Tag Archives: Péter Polt

An EU prosecutor’s office would be a heavy blow to Viktor Orbán

I don’t think that anyone familiar with the Hungarian situation can doubt the economic ramifications of the institutionalized corruption of the Orbán regime. It retards growth and competitiveness and distorts the market economy.

A significant source for this institutionalized stealing is the EU’s convergence funds. Across the EU approximately 50 billion euros in funds distributed to member states is lost to fraud. The problem is especially acute in the former Soviet satellite countries: Bulgaria, Romania, and Hungary. The European Commission’s European Anti-Fraud Office (OLAF) gathers evidence of financial misconduct and prepares hundreds of judicial recommendations, but the prosecution rate is only about 30%.

If you think that this rate is pitifully low, you should take a look at the Hungarian situation. In 2015 OLAF investigated 17 suspicious cases, of which 14 were deemed serious enough for the organization to suggest that financial penalties be paid by the Hungarian government. As far as I could ascertain, in no case did the Hungarian prosecutors move a finger.

Yet hardly a day goes by without news of corruption. Ákos Hadházy, co-chair of LMP who has done the most to unearth corruption, asked Péter Polt, the chief prosecutor, to reveal the number of cases prosecuted since 2011. The answer was staggering. In only four cases did prosecutors bring charges. In monetary terms, in comparison to the billions most likely stolen, the sums involved were peanuts. According to their findings, the financial loss to the European Union was only 286 million forints, or 917,030 euros. Even though every day Hungary receives about two billion forints in EU convergence funds. Several notorious cases, like the street lighting business of Prime Minister Viktor Orbán’s son-in-law, were simply dropped.

For the EU, setting up a new organization–the European Public Prosecutor’s Office or EPPO–to investigate the fraudulent misuse of EU funds and inter-state or so-called carousel fraud is becoming an urgent task. In December I devoted a post to the subject, in which I reported first the reluctance and later the refusal of the Hungarian government to accept such a supranational body. We heard the old refrain: “the sovereignty of Hungarian prosecution might be undermined.” Moreover, goes the argument, since the Hungarian chief prosecutor is appointed by parliament, there might also be a constitutional problem. The latter excuse is truly laughable: almost never does the need for an amendment to the constitution cause any problem for the Orbán government.

Knowing the government’s heavy reliance on the good offices of the chief prosecutor in fraud cases, it was inevitable that Hungary would fight tooth and nail against EPPO. In the last couple of days the issue emerged again after an informal meeting of the justice ministers in Malta. Seventeen countries indicated they would participate in so-called “enhanced cooperation,” which is a procedure whereby a minimum of nine EU countries are allowed to establish advanced integration or cooperation within EU structures without the other EU countries being involved. Five countries, among them Hungary and Poland, opted out.

Justice Minister László Trócsányi self-righteously announced after the meeting that the Hungarian government’s main concern with setting up an EU public prosecutor’s office is its fear of weakening such institutions as Eurojust and OLAF, neither of which has prosecutorial powers. The former is merely a coordinating body that is supposed to improve the handling of serious cross-border crimes by “stimulating” investigative and prosecutorial coordination among agencies of the member states. OLAF can only make recommendations. Trócsányi had the temerity to claim that “these institutions have achieved remarkable results.” In the statement given to MTI, the Hungarian news agency, Trócsányi left open one possibility: “In case they want to establish a European prosecutor’s office, it should be created on the foundation of Eurojust.” As far as Hungary is concerned, “regulating the competence of such a body should require a unanimous vote.” This is in contrast to other countries “who believe that its establishment is possible by a qualified majority.”

Péter Niedermüller, DK member of the European Parliament, somewhat optimistically predicted that “the establishment of EPPO can be delayed but cannot be prevented.” We do know that the EU is reassessing its convergence program, perhaps as a result of all the fraud. Commissioner Věra Jourová, who is in charge of the project, has already indicated that there might be a modification of the rules governing the assignment of EU convergence funds. In plain language, if a member state receives more funds than it contributes to the common purse, it will get less money in the future. The European Parliament can institute “ex ante conditionalities” that would allow for such modifications. That would be a heavy blow to Poland and Hungary, the largest beneficiaries of the convergence funds.

You may have been wondering why I haven’t written about OLAF’s report on its investigation into fraud in the Budapest Metro 4 project, which was reported by Politico at the end of December 2016. It has been heralded as one of the biggest fraud cases ever in the European Union. OLAF recommended the repayment of €228 million to the EC Department of Regional and Urban Policy and €55 million to the European Investment Bank.

Although in the last month the Hungarian media has been full of accusations and counter-accusations, no responsible reporting of the case is possible for the very simple reason that the Hungarian government refuses to make the OLAF document public. As long as we have no idea what is in the document and we have to rely on the interpretations of János Lázár and Nándor Csepreghy, the number one and two men of the Prime Minister’s Office, and Budapest Mayor István Tarlós, who has definite ideas on the subject but admits that he hasn’t seen the report itself, we cannot possibly pass judgment on the case.

The investigation covers the period between 2008 and 2014–that is, two years of the Gyurcsány-Bajnai government and four years of the Orbán administration. The only thing we can say is that it is unlikely that all the fraud took place before 2010 and nothing happened under the new government, which is what the Orbán government claims.

Under the present setup these OLAF reports can be an instrument for political games. The establishment of a supranational European Public Prosecutor’s Office would help prevent the kind of situation that currently exists in Hungary with the latest OLAF report.

January 29, 2017

The latest revelations in the Roland Mengyi case

People unfamiliar with Viktor Orbán’s Hungary might think that I’m spending far too much time on the case of Roland Mengyi, a Fidesz MP. So what, they might say. They caught a politician who is a crook. Happens in the best of countries. What’s the big fuss?

