Tag Archives: ministry of agriculture

“Visa shopping” in Moscow: The case of Szilárd Kiss

A young man phoned György Bolgár’s popular call-in show, “Let’s Talk It Over,” on Klub Rádió this afternoon. He was agitated over the latest public row within the ranks of the fractured opposition. “Don’t they realize that we are in big trouble? Don’t they realize that if they don’t unite, Viktor Orbán will be the ruler of this country for life just like Putin and Erdogan? It’s all very nice that LMP’s Bernadett Szél managed to get some documents out of the government, but what does she achieve with that? These politicians should try to figure out how to get rid of a dictator.”

It was only a little later that I realized that the caller was talking about documents that Szél has been trying to get from the ministry of foreign affairs and trade for almost two years. The documents were the result of an investigation into the wholesaling of Schengen visas to thousands of Russians without any vetting by a man officially employed by the Hungarian government.

When I read the details of this latest government scandal, my first reaction was: “But this is not a new story.” Two years ago I wrote two posts on the villain of this story, Szilárd Kiss, agricultural attaché in the Hungarian Embassy in Moscow, who was able to extract thousands of visas from the Hungarian consulate in the Russian capital for his friends, business partners, and even prostitutes. At the time that I wrote my first post on Kiss, he was being held in pre-trial detention for defrauding a credit union in Hungary. He had been in trouble with the law in Russia earlier.

A lot was known about Kiss already in 2015. We knew that he moved to Russia in 1990, hoping to establish himself as a successful businessman dealing with agricultural products. He was especially keen on exporting Hungarian wine to Russia, but somehow all his business ventures failed. Meanwhile he developed a wide network of Russian businessmen and high-ranking politicians through his Russian wife or girlfriend of long standing, Yelena Tsvetkova.

After 2010, with the arrival of Viktor Orbán as prime minister, Kiss thought his time had come. After all, Orbán was keen on establishing strong political and economic ties with Russia. Through his influential Hungarian friends, like Csaba Tarsoly, the CEO of the Quaestor brokerage firm that a few years later went under, Kiss was introduced to Péter Szijjártó, the current foreign minister who was then an undersecretary in the prime minister’s office. Szijjártó was impressed and sent Kiss on to Sándor Fazekas, minister of agriculture, who without further ado appointed him agricultural attaché in Moscow.

In 2014, however, the Hungarian ambassador was about to dismiss Kiss because he had failed to pass the vetting process by the national security office. During the investigation it became evident that Kiss had connections to the Russia mafia and perhaps even to the Russian secret service. In addition, it was discovered that Kiss had been involved in a profitable “visa business” on the side. It was known already in 2015 that he had secured Schengen visas for at least 2,500 people without the standard vetting. In 2015 Index learned that Hungarian consulates had, in total, issued more than two million visas since January 2008. The Russian share was staggeringly high: 400,000. That is, every fifth visa had been issued to a Russian citizen.

We knew all that two years ago, yet the Hungarian media and public act as if this revelation is brand new. I sympathize with the caller who said that politicians could spend their time more profitably than fighting for the release of documents. It took two solid years to get the documents, which only confirmed everything that Index had reported two years ago. Of course, it is good to have the proof as well as more details, which “give a frightening picture of what was going on in Moscow.”

Source: Index / Graphics: Szarvas

As a result of the newly available documents we know that half of all Schengen visas issued in 2013 were requested by Monte Tokaj Kft, Szilárd Kiss’s company. We are talking about 4,000 visas, not 2,500 as we thought in 2015. Moreover, these visas were issued to “Russian citizens with ill-defined financial backgrounds and professions” and “without any apparent documented control.” The Hungarian authorities were not even aware of the addresses of these people, their requests were granted within hours, 50% of the applicants had no references, and they didn’t even have to visit the embassy for a personal interview. What Kiss and his accomplices were doing was what we call “visa shopping.” I should add that it is likely that none of these people spent even as much as a full day in Hungary.

Without the consuls’ cooperation Kiss couldn’t have conducted this visa racket. It looks to me as if they tried to defend themselves by claiming “dishonest influence peddling, pressure, or even threats” against them. Are they talking about pressure and threats from Russian mafia bosses? Perhaps, but the internal investigation doesn’t address this topic.

