Tag Archives: Sándor Fazekas

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

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

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

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

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

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

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

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

Source: Index / Graphics: Szarvas

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

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

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

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

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

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

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

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

February 8, 2017

Viktor Orbán and his entourage in Baku

Not so long ago I wrote about Viktor Orbán’s fallacious theories regarding the direct connection between economic growth and authoritarian regimes. He looked at some of the countries that had plenty of gas, oil, and in some cases minerals and attributed their economic success in recent years to the nature of their regimes instead of to their natural resources. Ever since he became prime minister in 2010 he has been shamelessly courting the dictators or autocrats of these countries, only to discover that some of them are currently in deep economic trouble. One of these countries is Azerbaijan. I will not go into the details of the shocking deal Orbán made with President Ilham Aliyev concerning the fate of an Azeri murderer who was serving his sentence in a Hungarian jail. Anyone who’s interested in the particulars can find plenty of information on this blog.

At one point Orbán was even hoping that Hungary would issue bonds in Azeri currency, the manat, but the idea died a quiet death. And a good thing it did since the manat, which was worth 350 forints in January 2015, today trades at only 182 forints. Azerbaijan is in a deep recession (3.3%) with a 12% deficit and an inflation of 14%. I read somewhere that it is unable to pay for military equipment it ordered from Russia and the Russians are getting antsy.

Hungary, however, remains a steadfast ally of Azerbaijan. Not only did Viktor Orbán, his wife, and practically half of the Hungarian cabinet visit Aliyev in Baku, but it was announced during the trip by Foreign Minister Péter Szijjártó that the Hungarian Export-Import Bank has opened a $200 million line of credit to Azerbaijan to expand bilateral economic cooperation with Hungary. Aside from this announcement, the Hungarian media couldn’t discover any earth shattering reasons for the trip, certainly nothing concrete regarding “bilateral economic cooperation.” Although Viktor Orbán tried to give the impression that Azeri-Hungarian trade has soared since the Orbán government decided to treat Azerbaijan as a “stable partner, ally, and friend” of Hungary, the truth is that Hungarian exports to Azerbaijan today are only slightly above where they were in 2009. In fact, between 2010 and 2012 they decreased dramatically. Azeri exports to Hungary during the same period were flat.

Members of the cabinet nonetheless keep insisting that Azeri-Hungarian bilateral economic cooperation will be important to Hungary’s economy. Mihály Varga, minister of economy, spoke fleetingly about cooperation in the energy field, pharmaceuticals, and healthcare. Varga went on to emphasize Azerbaijan’s fantastic development in the past few years and stressed that the country is “the most important partner” in the South-Caucasian region. Which is not to say much. Hungarian exports to Azerbaijan amounted to a mere $65 million. Sándor Fazekas, minister of agriculture, chimed in, claiming that “Azerbaijan is the most promising agricultural partner of Hungary” because “since 2012 our exports to the country have quadrupled,” but, again, given the low level of trade volume that doesn’t mean much.

The Hungarian politicians felt obliged to say something about the changed circumstances of the Azeri economy. As Szijjártó cryptically put it, “we must place Azeri-Hungarian economic cooperation in a different dimension.” A Mandiner opinion piece sarcastically remarked that the “new dimension is the $200 million line of credit extended to Azerbaijan.”

Every time Orbán visits a country that is not exactly a democratic paradise the Hungarian media, with the exception of sycophantic publications like Magyar Idők, Magyar Hírlap, and Pesti Srácok, point out Orbán’s servile gestures toward his hosts. This trip was no exception. Csaba Káncz, formerly an advisor to the European Union, wrote that Orbán’s trip to Azerbaijan will not produce any tangible results,“it will [only] bring shame to the country.” One of the reasons for this shame is that Orbán and his wife lay a wreath on the grave of Heidar Aliyev, father of the current president of Azerbaijan, and his wife, Zarifa Aliyeva. The elder Aliyev’s political career was infamous. As first secretary of the Azeri communist party he ruled the country uninterrupted between 1969 and 2003 when he appointed his son to be his successor. Since 1995 there has been not one free election in the country. The last election, in 2014, was so free and fair that the results were announced the day before the actual election. Currently there are more than 100 political prisoners in Azerbaijan.

