Tag Archives: Lőrinc Mészáros

A new job for OLAF? Győző Orbán, the father of Viktor Orbán

Today’s Financial Times carries a lengthy portrait of Viktor Orbán by Neil Buckley, FT’s East European editor, and Andrew Byrne, the paper’s correspondent for Hungary, Romania, and Western Balkans. In this overview of the political career of Hungary’s maverick prime minister, the authors quote George Soros, who said that Orbán “started really going wrong when he made his father rich by giving him a quasi-monopoly on road-building materials, which was a big source of wealth. That’s when [he] started building a mafia state. It’s really when he actually gained power.”

As a matter of fact, immoral financial dealings have been part and parcel of Orbán’s whole career. In 1990 the new democratic parties were penniless and, in order to conduct their activities, they all received a large amount of seed money. Fidesz’s share was half of a very valuable downtown building, which the party sold for cash. Out of this money, quite fraudulently, a few million forints was given to Viktor Orbán’s father, Győző Orbán, who was short of the cash he needed to purchase a stone quarry owned by the state, of which he was the manager at the time.

As time went by, Orbán’s financial appetite grew. After he became prime minister in 1998, he was in the perfect position to work on fattening himself, his friends, and his family through inside information. He was especially interested in agricultural land because he knew that the landowners would receive considerable EU subsidies in the future.

His father’s quarry, just as George Soros remembered, became practically the sole supplier of crushed stone to state-owned companies involved in government-funded road construction. Once all this was discovered, there was an outcry, especially after the 2000 publication of a book on the shady affairs of the “first family.” Orbán, who in those days was a great deal less brazen, had a talk with his father which, according to the prime minister, wasn’t pleasant. His father couldn’t understand why he couldn’t continue supplying crushed rock for government projects.

Father and son

Although there has been less talk about Győző Orbán’s business activities since his son’s return to power, some investigative journalists are convinced that Orbán’s father still has his finger in the “government project” pie. The journalists who are most curious about the business affairs of the extended Orbán family work for Direkt36. It is a center for investigative journalists who work hand in hand with 444, the internet news site. Direct36 has a separate column called “business concerns of the Orbán family.” Two journalists, András Pethő and Blanka Zöldi, are especially busy collecting data on the elder Győző Orbán and his two sons, Győző, Jr., and Áron. Many of their articles can be found here. (As a point of linguistic and psychological curiosity: Győző is the Hungarian equivalent of Victor/Viktor. So Elder Győző named two of his sons after himself.)

In May of last year the journalists of Direkt36 reported that Győző’s crushed rock and concrete building materials were being transported to government projects, most of which are financed by European Union funds, like sewage systems and railroad construction in Érd, Budapest, Jászberény, and Püspökladány. While visiting these sites, the journalists noticed trucks with the name “Nehéz Kő” (Heavy Stone) delivering large amounts of crushed rock and building materials to the government projects. The journalists found out that the trucking company belonged to Áron Orbán (subsequently, it seems, Győző Orbán became the owner), and they suspected that the material Nehéz Kő was carrying came from Dolomit Kft., Győző Orbán’s company.

Dolomit was active throughout the country, but the journalists were especially interested in a mega-project, the construction of a 53 km  railroad line between Szántód and Balatonszentgyörgy with an estimated cost of 72.4 billion forints. The work is being done by a consortium of three firms: R-Kord Építőipari Kft., V-Híd Zrt., and Swietelsky Vasúttechnikai Kft. R-Kord is owned by (who else?) Lőrinc Mészáros.

Direkt36 suspected that they had just encountered a tightly-knit family business, but the reporters were unable to get hold of the documentation necessary to show that the elder Orbán was actually doing business with the government. Today, after months of litigation, Direkt36 received proof that, despite the denial by the prime minister, Nehéz Kő is one of the subcontractors of this EU-funded government project. By setting up a trucking company that doesn’t display the Dolomit name, the Orbáns presumably wanted to hide the fact that the material comes from the family company.

Last summer Blanka Zöldi of Direct36 confronted the prime minister with her findings that Győző Orbán is the supplier of stone and building material to important government projects. Viktor Orbán, during that Q&A session, made a distinction between general contractors, subcontractors, and suppliers. Hungarian law forbids, he claimed, the participation of close relatives of important political figures from being general and subcontractors, but not from being suppliers. Clearly, he said, his father and brother have no business dealings with the government. They have a contract with one of the general contractors. But the documents received today show that Nehéz Kő was a subcontractor on the southern Balaton railroad project to the tune of 300 million forints or $1.2 million.

The Demokratikus Koalíció, which helped call attention to the shady business dealings of Viktor Orbán’s son-in-law, István Tiborcz, is ready to turn to OLAF again. The party’s spokesman declared that “there is no civilized, democratic country where, after such a revelation, the prime minister remains in office. … The money coming from [Brussels] goes toward the enrichment of his family.”

