Tag Archives: Péter Polt

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

The European Anti-Fraud Office is a bit slow: The case of the Heart of Budapest project

Well, we are back in Budapest’s District V, which is known by many names: Lipótváros (Leopoldstadt), Belváros (Downtown), or lately for a little political propaganda “The Heart of Budapest.” At least this was the name of the mega-project undertaken within the boundaries of the district that made the historic district mostly traffic-free and repaved the streets between Kálvin tér and Szabadság tér, stretching 1.7 km, with fancy cobble stones. Like everything else, the project was largely financed by the European Union.

It was Antal Rogán, the newly elected mayor of the district, who came up with the idea of revamping downtown Pest shortly after the municipal election of 2006. He convinced the City Council of Greater Budapest to apply to Brussels for a grant, and it seemed that at least on the surface the SZDSZ-MSZP city and the Fidesz district were of one mind. We mustn’t forget that at this time Antal Rogán was considered to be a moderate and reasonable man. Later the Fidesz media praised him as a truly remarkable Fidesz mayor who managed, despite the fact that the city of Budapest and the government were in SZDSZ-MSZP hands, to receive a huge sum of money for the development of his district. Well, the Heart of Budapest project really was impressive. A good portion of District V became something of a showcase.

The renovated Károly körút - Photo András Földes

The renovated Károly körút – Photo András Földes

As we know, Antal Rogán has had his share of his political trouble ever since Péter Juhász, who was Együtt’s candidate for mayor last October, decided to investigate shady real estate deals during Rogán’s tenure. I wrote about corruption in the district in December and again in January. Juhász, unlike most Hungarian politicians, doesn’t give up. Whether he will succeed in putting Rogán in jail remains to be seen.

What Rogán did not need was another scandal. But he’s under attack yet again, this time in connection with the Heart of Budapest project. The internet site vs.hu reported yesterday that OLAF, the European Anti-Fraud Office working under the aegis of the European Commission, found serious irregularities in connection with Rogán’s project. According to vs.hu, OLAF finished its investigation at the end of last year and called upon the Hungarian Chief Prosecutor’s Office to begin an investigation of the case. Naturally, OLAF’s findings were also sent to the European Commission. The Chief Prosecutor’s Office admitted that they received the documentation that supports OLAF’s case but said that “currently work is being done on the translation of the material.” Knowing the Chief Prosecutor’s Office, they will work on that translation for months if not years. Moreover, some opposition politicians learned that in the last few years the Chief Prosecutor’s Office received several dozen such complaints, but as far as we know Chief Prosecutor Péter Polt’s crew did nothing about them.

This is not the first time that questions have been raised about the project. At the end of 2012 OLAF found that not everything was in order. There was a good possibility that both District V and the city of Budapest would have to pay sizable fines: about 900 million forints each. The charge? The officials of the district and the city who were handling the bidding process demanded such unnecessary qualifications from the applicants that only one combined firm, Reneszánsz Kőfaragó Zrt and Bau Holding 2000, forming the Heart of Budapest Consortium, could possibly undertake the work. The bidding was theoretically open to foreign firms as well, but I doubt that much effort was put into finding non-Hungarian companies for the job.

What kinds of unreasonable demands did the authorities insist on? To qualify, a company had to have references for 1.2 billion forints worth of work on historic buildings even though the new project focused on repaving streets. There was absolutely no restoration of historic buildings. This ploy is commonly used in Hungary to make sure that the “right” company is the successful bidder. In Hungary 40% of all projects end up with a single bidder. Every time such a thing happens we can be pretty sure that corruption is not far away.

In 2012, when this story broke, Rogán and his deputy András Puskás, who has since left the district under the cloud of possible corruption, argued that there was nothing wrong with the project. It was done properly. The problem, they countered, was that the European Commission didn’t like the Orbán government and concocted this case to attack Viktor Orbán and his politics.