Led by Viktor and Anikó Orbán the Hungarian delegation is visiting the grave site of Heidar Aliyev and his wife

Led by Viktor and Anikó Orbán, the Hungarian delegation visits the grave site of Heidar Aliyev and his wife

In light of Azerbaijan’s dictatorship (in force ever since 1920) it was jarring that the Hungarian prime minister praised “the leaders of the country who have made Azerbaijan one of the most respected and often envied countries in the world.” People rarely appreciate the success of others, but sooner or later hard work brings triumph, and of late Azerbaijan’s “weight and prestige have grown.” Looking at it from the vantage point of Europe, Azerbaijan is successful and “committed to cooperation between East and West.” Surely, Orbán didn’t want to say much about Azerbaijan’s current economic and financial woes. He merely suggested diversification, in which “Hungary can be a useful partner” and which will make Azerbaijan even more successful and stronger.

A pilgrimage to the grave of the elder Aliyevs wasn’t enough groveling before the Azeri dictator. Viktor Orbán decided to honor the wife of the president, Mehriban Aliyeva, who serves as chairperson of the Aliyev Foundation named after Heidar Aliyev, by conferring on her the Commander’s Cross of the Order of Merit. And then the Hungarian entourage packed up and left. Another pretty useless and very expensive trip.

March 7, 2016

Fidesz omnipresence in small towns in Hungary

As if Buda-Cash, Hungária, and Quaestor weren’t enough, we have a new financial scandal, this time in Karcag, a small town half way between Szolnok and Debrecen. Right now it’s is hard to know how many billions of forints disappeared after Mrs. Sándor Dobrai, the co-owner of Kun-Mediátor, a travel agency, together with her daughters and grandchildren, packed up and left Hungary in a great hurry. The woman was a “highly esteemed” member of Karcag society, the mayor of the town said after the scandal broke. The town’s political leadership, with whom she had excellent relations, had no idea that for years she had been acting as a quasi-broker for perhaps as many as one thousand people in town, promising them a 20% annual return on their investments.

Here I will not dwell on the shady business of Marcsi, as she was known to the locals. I am more interested in those small towns where nothing can happen without the approval of Fidesz. Karcag is prototypical of the settlements I have in mind.

Karcag has been in Fidesz hands since 1990. In that year Sándor Fazekas, a 27-year-old lawyer and brand new member of the then still liberal Fidesz, became the mayor of the town. Fazekas must have done something right because he remained in his post until 2010. In 2006, when he last ran as a candidate for mayor, he received almost 80% of the votes. He also became a member of parliament that year.

Everything revolves around Fidesz in Karcag, where the party’s only apparent opposition these days is Jobbik, whose candidate, an elderly gentleman, received 22.69% of the votes. This is a fairly new development. Four years earlier Jobbik had no mayoral candidate, and MSZP’s man received 20% of the votes. Last year the parties of the democratic opposition didn’t even bother entering the race. The lone “independent” candidate received 9.83%.

When Fidesz won the national election in 2010, Fazekas became minister of agriculture even though, according to Zoltán Gőgös, MSZP’s agricultural expert, he “cannot distinguish the front from the back of a cow.” Indeed, his performance has been spotty at best, and his questionable dealings with Russia via Szilárd Kiss brought calls for his resignation.

In addition to Fazekas, there is another “distinguished” son of the town–Mihály Varga, minister of national economy. The anomaly in this group of high level Karcag politicians is Ágnes Vadai, formerly of MSZP and now deputy chairman of the Demokratikus Koalíció. Vadai has not lived in Karcag since the age of 14, but she knows the situation in town well because her parents still live there. As she mentioned in one of her interviews, Karcag is so imbued with Fidesz ideology and a hatred of the “communists” that when she tried to buy red carnations at the flower shop she was told that they don’t stock the flower because it is part of MSZP’s logo. According to her, in Karcag everybody knows everything about everybody else, and therefore she finds it impossible to believe that the Fidesz city fathers knew nothing about the booming business of Mrs. Dobrai, especially since her relationship with town hall was close. Kun-Mediátor also owned a one-person television station that broadcast a two-hour program every evening, dealing mostly with local events. Fazekas as well as Varga appeared as guests on Mediátor TV several times in the past.