This may be the case (although Trump stretches the limits of what it means to personally benefit from political office), but Hungary at the moment doesn’t belong to the group of civilized and democratic countries. In a mafia state, a designation popularized by Bálint Magyar, earlier minister of education, like-minded people in high political office work together for their own and their families’ enrichment. Here we have the quarry business of Győző Orbán, whose initial capital came from his son’s newly-formed party. His company, Dolomit, supplies stone and cement products to government projects, which are being trucked by his company, Nehéz Kő. The goods are taken to the work site of the firm owned by Lőrinc Mészáros, who is suspected of being the stróman or front man of Viktor Orbán. All in the family.

January 25, 2018

The spectacular business career of Lőrinc Mészáros

On January 2 HVG published a short article with the title “The new year barely begun, Mészáros already grabbed more than one hundred billion.” Of course, they were talking about the “fabulously talented” Hungarian businessman, former pipe fitter, mayor of the village of Felcsút, and Prime Minister Viktor Orbán’s friend or, what more and more people believe, his front man, Lőrinc Mészáros. The information about this latest grab came from the Public Procurement Authority, according to which Mészáros and Mészáros Kft. got the job of reconstructing a 15.7 km railroad line between Százhalombatta and Ercsi, which will cost 49 billion forints. The same company, together with Euro Asphalt, will build a waste disposal system in Ózd at the other end of the country for 4.3 billion forints.

A few days later, on January 10, Válasz reported: “Hang on! Suddenly Lőrinc Mészáros owns 203 companies.” Anyone who’s interested can now look at the list Válasz put together. Less than a year earlier the same internet site recorded only 103 companies owned by this business wizard, whose assets have grown faster in ten years, especially in the last three years, than Facebook’s. When journalists asked Mészáros about his striking outperformance, he responded that “it is possible that I was smarter than Zuckerberg, don’t you think?”

The Hungarian media had lots of fun with Mészáros comparing himself to Mark Zuckerberg

Most of the amassed wealth has come from the European Union. Átlátszó calculated that between 2010 and 2017 Lőrinc Mészáros and his family won public tenders worth €1.56 billion, 83% of which came from EU funds. I might add that of the 203 companies Mészáros and family own, only nine have been the recipients of public procurements, but they were richly rewarded. All told, they won 97 public tenders, half of which were open tenders where the Mészáros firms had no competition whatsoever. A list of the public tenders won over the years can be seen here.

The English-speaking world was introduced to Lőrinc Mészáros’s fantastic business acumen last summer when Bloomberg published an article about him. The story that caught the eye of journalists was that stock in a Hungarian company called Konzum Nyrt., whose sales in 2016 had dropped 99 percent and whose debt ballooned, a year later, after Mészáros bought a 20% share of the firm, grew fifty-fold on the Budapest stock exchange. The article noted that in three short years Mészáros had become the fifth richest man in the country.

It doesn’t matter how emphatically Viktor Orbán insisted during a parliamentary debate that Lőrinc Mészáros is not his front man (stróman in Hungarian), an overwhelming majority of Hungarians are convinced that behind him and some of the other oligarchs is Viktor Orbán himself. Only a tiny minority, 6% of the adult population, can’t imagine that such a connection exists, while 78% consider a connection “very probable and/or possible.” Even Fidesz voters suspect their party leader is hiding behind hand-picked oligarchs. Among them, 31% believe in his innocence, but 60% are either certain (10%) or consider it possible (50%) that the prime minister is heavily involved in the corruption scheme which the majority of voters consider systemic. Of course, opposition leaders like Ferenc Gyurcsány of DK and Viktor Szigetvári of Együtt are convinced that the richest Hungarian today is Viktor Orbán.

Átlátszó came out with a fascinating article in December that tried to put the wealth of Orbán’s oligarchs into historical perspective. They picked the three richest men in the country in 1935: Count László Károlyi, Count Sándor Festetics, and Prince József Habsburg. Their wealth in pengő, the Hungarian currency at the time, is known, but it is hellishly difficult to translate that into today’s forints. Átlátszó asked two economists to come up with some comparable figures. Their results were wide apart, but in both cases they were only tiny fractions of Lőrinc Mészáros’s estimated wealth. Péter Szakonyi, who maintains an annual list of the 100 richest Hungarians, told Átlátszó that “there has never been anyone who got from zero to 120 billion in three years.” Indeed, in the last three years Mészáros has seen an exponential growth in his wealth.

There is no end to the Mészáros story. It doesn’t seem to bother Viktor Orbán that more and more people consider him a crook who through Mészáros is amassing a fortune. Just yesterday it was all over the media that Mészáros’s three children, who in 2015 established a company called Fejér-B.Á.L. Zrt., a construction company, had just won a public tender for the new building of the University of Physical Education. As for the company’s name, B stands for Beatrix, Á for Ágnes, and L for Lőrinc, Jr. According to their website, the company currently employs 120 construction workers and 27 office personnel. The company will share the job with Magyar Építő, one of the favorite companies of the Orbán government. It is this company that is in the process of building the new Ferenc Puskás Stadium and did the work on the Ludovika Campus. Both of these projects are extremely close to Viktor Orbán’s heart. The job that the Mészáros children got, at least on paper, is worth 1.2 billion forints.