Now that OLAF finally got to the point of calling on the Chief Prosecutor, the district is trying to shift the blame to the current opposition. After all, the argument goes, the first phase of the project was finished in 2009 when Gordon Bajnai was prime minister. And Gordon Bajnai was present at the official opening. I guess that, according to the brilliant logic of the editorial offices of Magyar Nemzet, Bajnai had something to do with passing on the job to an earlier designated firm just because he cut the tricolor ribbon at the opening ceremony. For good measure, Magyar Nemzet added that Viktor Szigetvári, co-chair of Együtt and then Bajnai’s chief-of-staff, participated in the negotiations. Szigetvári calls the accusation a lie.

In addition, Magyar Nemzet blames the SZDSZ-MSZP administration of the city of Budapest. “All this happened during the era of Demszky-Hagyó-Steiner.” Pál Steiner was the whip of the MSZP caucus on the city council while Miklós Hagyó was the MSZP deputy mayor. Hagyó was later accused in a vast corruption case, which is still pending. The lurid details of the case tarnished MSZP and helped Fidesz coast to an overwhelming victory, resulting in a two-thirds majority in 2010.

OLAF has been investigating for the last six years. Right now, the Chief Prosecutor’s office is busily, or not so busily, translating. When do you think we will know exactly what happened? If you ask me, never.

 

The Orbán government presses on

Some stories simply refuse to die. Although I have spent more time than usual on the corruption case involving the Hungarian tax authority (NAV), the American corporation Bunge (the complainant), and a Fidesz-established foundation called Századvég, which one of its former associates called a front for money laundering, I think I ought to say a few more words about the latest developments.

Today a new list of possible subjects of the U.S. ban was published by NépszabadságIn addition to Ildikó Vida, chair of NAV, three deputy chairpersons are on the list. All three are women: Mrs. Dezső Csillag, Marianna Dávida, and Katalin Somos. The fifth person is most likely Péter Heim, president of Századvég. The sixth person’s identity is still not known, but he is presumed to be an influential businessman. Right after the news broke about the American decision to ban six Hungarians from entering the United States, “an unnamed businessman” rushed to ATV to share the bad news he received from the U.S. embassy. Although hypothetical lists appeared earlier, none of them sounded plausible to me. This one rings true. Now we just have to find out who the influential businessman is.

The opposition parties keep demanding Ildikó Vida’s resignation, and there has been talk about organizing demonstrations to the same end. In my opinion, such demonstrations would be a waste of time and effort. Fidesz functionaries don’t resign under pressure from the opposition. Moreover, most likely Viktor Orbán doesn’t want her to depart right now because that would be a sign of weakness when he just decided to tough it out. At the moment he might be very angry at her for revealing that she told the government about the U.S. decision, but he needs her to keep the tax office working to enrich Fidesz.

I might add here that I’m becoming more and more convinced that APEH/NAV was an instrument of Fidesz’s money collecting scheme even between 2002 and 2010 when the party was in opposition. Of course, since then the financial opportunities have become much greater. Now not only pressure on businesses yields kickbacks but also huge amounts of public money from government sources land at Századvég and from there go God knows where. The Eötvös Károly Intézet, a legal think tank, wanted to review the “studies” ordered by the Ministry of National Development from Századvég. Unfortunately, they were unable to get hold of the studies, but they managed to learn the exact amount of money Századvég received from the ministry between January 1, 2011 and June 30, 2012. According to the information, the ministry paid out 939,632,750 Ft. and still owed 5,936,845 Ft. Given the personnel and the capacity of Századvég, EKInt figured that the ministry paid 470,000 Ft. (almost $1900) per page for studies ordered by the ministry. Századvég’s answer was that they also provided other kinds of services to the ministry. Of course.

"Good morning my sunshine!" Source: veranus.blog.hu

“Good morning my sunshine!”
Source: veranus.blog.hu

It is equally useless for the opposition to turn to the chief prosecutor for remedies as two Együtt-PM members of parliament tried to do today. They were politely called in for a personal meeting with Péter Polt, who explained to them that his office cannot do a thing as long as they don’t know the exact charges. He wrote a letter to the U.S. attorney general and, if he reveals the details, they will certainly act. Of course, Polt knows perfectly well that the U.S. attorney general can’t release the details. So, that argument is pretty safe. Polt also reassured them that investigations have been going on for some time at NAV and that Ildikó Vida is in no way involved with the cases under investigation. So, this is yet another dead end.