Karcag City Hall

Karcag City Hall

Of course, this proves nothing. It certainly doesn’t indicate that local Fidesz politicians were in any way involved in Mrs. Dobrai’s scheme. But then why does Mihály Varga feel compelled to write a Facebook note saying that “it is a well-known fact that during the 2002 and 2006 election campaign Ágnes Vadai received considerable help from the business group which also owns Kun-Mediátor”? Launching countercharges against political opponents is a typical Fidesz tactic, which I consider unfortunate because it calls, perhaps unwittingly, attention to their own possible culpability. The reaction from a commenter was that “in Karcag one cannot even go to the toilet without Fidesz’s permission,” and he accused the local Fidesz leadership of being involved in the illegal financial hoax. He mysteriously added: “ARE YOU PERHAPS AFRAID OF TALKING ABOUT ÉPKART?”

It was in 2011 that Tibor Szanyi called attention to a Karcag firm called Épkart Zrt., which was given preferential treatment when EU grants were handed out. The game was the same as that which the European Commission complained about the other day. The demands of the tender were such that only one company was eligible to apply and win it. Since then, Épkart has received numerous large jobs and the company has moved its headquarters from Karcag to Budapest. Last August the company even received an award from Sándor Fazekas for its excellent job in restoring the Grassalkovich Castle in Hatvan. Clearly, Fazekas, as the mayor of the small town for twenty years, and the owner of Épkart must be old acquaintances if not friends. Népszabadság learned a few days ago that Kun-Mediátor Kft., which also moved to Budapest, just happened to have the same address as Épkart Zrt. Moreover, it turned out that Épkart has been renting a building in Karcag to the two daughters of Mrs. Dobrai ever since 2013. Otherwise, Épkart denies any business dealings with Kun-Mediátor.

I’m certain that most people in Budapest and the few larger cities in Hungary have absolutely no idea of what’s going on in towns the size of Karcag. Just recently I read an article by Tamás Bod, the sole representative of the united opposition on the town council of Gyula, a town 90 km away from Karcag, close to the Romanian-Hungarian border. The mayor of Gyula received 67% of the votes. Out of the 14 members of the council eight are Fidesz, two represent a local group but usually vote with Fidesz, one is a member of Jobbik, and then there’s Tamás Bod. Bod used to be a newspaperman and was considered to be an enemy by the local Fidesz leadership even before he decided to enter local politics. For example, he was forbidden access to Fidesz events even in those days.

After he entered the race he was called “the shame of Gyula” and a “failed journalist” who was now trying to make a living as a politician. (By the way, he gets 48,000 forints a month for serving on the council.) They had a policeman “interrogate” him about a fist fight he allegedly caused miles away and used it as a photo op. He got a seat on the council from the compensation list. He is allowed to speak at council meetings for five minutes only, while the Fidesz members answer with 15- to 20-minute speeches. The local paper refused to let him answer an article by the editor-in-chief which reminded Bod “of the 1950s.” When he asked for remedy from a member of the board of directors, a literary historian, he was told that board members can deal only with financial matters, which Bod found strange since all three members of the board have a literary background. He is totally helpless, and the only thing he can say under the circumstances is “I hope I disturb you.”

If you take a look at the local paper, the Gyulai Hírlap, you will see that Tamás Bod is really trying, but in this town very few people would ever join Bod’s demonstration against Fidesz corruption.

At least in Karcag no one disturbs the work of the council as Bod does in Gyula. Fidesz and Jobbik members decide all matters. In Karcag the few people who don’t agree with the policies of the Orbán government must either hide their anti-government sentiments or pretend that they are a faithful followers of the party. It will be very difficult to break the stranglehold of Fidesz rule in these smaller towns where Fidesz functionaries have been in power for a decade or more.