The Mészáros children have every reason to smile

The Hungarian edition of Forbes described Mészáros’s wealth as something he didn’t take away from someone; he didn’t acquire it through his business acumen; he simply received it through the good offices of the prime minister of Hungary, who for one reason or other finds this man useful for his purposes. This simple pipefitter must play a key role in Viktor Orbán’s scheme to build his own financial empire. Mészáros is also used to increase the government’s presence in the Hungarian media through his purchase of regional newspapers. From the outside, this relationship between Orbán and Mészáros is hard to fathom, but I’m sure Orbán knows what he’s doing.

January 21, 2018

Recent gleanings from the Hungarian media

Frightening statistics

Here are a few items I found in the last few days that, while they may not deserve a whole post, certainly should be noted. The one that gave me perhaps the greatest shock came from an article I found on a site I wasn’t familiar with before but that has many useful pieces on economic and business matters. The article that describes a “frightening” statistic fresh off the website of the Központi Statisztikai Hivatal (KSH/Central Statistical Office) compares the productivity of foreign and domestic firms. It is a concise summary of the research published by KSH with all the necessary graphs, tables, and data.

The very first graph, on the share of foreign firms in the gross added value produced in the member states of the European Union, is shocking enough. It shows that Hungary, neck to neck with Ireland, has the greatest share. In general, and understandably, the foreign contribution to national economies is highest in the former communist countries. The sad truth in Hungary is that 53% of the revenue of the business sector is produced by foreign firms, which in monetary terms means 45 trillion forints. This sector produced 8,900 billion forints of added value. These firms also invested 2 trillion forints, or 45% of all investment, into the Hungarian economy. The foreign firms’ outperformance in revenue was accomplished with less than 30% of the workforce.

Both foreign and domestic firms increased their revenue over the last nine years, but the revenue of foreign firms increased by 20% while that of Hungarian firms grew by only 10%. If we look at the situation from the angle of added value, foreign firms have improved by 48% as opposed to the Hungarian companies’ 26%. So, instead of closing the gap with foreign companies, Hungarian companies are losing ground. Here are a few examples. Nine years ago an employee of a multinational created 9.7 million worth of added value as opposed to a Hungarian’s 4.1 million, or 2.4 times more. By 2015 the ratio was more than 2.6: 13.5 million versus 5.1 million forints.

That sounds bad enough, but it is even more shocking that about 690,000 men and women who work for foreign companies produce more goods and value than the almost 2 million employees of Hungarian companies.

Open your mouth and lose your job

One of the speakers at the Pécs rally in defense of the civil charitable group that received a large Soros-funded grant to disperse among smaller humanitarian groups in southern Transdanubia just lost his job. Tamás P. Horváth, who recently published his second book, became nationally known with his 2015 historical novel on the life of Miklós Zsolnay, the only son of the founder of the famed porcelain factory in Pécs. In private life, P. Horváth was the chef of the Hungarian Reformed Gymnasium. That is the school in which Péter Hoppál, Fidesz MP and undersecretary in charge of culture in the ministry of human resources, was once upon a time a chorister and music teacher. Hoppál eventually became the principal of the school and is still on the school’s board. It was his successor who called P. Horváth into his office to tell him that his services were no longer required. P. Horváth had signed a contract for a year in August, and after three months of satisfactory performance his position seemed secure. But retaliation was swift. He could pack up his belongings and leave immediately. The fact that the man is the father of five doesn’t seem to move the Christian souls of Calvin’s sons. After all, those children are not getting the “proper” education to become true patriots of the nation.

Of course, the principal of the school claims that there is absolutely no connection between P. Horváth’s political activities and his firing. But when Attila Babos of Szabad Pécs asked the principal the reason for P. Horváth’s loss of his job, the head of the school added a piece of advice both to the journalist and to P. Horváth. “Please understand that it wouldn’t help the situation of the person concerned if a basically work-related professional matter were to become a political issue.” So, back off because otherwise both the journalist and the fired chef can get into more trouble. The purported explanation for the firing was feeble, but it became truly ridiculous when it turned out that P. Horváth was supposed to deliver a lecture in January to the seniors on his new book and his literary craft. Interestingly, the lecture was also cancelled, and surely that lecture wasn’t about his culinary art.

Thirty-nine kitchenettes for the Felcsút Academy

After a lot of legal haggling Demokratikus Koalíció managed to find out how the Felcsút Academy spends the enormous amount of money it receives every year from Corporation Tax Allowance (TAO). It wasn’t easy to get the information. DK had to go all the way to the Kúria. For some strange reason, Felcsút was loath to reveal the amount it received and how it used taxpayer money.

First of all, last year Felcsút got 5.4 billion forints, which is a TAO record. Among the many sports-related items was one that took people’s breath away. 155 million forints were spent on a kitchenette. Index described a kitchenette (teakonyha) as a room used for cooking which must be larger than 2m² and no greater than 4m2 and must have separate ventilation. Index then calculated a 4m2 kitchenette’s price per square meter and compared it to the price per square meter of an apartment in the most elegant section of Buda, Rózsadomb (Hill of Roses). While the price of the Buda luxury real estate is 900,000 Ft per square meter, the Felcsút kitchenette’s price is almost 40 million.