Corruption may not move massive crowds, but internet users may yet have reason to take to the streets. If my reading of the bits and pieces of information that are being released about internet usage is correct, something might be in the offing that is much worse than a steep usage tax. I read with some suspicion that László L. Simon, undersecretary in charge of culture, would like “to improve” the quality of the internet. He also drew attention to the dangers lurking online and called on young people to leave cyberspace and join real-world groups. The fact that Tamás Deutsch is still entrusted with a “national consultation” on the issue of the internet also points in that direction.

Besides the internet, potential protesters should keep an eye on the the Christian Democratic People’s Party (KDNP)’s harebrained idea to close larger chains on Sundays. I’m hoping that the government will not fall for this proposal because of its adverse economic consequences, but anything is possible from this crew. I bet a lot of people would gather for a demonstration against closing the plazas and the malls on Sundays.

Another suggestion to keep pressure on the government is a large demonstration against closing half of the gymnasiums and forcing students into inferior trade schools. Parents, students, and teachers would make a hefty crowd.

There are no governmental checks to Orbán’s drive to create a national illiberal democracy where freedoms are being compromised and increasing numbers of people are living in poverty. Parliament is under firm Fidesz control, and the constitutional court has been packed with Fidesz judges. Only the people can speak against this regime, but they must pick their causes wisely for maximum effectiveness.

A medieval macabre show: Hungarian Jobbik member symbolically hangs Israeli leaders

Hungarians always complain that foreigners know little or nothing about their country. Well, lately they really can’t complain. Almost a week and a half after Viktor Orbán’s controversial speech the international press is still full of comments on it. Just today I encountered an opinion piece in The Moscow Times which concluded that something is indeed coming from the East “but it’s not the wind. It’s a virus. And with Orbán’s help, this virus has begun to infect the EU.” David Brooks in The York Times described Orbán’s speech as “morbidly fascinating.”

And now here is this effigy story. AP described what happened in Érpatak, a village of about 1,500 inhabitants. Mihály Zoltán Orosz, who has been mayor of the village since 2005, described Israel as “the Jewish terror state” that is trying to “obliterate the Palestinians.” Moreover, he is opposed “to the efforts of Freemason Jews to rule the world.” On the video below you can see a shorter version of the “public execution” where an executioner with a black hood over his face kicks chairs out from under the puppets of Israeli Prime Minister Benjamin Netanyahu and former President Shimon Peres, each tied to a gallows.

The whole scene reminded the journalists of HVG of a medieval macabre show. Who is this man? He is a Jobbik member, but in 2010 when he ran again for the position of mayor of Érpatak he called himself an independent. He is known for his bizarre outfits which are supposed to be traditional Hungarian fare, but they are all terribly exaggerated and therefore ludicrous. He also likes military uniforms. The last time he made quite a splash was at the Budapest gay pride parade where he appeared in a female peasant costume. I am sharing a few of his most “spectacular” outfits.

Of course, a lot of people think that Orosz doesn’t have all his marbles, which is a distinct possibility. But he seems to function quite well and rules the village with an iron fist. Law and order dominate in Érpatak. He calls his “system” the “Érpatak Model,” which he claims is a great success and which should be emulated all over the country. He boasts about the low crime rate, though his critics counter that he exaggerates on that score. And there are some people in the village who are not altogether happy with his activities and the circus he creates around town hall and across the country.

orosz2

His latest performance might have serious consequences. Israeli Ambassador Ilan Mor immediately expressed his outrage and said that in his opinion “the Hungarian government must act in order to stop these dangerous acts.” The Hungarian foreign ministry got the message. On Monday around noon they issued a statement in which they declared that what happened over the weekend “cannot be reconciled with European norms and with the rule of law. The mayor uses the war and its innocent victims as a pretext for spreading the propaganda of hate.”

