Tag Archives: Ráhel Orbán

“The struggling young couple”: István Tiborcz and Ráhel Orbán

I haven’t written anything about the financial affairs of the Orbán family lately, although news of the shady affairs of the father and brother of the prime minister crops up often enough. Today I’ll return to the financial affairs of Viktor Orbán’s son-in-law who, though barely 30 years old, has most likely already amassed a considerable fortune.

István Tiborcz’s first business venture ended rather abruptly when OLAF, the European Commission’s Anti-Fraud Office, announced that it was going to investigate his company, Elios, which had won tenders for the installment of LED lighting in scores of Hungarian cities. The lighting project was largely financed by the European Union. The Tiborcz-Orbán “family firm” realized that, in this instance, the brazen expropriation of EU funds would not be tolerated. So Tiborcz in a great hurry “sold” his firm to a businessman with very strong ties to Fidesz. Tiborcz then went into the real estate business. As he explained to Origo a few days ago, he, as a member of the prime minister’s family, is limited in the kinds of financial activities he can pursue. He claims that for the past two years he has been buying real estate only from private individuals, no state property.

All this sounds innocent enough, but if we take a closer look at Tiborcz’s business dealings it seems that the son-in-law may have received quite a bit of coaching from the master at hiding his wealth, the Hungarian prime minister himself. When Tiborcz established his first real estate firms, he hid behind two friends who were registered as the owners of TRA Real Estate Kft. and BDPST Zrt. By now these two companies own eight high-priced pieces of real estate, among them former aristocratic mansions and valuable commercial property in Budapest and elsewhere. Some of these properties were jointly owned by wealthy Turkish businessmen or sold to characters like Ghaith Pharaon, the now allegedly deceased Saudi businessman of dubious reputation. Tiborcz hid so well that, as far as the Hungarian media was concerned, his ownership of these companies couldn’t be ascertained. Until now.

To the surprise of those who have been trying to find out more about TRA and BDPST, István Tiborcz gave an interview to Origo, which is now owned by the son of György Matolcsy, Orbán’s right hand and president of the Hungarian National Bank. The title of the article is misleading when it claims that “We investigated: István Tiborcz is owner in the real-estate development company.” After reading the article, one can be absolutely certain that the journalists of Origo investigated nothing. For one reason or other, István Tiborcz went to the pro-government internet site to offer the information, which he had tried to hide at least since the summer of 2015.

People who have been following Tiborcz’s business ventures and his secretive behavior as far as his business affairs are concerned couldn’t figure out what got into him. Why did he feel compelled to open up suddenly? On October 30, the very same day the Tiborcz interview appeared, the internet edition of Heti Válasz  came out with an article from which one could learn that András Bódis of Válasz had been pursuing the case of BDPST’s ownership for some time, without much luck. The “CEO” of the company, a certain Judith Tóth, didn’t even bother to answer Bódis’s inquiries. In fact, Tiborcz was so reluctant to divulge his own involvement in the company that BDPST initially gave up the idea of a capital raise when the Registry Court (Cégbíróság) made it clear that it would not register the firm unless the ownership of the company was released. After some hesitation, Tiborcz decided that he needed the stamp of approval of the Registry Court and relented.

It is hard to fathom why Tiborcz felt compelled to give an interview. One reason may have been his fear that Válasz would come out with some juicy story about its efforts to discover more about Tiborcz and his firm. The other reason might have been that, simultaneously with the Válasz project, Átlátszó was digging into the young couple’s purchase of a luxurious eleven-room, three-story house with servant’s quarters and a swimming pool in the most expensive part of the Kútvölgy section of Buda. The listing price of the property was 360 million forints (about $1.35 million). Therefore, in addition to his admission that he is the majority owner (meghatározó tulajdonos) of BDPST, he casually mentioned that he bought a house as a business venture that is in such bad shape that it is practically falling apart. So, before he does anything with it, the house must be completely renovated.

The modest living room

I’m afraid that truthfulness is in short supply in the extended Orbán family. As Antónia Rádai of Átlátszó found out, the purchaser of the property was not BDPST but István Tiborcz. Therefore, it is unlikely that this luxury property was purchased for resale. As for the state of the house, which he described as “life threatening,” I have my doubts after taking a look at some pictures that appeared when the property was being advertised for sale. It is, however, apparently true that men are working furiously on the building, even through part of the recent long weekend. I suspect that it is still not up to the standards of the demanding young couple.