What about this design? It would be perfect for Felcsút

The country was aghast, or at least those were appalled who are sick and tired of Viktor Orbán, Felcsút, the Academy, Lőrinc Mészáros, and the whole lot. But then it was discovered that the initial figure was incorrect. Actually, 220 million will be spent on 39 kitchenettes. They will cost between 1.3 and 2.8 million forints per square meter. I do hope the students appreciate their posh accommodations.

December 21, 2017

A few gems from Viktor Orbán’s “strong and proud” Hungary

There are just too many topics that have piled up in the last few weeks that deserve at least a mention. So I decided that today’s post would be a potpourri.

Lex Felcsút

Hungarians like to use the Latin “lex” for “law” when a piece of legislation proposed by the Orbán government is specifically designed to circumvent already existing legal constraints or has been enacted for the specific benefit or disadvantage of individuals. Here are a couple of examples. When Viktor Orbán wanted György Szapáry, who was over the age of 70, to be Hungary’s ambassador to Washington, he simply changed the law, raising the upper age limit for diplomats. When he wanted Zsolt Borkai, an Olympic champion and former lieutenant colonel in the Hungarian Army, to become a Fidesz member of parliament, the five-year moratorium on members of the armed forces for political office was lowered to three. Thus, Lex Borkai.

In 2015 the Demokratikus Koalíció sued FUNA, the foundation that runs the Felcsút football academy, after the foundation refused to release all the documents between January 2013 and November 2015 that pertained to the billions of tax-deductible forints the foundation received from large corporations. The foundation’s position was that the money certain sports clubs receive this way is not considered to be “public money.” The Székesfehérvár court didn’t agree. It ruled that the so-called TAO money in support of sports facilities (Corporate Tax Program) is considered to be public money and instructed FUNA to provide documentation of their finances. FUNA appealed, but in February the Budapest Appellate Court ruled that the books of the foundation for the required period should be made public. The ruling this time was based not on the public nature of the TAO support but on FUNA’s designation as “a publicly useful nonprofit” (közhasznú) organization. Within 15 days FUNA was supposed to deliver the documents to DK.

Those who had been distressed over this murky set-up full of opportunities for corruption were thrilled. “Here is the end,” said Magyar Narancs in February 2017. But not so fast. Nothing is that simple in Orbán’s Hungary. First of all, 15 days came, 15 days went, and no documents arrived. At that point the Demokratikus Koalíció sued. And the case was moved to the Kúria, Hungary’s highest court, for a final decision. There is no decision yet, but the government doesn’t leave anything to chance. On June 27 Magyar Nemzet noticed a small change in the TAO law enacted by parliament a few days earlier. Sports organizations are henceforth no longer designated as “publicly useful nonprofit” entities. If the appellate court decided that the documents must be released because FUNA is a publicly useful organization, the way to deal with this problem is simply to abolish the designation. That’s why this latest fiddling with the law is called Lex Felcsút.

The Poster War

Another perfect example of Fidesz inventiveness when it comes to legislation is the recent law nicknamed Lex Simicska. After a couple of abortive attempts, the Fidesz majority pushed through a law that should have required a two-thirds majority by amending a piece of existing legislation that needed only a simple majority. President János Áder dutifully signed a clearly unconstitutional law. You may recall that these Jobbik billboards, the target of the law change, featured not only Orbán but also Lőrinc Mészáros and Árpád Habony. Jobbik made the right decision when it included these two on their posters. Only yesterday Iránytű Intézet (Compass Institute) released a poll on the popularity of Habony and Mészáros, in addition to that of politicians. These two are at the very bottom of the heap. Habony is most likely seen as the symbol of Fidesz’s very aggressive method of communication, while Mészáros is the symbol of corruption. Clearly the Hungarian people like neither.

A 2010 Fidesz poster right next to Hungária Circus in Hatvan / Source: 24.hu

Lajos Simicska’s firm, Mahír, gave a substantial discount to Jobbik, which Fidesz tried to portray as concealed party financing. But selling advertising spots is like any other business venture where there are no fixed prices. Sometimes they are cheaper–for example during winter. Sometimes they are more expensive–for example, at election time. And, I assume that in certain circumstances personal preferences may play a role. For example, in Jobbik’s case, Simicska’s by now intense hatred of Viktor Orbán must be taken into consideration. Or, conversely, when Simicska worked hand in hand with Viktor Orbán for the good of Fidesz, he gave, as we all suspected, a very good price to his own party. In fact, at the very beginning of the 1990s Simicska purchased Mahír for that very purpose.

Now we know how good a price Fidesz got from Simicska in 2010 when the whole country was plastered with Fidesz posters. Someone made sure that 24.hu got all the documentation covering Fidesz’s deal. Fidesz paid 63% less than Jobbik did for its recent billboards. One billion forints worth of advertising was purchased for 23 million! That’s a real bargain, all right. But that’s not all. Fidesz ordered 4,700 billboards for 23.2 million forints, and they got an additional 1,300 posters gratis. Thus, Fidesz had 6,000 billboards and posters as opposed to MSZP’s 2,000 posters and Jobbik’s fewer than 500 during the 2010 election campaign. But, of course, these parties didn’t have such a generous benefactor. Nor did they have such well-funded party treasuries.