Orosz1

How much do we know about Orosz? Not enough, I fear. We know from Professor David Baer’s Testimony concerning the Condition of Religious Freedom in Hungary, submitted to the U.S. Commission on Security and Cooperation in Europe (the Helsinki Commission) on March 18, 2013, that Mihály Orosz “was affiliated with, or the founder of, at least four different groups registered as [bogus] churches.” Indeed, I found the names of three of these bogus churches in a recent article in Gépnarancs: the Order of the Heart of the Sun, Church of the Sophia Perennis, and the Order of the Eye of Heart.

Orosz4

We know that in order to apply for a job in Érpatak’s town hall the applicants have to fill out a form with 165 bizarre questions on politics and everything else under the sun.

Some people believe that it is time to put an end to Orosz’s activities. Among them is Gellért Rajcsányi, a young conservative publicist of Mandiner. He quotes an announcement from Érpatak’s website which calls attention to a demonstration for June 2014 in front of the courthouse in Nyíregyháza. At this demonstration they “symbolically hanged a criminal prosecutor and a criminal judge to show them what will wait for them after their death because of their activities against the world and the nation.” Clearly, Orosz likes to hang those with whom he disagrees. He led a group of people in front of the building that houses TASZ, the Hungarian equivalent of  the American Civil Liberties Union, where they verbally attacked the associates of the organization. The author calls for an end to the career of this wannabe Arturo Ui, a reference to Bertolt Brecht’s play The Resistible Rise of Arturo Ui which chronicles the career of a 1930s Chicago mobster and his attempts to control the cauliflower racket by ruthlessly disposing of the opposition.

Orosz5

Well, the moment might have arrived. Ágnes Vadai in the name of DK urged Peter Polt, the chief prosecutor, to order an investigation. That in itself wouldn’t have prompted Polt to lift a finger, but then Israeli Ambassador Ilan Mor pressed charges because of “the anti-Israeli and anti-Semitic horror show” that took place in Érpatak. Suddenly, the case had international implications that the government and the prosecutor’s office couldn’t quite ignore. The prosecutor’s office in Nyíregyháza began an investigation into the National Network of the Érpatak and the Youth Movement of the Sixty-Four Counties. If Orosz and the other organizers are found guilty they may receive up to three years in jail. I very much doubt, however, that he will spend even one night in jail.

A Russian spy allegedly found in Jobbik’s European parliamentary delegation

It was about a month ago that I wrote a post on “Jobbik and the Russian connection: The role of Béla Kovács.” I suggest taking a look at that piece by way of background to today’s post. I ended it with the following sentence: “I assume that, given his background, the Hungarian national security office is keeping an eye on Kovács.” Well, as it turned out, only a few days before I wrote this sentence the office turned to Chief Prosecutor Peter Polt to instigate proceedings against Kovács on charges of espionage for Russia. But being an ardent supporter of Russia in the European parliament where he represented Jobbik does not necessarily mean that he was a spy. In fact, the more I read about the case the less I think that Kovács is guilty of the crime he is charged with.

As usual, Fidesz’s timing is impeccable. As we all know, the European parliamentary election will be held on May 25, and Jobbik is positioned to do extremely well at the polls. But Magyar Nemzet‘s revelation of the espionage charge may siphon off some Jobbik support.

It seems that the Fidesz top brass has known for months that the national security office was looking into Béla Kovács’s activities in Brussels. Several government actions support this hypothesis. For instance, last fall there was a belated addition to the new Criminal Code that extended the scope of espionage to include EU institutions. Prior to that, the charge of espionage could be leveled only against those who committed such a crime either against Hungary or NATO. As of January 1, if Kovács spied on the European Union he could be sentenced to a jail term of between two and eight years. One can’t help thinking that this change in the Criminal Code was not a coincidence.

More recently, on May 11, Peter Polt asked the president of the European Parliament, Martin Schulz, to revoke Kovács’s parliamentary immunity. Péter Polt should have known that the current parliamentary session had already ended and that there will be no meeting of the European Parliament between now and May 25, the day of the election. Therefore, Kovács’s case couldn’t be investigated by the European Union’s legal affairs committee and voted on by the members of the parliament before the election.