A bathroom in a house which is falling apart and needs immediate propping up

The interview was really touching. Tiborcz spoke about the struggling firm, which is still not quite profitable. Here and there they make money when they manage to sell a piece of property, but the road ahead them is long and the work is hard. This sob story naturally was spread far and wide by the government propaganda outlets. Of course, let’s not fool ourselves. The majority owner of a company that has yet to turn a profit doesn’t buy a house that costs over a million dollars. We don’t know the full story of Tiborcz’s investments, and I doubt that we ever will.

November 2, 2017

Hot topics of the day: Budaházy and Ráhel Orbán

The Hungarian media was preoccupied with two topics today. The first was the reaction to the stiff sentences handed out in the case of György Budaházy and his co-conspirators, who were convicted of terrorist activities. The other was the recent discovery of mysterious “negotiations” undertaken by Ráhel Orbán, eldest child of the prime minister, and her husband, István Tiborcz, in Bahrain.

The day after the trial

As one could anticipate, the Hungarian extreme right is outraged. Jobbik’s official internet news site is full of stories of the “seventeen patriots” who were in the forefront of the “national resistance” against the traitorous Gyurcsány government. What Budaházy and his friends did in 2006-2007 was a historic act. László Toroczkai, an old friend of Budaházy who today is the Jobbik mayor of Ásotthalom at the Serbian-Hungarian border, is demanding that Fidesz take a stand on the issue.

But Fidesz refuses to make any comments on the case. The closest approximation to a comment was an opinion piece by Zsolt Bayer that appeared today in Magyar Hírlap. Bayer’s memories of terrorist acts committed by the Budaházy gang, I suspect, are purposely vague. He remembers “some kind of a video of some kind of an explosion,” but basically he can’t imagine that this gentle man could possibly commit such atrocities. He is just hoping that there is “real evidence.”

In connection with the case, Bayer poses a number of questions: “Were they really the ones who threw Molotov cocktails into the houses of politicians? Were they the ones who beat up Csintalan?” And don’t forget, “the body is missing that lay on the street in Olaszliszka* as well as the one that was lifted from the lake in Kaposvár**.” Finally, Bayer says, comes the most important question: if Budaházy received 13 years, then what about Ferenc Gyurcsány and Péter Gergényi, police chief of Budapest at the time of the 2006 disturbances? After all, they are “the two most notorious miscreants of the age.” This question must be asked because “without Gyurcsány, Gergényi (and Draskovics, Szilvásy, and Bajnai) there is no Budaházy.” In brief, the guilty ones are not Budaházy and his fellow terrorists but the governments of Gyurcsány and Bajnai. I take Bayer’s attitude toward the Budaházy case to be a reasonably close approximation to the views of the Fidesz leadership.

András Schiffer’s Facebook note “Budaházy 13 years, how many for shooting out eyes” drew appreciative comments from the right, including Fidesz sympathizers. Viktor Orbán has been trying for years to implicate Gyurcsány in the “police brutality” during the 2006 street disturbances. Up to now they have been unsuccessful. They couldn’t come up with anything to tie Gyurcsány to the police action at the time. The decision to deal with the situation was entirely in the hands of the police chief and his close associates. And even at that level, although the Orbán government brought charges against Gergényi, they couldn’t prove their case.

According to Jobbik and Fidesz supporters, what happened on the streets in 2006 was “police terror,” pure and simple. They therefore equate the “terrorism” of Gyurcsány with the terrorist acts of Budaházy and his companions. The other side, by contrast, remains convinced that the disturbances were an attempt to overthrow the legitimate government of the country and that Fidesz politicians were in touch with the leaders of the mob that was supposed spark a general revolt in the population. It just didn’t work out. András Schiffer, who is allegedly a democratic politician, sided with the extreme right and Fidesz on this issue. It is no wonder that the liberals and socialists are outraged.