Well, that’s not how things work in Hungary. The Orbán government has been in power for more than six years, during which the independent media reported on a raft of suspicious cases. Not once did the “independent” prosecutor’s office ask the president of the parliament to initiate proceedings to suspend a Fidesz MP’s immunity, even when such a request was warranted.

Yes, Hungary’s chief prosecutor is independent in the sense that he and his office are not subordinated to the ministry of justice, unlike in most European countries or the United States. That was not the case between 1867 and 1949. The prosecutor’s office was the judicial arm of the state. After 1990 a restoration of the old system was briefly discussed and rejected, for fear of government interference in the judiciary. Thus, Chief Prosecutor Péter Polt, an important ally of Viktor Orbán, is responsible to no one except, of course unofficially, the prime minister. He is a man of immense responsibility and power. He could theoretically topple Orbán’s corrupt regime or, being a faithful servant, keep it in power by burying all the embarrassing and even politically lethal cases.

Very often the prosecutor’s office doesn’t even start an investigation of cases reported to the police. In a few bigger cases they begin an investigation but the prosecutors find the cases too weak to go any further and drop them. Then, there are those cases when the prosecutor’s allegations are so poorly worded that the judges have no recourse but to acquit the accused.

The Mengyi case is testing the “see no evil” prosecutorial system. Péter Polt was forced to act. He had no choice once 168 Óra released the third installment of the story of Roland Mengyi and his accomplices. It reported that the National Tax and Customs Administration has a video on which one can see two of the accused men handing Mengyi a small plastic bag that might have contained the 5 million forints Mengyi demanded from them. An hour after this information hit the newsstands Polt wrote to László Kövér requesting that Mengyi’s immunity be lifted.

Mama Rosa, Italian restaurant, where the Roland Mengyi allegedly received the money

Mama Rosa, the Italian restaurant in Tiszaújváros, where Roland Mengyi allegedly received 5 million forints in cash

In this post I will concentrate on what we learned from the third installment of Attila Rajnai’s series on the Mengyi case, but before that I will try to clarify why the National Tax and Customs Administration/NAV is involved in this case since it has nothing whatsoever to do with tax fraud.

Initially, NAV was not investigating Mengyi but Márta F. of Tiszaújváros, an accountant whom the NAV investigators suspected of being involved in tax fraud by gaming the special tax status of employees of social cooperatives. These employees, who are disadvantaged, pay lower taxes and have lower social benefits payroll deductions than employees of ordinary businesses. Márta F.’s scheme was to change the status of employees of ordinary businesses to social cooperative employees. The scheme worked this way. The worker was let go by his employer and immediately hired by one of the social cooperatives, but in reality he worked in his old workplace except that his employer now hired him as a social cooperative worker with a reduced tax burden. Márta F. was apparently arranging these switches in status in such huge numbers that NAV investigators became suspicious and began their surveillance of her activities. Mengyi’s bad luck was that Tibor B. and Zsolt E., the two friends who turned to Mengyi for help, got in touch with Márta F., who was known as an expert in setting up social cooperatives. Thus their conversations with Márta F. were also recorded. These conversations prompted a second investigation that led to Mengyi.

So, what did the public learn from 168 Óra’s third installment? Plenty. One important piece of information is that if NAV investigators find a political thread in the course of their investigation, they have to report the case immediately to the prosecutor’s office. The prosecutor’s office can then, if the chief prosecutor so desires, stop the investigation altogether. In fact, Rajnai is aware of an earlier case where an important business partner of one of Viktor Orbán’s oligarchs was in trouble with NAV but the prosecutor’s office stopped the investigation. It is quite possible that the same thing happened in the Mengyi case because just when the investigators were ready to arrest the Fidesz MP, their superiors refused to give them permission to proceed.

Of course, the newly appointed NAV president, András Tállai, might have put an end to the investigation, especially since in one of the conversations Péter K., the middle man between Mengyi and the two applicants for the grant, tries to quell their fears by telling them not to worry because András Tállai and Roland Mengyi are “on very good terms.”

The other revelation of this third installment is that last fall someone in the ministry of human resources told Péter K. that NAV investigators had paid a visit to the ministry and that they should be careful because their telephone calls are being monitored. At the moment we don’t know who that person was, but Rajnai suspects that his name is known to the prosecutors. Because revealing such information to subjects of an investigation is a crime, this person is probably also in trouble.

As the network of corruption expands, another possible culprit is the owner of Public Sector Consulting Kft. (KSC), Sándor Holbok, whom I described earlier as an “ősfideszes” or “primordial member” of the party. Although at the moment only Szilvia B., an employee of the company, is in jail, Holbok was most likely fully aware of what was going on in the firm. In one of the conversations one can hear that Mengyi is in negotiation with the owner of KSC, discussing the financial details, meaning who will receive what portion of the 600 million.

Whoever interfered at the level of the ministry saved Mengyi from a much more serious charge. The tender was rewritten, and therefore the deal couldn’t proceed. As it stands, Mengyi and his co-conspirators are accused only of attempted fraud.

Now it is up to Péter Polt to contain the investigation to the smallest possible circle. If the investigation goes much further, it could reach high officials in the ministry of human resources and perhaps even in the prime minister’s office. After all, there are rumors that even undersecretaries might be part of the conspiracy to illegally acquire EU money. Szilvia B. talked about her close relationship with Nándor Csepreghy, deputy of János Lázár. I’m sure that Polt will do his best as usual. Maybe the whole thing will peter out and Roland Mengyi will be the only one who is charged. And if Mengyi is deemed to be critically important to the party, the prosecutor’s office will probably prepare a case so full of holes that he will get off.

