic Great Britain, in the fold. This is a totally unacceptable response to the Brexit vote.

Foreign Minister Péter Szijjártó regurgitated Viktor Orbán’s wise words about a strong Europe, adding that “the time of honest politics has arrived in Europe” because the EU has for some time been following hypocritical and politically correct policies that have led to wrong answers to the migrant crisis. Lajos Kósa, representing Fidesz as a party, claimed that the majority of the Brits voted to exit from the Union because Brussels couldn’t defend them from the migrants. “It is an impossible situation that the socialist-liberal elite is pro-immigration while the decisive majority of European citizens is not.” Kósa added that “we can agree with the man who came up with the bon mot that Europe for the sake of a few million migrants lost 64 million citizens and the second strongest economy.”

Ildikó Csuhaj of Népszabadság usually uses her contacts with Fidesz politicians to get a sense of their attitudes on particular issues. According to her, the consensus in the party is that with Brexit Orbán lost an important ally. But in the future Orbán’s voice will become more audible in the EU. Her informants also believe that with the departure of anti-Russian Great Britain Orbán will have an easier time convincing the EU to put an end to the anti-Russian sanctions. The couple of Fidesz EP representatives she interviewed emphasized the importance of the unity of the Visegrád 4 countries, which should be used as a counterweight to French-German dominance. One of the EP representatives, György Schöpflin, is convinced that the European left wants to punish the exiting Brits. He had to admit, however, that it is not only the left that wants immediate negotiations but also the Christian-conservative parties in the European People’s Party (EPP). If that is the case, the Fidesz members of EPP have little choice but to go with the flow.

The leaders of the opposition parties naturally see the situation differently. Csaba Molnár, DK EP member, accused the British conservatives of a 20-year-long anti-EU campaign, which resulted in the disastrous outcome of the referendum. Viktor Orbán has been doing the same thing for years, and if he doesn’t stop eventually Hungary too will leave the EU. He therefore implored Orbán to call off the referendum.  Viktor Szigetvári of Együtt also asked Orbán “to stop his mendacious anti-EU campaign and his anti-European provocations.”

István Szent-Iványi, the foreign policy expert of the Magyar Liberális Párt, looks upon the outcome of the referendum as the result of “the British government party’s two-faced, ambiguous policies regarding the European Union.” The same attitude is present in Hungary and, given the lesson of the British decision, he called on the Hungarian government to make its relationship to Europe unambiguous, to stop its campaign against Brussels, and to cancel the referendum on compulsory quotas. At present, neither Hungary nor Europe needs this referendum, which is no longer about refugees but about Hungary’s relations with Europe.

Tibor Szanyi, an MSZP EP member, called David Cameron’s decision to hold a referendum irresponsible and selfish since he placed his own political survival ahead of the future of his country. But perhaps Cameron’s political sins will have a beneficial effect on Orbán. One possible outcome of the British decision might be that European politicians will have had enough of the selfish, nationalist members’ behavior and  will continue European integration without them. At the moment, Hungary still has a chance to be part of this work, but only if Orbán drastically changes course. He added that Brexit will have the most negative effect on the Central and East European countries because the leading demand of those who campaigned for Great Britain’s exit was that citizens of the European Union should not take work away from British citizens.

Given the official Fidesz interpretation of the British referendum, the great majority of the Hungarian people, as is often the case, will be misinformed and misled. I suspect that Orbán will go on campaigning against the EU and will hold the referendum. Otherwise, it is hard to predict how serious a handicap the absence of British support for the Visegrád 4 will be in the coming months. I suspect that from here on Orbán will have a more difficult time in Brussels.

June 24, 2016

Developments in the Hungarian National Bank corruption case

One goes for a little outing to Felcsút to admire that lovely little choo-choo train and what happens? The Hungarian public learns that, at least in the case of the Pallas Athene Domus Animae Foundation, György Matolcsy, chairman of Hungary’s National Bank (MNB), was directly involved in making its financial decisions. This flies in the face of the official story–that once the Hungarian National Bank parted with 260 billion Hungarian forints (almost $1 billion) of public money the management of the bank had no say in the affairs of the foundations.

Let’s start with the backstory, how the very existence of the MNB foundations and the extent of their funding was unearthed. The information initially came in a letter to the editor of HVG in the summer of 2014, shortly after the foundations were established. The letter called attention to a number of foundations established by the Hungarian National Bank and even mentioned the sum of money that had landed in these foundations. But the amount was so huge that the journalist assigned to the story was certain that the 200 billion forints mentioned in the letter must be either a typo or a figment of the letter writer’s imagination. It was far too large a figure. In August 2014 the journalist, Károly Csabai, who now works for Világgazdaság, started digging into the funding of these foundations. A law suit demanding that the National Bank reveal financial details of the foundations ensued. Verdict after verdict went against the bank, but it kept appealing. It wasn’t until March 2016 that the Kúria, the highest court of the land, declared that MNB had reached the end of the line. It must hand over the information.