The most eloquent condemnation of Schiffer came from Árpád W. Tóta in HVG, according to whom “András Schiffer took a deep breath and sank to the deep where Krisztina Morvai*** resides.” Schiffer should know the difference between an accident that happens during the dispersion of a crowd and premeditated criminal acts committed in a conspiratorial manner. Tóta admits that he never had a good opinion of Schiffer, but he never thought that Schiffer was wired into the same circuit as Krisztina Morvai. I can only agree with Tóta.

Ráhel Orbán and her husband in Bahrain

I must say that Ráhel Orbán, who by now is 27 years old, gets herself into a lot of trouble, unlike her brother Gáspár and younger sister Sára. One reason is that she appears to be interested in politics. Moreover, it seems that father and daughter work together on projects. As we know, Ráhel is interested in the entertainment and tourist industry. A few months ago there was a lot of talk about the government’s centralization of the industry under an umbrella organization in which Ráhel might play a prominent role. But, and this is yesterday’s scoop, it seems that Ráhel might also have been given an unofficial diplomatic assignment.

444.hu discovered an article on the website of Bahrain’s National Oil & Gas Authority (NOGA) with accompanying photos showing the Minister of Energy Abdul Hussain bin Ali Mirza, Ahmed Ali Al Sharyan, the general-secretary of NOGA, Ms. Ráhel Orbán, mistakenly identified as the wife of the prime minister of Hungary, and Balázs Garamvölgyi, the Hungarian consul in Bahrain. István Tiborcz, also in the picture, was not identified in the caption. This visit took place in September 2015. According to the article

They discussed a number of global oil and gas market and energy issues (…) investment opportunities and expanding economic and trade ties between the Kingdom of Bahrain and the Republic of Hungary. They discussed the benefit to the national economy in both friendly countries from improved cooperation.

Ms. Orban and her accompanying delegation expressed their deep appreciation to H.E. Dr. Mirza and thanked him for the warm reception and issues discussed, which were aimed at creating a sustainable business environment and helping build new trade and investment bridges between the two countries that will enhance the economic interests of both. They wished every success to the Kingdom for further development and prosperity.

The press department of the prime minister’s office had no information on Ráhel Orbán’s trip to Bahrain. A few hours later, however, Ráhel Orbán in her usual arrogant style released a statement saying that “between September 17 and 20, 2015 my husband and I paid a private visit to Barhrain [sic]. We paid for all expenses. All other claims are lies,” I guess even NOGA’s press release. Diplomacy is not her strength. Father and daughter express themselves forcefully. Of course, this answer is no answer at all. No one claimed that it was the Hungarian government that paid for their trip. The issue is her involvement in negotiations with Bahrain’s minister of energy.

bahrein1

Panic must have set in government circles after the revelations of 444.hu and word must have reached the politicians in Manama, the capital of Bahrain, because by now the objectionable text about negotiations has disappeared and has been replaced by the following:

Minister of Energy His Excellency Dr. Abdul Hussain bin Ali Mirza received in his office at the National Oil and Gas Authority (NOGA) on a courtesy visit, the daughter of Prime Minister of the Republic of Hungary Ms. Rahel Orban, accompanied by the Honorary Consul of the Republic of Hungary to the Kingdom of Bahrain Mr. Balazs Garamvolgyi, in the presence of Dr. Ahmed Ali Al Sharyan, the NOGA General Secretary.

H.E. Dr. Mirza welcomed the distinguished visitors in the Kingdom of Bahrain and gave a brief overview of the economy of Bahrain.

Ms. Orban and the accompanying guests expressed their deep appreciation for H.E. Dr. Mirza, and thanked him for the warm reception.

They wished every success to the Kingdom for further development and prosperity.

Journalists at Index had a lot of fun with Balázs Garamvölgyi, who gave “probably the best mini-interview of his life” because he conveniently forgot what he was doing in Bahrain. As he said, “it was last September and I really no longer remember.” But one thing HírTV managed to learn: Péter Szijjártó, the foreign minister, had no knowledge of any official trip undertaken by Ráhel and her husband to Bahrain.