Moreover, Fidesz was well apprised of what was going on in the prosecutor’s office. On May 11, the same day Polt wrote to Schulz, Antal Rogán referred to a Jobbik MEP “who spends more time in Russia than in Budapest or in Brussels.” As usual, Fidesz and the prosecutor’s office worked hand in hand.

Kovács himself made no secret of his Russian sympathies. In fact, he made several speeches in the parliament scolding the European Union for not wanting to have closer relations with Russia and for not embracing Putin’s idea of a Eurasian Union. He repeatedly urged closer cooperation with Russia, which led his colleagues in Brussels to call him “the Russian lobbyist.” Such open crusading would be strange behavior from a cloak-and-dagger spy.

Béla Kovács who according to Jobbik is so important that Vice President Joe Biden himself asked Viktor Orbán to prevent his work in the European Parliament Source jobbik18.hu

Béla Kovács, who according to Jobbik is so important that Vice President Joe Biden himself asked Viktor Orbán to prevent his work in the European Parliament
Source: jobbik18.hu

It would also be utterly foolish of a Russian spy to use Russian citizens as parliamentary aides, but this is exactly what he did when he hired two Russian youngsters to work for him. Apparently, they were  rarely seen but received a monthly salary of 1,400 euros. One of them was a nephew of his wife who is a Russian-Austrian citizen.

The Orbán government has a penchant for using the national security office for political purposes. Let us not forget the charges of espionage leveled against Lajos Galambos, former head of the national security office, and György Szilvásy, minister in charge of the secret service. We know very little about the exact charges because the proceedings were held in camera and were declared to be a state secret. But what we learned about them unofficially indicates that the charges were trumped up. A Népszabadság editorial put it this way: “We will never learn the truth about Béla Kovács. But we know all about the methods of Fidesz.” They seize every opportunity without a moment’s hesitation and use the theoretically neutral police, secret service, and prosecutor’s office. The “cases” are lined up, waiting for an order from above: we now want a picture of the hooded Zsolt Molnár or some real estate fraudster. “Oh, espionage and not for the United States but Russia? Too bad, but it will do.” Of course, Kovács still might be a spy, but “it is more and more difficult to believe the national shepherd when he cries wolf.”

Béla Kovács naturally denies the charges: “I have never been a member of any secret service, Hungarian or foreign. I never cooperated with them, nor have there been attempts to recruit me on their part.” By now, all kinds of stories are circulating, including that his Russian-born wife, Svetlana Istoshin, worked for the KGB. Something he also denies.

Fidesz naturally cast a wide net. The parliamentary committee on national security will be convened and, according to the chairman, the socialist Zsolt Molnár, they want to question Gábor Vona as well.

How much this will hurt Jobbik’s chances at the polls no one knows. Index yesterday ran an article with the title “Kágébéla might be Jobbik’s undoing.” The “Kágébéla” of course refers to his alleged ties with the KGB. Or at least this is what some of his colleagues in the party called him. In Jobbik he was mostly valued for the amount of money he managed to get for the party. Whether this money came from Russia or not, we have no idea. Without a doubt, there are many questions concerning Kovács’s past, but I am not at all sure that spying is one of his sins.

Ukrainian-Hungarian relations during the Orbán years

Today I’m going to survey Hungarian-Ukrainian relations over the course of the last four years, since Viktor Orbán won the election. You may recall that the new prime minister began his diplomatic rounds with a trip to Poland, which was supposed to signal a foreign policy that would put the emphasis not so much on relations with western Europe as on relations with other central and eastern European nations. Of course, he also made several official visits to Brussels, but they were quick trips related to Hungary’s membership in the Union. There is a handy list, compiled by MTI, on Orbán’s foreign visits, showing that Ukraine was one of the first countries he visited. It was on November 12, 2010 that he traveled to Kiev. Shortly thereafter, on November 30, he went to Moscow.