Even as the MNB was meeting resistance in the courts, the foundations continued to hand out money without worrying about possible consequences. Perhaps György Matolcsy simply believed that the bank would be able to keep its foundations’ activities secret. People who know him say he is a modern-day Pangloss who believes that everything will turn out just fine regardless of how hopeless things seem. Perhaps he was also encouraged by the lawyers of the bank who were convinced that even if they lose the suit the arrangement would ultimately withstand legal scrutiny. But things are starting to fall apart.

In addition to the media, Bertalan Tóth, an MSZP member of parliament, has been pressuring the central bank via the justice system for more information. Today at last he received the documents concerning the financial decisions of Pallas Athene Domus Animae (PADA). The chairman of that particular foundation was Matolcsy himself, and the documents reveal that all investment decisions were the exclusive right of the chairman. That in itself is bad enough, but what is truly embarrassing is that the bulk of PADA’s money (well over 60 billion forints) was kept in the tiny little bank of Matolcsy’s cousin, Tamás Szemerey. And, worse yet, the foundation lent money to the struggling bank, presumably to avert liquidity crises, at a lower interest rate than the national bank’s stated rate at the time. It is noteworthy that Szemerey’s bank lent a substantial amount of money to Matolcsy’s son Ádám to enable him buy a furniture factory that would otherwise have been way beyond his means. I guess we can say that, in an admittedly indirect way, the Hungarian National Bank financed Ádám Matolcsy’s business venture.

Bertalan Tóth has also calculated that the foundations, by buying government bonds, added the equivalent of 0.7% of the Hungarian GDP to the national budget. In this way they massaged the size of the deficit. Last year’s official deficit was 2.5%, but without the extra money pumped into the budget by the foundations, it would have been over the 3% allowed by the European Union.

Bertalan Tóth and others wanted to question Viktor Orbán and György Matolcsy in parliament today. Neither of them showed up. Matolcsy sent one of his hapless deputies to answer the questions he was supposed to answer himself. András Schiffer of LMP demanded Matolcsy’s resignation from Viktor Orbán, who was also busy elsewhere. In his place András Tállai, undersecretary of the ministry of the economy, claimed that the government has absolutely nothing to do with the central bank. This is true in the sense that the government cannot dictate the bank’s monetary policy. But here we are talking about the questionable financial activities of the bank. Since the bank is owned by the Hungarian government, the government is responsible for any mismanagement that might take place at the MNB. Tóth compared the managers of the Hungarian Bank to the characters in the 2013 American movie The Wolf of Wall Street. His fellow MSZP member of parliament Lajos Korózs called the Hungarian National Bank “the residence of criminals,” saying its decision makers were planning to steal most of the money they deposited in the foundations.

So far Fidesz doesn’t have a competent point man to deal with this scandal. Lajos Kósa, who replaced Antal Rogán as the leader of the party’s parliamentary caucus, is famous for his bungling linguistic performances. This was certainly the case today when Index’s Szabolcs Dull pumped him for his reaction to the documents that demonstrate Matolcsy’s critical role in the financial affairs of PADA. Kósa, after some long and incomprehensible blabbering, could only fall back on the claim that “this assertion has not yet been ascertained” when the facts are there in black and white for everybody to see. The whole pitiful performance is available on the website of Index.

Lajos Kósa explains his interpretation of the connection between György Matolcsy and his foundations

Lajos Kósa explains the connection between György Matolcsy and his foundations

All in all, this is a case that will haunt the Orbán administration for a while. A few days ago the top brass of Fidesz expressed their relief because, according to their poll, only 10% of the electorate had heard anything about the central bank’s foundations. Moreover, they figured that the whole case is far too complicated for the man on the street to comprehend. I wouldn’t be so sanguine in their place. First of all, the scandal can only grow as Matolcsy will have to release ever more information. For example, there are all those “private persons” who received money from the foundations. So far their names haven’t been revealed, but pressure is mounting to release their identities. Moreover, ordinary folks don’t need fancy explanations about private as opposed to public money. It is enough for them to understand that these people, along with their friends and families, stole a heck of a lot of their hard-earned money.

May 2, 2016

The Orbán regime’s reaction to the scandal at the Hungarian National Bank

The Hungarian National Bank cagily released the documentation on its foundations’ grants and contracts Friday night after 5 p.m., but the timing didn’t help much. The outcry was immediate. And ever since, more and more revelations have been adding fuel to fire, from the grants given to relatives of György Matolcsy to the extra money that went to the wife of Chief Prosecutor Péter Polt. (In addition to her regular job as one of the department heads of the bank she also sits on the boards of several foundations.) The opposition, including Jobbik, is up in arms. All parties demand an investigation as well as the abolition of the six foundations which, by all accounts, were established illegally.