What is also interesting about this case—something we already knew in 2015—is that although the foreign ministry asked the ministry of agriculture to get rid of Kiss, he was not fired outright. Fazekas worked out an arrangement that allowed Kiss to remain with the ministry. He was asked to resign from his diplomatic post, thereby avoiding the stigma of dismissal. In compensation, Kiss was appointed “commissioner of eastern economic relations.” Why the change? Perhaps because the new appointment was based on a contractual agreement for which one didn’t need national security clearance. Kiss thus remained a public servant until January 2015, when he was arrested because of his role in defrauding a credit union.

By now Kiss is free again, awaiting trial. The last time his name showed up in the media was when he was spotted using a car with a diplomatic plate.

The foreign ministry now claims that they filed a complaint with the police regarding the case. If that happened at all, it must have occurred only recently, under pressure from a court order for the release of the report of the internal investigation that took place four years ago, in 2013.

Although it’s good that we know more about the case than we did two years ago, I’m sure the story will be forgotten within days just it was in 2015. In fact, I would be surprised if there were a police investigation at all. Kiss’s visa racket will be at best a footnote in a history book.

The Hungarian government has every reason to downplay this case. Although Szijjártó claims he never worked with Kiss, he can be seen cutting the ribbon at the opening of the visa center in Moscow with Yelena Tsvetkova, wife/girlfriend of Szilárd Kiss, partial owner of the company. It is also unlikely that the Hungarian government would be too keen to investigate the deal Fazekas made on behalf of his friend Szilárd Kiss in the ministry of agriculture.

So yes, we now know more lurid details of the visa scandal, but given the present government’s stranglehold on the police and the prosecutor’s office nothing will ever come of it. I agree with the caller to “Let’s Talk It Over.” Opposition politicians should slowly turn the job of investigative journalism over to the professionals and instead focus on the daunting task of becoming an unbeatable political juggernaut.

February 8, 2017

The “real” Hungarian watermelon season begins

I’m happy to announce that Hungarian consumers no longer have to wait. It’s watermelon season. In the last month alone more than 200 articles appeared about the excellence of watermelons grown in Hungary. The Orbán government fell in love with the watermelon and made it “prestige produce,” as MTV’s Híradó called it. Or, put another way, it became a national fruit, which is really funny considering that watermelon in Hungarian is called “Greek melon” and the Hungarian word for “melon” (“dinnye”) comes from one of the Southern Slavic languages. Watermelon arrived in Hungary sometime in the later fourteenth century, most likely from the Byzantine Empire with which Hungary had close relations.

Watermelon may be called “Greek melon” in Hungarian, but the ministry of agriculture began a campaign against buying “Greek melon from Greece.” Instead, consumers should buy “Greek melon from Hungary.” Preferably twice as many as they would normally buy. Why? Because Hungarian watermelon is much better than the Greek import and because there is an overproduction of watermelon year after year.

Shortly after the formation of the second Orbán government the ministry of agriculture decided to subsidize watermelon production. And they promoted the idea of farmers using their land to grow watermelon. Why watermelon? I have no idea, especially since growing melons is an expensive undertaking, and growers specializing in watermelon have only a month to sell enough watermelon to provide them with income for a whole year.

Growing melons requires a lot of land. It is also labor and capital intensive because one needs greenhouses equipped with incubators and farmers have to carefully graft watermelon plant shoots onto squash vines. Yes, you heard it right. This is a fairly new method that makes the watermelon plants more resistant to blight and disease. Growers tell us that the final result is practically indistinguishable from the old-fashioned watermelons. And the ministry assures people that these hybrid melons are absolutely safe, unlike some of those coming from elsewhere.

From the very beginning there have been problems with Orbán’s prestige product.  During the summer of 2011 many jokes were cracked about how “Orbán will slip on a watermelon peel.” Although the government set up “watermelon stands” which growers could rent for very little, there was minimal interest. Because of overproduction, prices were low. The lowest prices could be found at László Baldauf’s CBA chain, which is a favorite of the Orbán government. In addition, the weather was lousy: it was cold and wet, and watermelon needs a warm climate and lots of sunshine. No wonder that Greece, Italy, and Spain are large exporters of melon.