State support of parochial schools

I just read that the Orbán government spends 200,000 forints on children who attend parochial schools and only 54,000 on those who attend public schools. If all children were considered equal, public schools should receive 112.5 billion forints more than they get now. I feel very strongly about this issue, and I find the trend of passing public schools gratis to various churches unacceptable. The kind of education children receive in parochial schools, given the extremely conservative nature of Hungarian churches, may have an adverse effect on Hungarian society as a whole. Moreover, how can the Orbán government justify that kind of discrimination against most of its own young citizens?

Shooting galleries for school children

I left the best for last. Even the Associated Press reported about two weeks ago that Hungarian educational authorities are currently evaluating the installation of shooting galleries in schools to increase the variety of sports available to students. Officials of the Klebelsberg Center insist that the idea has absolutely “nothing to do with aggression and violence.” I saw a high-ranking official of the Center talk about this plan with great fervor in a TV interview, but about two weeks later came the denial. Márta Demeter, formerly an MSZP member of parliament, asked István Simicskó, minister of defense, about the veracity of the news. He flatly denied any such plans. He claimed that the Klebelsberg Center’s inquiries from school principals about appropriate locations for shooting ranges have nothing whatsoever to do with “the long-range defense development program” of his ministry. I’m sure that the Center’s inquiry and Simicskó’s earlier plans of building shooting ranges all over the country are connected. I also suspect that reactions to the notion of putting firearms into the hands of 13-14-year-olds were so negative that the great plan had to be abandoned.

Conclusion

That’s all for today, but I think these few examples are enough to demonstrate that something is very wrong in Viktor Orbán’s “strong and proud” Hungary.

July 2, 2017

One can always count on a good friend (or an alter ego): Lőrinc Mészáros and Viktor Orbán

I have the feeling that as long as Hungary has the misfortune of having Viktor Orbán as its prime minister there will be no end to the scandalous affairs surrounding Lőrinc Mészáros, the pipefitter from the village of Felcsút whose brilliant business acumen is the marvel not just of Hungary but perhaps the whole world. Since 2010 he has become one of the wealthiest men in the country thanks to, as he himself admitted, God, hard work, and, last but not least, his friendship with Viktor Orbán. Every time one turns around the miracle pipefitter has made a new acquisition. By now he himself is confused about the businesses and properties he owns. Occasionally he has to be reminded by others that he is the owner of this or that property or business. It could be amusing if it weren’t so sad.

I don’t think you would find too many Hungarians who think that Mészáros’s businesses are actually his own. The information made public today only reinforces this skepticism. One of Mészáros’s companies paid a 3 billion forint debt of Cider Alma [Apple] Kft., a company in part owned by Viktor Orbán’s brother-in-law and nephew. No, this figure is not a mistake; we are talking about 3 billion forints or $10.3 million.

To understand this transaction, let’s go back a little in time to the establishment of a number of centers, representing the Hungarian National Trading House (MNKH), under the aegis of the newly reorganized ministry of foreign affairs and trade. An incredible amount of money was poured into these trading centers in far-flung places across the globe. They were supposed to promote Hungarian business abroad. Unfortunately, in the last two years the foreign ministry’s business venture has lost something like 6 billion forints without bringing in an appreciable amount of money as a result of international trade.

At the end of September 2016 444.hu found out that a certain Cider Alma Kft. owes MNKH 3.2 billion forints and that the trading house now has in its possession 5 million packages of 425 ml vacuum-packed corn and 1.5 million 720 ml packets of pitted sour cherries. 444.hu’s investigative team was a bit puzzled and at first couldn’t see the connection between the corn and sour cherries on the one hand and Cider Alma Kft. on the other. But then they found an item from 2015 which revealed that MNKH had lent 3.2 billion forints to Cider Alma to produce apple sauce (not, as its name would indicate, apple cider). A year went by and only 280 million forints were paid back. Obviously something went wrong and Cider Alma was broke. Or, using a slang expression, the whole thing went “alma,” in this sense meaning “went bust.” 444.hu couldn’t resist a good line: “Would you like to have some apple sauce? Call the foreign ministry.”

Close friends with lots of secrets

It didn’t take more than a couple of days for 444.hu to learn that “Orbán’s relatives are dropping from the spaces between the packets of corn and sour cherries.” It turned out that Gizella Lévai, sister-in-law of Viktor Orbán, and her partner, Imre Ökrös, are business partners in three different subsidiaries of Cider Alma Kft. The relationship between the owners of Cider Alma and the Orbán relatives is so close that Ökrös’s two companies, Érvölgye Konzerv Kft. and Kelet Konzerv Kft., became the guarantors of the loan MNKH extended to Cider Alma. There are other Orbán relatives in this particular business venture as well. Most notably, Ádám Szeghalmi, Gizella Lévai’s son, cousin of the Orbán children, is the CEO of Drogida Hungaro, also a subsidiary of Cider Alma.