István Tiborcz definitely needs a new suit and Ráhel a new dress

István Tiborcz definitely needs a new suit and Ráhel a new dress

The latest piece of news is that one month after Ráhel Orbán’s visit to Bahrain a delegation from MOL, an international oil and gas company headquartered in Budapest, paid a visit to Abdul Hussein bin Ali Mirza, minister and head of the National Oil and Gas Authority. Garamvölgyi, who seems to have miraculously recovered from amnesia, insists that the two visits had absolutely nothing to do with one another. Of course not. The author of the blog “Most és Itt” (Now and Here) told this story in the form of a fairy tale (“The little royal princess Ráhel in Bahrain”). Most adults no longer believe in fairy tales just as we don’t believe that the two events had nothing to do with one another. Let’s finish this story with the customary last line in Hungarian fairy tales: “Itt a vége, fuss el véle.” Here is the end, run with it.

—-

*Olaszliszka was the town where a group of Roma killed a man driving through town because they thought that a little girl had been killed by his car.

**A reference to the brutal murder of a little boy whose body was thrown into a lake near Kaposvár in 2012.

***Krisztina Morvai began her career as a liberal civil rights lawyer but eventually ended up as a fiercely anti-Semitic member of Jobbik. Currently she represents the party in the EU Parliament.

August 31, 2016

Turkish and Saudi business ties of Viktor Orbán’s son-in-law

I’m coming to the conclusion that the “first family” of Hungary must have gotten together on several occasions to figure out how to guarantee that their new son-in-law, István Tiborcz, becomes a very rich man. Thanks to the good offices of Viktor Orbán, the young man—he is still not quite thirty years old—made a small fortune in the LED street lighting business. In fact, he was too successful. OLAF, the European Union’s Anti-Fraud Office, wanted to know more about this super company that received almost all of the contracts for EU-financed modernization of city lighting in Hungary.

With a possible investigation on the horizon, Tiborcz had to distance himself from the lighting business. And the head of the family had to find another source of income for Tiborcz that would be less directly involved with public procurements. It looks as if Orbán’s advice was for his son-in-law to try his hand at real estate.

Tiborcz’s first real estate venture was the purchase of the Schossberger Mansion last October. His father-in-law most likely also counselled him to make sure that his name doesn’t appear on the letterhead of companies he owns in full or in part. So, the new real estate company, called BDPST Ingatlanforgalmazó, is on paper owned by two people, apparently friends of Tiborcz. But since he paid the excise tax in connection with the purchase of the mansion, we can be confident that Tiborcz is behind BDPST. I wrote about this deal about half a year ago.

At that time we also learned that Tiborcz may have interests in two other real estate firms, AMX HS and AMX Nador House. The CEO of both companies was a wealthy Turkish businessman, Suat Gökhan Karakus, who lives in Hungary.

In the foreground Adnan Polat / Source: Magyar Narancs

Adnan Polat  / Source: Magyar Narancs

A few months later atlatszo.hu discovered that Tiborcz has other important foreign backers. One of them is the incredibly rich Adnan Polat, a Turkish businessman who is one of the owners of AMX HS and AMX Nador House. He has, as 444.hu learned, many contacts within the Orbán government and is very active in Hungarian-Turkish cultural and business associations. He is involved with the Hungarian Trading House in Istanbul, and the Hungarian Cultural Center set up shop in the offices of Polat Holding.

Another man who is now in Tiborcz’s circle of business associates is Ghaith Pharaon, a Saudi businessman of dubious reputation. AMX Nador House, a joint venture of Polat and Tiborcz, managed to buy from the state the old headquarters of Postabank at József Nádor tér. Soon enough they sold AMX Nador House to a certain Ammar M. A. Abu Namous, who immediately changed the name of the company to Pharaon-Kappa Befektetési és Tanácsadó Kft. The Hungarian internet site Válasz soon found out that Namous is a lawyer who handles Ghaith Pharaon’s business ventures in Hungary. There are already seven such businesses, all of whose names include letters of the Greek alphabet. In addition to extremely valuable Budapest properties, Pharaon through Namous bought the Zichy-Hadik Mansion in Seregélyes and the Hochburg-Lamberg Mansion in Bodajk.

The available English-language information on Ghaith Pharaon is extensive, mostly because of his association with the Bank of Credit and Commerce International (BCCI) back in the 1990s. Secretly acting on behalf of BCCI, Pharaon acquired control of two American banks in violation of federal banking laws. When the fraud was discovered, BCCI was forced to sell the banks, which soon after were shut down by regulators when it was determined that they were insolvent. Pharaon was charged with wire fraud and racketeering conspiracy. He has been wanted by the FBI since 1991 for his role in the fraud involving the financial collapse of BCCI and remains a fugitive. In addition, Pharaon was accused in a 2002 French parliamentary report of having financial dealings with hawala, an Islamic financial network which is also used by terrorist organizations. Currently, he is chairman of Attock Petroleum, CEO of National Refinery, and Director of Pakistan Oilfields, just to mention a few of his business ties. He lives mostly on his super yacht named Le Pharaon.