Ukrainian-Hungarian flagsSo, let’s see what Orbán had to say about Hungarian-Ukrainian relations at the time. He claimed that former Hungarian governments hadn’t paid enough attention to Ukraine, but from here on everything would change because “the current Ukrainian leadership stabilized Ukraine” even as he is “working on stabilizing Hungary.” He was looking forward to cooperation between two stable countries, and he expressed his appreciation that Viktor Yanukovych’s government had withdrawn some legislation that was injurious to the Hungarian minority in Subcarpathia. A few months earlier, during one of his visits to Brussels, Orbán had a meeting with Anders Fogh Rasmussen, secretary-general of NATO, during which he commented favorably on the new Ukrainian government (Yanukovych became president of Ukraine on February 25, 2010), which he considered to be a “reliable” partner.

Since 2010 Ukrainian-Hungarian relations have been friendly. In fact, behind the scenes they were quite close. Here I will give just one example of how close: the story of Oleksandr Shepelev, former member of the Ukrainian parliament. Shepelev belonged to Yulia Tymoshenko’s party from 2006 until December 2012. The Ukrainian government charged him with three contract killings and one attempted murder. In addition, he was alleged to have embezzled one billion dollars of government funds which, they contended, he pumped into Rodovid, an ailing bank with which he was associated. He fled Ukraine, fearing for his safety. The Ukrainian government went to Interpol asking for his arrest. He and his family were found in Budapest in July 2013 where he was seeking political asylum. The Ukrainian online newspaper Kyiv Post triumphantly announced on September 30 that “the Hungarian authorities have denied refugee status to former Ukrainian member of parliament Oleksandr Shepelev, a diplomatic source told Interfax-Ukraine.” The Hungarian judicial system ordered the Shepelev couple to be incarcerated until the immigration authorities decided their fate. Half a year went by and there was still no decision about the Shepelevs.

According to Indexthe Hungarian government that was asked to extradite the Shepelevs to Ukraine was quite eager to oblige. Vitali Zakharchenko, the just recently dismissed minister of interior, came to Budapest several times to confer with his Hungarian colleague, Sándor Pintér, about the fate of Shepelev. Viktor Pshonka, the prosecutor-general of Ukraine whose garish house we admired online, who since was also dismissed by the Ukrainian parliament and is currently in hiding, also paid a visit to Budapest to confer with Hungary’s own chief prosecutor, Péter Polt. In fact, the Hungarian government was certain that Shepelev would be in Kiev soon enough, and they leaked the impending extradition to reporters. The Hungarian courts, however, intervened. In a December 9 hearing the judge ruled that the reasons given by the immigration office for a denial of political asylum were insufficient. Shepelev, who might have been thrown into jail for life in Ukraine, was temporarily saved by the Hungarian judiciary despite the best efforts of the Orbán government.

The immigration office had to make a decision by January 6 but nothing happened. At this point Galina Shepeleva threatened the prison authorities with a hunger strike. Shepelev’s lawyer, after looking at the documents submitted by the immigration office, came to the conclusion that the office was following the explicit orders of the Hungarian government. In brief, Viktor Orbán was effectively assisting Yanukovych’s thoroughly corrupt government go after a political opponent, possibly on trumped-up charges.

As long as Vladimir Putin and Viktor Yanukovych were both in power Viktor Orbán’s situation was easy. He could have excellent relations with both. But now Yanukovych, who according to Orbán brought “stability to Ukraine,” is gone and Putin has sent troops to the Crimea. Orbán, as prime minister of a country that is a member state of the European Union, is supposed to follow the lead of the European Union. The prime ministers or presidents of most European countries, including Hungary’s neighbors, have openly condemned the Russian military action. Viktor Orbán is silent.

The Russian military move is clearly illegal. The reference point is the so-called Budapest Memorandum of 1994 signed by Bill Clinton, John Major, Boris Yeltsin, and Leonid Kuchma, who was then the president of Ukraine. The complete text of the Budapest Memorandum is available on the Internet. The parties agreed, among other things, “to refrain from economic coercion designed to subordinate to their own interest the exercise by Ukraine of the rights inherent in its sovereignty and thus to secure advantages of kind.” In this light, Putin’s economic pressure on Ukraine was already a violation of the agreement. Point 2 of the agreement states that “the United States of America, the Russian Federation, and the United Kingdom of Great Britain and Northern Ireland, reaffirm their obligation to refrain from the threat or use of force against the territorial integrity or political independence of Ukraine.”