August 20, 2016

Roland Mengyi, the Fidesz Voldemort: from billionaire’s front man to politician

This is the story of Roland Mengyi’s sudden appearance, out of total obscurity, in high politics. The original article titled “Egy milliárdos táskahordójából lett politikus a fideszes Voldemort” (The Fidesz Voldemort went from being the bag carrier of a billionaire to a politician) originally appeared in index.hu and was translated by the staff of The Budapest Sentinel.

Earlier I reported on the findings of Attila Rajnai, an investigative journalist, who in two installments published details of the scandal in the weekly 168 Óra. Since then another installment has appeared, which strongly suggests that officers of the Nemzeti Adó- és Vámhivatal (National Tax and Customs Administration/NAV) were ready to arrest Mengyi when he was negotiating with the two tender applicants from Tiszaújvár about a year ago. The officers’ superior, however, wouldn’t give them permission to act. Rajnai suspects that it was either András Tállai, president of NAV, or Péter Polt, the country’s chief prosecutor, who, for a while at least, saved Mengyi’s skin.

Tállai is a member of parliament, undersecretary in the ministry of interior, and, in his spare time, head of NAV, a huge organization. For one reason or other, Tállai’s appointment was of special importance to Viktor Orbán. But, at the same time, he didn’t want Tállai to relinquish his parliamentary seat in case Fidesz loses a third seat at a by-election. Hence Tállai’s multitasking challenge.

Another development in the case is a unique move by Péter Polt. He asked László Kövér, president of parliament, to initiate proceedings which might lead to the suspension of Ronald Mengyi’s immunity. In the past, the Fidesz majority of the parliamentary committee in charge of immunity cases always denied requests to suspend Fidesz members. This time, I believe, they will oblige. Tomorrow I will outline one possible way Fidesz might handle the case.

♦ ♦ ♦

Mengyi2

Official résumé: We know almost nothing about what the Fidesz parliamentary representative Roland Mengyi did prior to becoming a politician in 2010. He is not answering any questions about his earlier life. Nor is he talking about an ugly corruption scandal to which he has been connected. For this reason we looked into his past. It turns out that, while it does not appear on his résumé, he worked first for the Republican Guard, later as a driver for the front man of a billionaire entrepreneur.

Apart from his enterprising wife, an influential Fidesz city politician may have played an important part in his suddenly becoming a politician.

A typical political entrepreneur—based on his previous life this would be the best way to characterize Roland Mengyi, although his previous life is the thing about which it is possible to know virtually nothing, at least on the basis of what the politician has disclosed about himself.

When Mengyi became a Fidesz member of parliament in 2009, he wasn’t only completely unknown to voters but also within his party as well. He just appeared out of nowhere. As to what Mengyi did prior to 2010, the only thing appearing on his official résumé uploaded to parlament.hu is that, and we quote, “Public administration, free market. Former president of a public foundation, (sic).

Although we tried to ask Mengyi about the period before his career in politics, he was not willing to say anything. The Fidesz press office wasn’t able to help us learn anything about his past. For this reason we had no choice but to investigate where the Fidesz politician came from and whom he has to thank for his political career. We spoke with those who knew him from the past and had either a business or personal relationship with him. Finally the picture became clear. Mengyi was born in Tiszaújváros in 1975. He was still a child when his parents moved to neighboring Sajóörös. He attended school in Tiszaújváros where he obtained his high school diploma. He liked to do sports and in 1994 placed 10th in the junior body building tournament in the 90 kg category where he represented Tiszaújváros. Later he moved to Budapest.

His résumé doesn’t mention this either, but we know from other sources that at the end of the 1990s during the first Orbán government he worked in parliament as a member of the Republican Guard. Mengyi did not answer questions relating to this. The Ministry of the Interior, on the other hand, indicated that it could not release information about this.

One of his former colleagues told Index that he served as a security guard, and we spoke with another acquaintance of his who said he was a personal bodyguard.

One source close to him told us that he was in fact with the Republican Guard and later became the personal bodyguard of Pál Solt, then president of the Hungarian Supreme Court. At that time he was proud of the fact that he appeared in the background of a photograph of Viktor Orbán and Pál Solt.

How the driver became a lawyer

The turning point in Mengyi’s career came when he got together with the daughter of a famous Budapest veterinarian. His acquaintances at that time believe that through his girlfriend he entered an intellectual world previously unknown to him and that this influenced his future career: the simple, less intellectual, country bumpkin began studying law at the Pázmány Péter Catholic College. However, a terrible tragedy turned his family life upside down. When he was down on his luck, the veterinarian’s cousin, the billionaire entrepreneur István Petrás, took Mengyi under his wing.

Those in the billionaire’s circle say that at the beginning Petrás did not especially like Mengyi. The persons in question recollect that those belonging to the circle felt the guy of humble origins was using the intellectual medical family as a kind of springboard. “Roland was a clever guy, he learned fast, and studied law at night, he was hard working,” says an old acquaintance. Another person says precisely the opposite. A person belonging to Petrás’s circle says he doesn’t remember Mengyi for his brilliant mind.

In any event, in time Mengyi became Petrás’s confidante.

At that time Petrás was doing well. With assets amounting to many billions of forints, he was listed as one of the 100 most affluent Hungarians. There must have been real trust between the two because, between 2006 and 2008, Mengyi was listed as an owner of one of the billionaire’s companies. However, Petrás’ acquaintances believe that the future politician was needed only as a kind of front man (stróman) for the wealthy entrepreneur, who was dealing primarily in real estate and who characteristically avoided the spotlight. In other words, although Petrás paid him well, he used Mengyi as a simple errand boy and bagman. This explains how Mengyi became the chairman of the board of trustees for the Biatorbágy Health House Foundation founded by Petrás in 2006. The foundation was created for a project belonging to a public private partnership (PPP) in which Petrás was interested along with the Biatorbágy local government. The health house was eventually christened in 2009 by Gordon Bajnai’s Minister for Health, Tamás Székely. According to the minutes that can be downloaded over the internet, by then Mengyi was already a Fidesz member of parliament and thus represented the foundation in the negotiations with the local government.