Pharaon might be wanted by the FBI, but the Orbán government is not fussy. Rumor has it that the state is planning to sell the building next door to the former Postabank building that is already in Pharaon’s possession. The building, which is currently occupied by the ministry of national economy, will soon be available when the ministry moves, along with the prime minister’s office, to the Castle District in Buda. In addition to his various real estate deals, Pharaon is also a business partner of the Hungarian state through the Hungarian National Trading House.

The stories circulating about Pharaon eventually worried opposition politicians. At the end of April the parliamentary committee on national security spent a three-hour session on the relationship between Pharaon and the Orbán government, at the end of which deputy chairman Szilárd Németh (Fidesz) informed reporters that “this Pharaon is not that Pharaon.” Then, on June 6, when János Lázár was testifying before the committee about the work of the secret services in the year 2015, Bernadett Szél (LMP) decided to ask him about the “Pharaon case.” Did the government manage to learn more about Pharaon? Since she didn’t receive a satisfactory answer, Szél is demanding a separate hearing of the case in the near future.

Whether Pharaon is a national security risk or not I have no idea, but Tiborcz’s role as an intermediary between the Hungarian government and foreign businessmen, given Tiborcz’s relation to the prime minister, is troublesome to say the least. It seems that Tiborcz and his father-in-law are unwilling to settle for a role for Ráhel Orbán’s husband that has nothing to do with the Orbán government and the Hungarian state. After all, as long as Orbán is prime minister, the financial benefits of such a relationship are enormous.

June 8, 2016

The latest business venture of Orbán’s son-in-law

István Tiborcz, Viktor Orbán’s son-in-law, pretty well disappeared from the spotlight once OLAF, the European Union’s anti-fraud office, started to investigate his firm, Elios Innovatív Zrt. The firm specialized in LED street lighting technology and practically cornered the market: one city after the other signed contracts with Elios to modernize its street lighting with funds that came from the European Union. With the EU investigation pending, Viktor Orbán and his son-in-law decided that it might be wise for Tiborcz to “sell” his share of the business to Attila Paár, a well-off businessman with excellent connections to the Orbán government.

Only once, in December, did Tiborcz get any media coverage. The story was about Elios’s work in Zalaegerszeg, which seems to have been less than satisfactory. In some parts of the city it is pitch dark, while in others pedestrians have difficulty navigating because the streetlights shine only on the road, leaving the sidewalks practically unlighted. Complaints poured into city hall, which the mayor, naturally a member of Fidesz, “tried to handle discreetly.”

Now the Tiborcz family is back in the news. It seems that István Tiborcz might be one of the investors who purchased the Schossberger Mansion in Tura, which has been described as the most beautiful castle in Hungary, comparable only to the palaces along the Loire River in France.

Who were the Schossbergers? Not much can be learned about them online, but William O. McCagg, Jr.’s Jewish Nobles and Geniuses in Modern Hungary provides quite a bit of information about the family, who were originally from Moravia. The first Hungarian Schossberger who settled in Pest in 1833 was Lázár. His son, Simon Vilmos Schossberg, was the first unconverted Jew to receive nobility from Franz Joseph, in 1863. In 1873 Simon’s son Zsigmond purchased 13,000 hectares from Prince Miklós Esterházy. Ten years later he commissioned a neo-Renaissance mansion based on the plan of Miklós Ybl, one of Europe’s leading architects in the second half of the nineteenth century. Ybl’s best known work is the Hungarian State Opera House (1874-1884).

schossberger

The Schossberger Mansion

After 1944 the mansion was used by the Germans and the Soviet troops. It then became an elementary school. After the regime change it was sold twice, but no one did anything with the building, which would need serious renovation.

