Tag Archives: Mahir Cityposter

What’s MSZP up to? Other opposition parties are suspicious

On April Fool’s Day thousands of stark black-and-white billboards appeared all over the country. The message they carried was simple: ordinary citizens work while the political elite and their friendly oligarchs steal the country blind. Jobbik, the party that ran this billboard campaign, hit Fidesz where it hurt. An infuriated Viktor Orbán wanted the billboards gone as soon as possible. In the beginning Fidesz activists were sent to remove or deface them, but, given the number of billboards Jobbik scattered all over the country, a better solution had to be found. In such cases Fidesz’s usual response is to create a new, targeted law.

This is exactly what happened here. On April 27 Lajos Kósa, leader of the Fidesz parliamentary delegation, and János Halász, undersecretary for culture in the ministry of human resources, submitted a proposal to re-regulate the use of posters and billboards. The bill included the stipulation that if the provider of advertising surfaces sells spaces at a price lower than the “current market value,” such an action would be considered to be hidden and forbidden party financing. This regulation would be applicable at times outside of the three months officially designated as the “campaign period.” Owners of poster surfaces must turn in a price list to the State Account Office and will be obliged to make their prices available on their websites.

In addition, and much more worrisome, a government decree signed by Viktor Orbán stipulated that starting on June 1, 2017, local government permission would be needed to place new advertising spots anywhere. The decree also introduced other new regulations. For example, the size of the billboards would have to be reduced from 12m2 to 9m2 and the frame size changed from 14m2 to 11m2. An additional burden on the companies. Much worse, the appendix to the decree stipulated that in the future one will be able to advertise only on properties owned by the state or the municipality. As it stands now, 90% of the advertising surfaces are in private hands and only 10% belong to the municipalities. This decree turns the billboard market upside down and will institute a state monopoly over political advertising.

There was only one problem. Certain parts of the Kósa-Halász bill needed a two-thirds majority, and Fidesz at the moment is short by two votes. Fidesz couldn’t convince any member of the opposition to vote for the bill. The opposition, both right and left, found it unacceptable. And although one of the DK members of parliament had such a serious attack of kidney stones that he had to be taken to the hospital and missed the vote, Fidesz still came up one short. As you can see on this photo, Orbán was anything but happy. Nonetheless, it was decided to resubmit the proposal this Friday at an extraordinary session of parliament.

Zsolt Semjén, Viktor Orbán, and János Lázár after the voting was over Magyar Nemzet / Attila Béres

At the center of this billboard controversy is Lajos Simicska, Orbán’s former friend and business partner. Simicska, in addition to owning Közgép, a construction company that once had a virtual monopoly on government infrastructure contracts, also owns several other businesses, including Mahir Cityposter and Publimont, which rent out billboard spaces and advertising kiosks. Jobbik’s billboards and posters appeared on spaces owned by these two companies. It was suspected from the beginning that Simicska, who broke with Orbán and Fidesz about two years ago, provided space for the Jobbik posters at a cut rate, but until very recently Jobbik refused to divulge the cost. So, in addition to the Kósa-Halász bill and Orbán’s decree, NAV, the Hungarian equivalent of the Internal Revenue Service, paid a visit to Mahir’s headquarters. They had the right to check all financial transactions between January 1 and April 30. They were specifically looking for financial transactions connected to the Jobbik posters.

When the price Jobbik paid Simicska’s firm was finally made public last week, it was obvious that “Simicska had sold the surfaces at a ridiculously low price,” as Népszava pointed out. Simicska, who until recently was the “financial genius” behind Fidesz’s coffers, used to favor Fidesz by charging very little for advertising posters. Now he was doing the same for Jobbik.