The summer of 2012 was not much better. Prices were again terribly low. Gyula Budai, undersecretary of the ministry of agriculture, blamed the supermarket chains for buying imported watermelons about a month before the Hungarian season began. An abundance of watermelons in June would reduce interest in the superior Hungarian melons in July. At this point the ministry put pressure on the supermarket chains and forced uniform pricing on them. They had to promise that they would not sell watermelon under 99Ft/kg. Apparently, the chains thought that the Hungarian Competition Authority (Gazdasági Versenyhivatal/GVH) had given its blessing to the deal. They were mistaken, and when GVH learned about the price fixing they investigated and threatened the participants with heavy fines. At this point a Fidesz MP, who himself was a watermelon grower, suggested a change in the law that allowed GVH to investigate agricultural cartels only with the permission of the ministry of agriculture.

But who knows where it came from?

But who knows where it came from?

In 2013 the ministry again tried to force price controls on the supermarkets, but they refused because such an agreement would have meant banning practically all imported watermelon from the Hungarian market. They were also afraid that the European Union might investigate and fine the businesses for engaging in price fixing. By the end the government only asked the firms not to buy Hungarian watermelon for less than they were paying for Italian or Macedonian imports.

What is the situation today? The campaign is on. About three weeks ago an article appeared with this headline: “Be careful, imported watermelons have already appeared in the stores!” According to a headline in Figyelő: “One doesn’t have to bear it much longer: the watermelon season is about to begin.” “Only two more weeks and the watermelon season will begin!,” says an article in Népszabadság, with the author adding that “this will be the real Hungarian season.” We learn from the article that watermelon is being grown on 5,800 hectares, mostly in the southern section of Békés County, along the Romanian-Hungarian border. Almost half of the watermelon is exported, primarily to Germany, the Czech Republic, and Poland.

Meanwhile some of the supermarket chains have made their peace with the Orbán government. Lidl stocks Hungarian watermelons earlier than any other chain because for them “assisting Hungarian farmers, in particular watermelon growers, is very important.”

The ministry of agriculture urges people not to buy Greek watermelon/görögdinnye because by buying the Hungarian product the customer will support 11,000 Hungarian families engaged in melon growing. The crop looks very good. About 220,000 tons of watermelon are expected to reach market this year. Meanwhile the National Office of Taxation and Customs–NAV (Nemzeti Adó- és Vámhivatal)–is out in full force to find people who are selling watermelon at roadside stands. Farmers who have the requisite permit can sell their own produce at roadside stands. But the NAV officials found a few stands where watermelons of unknown origin were being sold. They were promptly confiscated.

And latest happy news on the watermelon front. An internet site from Pécs announced that “the watermelon season has burst onto Pécs.” The watermelon comes from the Ormánság region of Baranya, south of Pécs. The article assures consumers that not only is watermelon available but also “freshly picked squash from reliable peasant women [kofa] at the markets.” I guess one can’t be too careful when screening peasant women who sell squash.

The Quaestor story is becoming less transparent despite the release of documents

It was four days ago that I wrote an article titled “A Crime in Search of a More Coherent Cover-up.” Well, the Orbán government is still searching and the story, instead of becoming more coherent, is getting more confusing. It’s hard to know whether the government is intentionally obfuscating the issue or whether it simply can’t concoct a halfway believable plot in which nobody in the government is at fault. The prime minister, we have been told, misremembered. It seems that the buck didn’t stop with him after all. But at the same time he doesn’t want to implicate any of his colleagues. That wouldn’t be good for business.

Meanwhile the police twiddled their thumbs, presumably waiting for instructions from above. Although Quaestor collapsed on March 9 and rumor had it that Csaba Tarsoly, its CEO, was a flight risk, they did nothing until March 26. Finally, two days ago, they arrested Tarsoly.

The chief prosecutor of Budapest, Tibor Ibolya, tried to explain away the delay by saying that “he did not want to prejudice the case” by acting hastily. In order to bolster this claim he had the temerity to quote the guidelines of the European Court of Justice. It is hard to tell whether Ibolya is just incompetent or, more likely, an eager accomplice of the Orbán government like his boss, Péter Polt. To get a sense of the man, I recommend Olga Kálmán’s interview with him on Egyenes beszéd (Straight talk).