Last October a mysterious new buyer showed up: TRA Real Estate Kft., a brand new joint stock company headed by Dr. Judit Tóth. TRA Real Estate Kft. is the parent company of BDPST Ingatlanforgalmazó és Beruházó Zrt., owned by Judith Tóth and Loránd Aurél Szabó, both lawyers. The new buyer wanted to be sure that the city of Tura didn’t have the right of first refusal and therefore sent the law firm of Endre Hamar to approach the city.

It is here that one becomes suspicious. First, Hamar got in touch with the town of Tura on September 7 in the name of TRA, when the firm didn’t yet exist. It was established only a week later. Second, Endre Hamar is a former business partner of István Tiborcz. Third, Hamar’s law firm might exist only on paper. It is ostensibly located in the same building as the headquarters of Elios Zrt. BDPST Ingatlanforgalmazó, which is linked to TRA, also has the same address. As 444.hu notes, Endre Hamar cannot have too many clients, considering that his firm has no website and one cannot even find the firm’s name on the list of businesses renting office space in the building.

Meanwhile, the deal took place. Whoever bought the mansion paid 200 million forints, including a 80 million forint mortgage, to the Széchenyi Bank.

When the the Schossberger Mansion was purchased, the transaction couldn’t be directly linked to István Tiborcz. But three days ago 444.hu found out that it was István Tiborcz himself who paid the 100,000 forint excise tax on August 14, at the time of BDPST’s registration as a new business. What is still a mystery is where TRA Kft. got the millions of forints that it spent on the mansion in Tura. Neither Judith Tóth nor Loránd Aurél Szabó has any other business venture that could fund the purchase.

If Tiborcz is behind BDPST Zrt., he might also have interests in other real estate ventures because BDPST is the part owner of two other businesses dealing with real estate, AMX HS and AMX Nador House. The CEO of both companies is a wealthy Turkish businessman, Suat Gökhan Karakus, who resides in Budapest. The other part owner of these companies is HBRE International Investments B.V. of Amsterdam.

On January 8 Együtt (Together) released a communiqué in which the party asked István Tiborcz and Ráhel Orbán to come forward and explain the source of their wealth. I think Együtt can wait for the day when anyone in the Orbán or, by extension, the Tiborcz family reveals the source of their rapid enrichment. Of course, it would also be nice to know where the 2 million euros came from that Lőrinc Mészáros just invested in the NK Osijek football club. That would be quite a job, not just for an investigative journalist but for a whole slew of the best detectives in Europe and the Americas.

The end of an Orbán family business?

In November 2014 I wrote a post,”How do European Union funds end up in the hands of the Orbán family?” It was about the new member of the Orbán clan, István Tiborcz, the husband of Viktor Orbán’s eldest daughter, Ráhel. Tiborcz and Ráhel had known each other for at least six or seven years before they married in September 2013. The young man in 2008 was a fledgling businessman, half owner of a small business dealing with electrical supplies. In 2010, however, one of Közgép’s divisions purchased the majority of shares in Tiborcz’s business. From this point on the business, named Elios Innovatív Zrt., changed directions and became the leading installer of LED-technology street lighting. One after the other, Fidesz-led municipalities made sure that the to-be son-in-law’s company received lighting contracts. By 2012 Elios was thriving. What surprised me at the time was Közgép’s withdrawal from the company just when Elios was doing so well. I wrote: “what baffles me is the role of Simicska’s Közgép. I find it more than a little odd that Simicska’s Közgép shows up to support the fledgling business of István Tiborcz, already known to be Ráhel’s boyfriend, only to withdraw from the firm after its spectacular growth. Közgép is not, as far as I know, active in venture capital or private equity.” Now, a few months later, I am no longer baffled. Közgép/Fidesz, because it is difficult to know where one began and the other ended before the Simicska-Orbán fallout, in fact did play the role of venture capitalist. It financed the “promising” company of István Tiborcz, the future son-in-law of the boss. Moreover, it was a surefire investment given Elios’s business profile. Especially since, as it turned out, the government allocated almost 9 billion forints of mostly EU money to upgrade ordinary street lighting to LED technology. And orders from Fidesz-led municipalities could be counted on.