News travels fast, especially nowadays. The Financial Times carried the story of the resignation of the journalists at vs.hu on its front page. The New York Times and the Washington Post also covered the story.  Bloomberg had a complete rundown on Chairman Matolcsy’s machinations with the almost one billion U.S. dollars that was moved from the assets of the National Bank to private foundations. If something like this had happened in western Europe, it would undoubtedly have resulted in the resignation of the chairman of the central bank and perhaps even the whole government. In Hungary, however, nothing of the sort will happen. As Lajos Bokros, the former finance minister, put it when asked about the consequences, “I have no illusions. As long as we are saddled with the Orbán regime, nothing will change.”

Despite the many juicy stories surrounding this case, we shouldn’t get bogged down in details. The important thing to keep in mind is that the very establishment of these foundations was illegal. Bokros in a post on Facebook summarized the legal objections to Matolcsy’s “unorthodox” handling of the assets of the central bank. (1) All money that is accrued over the fiscal year by the bank must be put into the budget of the Hungarian state. Matolcsy, in office now for three years, has not been doing this. (2) The National Bank cannot establish foundations because by doing so it siphons public funds from the budget. (3) The Bank cannot utilize funds for public purposes because the utilization of public funds can be done only with the approval of parliament. (4) The Hungarian National Bank cannot get involved in the formulation of fiscal policy. Its only job is the formulation and execution of monetary policy. (5) The National Bank cannot attempt to transform public money into private funds because that is intentional theft and fraud.

Péter Róna, another economist and banking expert, in a conversation with György Bolgár on Klubrádió this afternoon added that the only assets Matolcsy could have used to buy works of art, musical instruments, or even to establish foundations were the bank’s private “income” from dues paid by banks and entrance fees to view the bank’s numismatic collection, which when Róna was a member of the board of directors a couple of years ago was no more than 4 billion forints a year. The foundations received 260 billion forints, more than 17 billion went for real estate, and an incredible amount of money was spent on artwork, including a picture by Titian for 4.5 billion forints.

From the general silence, it is apparent that members of the government and Fidesz-KDNP MPs find the whole scandal most unfortunate. When journalists asked questions of László Kövér and Viktor Orbán in the corridors of the parliament building, the politicians just kept going, eyes fixed on the floor. They refused to utter one word. Some of the lesser characters tried to act dumb. The excuse of one of the Fidesz deputy chairmen, Szilárd Németh, was that since he has only a simple cell phone, not like the journalists with their smart phones, he had heard nothing about the whole thing. I suspect that they were told to remain silent in the hope that eventually the whole scandal will just die down. However, I would like to remind Árpád Habony and Antal Rogán, head of the propaganda ministry, that this kind of strategy didn’t work in President Pál Schmitt’s plagiarism case.

Behind the stony silence I suspect fear because journalists of four independent organs were told yesterday that they will not be able to enter the parliament building for an unspecified duration. The four publications are Népszabadság, HVG, Index, and 24.hu. Letters notifying the editors-in-chief of the decision asked the editors to instruct their colleagues to obey the rules governing the presence of journalists in the parliamentary building “in order to maintain your publication’s parliamentary accreditation.”

In addition to the silence, the decision must have made somewhere high up, most likely in Fidesz, to leak a ten-year-old story according to which Péter Medgyessy, prime minister of Hungary (2002-2004), received 597,000 euros from the French company Alstom while he was serving as “traveling ambassador” for the country. After Medgyessy resigned, his successor Ferenc Gyurcsány named him to the post as a kind of consolation price. At the same time, however, Medgyessy returned to his old consulting business. Magyar Idők claims that the money Medgyessy received from Alstom was not compensation for his consulting services but a bribe in connection with Alstom’s bid for the metro cars for the new M4 metro line negotiated in and around 2006. Alstom was found guilty of paying more than $750 million in bribes to government officials around the world in December 2014. To make sure that the story sticks, a few hours later Magyar Idők also published a tabloid-like editorial.

Lajos Kósa, leader of the Fidesz parliamentary caucus, announced that “no prime minister in the 25 years of our democracy was accused of such a crime. Péter Medgyessy must give an account of that sum.” The prime minister’s office immediately joined the chorus, and its spokesman promised an investigation into how “this money is connected to the governance of the left.” They will investigate not only the affairs of the former prime minister but also those of former Budapest mayor Gábor Demszky. As for Medgyessy, he admits that he received almost 600,000 euros from Alstom through a Danish and Austrian company but claims it was all on the up and up.

Of course, at this stage we have no idea what transpired, but I must admit that 600,000 euros for a consulting fee is pretty steep. I heard Csaba Molnár (DK) contemplate the possibility that the reason for Medgyessy’s rather sympathetic attitude toward the Orbán government of late might have something to do with Fidesz’s holding this information over his head. Of course, this is just speculation, but it was rather embarrassing when a few months ago Medgyessy claimed in a radio interview that the Orbán government’s corruption is no different from corruption during the socialist-liberal period. I guess this also included his own two years as prime minister.

I’m sure that the pro-government media, including state TV, will keep this issue alive while an investigation will immediately begin into the bribery charge against Medgyessy and perhaps even against Demszky. Meanwhile, of course, nothing will happen on the Matolcsy front.

April 26, 2016