The ineffectual János Martonyi did go to Ukraine with the Czech and Slovak foreign ministers. Poland sent only an undersecretary. They went to Kiev and the Donetsk region where they held most likely absolutely useless talks with Ukrainian leaders. Martonyi subsequently visited the Subcarpathian region where he conferred with leaders of the Hungarians living there who hold conflicting political opinions. Ever since Orbán won the election in 2010 the Hungarian government has given financial help to one faction while it has ignored the other. It looks as if the main difference between the two groups is their attitude toward the Yanukovych government. The Yanukovych government, most likely as a sign of its appreciation for Viktor Orbán’s support, lifted some of the discriminatory pieces of legislation previously enacted. That made some of the Hungarians supporters of the Yanukovych regime. Others sided with the supporters of the European Union. Throughout his visit to the region Martonyi kept emphasizing the need for unity. However, under the present circumstances I’m not at all sure what this means. Supporting whom? The parliament in Kiev rather foolishly abrogated the language law enacted in 2012 but thanks to the intervention of the acting president it is still in force. Therefore it is also difficult to figure out what Martonyi’s silly motto, “Don’t hurt the Hungarians,” which he repeated on this occasion, means in this particular case.

For a good laugh, which we all need today, here is what the sophisticated deputy prime minister, Zsolt Semjén, said about the Ukrainian crisis last night in an interview on HírTV. “It is a good thing to have something between us and Russia.” Let’s hope that this statement, however primitive, means that Hungary stands behind the territorial integrity of Ukraine.

The Fidesz robber barons. Part I

I think that among the comments there was already mention of a new book by József Debreczeni, A fideszes rablógazdaság (The Fidesz robber barons). In a way it is a companion volume to the book edited by Bálint Magyar entitled Magyar polip: A posztkommunista maffia állam (Hungarian octopus: The post-communist mafia state). In fact, Debreczeni borrows Magyar’s description, “the upperworld,” to describe the modus operandi of the Orbán government between 1998 and 2002. Debreczeni’s book is an account of the illegal activities of Viktor Orbán’s closest associates and provides critical background for understanding the current functioning of the mafia state.

Debreczeni combed through the findings of two decades of Hungarian investigative journalism, which unearthed some of the shady dealings of the Fidesz empire. There is no question that in a truly democratic country some of the actors in this story would have long been retired to lengthy stays in prison. The reason this didn’t happen in Hungary was that the cast of characters was extremely cunning. They made sure that there would be no legal consequences of their criminal activities.

How was this achieved? Most likely, at least in part, through blackmail. The highly respected chief prosecutor, Kálmán Györgyi (1990-2000), after having a conversation with János Áder, in those days president of the Hungarian parliament, suddenly resigned in March 2000 although his tenure expired only in 2002. The Fidesz government thus had a free hand to nominate a man, Péter Polt, a Fidesz party member and an older friend from the early 90s, who in the following years became the incarnation of the Chinese wall between justice and the thoroughly corrupt Fidesz leaders, including Viktor Orbán.

From the earliest days of Fidesz, only a handful of people–Viktor Orbán, László Kövér, Lajos Simicska, and Tamás Varga–dealt with financial matters. Of these four only Tamás Varga ended up in jail.

Once Fidesz became a parliamentary party and thus received a certain amount of money from the central budget, it became patently obvious that “the boys” had little notion of or even inclination toward keeping their finances in order. The party’s steering committee eventually became curious about what was going on with the money at the disposal of the parliamentary delegation. The members who were supposed to take a look at the books were faced with assorted slips of paper stuffed into plastic bags. Bookkeeping Fidesz style, I guess. After some scrutiny, it was determined that there were serious questions about how the money had been spent. The committee entrusted with checking the nonexistent books came to the conclusion that “responsibility for the party’s financial disarray should be the subject of a criminal investigation.”

In the end nothing happened because Viktor Orbán convinced the party membership that the report was the work of people who wanted to ruin the party. He asked for, and received, their vote of confidence. At the same time he threatened members of the steering committee with legal action.