Looking back now on the beginnings of Tiborcz’s business career, I’m almost certain that Tiborcz’s transition from owning a business that sold electrical supplies to owning one that installed street lighting was inspired by Viktor Orbán himself, who by 2010 knew very well that there would be plenty of EU money for more efficient street lighting fixtures. It was to the advantage of the municipalities to embark on such a project because 85% of the cost was covered by EU and Hungarian government money. And given the family connection, business success for Elios was guaranteed.

István Tibor and his father in law, Viktor Orbán having some  homebrew

István Tibor and his father in law, Viktor Orbán, having some homebrew

My suspicion was further aroused when I read lately that János Lázár, then mayor of Hódmezővásárhely, was the first head of any Hungarian city to come up with the idea of LED-technology street lighting. That was in the fall of 2009, before the 2010 elections. At the time such technology was still in its experimental phase, even in the most developed parts of the world. The city fathers approved the idea and soon enough Hódmezővásárhely chose István Tiborcz’s brand new company to do the job. It was this job that established Elios as the expert in LED street lighting technology.

In fact, Elios was too successful, Tiborcz too greedy, or the municipal leaders too servile. Far too many contracts landed in Tiborcz’s lap, and questions kept popping up about his business success, which smacked of corruption and nepotism. Yet, although months went by and negative articles multiplied, Viktor Orbán didn’t seem to be bothered about the unfavorable press. In fact, Nándor Csepreghy, assistant undersecretary for communication involving European Union projects, outright lied to György Bolgár of KlubRádió when the reporter asked him about the inordinate number of projects in which Tiborcz’s firm was involved. He claimed that there were hundreds and hundreds of such municipal orders and that Elios won only a couple of dozen of them. Soon enough it became known that so far only 33 cities have received grants from the EU and the government for street lighting to the tune of 5.7 billion forints and surprise, surprise, István Tiborcz’s firm won 71% of these contracts–that is, close to 4.1 billion forints. Very often Elios was the sole firm that qualified because the demands of the Fidesz-led municipalities were tailor-made to fit the son-in-law’s firm. Details of this highly irregular affair can be found in an article published by direkt36.hu in March of this year.

Although Viktor Orbán acted as if he were oblivious to the growing scandal surrounding his son-in-law’s business dealings, by now we learned that the decision to escape from a very sticky situation was made sometime earlier. They decided “to sell” István Tiborcz’s 50% stake in Elios. On May 28 Napi Gazdaság, the new servile government newspaper, reported that exactly one month earlier, on April 28, István Tiborcz sold all of his businesses that had anything to do with public procurement. The family could no longer stand the constant attacks by the opposition and the antagonistic media.

On April 30, two days after the sale of Elios, HVG reported a “sensational piece of news.” János Lázár himself rejected the city of Jászberény’s proposal because its wording was suspiciously designed to match Elios’s qualifications. Well, in light of our current knowledge that by that time István Tiborcz was no longer a co-owner of Elios, Lázár’s bravery, hailed by HVG, is less admirable than it seemed at the time.

Who is the new part-owner of Elios? His name is Attila Paár, another Fidesz oligarch who has been involved in many large projects, such as the renovation of the Várkert Bazár and the National Civil Service University. On April 23, 2015 he established, together with two partners, a business called WHB Befektetési Kft (WHB Investment), which  five days later purchased Tiborcz’s share of Elios.

Before Tiborcz’s share of Elios was sold, Tiborcz and his partner took out 470 million forints in dividends from the company’s profits, which left the company with only 6.29 million forints on its balance sheet. The deal has all the earmarks of a fictitious transaction.

How do European Union funds end up in the hands of the Orbán family?

The European Union has been, wittingly or unwittingly, enriching members of the Orbán family. Today, in what is undoubtedly only one story of many, I’ll focus on Viktor Orbán’s eldest daughter, Ráhel.

The last time Ráhel, Rasi to her family and friends, was in the news was more than a year ago when she got married with great fanfare to István Tiborcz, a 27-year-old businessman with a law degree. In 2008 Tiborcz and a friend started a small business dealing with electrical and energy supplies. In 2009 the business had a modest profit of 8 million forints on which they paid 2 million in taxes. Two years later the annual profits of the groom’s business were over 2.5 billion forints.