And so, if Fidesz’s bill were to fail again, because of Jobbik’s special relation with Lajos Simicska, the real winner would be the far-right but lately somewhat mellowed Jobbik. MSZP swung into action. They dusted off an old proposal that they had earlier submitted to parliament, which they now presented as an alternative to the Fidesz proposal. It would, just like the Kósa-Halász bill, forbid political advertising except during the campaign period by parties, municipalities, and the government, but, in addition, it would specifically forbid advertising by CÖF, the government-financed so-called civic organization, and Fidelitas, Fidesz’s youth organization.

With MSZP’s move Fidesz-KDNP was presented with an easy path to victory. Fidesz is “still studying” the matter, but it finds many aspects of the MSZP bill acceptable. Jobbik naturally is not game, and it looks as if LMP is also holding to its original position. According to LMP’s spokesman, unity must be maintained against this bill, which would only help Fidesz. However, as we all know, if MSZP is ready to sit down and negotiate, there will be no problem on Friday. And in that case, Jobbik will have been outfoxed. Not surprisingly, Jobbik politicians are crying foul. János Völner, head of Jobbik’s parliamentary delegation, described MSZP’s move as one of the most obvious and brutal political pacts since 1990. He claims that the poster market was the only one where there was parity among the parties. MSZP with this move contributes to Viktor Orbán’s media dominance.

Alfahír, Jobbik’s online news site, illustrates the mood in the party. The article reporting on MSZP’s offer begins this way: “June 19, 2017. Please don’t forget this date. Today is the birthday of the Orbán regime’s Patriotic Popular Front. Today what we had suspected for years has become official: MSZP became the prostitute of Fidesz.” The Patriotic Popular Front (Hazafias Népfront) was created in 1954 and was dismantled in 1990. It was supposed to be a body representative of the whole society.

Too little time has passed since the MSZP proposal to be able to gauge the reaction of the other smaller parties on the left. I suspect that, similarly to LMP, they will not be thrilled with MSZP’s special deal with the government party. They will be most likely strengthened in their suspicion that MSZP is not playing a fair game and that somehow it has a secret understanding with Fidesz. I wouldn’t go that far, but MSZP’s leadership is not known for its boldness and clear-cut positions. How MSZP voters will react to this unexpected move no one can tell yet, but somehow I don’t think that it will be popular among MSZP voters, most of whom, I suspect, wouldn’t want to have anything to do with Viktor Orbán and his party.

June 19, 2017

Two men who put up a fight: Lajos Simicska and Bachar Najari

Among the active members of Hungarian Spectrum there has been a long-standing debate about the most useful attitude toward the Orbán regime’s very existence and future. There are those who get upset when they encounter pessimism regarding the removal of the present Hungarian government. They think that defeatism is counterproductive and take every opportunity to raise their voices against naysayers. Among these people we find some who think that these pessimists are actually Fidesz propagandists whose job is to spread the dogma of Fidesz invincibility. But, to be fair, one doesn’t need to be a Fidesz troll to feel less than optimistic given the state of affairs in the country.

I for one agree that the proverbial Hungarian pessimism can become a self-fulfilling prophecy, which should be avoided at all costs. But, at the same time, we must admit that overcoming the obstacles that Orbán and his minions have placed in front of those desiring change is a formidable task.

Today I would like to hearten those who are worried about Hungary’s future by writing about two men who decided to stand up to the government. The first is Lajos Simicska, Orbán’s friend from high school, who reaped all the benefits of the mafia state until his falling out with the prime minister about a year and a half ago. The other is Bachar Najari, a Syrian-Hungarian-Swiss businessman, the new owner of the famed Zsolnay Porcelain Factory in Pécs. Although for different reasons, both were targeted for financial annihilation by a corrupt regime. It looks as if the powers that be are finding it difficult to destroy them.

Some people believe that Lajos Simicska’s contribution to the creation, development, and final accomplishment of Fidesz was even greater than Viktor Orbán’s. After all, it was Simicska who brought home the bacon. Of course, in the process he himself became immensely rich. But then came the falling out. Orbán, being a vindictive man, decided to ruin his old friend financially.