It wasn’t Petrás who played a key role in Mengyi’s political career but his wife, who dealt in real estate in the 2000s and who later developed a close working relationship with Petrás. In fact, the two met through the billionaire businessman. The woman belonged to a group of businessmen whose success was largely due to their political connections. The defining individual of this circle was Róbert Juharos, who had a joint company with Mengyi’s future wife in the 2000s.

Juharos, who at one time worked at the law firm of KDNP MP György Rubovszky, was one of the founders of the Budapest 8th district chapter of Fidesz and was a member of parliament between 1998 and 2002. But his real career took place in the 8th district. Everything having to do with district development or related to property development went through his hands. Many credit him with the fact that over time a rundown district became a more secure place attractive to investors. Mengyi’s wife also benefited from being connected to Juharos, since one of her real estate companies, for example, specialized in the property of the district government. Furthermore, she, alongside her former husband, had a stake in Juharos’ law office.

Mengyi’s wife was not a simple dealer in real estate. Earlier she worked together with her lawyer husband on the sale of industrial property and on re-zoning, and she dealt with municipal properties, including those slated for demolition. That was the time when companies and private individuals of dubious reputation were able to acquire real estate very inexpensively by promising phantom projects and improvements, even guaranteeing them, which never materialized. In many cases the real estate was sold based on loose interpretations of the terms of the public tender. Juharos did so well that, in time, his name was mentioned as one of the future Fidesz hotshots, although he severely jeopardized his party career when in the middle of the 2000s Lajos Simicska became upset with him. Regardless, to this day he has been able to preserve his influence in the district under Máté Kocsis, Fidesz mayor. He is the president of the district chapter of Fidesz, is Kocsis’ adviser, and his law office contracted with the district government between 2011 and 2014.

Took up politics in secrecy

Not long after Mengyi and his future wife got together, Petrás and Mengyi had a falling out. According to acquaintances, Petrás had a very ugly quarrel with Mengyi because Mengyi concealed things from him which the billionaire believed he should have known. For example, that his protégé was getting into big politics. He only found out when Mengyi wanted to quit. “Roland wanted to leave Petrás. He asked from him his money and the promised percentages, to which Petrás reacted by telling him he was not entitled to them because the projects were not yet completed and money had yet to come in. They had an ugly quarrel, but I believe that since then they’ve patched up their relationship,” a source with a vantage point on both individuals told Index.

Those close to Mengyi believe that Juharos did a lot to help him go from being an errand boy to a politician. Many believe it was the president of the District 8 chapter of Fidesz who introduced Mengyi to how things worked in the party, and how to advance. This helped Mengyi obtain a position even though he was completely unknown within Fidesz.

It was not only Juharos who helped him, but also the lawyer who introduced him to Petrás in the first place. The lawyer personally knew one of the leading Fidesz politicians who had the final word on nominating candidates. Suddenly, out of nowhere, Mengyi became the Fidesz candidate for parliament for Tiszaújváros even though he did not reside there and played no role in the life of the party in Borsod County. Apart from the fact that he was born there and went to school there, he had nothing to do with Tiszaújváros. As we wrote in an earlier article, after the 2010 parliamentary elections, the political career of the previously unknown Mengyi began to rise. By summer it was decided that he would be the Fidesz candidate for chairman of the Borsod County Assembly in the autumn election after it was determined that the current president, Ferenc Ódor, was leaving. Mengyi was nominated by the head of the Fidesz delegation, Dezső Török, to be Ódor’s successor. We tried to ask Török about Mengyi, but he was on vacation. At the same time he indicated that, in his opinion, he was not qualified to speak about his fellow politicians.

After becoming a politician, Mengyi’s self-confidence grew. According to his acquaintances, it is entirely believable that Mengyi referred to himself as Lord Voldemort according to the wiretap records leaked by 168 Óra, because at a family event held in Tiszaújváros in 2010 the waiters called him “My Lord Lieutenant” (“Főispán uram”), and those in attendance said that wasn’t supposed to be a joke.

Poor rich people

If we look at Mengyi’s declaration of assets, the politician does not rank among the more affluent Hungarians. According to his 2011 financial statement, he already had HUF 10 million ($40,000) in savings, that is he was able to put aside 9.2 million in under a year, which means that he must have made an average of HUF 760,000 a month at minimum. One year later he inherited a house and a flat (he became the half owner), but he was no longer an owner in his company, and his savings had decreased by half. According to his most recent financial statement (2015), he bought neither a car nor a flat last year, and his savings do not amount to even HUF 4 million ($12,000). His children don’t have their own assets either. Nevertheless, his acquaintances believe that his wife owned many Budapest properties when they met her. Moreover, one of the politician’s previous companies, Park Consulting, lets out property that it owns. According to them, the Mengyi family purchased a number of pieces of property since 2010 that are not registered in the politician’s name.

Scandalous affairs

Since entering politics in 2010, his name has come up in connection with two scandals. The most memorable one was when Blikk published a list of Fidesz politicians who spent a few pleasant days in the Azores on the occasion of the European Regional Assembly. Mengyi’s name appeared on this list. In fact, it turned out that he played a central role in the scandal because the Fidesz politicians taking part in the holiday on the islands justified their trip on the basis of Mengyi’s being the county chairman of the Roma strategy.

He was once again in the spotlight in the fall of 2013 in connection with an unusual matter involving the tendering of state lands, which was uncovered by Népszabadság. The 2011 land tender was interesting because the tender was withdrawn after the deadline due to pressure from above so that the land could be awarded to people close to Fidesz.