Ráhel is in the news again. This time on account of her spending a year at the École Hôtelière de Lausanne in Switzerland where she is working toward “an Executive MBA in Hospitality Administration.” Why the interest in Ráhel’s studies? The reason for all the fuss is the high tuition fee she has to pay for the two semesters she is spending in Lausanne. The cost is 60,000 Swiss francs or 15 million Hungarian forints. Because of the recent focus on alleged widespread corruption among Hungarian politicians, this tuition fee prompted questions about the source of the money. Journalists pointed the finger at Rasi’s father, Prime Minister Viktor Orbán. How can he plop down 60,000 Swiss francs?

I, who followed the research done by Atlatszlo.hu at the time of the wedding and reported about the sudden enrichment of István Tiborcz, couldn’t quite understand why Hungarian journalists assumed that it had to be Orbán who footed the bill when Rasi has been married for over a year to a young man who since 2010 has become quite wealthy.

Ráhel became tired of all the questions and accusations and decided to speak up on her Facebook page. She said that she and her husband are paying her tuition, not her father. I’ll bet she regrets that decision now because her Facebook note prompted Atlatszlo.hu to look into Tiborcz’s more recent business affairs. And what they found is not pretty.

The happy couple

The happy couple

Of course there is nothing wrong with being a successful businessman, but István Tiborcz’s success most likely has nothing to do with his business acumen. Before Viktor Orbán became prime minister he owned a very modest business. The meteoric rise in his fortunes can be compared only to that of Lőrinc Mészáros: from 8 million in revenues in 2009 to 3 billion in 2011.

How did he achieve this incredible feat? In 2010 one of Közgép’s divisions purchased the majority of shares in Tiborcz’s business and used it as yet another of its conduits for EU cohesion funds. The customers of E-Os Innovatív Zrt., as the business was renamed, were almost exclusively municipal governments with Fidesz mayors. They contracted with E-Os to do work that was funded by cohesion funds from Brussels.

For reasons that are unclear, in 2012, according to publicly available information, Tiborcz’s business was renamed Elios Innovatív Zrt. and Közgép no longer had a majority stake. Two companies bought out Közgép, one of which, Green Investments, was owned by a former partner of István Tiborcz, Endre Hamar. The change in ownership had a decidedly negative impact on the company’s revenues. In 2012 Elios Innovatív Zrt. grossed only 20 million forints. Three weeks after the 2014 national election, however, Tiborcz bought out his former partner Endre Hamar, and from there on business boomed.

Tiborcz’s firm installs street lighting. Atlatszo.hu lists 2.9 billion forints worth of contracts with different municipalities: Hévíz, Balatonfüred, Kecskemét, Szekszárd, Dunaújváros, Sopron, Hatvan, Kalocsa, Bicske, just to mention a few. Most of these revenues (2.1 billion) were the result of a tender issued by the Nemzeti Fejlesztési Ügynökség (National Development Agency) and financed by the European Union. Local governments could apply for grants to reduce their energy costs; if successful, they received large sums of money to have the appropriate work done.

There are strict EU guidelines that the Hungarian authorities must follow. The most important rule is that the firm that prepares the technical details must not in any way be connected with the successful bidder. However, as Atlatszo.hu discovered, most of the tenders Tiborcz’s firm won were prepared by his former partner, Endre Hamar, who owned another company called Sistrade Kft. It is likely that Hamar and Tiborcz acted in collusion, making Tiborcz’s bid fraudulent. In fact, Atlatszo.hu notes that the arrangement was so bizarre, and presumably illegal, that Hamar was still an owner of Elios Innovatív Zrt. at the end of April 2014 when the firm signed the contract with the city of Héviz.

Atlatszo.hu did a yeoman’s job in trying to make sense of the company’s shifting identity and ownership structure. Unfortunately, many questions remain. One that baffles me is the role of Simicska’s Közgép. I find it more than a little odd that Simicska’s Közgép shows up to support the fledgling business of István Tiborcz, already known to be Ráhel’s boyfriend, only to withdraw from the firm after its spectacular growth. Közgép is not, as far as I know, active in venture capital or private equity. And, as the next year’s revenues showed, Tiborcz’s company was not ready to stand on its own.

I think it would be high time for Brussels to take a harder look at some of the businesses–and individuals–that profit from its largesse. Let’s not forget that in this case we are talking about the daughter and son-in-law of the prime minister. Surely, the goal of the EU convergence program is not to make the Orbán family rich.