Simicska’s most important business venture is Közgép, a construction company that specializes in building highways and railways. As such, it is heavily dependent on government orders. Thus, Simicska looked like an easy target. Indeed, right after the blow-up between the two men, the government suspended midstream the highway that was to be built by Közgép. The second move was that the Public Procurement Authority (Közbeszerzési Hatóság), which handles government tenders, “discovered” that Simicska’s firm had cheated on one of its tenders. It was decided that as punishment Közgép would not be able to compete for any government jobs for three years. Simicska went to court and won, both in the lower court and also on appeal.

Trying to ruin Simicska through Közgép was not enough. Orbán instructed István Tarlós, mayor of Budapest, to break a long-term contract with Simicska’s firm, Mahir Cityposter. In 2006 the firm acquired the right to provide the city with 761 large cylindrical kiosks. The contract was to be good for 25 years. Ten years later the city suddenly “discovered” that the contract was not fair. When Simicska didn’t remove the kiosks by a specified date, the city ordered them to be forcibly removed despite a court order to stop the vandalism. Simicska promptly hired György Magyar, a very able lawyer, who said from the beginning that the case was absolutely clear-cut. And indeed, he was right. A few days ago the court agreed with the argument Simicska’s lawyer presented and forbade the removal of the kiosks while the case is pending before the court of appeal. The city will also have to pay 6.8 million forints in court costs. If the city loses, it will have to pay Simicska 600 million forints in damages.

Perhaps Simicska’s savviest move to date has been to form a consortium with the Italian company Itinera, which has been described in the Hungarian media as “a big gun.” Itinera has been “active in large-scale infrastructure projects and civil construction for more than 75 years in Italy and around the world.” Közgép together with Itinera presented a bid for a 27 km-long section of the M4 highway between Berettyóújfalu and the Romanian border. Their bid was 58 billion forints or approximately 188 million euros. Two other consortiums were also eyeing the job: (1) a consortium of three Hungarian companies whose bid was 84 billion forints or approximately 268 million euros and (2) a French-Slovak-Czech consortium that bid 87 billion forints or 272 million euros.

The difference in price is staggering. It seems that Simicska with this offer wanted to show the fair (admittedly, probably on the low end of fair) price of road construction and to highlight the graft that is normally built into these bids. In the case of the Hungarian consortium it was as much as 26 billion forints or 80 million euros. In this particular case almost 3 million euros per km would end up in someone else’s pocket. Of course, it is still possible to find fault with the Közgép-Itinera tender if Viktor Orbán so desires, saying that price is not everything, but apparently the Közgép-Itinera bid is also best in every other category, including environmental considerations. The consensus is that it will be very difficult to award the project to anyone else.

 

Now we can turn to the case of Bachar Najari, the Syrian-Swiss businessman with a Hungarian wife who also speaks fluent Hungarian. How Najari ended up owning the Zsolnay porcelain factory is a long story, which I pretty well told in a post titled “How to ruin a businessman with government help.” The upshot of the story is that one of Viktor Orbán’s oligarchs, Attila Paár, decided that he would like to own the factory because many of the vintage buildings in Budapest that will be restored or even rebuilt will need the famed terracotta tiles Zsolnay was famous for in the last decades of the nineteenth century. Najari had managed to put the formerly city-owned factory on solid financial footing, and it looked as if from here on it would be a profitable enterprise, especially with the impending sale of roof tiles. There was a fairly large loan which had been taken out by the city earlier from the Hungarian Development Bank for which Najari offered a certain amount of money to settle the account. The bank declined the offer and instead sold the debt for half of what Najari had offered to Attila Paár. Meanwhile, the city of Pécs decided to help Paár along by setting up a bogus company to which it recruited more than half of the workforce of Zsolnay. These workers are actually on paid vacation and no one knows who pays them. The situation was compared by one of the workers of the factory to a gangster film from the 1930s.