Hír TV immediately went after the story and asked for details of the deal. Specifically, they launched an inquiry into the fate of that loan. Ordinary citizens are entitled to get such information because MNKH is a state company and therefore the sum in question is public money. Five months later, Hír TV learned that the debt had been sold to Hórusz Faktorház Zrt., which happens to be a business venture in which Lőrinc Mészáros is involved. Factoring is a financial transaction and a type of debtor finance in which a business sells its accounts receivable to a third party at a discount. It is hard to find out much about this factoring company, except the name of its CEO.

Factoring is a common tool of finance, so Jobbik’s spokesman, Ádám Mirkóczki, was uninformed when he said: “I have never heard of a case where one company pays another company’s debt.” Admittedly, this arrangement is atypical. Cider Alma, it seems, had no accounts receivable, only some inventory to sell. Perhaps Mészáros and his business partners thought that the corn and sour cherries could be sold for more than they paid to settle Cider Alma’s debt. Of course, it is also possible, perhaps even likely, that Hórusz Faktorház took over the debt knowing full well that the firm will never see a penny. It was simply an arrangement among relatives. Whether we will learn more about this case I very much doubt. I agree with Ágnes Vadai of Demokratikus Koalíció that Fidesz corruption cases are simply dropped by the prosecutor’s office and this is especially so when the prime minister’s relatives are involved.

The funniest piece on the case was written by Bálint Molnár in Kolozsvári Szalonna (Bacon à la Kolozsvár). It bears the title “Is it surprising that with such stupid relatives the prime minister is flat broke?” The reference is to Viktor Orbán’s latest financial statement in which he went a bit too far in trying to make himself an average Joe financially. He was already quite poor in 2015 according to that year’s financial statement, but by the end of 2016 he was outright poverty-stricken. He does have one and a half pieces of real estate. He is half owner of the family’s Budapest home and sole owner of the house in Felcsút, right next to the stadium. But he and his wife have only 743,000 forints ($2,551) in their checking account, and they owe 5,999,694 forints ($20,600). He still has four dependent children, and his monthly pay as prime minister is 1,558,333 forints ($5,350). Let me add that an average Hungarian family has over 2,500,000 forints ($8,580) in its checking account. Anikó Lévai must be a very frugal housewife. On the other hand, Mészáros is busily buying one piece of property after the other. According to the latest account he is building a football stadium in Osijek, Croatia, where he wants to establish Europe’s best football academy. Oh my, and what will happen to Felcsút?

February 14, 2017

Silencing the media: Hír TV

I have noticed in the last month or so that Fidesz and the Orbán government are paying far too much attention to Hír TV, which has gone through quite a metamorphosis since February 6, 2015, the day known in Hungary as G-Day . It was on that day that Lajos Simicska told the world that Viktor Orbán and he had parted ways. Moreover, he called Orbán “geci,” which I “politely” translated at the time as “prick.” In the original it was much worse. After this day Simicska’s daily paper Magyar Nemzet, his radio station Lánchíd Rádió, and his television station Hír TV, ceased to be government mouthpieces. I must say that, as a result, the quality of Magyar Nemzet and Hír TV has vastly improved. It is another matter that one can only marvel at the “ideological flexibility” of those reporters who remained, because the change from a pro- to an anti-government stance took place practically overnight.

The loss of Hír TV must have been a heavy blow to the Orbán government, which it tried to redress by getting Andy Vajna, the former American-Hungarian movie producer, to purchase TV2, a commercial station that serves the whole country. Although the producers of TV2’s newscast have been doing their best to tarnish the opponents of the government, Viktor Orbán is still not satisfied. At least this is the impression I got when I heard that Gábor Széles, a far-right Fidesz supporter, was ready to sell his Echo TV to Lőrinc Mészáros. With the change of ownership, the work of making Echo TV, a formerly right-radical station, into a replacement for Hír TV began. At the same time, Fidesz is doing its best to squeeze Simicska’s Hír TV financially.

Hír TV was Fidesz’s channel from the moment of its inception in January 2003. The first president of the company was the same Gábor Borókai who had been the government spokesman of the first Orbán government (1998-2002). Many of the channel’s early reporters actually ended up working for the government after 2010. In October 2015 Péter Tarr, deputy CEO of Hír TV, admitted that “members of the government’s communication team visited the station at least once a week in order to give instructions” to those responsible for the ideological content of the station. By 2007 Hír TV could reach 2.1 million households.

After G-Day, many of the top brass both at Magyar Nemzet and HírTV left, among them the staff of “Célpont” (Target), who were investigative journalists. For a while this very popular weekly program was off the air. Now, however, it is back, and rumor has it that considerable effort, financial and otherwise, is being expended to make it HírTV’s flagship program, alongside Olga Kálmán’s forthcoming interview show. Given the incredible corruption surrounding the present government, a program of this sort is certainly a good investment, especially since ATV doesn’t have the financial resources to include such a show in its programming lineup.