Viktor Orbán survived this early investigation as he has survived all subsequent ones as well. The few million forints spent on who knows what at the launch of Fidesz were peanuts in comparison to the close to 700 million forints Fidesz received in September 1992 as a result of the sale of a very valuable building in downtown Budapest. The building was given to MDF and Fidesz by the Hungarian state. The two parties had every right to sell the building and use the proceeds to cover their own expenses. That was not the problem. The problem lay with where the money went.

Out of the 700 million, Simicska, who by then was in charge of the party’s finances, immediately transferred 574 million forints to FICO Kft., which had acted as a Fidesz foundation since 1990. For two years there was little movement of money in or out of FICO, but in 1992-93 everything changed. Simicska began establishing assorted businesses: Quality Invest Rt., Millennium Rt., Quality Party Service Kft., Terra Negra Ingatlanértékesítő és Hasznosító Bt., Quality Profit Kft, Taxorg Kft., Best Lízing Kft., Auto Classic Kft., etc. Moreover, as it turned out, a few million forints also ended up in the hands of Viktor Orbán’s father who didn’t have enough money to buy the state stone quarry he had managed during the Kádár years.

forints

These were not Fidesz owned companies. They were owned by a network of old friends around Viktor Orbán and László Kövér: Lajos Simicska and Tamás Varga were old high school friends; Szilárd Kövér was László’s younger brother; Zsuzsanna Pusztai, Simicska’s wife; Sándor Varga, father of Tamás; István Bakos, Szilárd Kövér’s brother-in-law; Gyula Gansperger, high school friend; Katalin Horváth, Gansperger’s wife, and so on. So, the state property became party property and then the party property became private property. Surely, the argument goes, Simicska must have convinced Orbán and Kövér that these companies would ensure Fidesz’s financial well-being, which at this juncture looked as if it would win the 1994 election.

What happened to the money that ended up in these private companies? Very little is known of its fate. We know that after a while these companies did not pay taxes, VAT, or social security. Eventually they were sold, twenty-two of them on the same day, allegedly to a Turkish guest worker in Germany, Ibrahim Kaya, and a Croatian called Josip Tot. They, of course, were not the real buyers. As it turned out, the passports belonging to these two men had been stolen, and allegedly they knew nothing of the transaction. Of course, the companies that went bankrupt and were sold for pennies to unknown individuals had also taken out substantial bank loans, on which the banks were unable to collect.

All this came to light in 1999 when two investigative journalists unraveled the complicated story in Élet és Irodalom. Unfortunately, it was too late. By that time Viktor Orbán was prime minister of Hungary. Immediately after the formation of his government he made Lajos Simicska head of APEH (Adó- és Pénzügyi Ellenőrzési Hivatal), the Hungarian equivalent of the U.S. Internal Revenue Service. All documentation on these companies disappeared from the computers of APEH. After all, Simicska was put there for the sole purpose of covering the tracks of their illegal financial activities. Simicska stayed at the head of APEH only as long as was necessary to accomplish his task. A few months later, in the summer of 1999, claiming that attacks on his person ruined his health and caused his father’s death, Simicska resigned. By that time, the APEH files were most likely clean as a whistle. When later during the socialist-liberal period a government commissioner wanted to reopen the case, Péter Polt, the chief prosecutor, blocked his way.

According to an article that appeared in Magyar Narancs in 1999, at least 60 Fidesz-related companies were established between 1990 and 1998. Simicska’s name appeared on 24, of which 14 were “purchased” by Ibrahim Kaya and Josip Tot.

After reading the details of the relationship between Orbán and Simicska, some people came to the conclusion that Orbán had been dragged into the morass of financial wrongdoing concocted by Simicska. He was in so deep that he was unable to extricate himself without landing in jail. He was the good guy under the thumb of the bad Simicska. But, as Debreczeni sums it up: “At the beginning one could perhaps think that Fidesz was led by a democratic Dr. Jekyll and a mafioso Mr. Hyde, but in the end it turned out that in reality a politician Hyde and a financier Hyde ruled the party, and by now, rule the country.”

To be continued