At the time Népszabadság wrote that Mengyi played a role in the revocation of the tender. Allegedly, he was the one who ordered the head of the Bükki National Park Directorate to withdraw the tender. Among those who won the land was Mengyi’s former campaign manager, who had absolutely no previous experience cultivating land.

The biggest scandal of Mengyi’s political career, one that might even cost him his freedom, was revealed recently by 168 Óra. The crux of the matter is that social cooperatives wanted to apply last year for EU money. They claim that Mengyi would have helped in the disbursement if they gave back at first 50 percent and finally 90 percent of the money won. Instead of offering to help with an existing tender, a separate HUF 500 million ($1.8 million) tender was written for the cooperative that sought Mengyi’s help. Mengyi asked for a bribe which he referred to as “constitutional costs” (“alkotmányos költségek”) and, according to the wiretape transcripts, received HUF 5 million ($18,000), referring to himself as Lord Voldemort throughout. Roland Mengyi denies the whole Voldemort story and said he is prepared to undergo any investigation. Barnabás Futó, Mengyi’s lawyer, claims that the transcripts only refer to Mengyi, but that he himself never spoke. However, according to 168 Óra’s latest article, Mengyi participated in one of the telephone conversations.

August 18, 2016

Fidesz and the criminal underworld

Yesterday we learned from Medián’s fascinating poll on corruption that a fair number of Hungarians think of their government as a criminal organization and the country they live in as a mafia state. They are not imagining things. Not only is the Orbán government corrupt. We also have convincing evidence that certain members of Fidesz and the government had dealings with figures in the criminal underworld.

Earlier I wrote about Antal Rogán, who during his tenure as mayor of District V of Budapest may have engaged in an illegal transaction with Tamás Portik, a convicted murderer. Rogán’s name also cropped up in connection with the investigation of László Vizoviczki, another shady character who might be responsible for several deaths from drug overdoses at his nightclubs.

That Rogán had dealings with Vizoviczki is not surprising. After all, Vizoviczki owned or rented several nightclubs in District V. Rogán most likely also knew Portik since Portik’s wife/girlfriend had financial dealings with the District through the purchase of a piece of real estate.

But evidence has surfaced indicating that Antal Rogán was not the only Fidesz politician with ties to the Budapest underworld. In a letter written to the prosecutor’s office in April of 2013, in which he outlined a possible plea agreement, Vizoviczki indicated that he had extensive dealings with other important Fidesz politicians.

Vizoviczki’s implicit threat–make a deal or I’ll spill the beans–was not idle. Jobbik’s N1TV, a well-informed internet site which earlier discovered Vizoviczki’s letter to the prosecutors, yesterday made another discovery. According to the story, on February 12, 2013, the police searched Vizoviczki’s four-story mansion in Buda. Among the items found was a 10-page letter addressed to “Gábor.” Gábor turned out to be Gábor Kubatov, currently one of the three deputy chairmen of Fidesz. In it, Vizoviczki asked Kubatov to use his good offices with the prosecutors and the police to get him released from jail and placed under house arrest for the duration of his trial. As Vizoviczki reminded Kubatov, he deserves assistance in exchange “for his support in the campaign (Reform Plan).” The content of this letter is known only from the very short description written by the policeman who took an inventory of the confiscated items because the prosecutors found the letter so insignificant that they didn’t include it in the material that was sent over to the court. On May 30, 2013, Vizoviczki was released from jail.

On the basis of this very brief summary of the letter I think it’s fair to assume that Vizoviczki was a generous supporter of the Fidesz campaign in 2010, which may be one reason that his case, which is still dragging on, hasn’t been vigorously investigated. Neither the police nor the prosecution seems to be eager to go after Vizoviczki. The police are most likely trying to bury the case because high-ranking police officers were allegedly in his pay. And, as we now suspect on the basis of Vizoviczki’s letter to Kubatov, Fidesz is probably also beholden to him.

The emergence of this short summary of the letter must have come as a shock to Kubatov because in the last 24 hours he hasn’t been able to come up with a coherent story about the background of the letter. His answer at a press conference yesterday about his acquaintance with Vizoviczki was fairly light-hearted. “Of course, I know him. I’m a politician and it is my business to meet people,” he answered to a question from Index’s journalist. A few hours later he realized that his flippant answer might not have been appropriate. In the second iteration, he tried to minimize his contacts with Vizoviczki. Kubatov claimed to the pro-government Magyar Idők that they had met only twice, once at the 110th anniversary of the kindergarten they both attended and once when Vizoviczki approached him about his plans to invest in sports, specifically in Fradi, Kubatov’s football club. Kubatov was not interested. Otherwise, according to Kubatov, on that occasion they talked about the terrible tragedy at the West-Balkan disco where several people died because of overcrowding and the subsequent stampede. Kubatov and Vizoviczki discussed safety measures that should be introduced in discos to prevent such tragedies in the future.

How well did these two men know each other? I suspect much better than Kubatov now lets on. On the photograph taken at the anniversary celebration of their kindergarten in April 2012 the two men are sitting next to one another. Admittedly, this doesn’t prove anything since the crowd seems to have divided itself largely along gender lines and more women than men attended the gathering. So even if they were perfect strangers they may well have ended up sitting beside one another. But my hunch is that they were no strangers.

kubatov-Viz

The whole story is suspicious, starting with the fact that the prosecutors didn’t include Vizoviczki’s letter to Kubatov in the material they passed on to the court. This cannot be a coincidence, especially in view of the close relationship between the prosecutor’s office and Fidesz. The prosecutors, realizing the damaging material in that letter, hoped that the document would never surface, as indeed it still hasn’t.