gangsters

Najari decided to fight. First he managed to get back his stock, which had been placed under sequestration. He used his own money and made good on the debt he inherited when he bought the factory from Pécs and also paid 90 million in local taxes, although it was a disputed item. Therefore there was no more reason for the city, which owns 19% of the stock, to take over the factory. Then the Kaposvár court refused to register Pécs’s new porcelain manufacturer, called Ledina Kerámia. Finally, the court in Zalaegerszeg turned down the request for a liquidation of the Zsolnay factory. A few days ago the city of Pécs “sold” the nonexistent Ledina Kerámia to an unnamed off-shore company. The city claims that the sale, for 3 million forints, “will ensure the jobs of those workers who were enticed to leave Zsolnay because it was to fold soon.”

Meanwhile work is being done at Zsolnay. Najari refused to be intimidated, and it seems that he managed to foil the attempt to rob him blind.

Although it is not easy, these two cases show that a person can win as long as he has the means and the determination to stop the Orbán regime’s unscrupulous, illegal activities.

September 19, 2016

Defending “the social order” by force of arms?

Most Hungarian journalists and even opposition politicians find what’s going on in Budapest at the moment highly amusing. The City of Budapest dismantles a dozen advertising kiosks, which workmen hired by Mahir Cityposter, a firm owned in part by Lajos Simicska, then replace with brand new ones. This is not, however, something that one ought to find funny or entertaining. What’s going on is further proof that Hungary is no longer a country of law. The Orbán government can do whatever it wants to those who are in its way. And Lajos Simicska is very much in Viktor Orbán’s way. He must be destroyed.

In 2006 Mahir signed a 25-year contract with the City of Budapest which gave it the right to set up 780 cylinder-shaped kiosks in the busiest parts of the city. Because the investment was substantial, Mahir negotiated a contract that couldn’t be broken before the date of its expiration. I cannot decide whether the contract was disadvantageous from the city’s point of view, but for ten years the city fathers found no fault with it. Last fall, however, they decided that the contract was so shamefully drafted in favor of Mahir that decency and good conscience (jóerkölcs) might be issues here. Sometime in September the city council, with a huge Fidesz majority, voted overwhelmingly to break the contract with Mahir as of October 31. They gave Mahir 60 days to remove all kiosks. If it fails to do so, they said, the city itself will do the job, starting in January 2016.

The inspiration for this late discovery of the foul nature of the contract undoubtedly came from the prime minister, who ever since March has been trying to ruin his old friend Lajos Simicska because Simicska humiliated him, called him all sorts of names, and, above all, was no longer willing to use his media empire in the service of the government. Simicska’s company, Közgép, which previously had received fantastic government contracts financed primarily by the European Union, was put on the government’s black list and, in fact, some of its projects that were under construction have been suspended. The latest chapter in this struggle is “kiosk gate.” We can be pretty sure that István Tarlós, mayor of Budapest, received a telephone call one day and was instructed to get rid of Simicska’s Mahir. Tarlós and 19 Fidesz members of the city council obliged.

Hard at work

Hard at work

It always surprises me how inept opposition politicians can be when it comes to realizing the significance of some of Viktor Orbán’s moves. For example, Csaba Horváth (MSZP) said: “they should conduct this Fidesz in-fighting among themselves and, if it is at all possible, they shouldn’t entertain either the public or the city council with them.” I must say that an unnamed journalist of stop.hu is much more sophisticated politically than Horváth because he captured the essence of this so-called “in-fighting” when he wrote: “Now Lajos Simicska can really see what kind of a country he and his former friend built. If necessary, the government will get even with those who are in the prime minister’s way even if it means disregarding the law. The only difference between Simicska and the average Joe is that the CEO of Közgép became a billionnaire from government investments. While Simicska fights his prestige battles with loose change, Everyman is fighting for his life.”