QuaestorAlthough we heard earlier that Csaba Tarsoly, CEO of Quaestor, had officially announced the firm’s bankruptcy, the revised account is that no such notification to the authorities ever took place. Tarsoly simply told the National Bank that the company had collapsed; he didn’t file any bankruptcy papers. As a result, Tarsoly and his associates had plenty of time to get rid of evidence, hide assets, and do all sorts of things that would obscure their allegedly illegal activities.

It is possible that a great deal more public money landed in the coffers of Quaestor than the 3.5 billion returned in the form of cash to the Magyar Nemzeti Kereskedőház (Hungarian National Trading House), which is under the jurisdiction of the ministry of foreign affairs and trade. Népszabadság received information that the ministry of agriculture lost millions, but the paper’s Fidesz sources said that its money was not at Quaestor. I, however, wouldn’t be at all surprised if this ministry also had money with Quaestor because of Tarsoly’s close business connections with Szilárd Kiss, the man accused not only of embezzlement but also of possible connections to the Russian Federal Security Service. Kiss was a special favorite of the minister of agriculture, Sándor Fazekas.

The Hungarian public was promised information about the extent of the loss of public funds by tomorrow. This will be a tricky document to put together.

By now the government seems to have realized that it has lost public confidence. Therefore in the last few days it released a number of documents to build a more believable story.

Among the documents the government released is the March 9th letter of Csaba Tarsoly to Viktor Orbán in which the Quaestor CEO asks for government help in saving his firm. He requested a 300 billion forint loan to protect 50,000 small investors, resulting in greater public trust in the Orbán government. The government even released Viktor Orbán’s answer as transmitted by his private secretary:

We gratefully acknowledge the receipt of your letter. The Prime Minister informed the minister of economics of its content. Mihály Varga will appoint a person to conduct the negotiations you suggest. He will most likely get in touch with you today.

It looks as if Hungary’s prime minister was prepared to make a deal with the man whom now he calls a crook.

One would assume, on the basis of these letters, that the man appointed by Mihály Varga actually had a conversation with Tarsoly on the evening of March 9th, which was unsuccessful. Therefore, Tarsoly had no choice but announce, albeit unofficially, the collapse of Quaestor to György Matolcsy, president of the Hungarian National Bank. Today, however, we learned that this sequence of events, however logical, is wrong.

VS.hu asked for additional information from the ministry of national economy, and it actually got what its reporter asked for. Yes, Mihály Varga did appoint Undersecretary Gábor Orbán (no relation to the prime minister), who met Tarsoly not on 9th but on the following day, March 10th. Apparently he didn’t like Tarsoly’s proposal. Undersecretary Orbán “found the plan unrealistic and unacceptable because it would have put the whole financial burden of restitution on the Hungarian government.” Another inexplicable twist in an already badly twisted story. What was the point of negotiation between Csaba Tarsoly and the Hungarian government a day after the unofficial announcement of Quaestor’s collapse? Why didn’t Tarsoly wait until he had a chance to talk to Gábor Orbán? Is it possible that Tarsoly was still hoping to make a deal, even after March 10th? That he viewed the collapse of Quaestor as remediable?

In this story of twists and turns, contradictions and memory lapses, Népszava noticed another oddity. While the prime minister office’s short e-mail to Csaba Tarsoly was written on March 9 at 17:24, Tarsoly’s letter to Orbán was logged in only on March 10th. Naturally, the Hungarian media immediately picked up this anomaly. Admittedly, it may be nothing more than the usual sloppiness that reigns in Hungarian government circles. It might happen, though it seems odd, that a letter would be received and answered before it was logged in. The official explanation is that the office of the prime minister receives an inordinate amount of mail and that the log-in process–all done by hand–is slow. Surely, even Viktor Orbán’s “plebeian government” could afford an electronic automatic scanner which would take care of all this in seconds.

What is much more difficult to explain is why the Tarsoly letter to Orbán, which Giró Szász proudly showed to Antónia Mészáros, a reporter for ATV, last Sunday, March 29, had no log-in information on it whatsoever. Which letter is authentic? The one the government released, with the log-in date of March 10, or the letter Giró Szász showed on March 29, which had never been logged in? I’m sure the government will say that the letter Giró Szász had was a copy of the letter the prime minister received, a copy made prior to its being logged in. But why, when it is in the throes of a scandal, doesn’t the government keep things tidy? It just raises new questions, arouses new suspicions.