In any case, I’m not the only person who finds the prosecutors’ handling of this important letter more than strange. Today MSZP called on Péter Polt to explain why the prosecutor’s office ignored the letter written by Vizoviczki to Kubatov. It’s easy to predict what the answer will be. The same as when the prosecutors were supposed to investigate Tamás Portik’s testimony about the bribe he allegedly handed to Antal Rogán. The prosecutors announced a couple of days ago that they see no reason to investigate Portik’s allegation. Charges were dropped.

July 29, 2016

Orbán’s vision of the future: autocracy with the assistance of law enforcement

A few days ago Viktor Orbán delivered a speech commemorating the 145th anniversary of the establishment of Hungary’s modern prosecutorial system in 1871. In 1991, on the 120th anniversary of the occasion, at the suggestion of Kálmán Györgyi, chief prosecutor at the time, the decision was made to celebrate the event every year. As part of the observance, prosecutors whose work merits special recognition receive the Sándor Kozma Prize. Kozma was the first royal chief prosecutor of Hungary between 1871 and 1896.

Until 1990 the prosecutor’s office was subordinated to the ministry of justice, as is the case in most European countries. After the change of regime, however, in an attempt to stave off undue state power over the judiciary, the new constitution declared the prosecutorial structure independent of the government. The result, even before the arrival of Peter Polt as chief prosecutor in 2000, was problematic. “Independence” in reality meant “responsible to no one.” A state within the state. At one point, during the first Orbán administration, Minister of Justice Ibolya Dávid did attempt to end the independence of the prosecutorial system and place it under her ministry, but because of the opposition’s objections the idea was dropped.

The last time that Orbán appeared at this festive occasion and delivered a speech was in 2012. At that time his message centered on the relationship between the government and the prosecution. He argued against an artificially forced distance between the two. This year he lauded the present system of prosecutorial independence, although he had to admit, most likely because Kálmán Györgyi was in the audience, that earlier he had argued rather vehemently with the former chief prosecutor in favor of placing the prosecution under the government. Now, however, he seems to be satisfied with the current arrangement. He had to admit, he said, that Györgyi was right. Of course. The pseudo-independence the prosecutorial hierarchy suits Viktor Orbán perfectly.

After a few more or less incomprehensible sentences, the prime minister came to the defense of the prosecutors under the leadership of Péter Polt. Opposition politicians consider Péter Polt the kingpin who keeps Viktor Orbán’s corrupt government in power, and they are openly asking for his resignation. They promise him jail time once Viktor Orbán is gone. So, the prime minister wanted show his support. He blamed these attacks on the prosecutor’s office on the West, where such openly critical remarks from politicians against the courts and the prosecution are commonplace. “This is one of the less desirable results of our membership in the European Union.” Naturally, Orbán encouraged them to forge ahead and do their work to the best of their ability, listening only to their own consciences.

A strange scene: the prime minister bowing to the chief prosecutor

A strange scene: the prime minister bowing to the chief prosecutor

It was at that point that he came to his core message, which some people, like András Bruck, consider to be “the most frightening speech of [Orbán’s] life.” In his view, ever since World War II, when we talked about “competitiveness” we were thinking of economic growth. The most successful nations were the ones that could provide the most prosperity for their citizens. But now Viktor Orbán believes that in the next two decades there will be a distinct change: the most successful countries will be the ones that will be able to create “order, legality, and orderliness.” How these conditions will help Hungary in the “race against time” is not clear to me.

Although the connection between order and competitiveness may be fuzzy, Orbán’s discussion of party politics and the question of order, legality, and orderliness is unfortunately crystal clear. His argument goes something like this. In the post-war developed world the most important legitimizing factor was the state of the economy. Right-of-center and left-of-center came and went, but “they all remained within the system, within the elite, within the same cultural milieu.” They were all thinking about the world in a similar way. Parties that were thinking in a novel way couldn’t enter the political structure. It was “a stable system, which will now change.” Over the past sixty years people accepted the same basic political structure because, with only few exceptions, governments were able to provide greater prosperity. “This era, ladies and gentlemen and deeply honored chief prosecutor, is over.”

If we take these sentences at face value, as András Bruck did, one could conclude that “Orbán in essence acknowledged that Hungary is not only unable to create prosperity and social security for its citizens but doesn’t even want to.” But, as usual, Viktor Orbán is never that straightforward. He can’t possibly abandon his habit of double-talk. It is true, he continued, that the European Union will be unable to provide sustained prosperity for its citizens, but this prediction is not true for all EU countries. There will be exceptions. “Thank God, we Central Europeans are not doomed to the fate outlined above because Central Europe’s economic growth surpasses that of the European Union.” Unless the leaders of the region do something very stupid, there will be continued growth in this part of the world for the next 10-15 years. So, in Central Europe the legitimating force of economic success, unlike in the West, will remain. In addition, of course, to the new organizing principles of order, legality, and orderliness.

Hungary will be doubly blessed. One blessing is that Hungary, just like all other European countries, will be led by governments and/or parties that in no way resemble the traditional governments/parties we have been used to in democratic countries. Given the Hungarian prime minister’s political philosophy, he is almost certainly talking about those right-wing, even extremist, new formations in Western Europe whose leaders are such enthusiastic supporters of Viktor Orbán. These parties and the governments they form will then enforce law and order with the assistance of the “independent” prosecution, the police, and perhaps even the army. A frightening prospect, if he is allowed to make good on it. It is up to the Hungarian people to make sure that he doesn’t have the opportunity to make his dreams even more of a reality than they already are.

June 12, 2016

Viktor Orbán and his protector Péter Polt, the prosecutor-general

A noteworthy article appeared in B1, a blog that identifies itself as a site “where blogging begins.” I must admit that I had never heard of it until yesterday, when I received three e-mails from three different sources calling my attention to a post on that site. The pieces on the site are written by “nickgrabowski.” It would require an analysis of style and word usage to decide whether all the articles are written by the same person. I have not gotten that far.