Mahir Cityposter’s legal defense is in good hands. Simicska hired György Magyar, an able lawyer. As far as he is concerned, the case is clear-cut. Immediately after the city council voted to break the contract, he filed suit against the city of Budapest. As far as he knows, the case will be heard on January 11. Until then, every action taken in this case is illegal. However, a new pro-government website, factor.hu, claims that Mahir’s request for a postponement of the removal of the kiosks was denied on December 12. The only problem is that Mahir’s lawyer knows nothing about this. Perhaps these discrepancies will be cleared up in the next few days. At this point it is useless delving into the details of the case. The immediate reaction of Orbán’s minions is much more interesting and telling.

The very fact that Mahir didn’t take what it is considered to be an illegal action lying down angered those who feel compelled to defend their master. Máté Kocsis, the mayor of District VIII who has been mentioned as the possible next lord mayor of Budapest, suggested police action to ensure the removal of the kiosks. He also threatened the company Mahir hired to guard the kiosks with the withdrawal of its operating license. György Bakondi, chief adviser to Viktor Orbán who made himself ridiculous during the refugee crisis, happily agreed that “public security and social order” might be maintained by armed forces. The word he actually used was “karhatalom,” which has a horrible connotation in Hungarian. After the failed Hungarian Revolution in 1956 the newly installed Kádár regime recruited civilians who were ready to support the new government to patrol the streets, arms in hand. These people were called “karhatalmisták.” Their task was to defend the “social order.” As one newspaper rightly pointed out, Bakondi slept through 27 years. He still thinks he is in the People’s Democracy of Hungary.

What is really frightening is the talk about “public security” and the defense of “social order.” At the moment Orbán and Company want to save the social order from Simicska and they have gone to war against him but, as László Seres pointed out in HVG today, “Who is interested in Simicska? This is a declaration of war. Against all of us, just for your information.” Indeed, whatever one thinks of Simicska, let’s not forget that what is happening to him can happen to any Hungarian.

Viktor Orbán punishes his adversaries

It is dangerous to cross Viktor Orbán. Sooner or later he will get you, if necessary with the help of crooked judges. Here I will tell the story of three people whom Viktor Orbán has been hard at work trying to ruin. One of his foes was acquired only a few months ago when his old friend, Lajos Simicska, turned against him. The other two are Ferenc Gyurcsány and Ibolya Dávid, who have been on Orbán’s black list since at least 2005. These two did something that in Orbán’s book was unforgivable: they were responsible for his failure to win the 2006 national election.

Ibolya Dávid, leader of the Magyar Demokrata Fórum, became an enemy because of her refusal to run on the same ticket as Fidesz in 2006. She thus deprived Viktor Orbán of those extra votes that were necessary to form a Fidesz government under his premiership.

Gyurcsány’s “crime” was even greater. Orbán noticed early on that Gyurcsány was a talented politician who might be his political opponent one day. And indeed, in 2004 Gyurcsány became prime minister, which was bad enough. But when in the 2006 television debate Gyurcsány decisively beat him, Orbán’s dislike of the man turned into hatred. Orbán was humiliated, and never again was he willing to debate anyone at any time. I’m convinced that from this point on he began assiduously planning the ruination of Gyurcsány, which he has partially managed to achieve by his unrelenting character assassination of the former prime minister, from which he hasn’t been able to recover.

Orbán’s original plan most likely included sending Gyurcsány to jail, and it must have been a great source of frustration that he failed, at least thus far. But if he couldn’t incarcerate Gyurcsány, he could settle for second-best: jailing two officials of the government office that handled the sale of state properties, among them the one that involved a group of foreign businessmen who planned to build a huge casino and wellness complex at Lake Velence, the so-called Sukoro project. Today, in the culmination of a trial that resembled the show trials of the Stalinist period, the two officials were handed very stiff sentences. Miklós Tátrai, the CEO of the company, received four years, and Zsolt Császy, one of the department heads, received three and a half years. They will appeal the verdict.