Distressed by all these changes at Hír TV, Fidesz and the Orbán government moved into action. Even earlier, the Fidesz leadership had forbidden members of the government and high officials of the party to accept invitations from Hír TV. Now they are putting pressure on cable companies, suggesting that they drop Hír TV from their offerings. One company, PR-Telecom, obliged and announced that as of January 1, they had dropped Hír TV along with six other, mostly foreign-language, channels. At the same time the company announced that 14 new channels will be available, among them six that are owned by Andy Vajna. While they were at it, the company picked up two porn channels as well. The majority stakeholder in PR-Telecom is an off-shore company in Malta, Central Eastern Cable & Media Group Limited, whose owner is the same man in whose yacht Lőrinc Mészáros was seen in the harbor of Zadar last summer. What a coincidence, don’t you think?

Soon enough Magyar Nemzet discovered that PR-Telekom had received state aid to the tune of 3.3 billion forints a couple of months before the cable company informed Hír TV of its decision to break its contract. The grant (and it’s an outright grant, not a loan) for improvements of the company’s network in certain regions of the country came from money Hungary had received from the European Union. This is how the EU is unwittingly aiding the undemocratic policies of the Orbán government. Luckily, not all is lost as far as Hír TV is concerned. Since the cable company’s breach of contract was illegal, those subscribers who would like to switch service providers can do so without any penalty. At least this is what Hír TV claims on its website.

Meanwhile Hír TV has been hiring people right and left. Some of them came from the defunct Népszabadság, others from the state television. The government mouthpiece, Magyar Idők, has been watching all this with a certain amount of apprehension. Its articles talked about the alleged tension within Hír TV because the same Péter Tarr who earlier had complained about government interference in its programming now announced that the channel will be even more “critical of the government.” The newspaper provided a long list of reporters who have already joined or will join Simicska’s cable network.

The government-sponsored Pesti Srácok learned that Simicska’s partner in Közgép Zrt., Zsolt Nyerges, had announced that he is no longer ready to sacrifice his quite significant wealth on Simicska’s “pointless fight” with Viktor Orbán while their business is dying. Apparently the “discussion” was so vehement that it almost turned into a fist fight. Whether such an encounter happened or not (Nyerges denies that it did), Közgép announced Nyerges’s retirement as CEO and the appointment of Ildikó Vida in his stead. Her name ought to be familiar to the readers of Hungarian Spectrum since she used to be head of the Hungarian Internal Revenue Service. She was suspected of corrupt practices and thus barred by the U.S. government from entering the United States.

Viktor Orbán takes the remaining few opposition electronic media outlets deadly seriously. As it stands, by now there are only two government-critical television channels left in the country. Both can be reached only by cable. Hungarian political observers are convinced that 90% of all media today is in government hands. Yet it seems that 90% is still not enough. Viktor Orbán seems set on silencing all voices critical of his regime.

This reminds me of an article by Ekaterina Shulman, a Russian political scientist, which I read in a Hungarian summary. She called Putin’s Russia a “hybrid regime,” 80 percent propaganda and 20 percent coercion. This description of the leading illiberal democracy also fits the regime Viktor Orbán has built in the last seven years. Even the arch-conservative Batthyány Circle of Professors, which in the past had found the state of the country to be picture perfect, recently called attention to the gap between “appearance and reality,” the former having the upper hand in today’s Hungary. And to sustain appearance and suppress reality a government needs a full pipeline of propaganda with a healthy dose of coercion.

January 16, 2017

Sports and politics: a football empire and rebellious swimmers

I was pleasantly surprised this morning because, despite the holidays, I found quite a few topics that might interest readers of Hungarian Spectrum. For today’s post I picked two, both having to do with sports and, naturally, politics.

The football empire of Greater Hungary

I had not been aware until now that the Orbán government has been generously supporting football academies outside the borders of the country. The favorite for a long time was the Romanian academy in Csíkszereda/Miercurea Ciuc, where the former mayor Jenő Szász was a political ally of László Kövér and in general a favorite of Fidesz. According to 444.hu, a couple of years ago the Hungarian government gave one billion forints to the Csíkszereda Football Academy. An additional 300 million came from Hungary’s most successful pipefitter, Lőrinc Mészáros, who, in recognition of his generosity, was named an honorary citizen of the city. Apparently, in the final months of 2016 the government gave another billion forints to the Csíkszereda Academy.

Early this year Mészáros also became the “owner” of the NK Osijek (in Hungarian Eszék), Class I football team in eastern Croatia. The Hungarian government was again very generous. One billion forints was given to a center that is supposed feed new talent to the Osijek football team. Naturally, Mészáros’s own firm, Mészáros & Mészáros, is the chief sponsor of the club, but other Hungarian companies favored by the Orbán government also support NK Osijek: TRSZ, Duna Aszfalt, Magyar Épitő, and West Hungária Bau. As Benjamin Novák explains in Budapest Beacon, “a particular corporate tax benefit scheme allows corporations to write off 100 percent of donations made to sport clubs meeting certain criteria.” Transparency International, which investigated the case, “believes such contributions amount to a diversion of corporate taxes from public coffers to private sports clubs, and that for this reason such contributions should technically be regarded as public funds.”

Until now, at least the public could learn the names of the corporations that were generous supporters of Viktor Orbán’s favorite sport. According to the latest plans, however, this information will no longer be available. Business secrets, you know.