My three friends were impressed with the logic of the article titled “What or who keeps the Orbán regime in power?” Reading it, I was also struck by the likely correctness of the author’s post.

According to “Nick Grabowski,” analysts usually offer three alternative explanations for the continued political success of Fidesz and Viktor Orbán. The first lays the blame on the media. Journalists are unwilling or unable to drive home all the criminal activities of the Orbán government. The second group of critics concentrates on the “impotent” opposition. Their voices are just not loud enough. And third, the continued existence of the regime is the fault of the electorate who are not bothered by the corruption all around them and/or don’t understand the intricacies of some of the rather complicated financial deals.

But these explanations are unfair, says the author. The media does what it has to do, and the opposition politicians are loud enough. It is true that the electorate can’t always understand the fine points of such matters as the Hungarian National Bank’s “foundations,” but that has no relevance to the discussion at hand because “it is not their job” to understand or interpret these details. The public pays taxes to maintain institutions that deal with such matters. Specifically, in a democratic state it is the prosecutor’s office that is supposed to handle criminal cases. But as “Nick Grabowski” points out, “while Julius Caesar and Genghis Khan had armies and Lenin, Hitler and Rákosi had their internal network of policing, times have changed. Today [heads of governments] cannot simply kill their political opponents. They must maintain a semblance of legality.”

What does Orbán have? The prosecutor’s office

“Nick Grabowski” argues that Péter Polt is the modern-day incarnation of those earlier forces that both protected their leaders against attack and went on the offensive against their enemies. Before I turn to the long list of cases “Grabowski” cites where Péter Polt, the prosecutor-general, failed to bring charges against individuals involved in highly suspicious cases, let me go back in time, all the way to 2000, when the highly regarded prosecutor-general, Kálmán Györgyi, resigned two years before his term would have ended. In those days the prosecutor-general was elected, on the recommendation of the president, for six years. Györgyi’s second term would have expired in 2002. Györgyi offered no reason for his resignation. By now the consensus is that the Orbán government wanted to get rid of the far too independent Györgyi and replace him with Fidesz’s own candidate. To this day we have no idea about the real reason for the resignation, but the suspicion is that Györgyi was blackmailed. Even before the resignation of Györgyi became known, rumors circulated that his successor would be Péter Polt. Polt has been the prosecutor-general of Hungary during every Orbán administration.

The great friends: Péter Polt and Viktor Orbán

The great friends: Péter Polt and Viktor Orbán

I agree with “Nick Grabowski.” Polt is worth his weight in gold. Although he is not entitled to special government protection, Viktor Orbán recently assigned a contingent of TEK guys to him as a security detail.

Polt’s job seems to be twofold. First, he is supposed to ensure that no procedures are launched in cases that are politically uncomfortable or worse for the Orbán regime. A few examples will suffice here. Polt’s office doesn’t seem to be interested in investigating the skinheads who prevented István Nyakó from turning in MSZP’s referendum question. The facts of the case point to Fidesz involvement. Nothing happened in the case of the phony parties the government financed in order to enhance Fidesz’s chances at the ballot box. No investigation is underway into the VAT fraud of 100 billion forints which András Horváth, the whistleblower at the tax office, reported. No matter how many times Péter Juhász (Együtt) went to the police about the real estate fraud unearthed in District V under the mayoralty of Antal Rogán, nothing happened. As “Nick Grabowski” says, “what’s going on is the systematic plunder of the Hungarian state,” but since the prosecution does nothing, we can’t even call it a crime.

Prosecutor’s office as shield and weapon

The prosecutor’s office shields the regime from any damaging legal procedure. As long as Péter Polt is prosecutor-general, Viktor Orbán and his minions are safe. And he will hold this office for a very long time. In 2010 he was elected for nine years, and his term can be renewed ad infinitum. No retirement age applies in his case. Therefore, Péter Polt can remain prosecutor-general as long as he lives.

Polt’s office not only shields the criminal activities of the government, it also acts as an agent of the government party. As “Nick Grabowski” more forcefully says, “it acts like a political police.” The office does nothing when it comes to Rogán’s shady real estate deals, but it proceeds against Péter Juhász for slander. It moves against people who “liked” a Facebook text uncovering shady real estate deals of the Fidesz mayor of Siófok. There were cases in which the prosecutors hired “false witnesses” against the opponents of the government. They were quick to bring charges against MSZP politicians on the flimsiest of evidence which, after years of litigation, proved to be unfounded.

The power to bring charges lies exclusively with the prosecutor’s office. Since 2011 this provision was even put into the constitution: “The Prosecutor-General and the prosecution service shall be independent, shall contribute to the administration of justice by exclusively enforcing the State’s demand for punishment as public accuser.” Its mandate includes corruption cases. The Orbán government, which considers corruption a means to its political goal of creating a national bourgeoisie, remains perfectly safe as long as Polt is the chief prosecutor.

What happens is the following. Some criminal activity takes place. The media uncovers all the details and the opposition protests, but the case never comes before a judge. Within three days everybody forgets about all the dirty details. “Nick Grabowski” finishes his article on this sarcastic note: “If one day we want to be autocrats, someone should warn us to make sure that we acquire a sufficiently loyal prosecutor-general…. If the prosecutor-general is ours, we can do anything.”

May 16, 2016

Letting the fox guard the henhouse: Hungarian prosecutors undermine justice

The thread that connects today’s topics is the state of the Hungarian legal system. As it stands, Hungary has a thoroughly corrupt prosecutorial system and a judiciary that at times shows itself to be truly independent despite considerable pressure from the executive branch. All three topics I’m addressing today are in one way or the other connected to these two branches of the legal system.