Tonight, in an interview with ATV, Tátrai revealed that his lawyer had received an informal offer from one of the prosecutors: if Tátrai implicates Ferenc Gyurcsány, he will be acquitted. Since Gyurcsány in no way tried to influence their decision, he naturally refused even to contemplate the offer.

This was obviously a very important case for the Orbán government, and it was one of the first cases sent to a court outside of Budapest, in Szolnok. And the Budapest Appellate Court won’t rule on the case. The next round will be in Szeged. The case may end up in Strasbourg.

Ibolya Dávid, chairman of the right-of-center Magyar Demokrata Fórum (MDF), agreed to a coalition with Fidesz in 1998 and thus received the post of minister of justice in the first Orbán government. I might add that Fidesz, a macho party, makes no effort whatsoever to put women in leading positions either in the party or in the government. Dávid’s experience with Viktor Orbán and the Fidesz leadership between 1998 and 2006 must have been so negative that in 2006 MDF decided to brave the election on its own, despite the considerable pressure on them to support Viktor Orbán. To the great surprise of political commentators, Dávid’s moderate conservative party received  5.04% of the votes and could form a caucus with 11 members. If the MDF leadership had agreed to a joint ticket, Orbán could have formed a government with 107 members. The socialists (MSZP) and liberals (SZDSZ) won 103 seats.

From that point on, Orbán was out to get Ibolya Dávid and MDF. By 2010 he succeeded. MDF managed to get only 2.67% of the votes, and by now MDF is gone. The party was undermined from the inside. Fidesz offered all sorts of enticements, including financial rewards, to people in the MDF leadership who were ready to be secret agents of Fidesz and turn against Dávid. Unfortunately for Fidesz, as a side issue of another piece of Fidesz “dirty business,” which involved spying on the National Security Office, it came to light that Fidesz wanted to pay off a young MDF politician to run against Ibolya Dávid and thus split the party. This was in 2008. The court case has been dragging on ever since. Although Ibolya Dávid and Károly Herényi, the leader of the MDF caucus, were the victims, during the course of the trial they became the culprits. I wrote several articles on UD Zrt., the company Fidesz used to spy on the government, and how Fidesz turned the tables on the MDF leaders. After innumerable court appearances, today the judge decided to “reprimand” Dávid and Herényi, whatever that means. Surely, not even this kangaroo court could find them guilty. So they came up with something called “megróvás” (admonition/reprimand). Both the prosecution and the defense will appeal.

They are supposed to be removed altogether

They are supposed to be removed altogether

And finally, we have the case of Lajos Simicska. In the last few months we have been witnessing Viktor Orbán’s efforts to ruin Simicska financially. Again, I wrote several posts on the subject. The latest is that István Tarlós, the mayor of Budapest, decided to break a long-term contract with one of Simicska’s firms–Mahir Cityposter. In 2006 Simicska’s firm acquired the right to provide the city with 761 large, cylindrical advertising surfaces. The contract was good for 25 years. According to the terms of the contract, Mahir was supposed to pay the city 15% of its profits or at least 45 million forints per year. Now, nine years later, the city fathers came to the conclusion that the deal was tilted in Cityposter’s favor and that if the city itself took over these advertising surfaces it would make between 73 and 125 million forints. Surely, this sudden discovery was inspired by Viktor Orbán’s anti-Simicska campaign.

I should point out that Simicska acquired these large cylinders back in 1994. Simicska, who at that point handled Fidesz’s finances, saw the importance of owning advertising surfaces in cities all over the country to give Fidesz advertisement opportunities at a lower price than that offered to the opposition parties. But that was a long time ago. The situation after the Simicska-Orbán falling out is entirely different.

In brief, don’t cross Viktor Orbán. He is a vindictive man who can now use even the Hungarian judicial system to ruin his adversaries. It is a sad day for Hungarian jurisprudence.