NK Osijek’s stadium / Source: Index

The Hungarian government, directly and indirectly, spends an incredible amount of money on football. Just for Christmas, according to the latest government decree, 50 billion forints was poured into the clubs of five spectator sports, most of them, of course, football clubs.

But why is the Hungarian government supporting football academies in the neighboring countries? In addition to Csíkszereda and Osijek, several other football clubs in Ukraine, Slovakia, and Serbia are the beneficiaries of the Hungarian government’s largess. One billion was sent to the football academy in Mukacheve (Munkács), another billion to the football academy in Dunájska Streda (Dunaszerdahely), and three billion to the Délvidék Sport Akadémia in Serbia. (Today’s Voivodina used to be called “Délvidék” or “the southern parts.”)

And why did Mészáros buy a team? A partial answer may be, as Mészáros admitted in a casual conversation with journalists, that the price for Croat and Serb players in the football market is a great deal higher than for those from Hungary.

 

Right-wing attacks against Katinka Hosszú and her American husband

A month ago I covered the struggle between the Hungarian swimmers and Tamás Gyárfás, then president of the Hungarian Swimming Association (Magyar Úszószövetség/MÚSZ). The swimmers’ case was pressed by Katinka Hosszú, the current star of Hungarian swimming.

Katinka Hosszú was victorious. Once Viktor Orbán made it clear that the upheaval in MÚSZ should cease, Gyárfás knew that he would have to resign. Mind you, although he might be despised by the star swimmers, Gyárfás remains popular with the affiliated club managers. A couple of days ago he received the most nominations for the post of president of MÚSZ, although the chance of his regaining his position is close to nil.

At the end of my post on the storm in the swimming pool, I wrote briefly about Hosszú’s American husband and trainer, Shane Tusup, whom the Hungarian swimming establishment resents. Although he is not an easy man to get along with, I came to the conclusion that this resentment has a lot to do with the fact that Tusup is an American, a foreigner. I recalled a television discussion in which the moderator completely lost his cool and abused Tusup, who thinks he is in Uganda instead of Hungary, which is a powerhouse of aquatic sports. He comes here to teach us?

Since then I have encountered many similar reactions to Tusup and, to some extent, to Hosszú as well. Soon after the world championship (25m) ended in Windsor, Ontario, Canada, an opinion piece appeared in Magyar Idők titled “A strange couple.” At that meet Hosszú received seven gold medals, which should have warmed the hearts of all Hungarian nationalists. But, strangely enough, that was not the case. On the contrary, the author of this particular article tried to minimize the importance of her and her husband’s achievement. The author stressed the prominence of Hungarian swimming ever since Alfréd Hajós received two gold medals at the first 1896 Olympic Games. And, he continued, he hasn’t met any “swimming expert” who would “tip his hat” to Shane Tusup, who is internationally recognized and was named “trainer of the year” three times in a row. The author of the article identifies with Sándor Petőfi, who “admired but didn’t like” mountains as opposed to Hungary’s Great Plains. In fact, the locals hate Tusup with such gusto that the Hungarian Swimming Association neglected to mention his trainer-of-the-year award from FINA, the international federation of aquatic sports.

The latest attack came from an extreme right-wing association called Honfoglalás 2000. Honfoglalás is the official historical name for the arrival of Árpád and his tribes in present-day Hungary. Honfoglalás 2000 is best known for its utter devotion to Russia and to Vladimir Putin. 444.hu has written several articles about this strange group, which thinks so highly of Putin that they suggested he should receive the Nobel Peace Prize. They thanked Putin for occupying Crimea. They demonstrated for the Russian-financed Paks Atomic Power Plant with placards reading “Roszatom: Jó atom!” They demanded that Péter Juhász be taken into custody because, according to them, he called on anarchists to commit disorderly acts. You get the idea.

This group had earlier called on the swimmers “to swim and not engage in political discussions.” Tusup’s name appeared in that statement: “We don’t want America (Shane Tusup) to intervene in our sports; we don’t want to introduce American-style, disgusting election campaign style conditions in Hungary. Hajrá Magyarország, hajrá magyarok!” Orbán finishes all his speeches with this sentence, which means roughly “to the finish Hungary, to the finish Hungarians.”

This time Honfoglalás 2000 is convinced that the storm inside the Hungarian Swimming Association was organized by Shane Tusup, who is purposely creating trouble in Hungarian swimming circles and thus jeopardizing the success of the World Aquatic Championships, which will be held in Budapest next year. The reason for his actions? He wants to make sure that the 2024 Olympic Games will be held in Los Angeles and not in Budapest. “Aggressive American politics by now is attacking Hungary even through sports.” The Hungarian swimmers should realize this and should cooperate with the management of the swimming association for the sake of the success of next year’s games. “Those who are not willing to do so can go, for example, to America where they should compete in Hungarian colors—we don’t hold them back.”

One might ignore all this, arguing that these people belong to the lunatic fringe of Hungarian politics. Unfortunately, my sense is that these sentiments are widely shared by those who follow the affairs of the Hungarian Swimming Association. And their numbers are significant because swimming is one of the two most successful Hungarian sports.

December 27, 2016