Let me start with a surprising verdict handed down today by the Budapest Court of Justice. Altus Zrt., Ferenc Gyurcsány’s company, sued Viktor Orbán because in May 2015 Orbán claimed that Altus is a bogus company created for the sole purpose of generating revenue from the European Union to finance Gyurcsány’s party, the Demokratikus Koalíció. Altus is actually managed by Gyurcsány’s wife, Klára Dobrev, an economist and law professor who teaches banking and financial law. The firm received, in an open bid process, a large contract from the European Union to evaluate the use of subsidies by member states and to suggest solutions for their more effective use. Given the political atmosphere in Hungary, Altus, regardless of the quality of its associates, can’t get jobs in the country and must offer its consulting services abroad.

Altus decided to sue Viktor Orbán for slander. Today the Budapest Court of Justice declared that Viktor Orbán’s claim was false and ordered the prime minister to refrain in the future from similar libelous statements. He will have to pay Altus 270,000 forints for court costs. And finally, and this is the one that must hurt Orbán the most, he has to openly express his regret for ever having made such a statement. I don’t know who that brave judge was, but the verdict is simply breathtaking. No one remembers such a verdict against a sitting Hungarian prime minister. Of course, this decision is not final. I’m sure it will be appealed.

Viktor Orbán must be livid. Fidesz immediately released a statement which, in total disregard of the verdict of the court, declared that “even a blind man can see that Ferenc Gyurcsány is financed from Brussels.” Fidesz’s spokesman quickly segued into Péter Medgyessy’s business transaction with Alstom, the French company that provided cars for the new Budapest metro line, the M4. “On the left only the companies and the size of the bribes change, the essence remains. Both Gyurcsány and the other socialist prime minister [meaning Medgyessy] conducted business through their wives. We are looking forward to Gyurcsány’s answer about how much money he received from the bribe of Alstom because, after all, it was during his premiership that the Alstom contract was signed.” Well, it is time for Gyurcsány, who a few years back swore that he would sue anybody who falsely accuses him of anything, to start proceedings again, this time against Fidesz.

That takes us back to the Medgyessy case, which I already mentioned in a post. Since then ten articles dealing with Medgyessy’s involvement with Alstom have appeared in Magyar Idők. The government obviously finds the case extremely useful politically. But how did Magyar Idők get hold of the story in the first place? The articles that appeared in the government paper are based on detailed information, including individual bank transactions. It is unlikely that the source of the information is the Medgyessy couple’s bank. We mustn’t forget that in the last couple of years the Hungarian prosecutor’s office has been investigating Alstom’s possibly illegal activities in Hungary in connection with the metro cars. So it is highly probable that Magyar Idők, just like its predecessor Magyar Nemzet, received the documents directly from the prosecutor’s office, headed by Péter Polt, chief prosecutor of Hungary and an old friend and protector of the prime minister. And this is a crime.

Marianna Polt-Palásthy

Marianna Polt-Palásthy

One cannot overemphasize the importance of Polt to Orbán’s system. It is no exaggeration to say that without Polt, or someone as crooked and loyal as he is, Orbán’s mafia state would have collapsed a long time ago. He is the one who stands between Viktor Orbán and justice and ultimately jail. So, it’s no wonder that Polt receives special treatment. A few months ago we heard that TEK, Orbán’s private bodyguard, will also guard this precious man, who is not entitled to such protection by law. And a few days ago, thanks to the documents released by the Hungarian National Bank’s foundations, we learned that Polt’s wife, Marianna Polt-Palásthy, personnel director of the bank, is also the chair of the board of Pallas Athéné Domus Scientiae, a member of the board of Pallas Athéné Domus Mentis, and a member of the Kecskeméti Duális Oktatás Zrt. She was hired by György Matolcsy in 2013, originally with a salary of 2.3 million a month, but by now she makes five million. Matolcsy’s salary was just raised to five million. So, while the chairman of the bank was making only two million, the director of the personnel department made five million. I wonder why. (Oh, those wives….) We also mustn’t forget about the extra remuneration for her jobs on the foundations’ boards.

And one more story about the Hungarian prosecutor’s office. It has something to do with the Quaestor scandal about which I wrote a year ago. The Quaestor affair is often described as Hungary’s Madoff case, except that here it is likely that the Orbán government itself was involved. Several ministries invested in Csaba Tarsoly’s pyramid scheme, and to the very last minute before the company collapsed Tarsoly was hoping for, and expecting, a government bailout. In brief, a thorough investigation of Csaba Tarsoly’s fraud case is not to the advantage of the Orbán government. And that takes us to our next story.

The victim's of Tarsoly's pyramid game The sign reads: "Orbán get lost and take your cronies along"

The victims of Tarsoly’s pyramid game
The sign reads: “Orbán get lost and take your cronies along”

It is becoming an everyday occurrence that the prosecution’s cases are so poorly prepared that cases that seem very strong even to outsiders are lost time and again. One of the worst offenders is Budapest Chief Prosecutor Tibor Ibolya who, contrary to his family name, is anything but a “violet.” In fact, he has gotten into all sorts of trouble with the courts and judges for speaking in ways the judges found unacceptable. In the Quaestor case Ibolya’s office dumped thousands of documents, absolutely unsorted, into the lap of the judge, not even indicating which documents supported what charge. Among the documents the judges found music, private documents, and photos that had nothing to do with the case. The court sent the whole mess back, asking Ibolya’s office to put their case together in a proper manner because what the court received was useless. Thus far Ibolya refuses to oblige. But the court isn’t budging either. If there is no action by May 31, the whole case against Tarsoly will be dropped. The suspicion is that this is exactly what the prosecutor’s office, with the active encouragement of the Orbán government, wants.

And one final word. It is Péter Polt’s office that is supposed to investigate the legality of the establishment of the Hungarian National Bank’s foundations even as his wife is deeply involved in and profits from the whole illegal scheme.

April 29, 2016