Our man in Moscow: Szilárd Kiss

The big news in Hungary is still the financial collapse of the Quaestor Group, which may involve the loss of 150-200 billion forints to those who used the companies’ services. The consequences of the bankruptcy might be far-reaching, including a loss of trust in Hungary’s financial institutions.

The more we hear about the details of Quaestor’s ventures the clearer it is that the Hungarian government was heavily involved in the business affairs of Csaba Tarsoly, the CEO of the firm. As the story unfolds, it looks as if two ministries in particular are implicated: the ministry of foreign affairs and trade and the ministry of agriculture. A closer look at the cast of characters reveals that there was one man who had a close working relationship with Tarsoly as well as the two ministers: Szilárd Kiss. Commonly described as an adventurer of dubious reputation, Kiss may have posed, and in fact still may pose, a national security threat to the country.

I wrote about Szilárd Kiss once, but here I would like to say a few words about the likely relationships between Kiss and Csaba Tarsoly; Péter Szijjártó, minister of foreign affairs and trade; and Sándor Fazekas, minister of agriculture. Today, a month after I wrote a post on Kiss, I believe that he had a much more important role to play in Viktor Orbán’s “eastern opening” than I suspected earlier.

As we know, Kiss has been living in Russia at least since 1990, where he moved in the hope of exploiting business opportunities. His specialty was agricultural products. Eventually, he worked as an unofficial lobbyist for Hungarians who wanted to do business in Russia. But how did Péter Szijjártó and Sándor Fazekas come to know Kiss? I suspect through Csaba Tarsoly, whom Kiss most likely tried to entice into some Russian business venture. Their relationship goes back to 2002 and 2003, way before Viktor Orbán ever dreamed of any “eastern opening.” Szilárd Kiss could be persuasive. As early as 2003 he was named to the board of Quaestor Financial Consulting. Three years later, in 2006, he became a board member and part owner of Quaestor Energetics. He resigned both positions in April 2011 when he became a civil servant.

After the 2010 Fidesz victory and the announcement of the “eastern opening,” Szilárd Kiss’s time arrived. It must have been Tarsoly who called the attention of Péter Szijjártó, an old friend from Győr and the key person in the new foreign policy introduced and directed by Prime Minister Viktor Orbán, to Szilárd Kiss, who allegedly had important connections in Russia with both businessmen and officials in the ministry of agriculture. Although at present Sándor Fazekas doesn’t want to remember anything about Szilárd Kiss, it had to have been the ministry of agriculture that named him agricultural attaché in the Hungarian Embassy in Moscow.

Szilárd Kiss / válasz.hu

Szilárd Kiss / válasz.hu

István Íjgyártó, the Hungarian ambassador to Russia between 2010 and 2014, knew about Kiss’s shady business dealings and even his brush with the law. And in September 2013 Kiss was about to be dismissed from his diplomatic post. What was behind this sudden decision when apparently both Fazekas and Szijjártó were satisfied with Kiss’s work? The foreign ministry, it seems, learned that Kiss had been vetted by the national security office and had failed the test. It had become evident during the investigation that Kiss had connections to the Russian mafia. His dismissal was not automatic, however, because the Orbán government had changed the law on the vetting of officials. An official’s superior can make his own decision about the dangers involved. Fazekas suggested to Kiss that he resign, thus avoiding the stigma of dismissal. In compensation, Fazekas immediately appointed Kiss commissioner of eastern economic relations. Why the change? Because the new appointment was based on a contractual agreement for which one didn’t need national security clearance.

Szilárd Kiss was also involved in a profitable “visa business” on the side, which he continued even while he was a member of the Hungarian diplomatic corps. All told, he was responsible for getting Hungarian visas for about 2,500 Russian citizens. Considering Kiss’s relations with the Russian underworld, it is very likely that some of his friends from the Russian mafia are today the happy owners of a Hungarian visa. Kiss was also known to be involved in human trafficking. Hundreds of prostitutes received visas through his good offices. How did he manage to acquire all these visas? It was fairly simple. He approached one of his influential Hungarian businessmen to invite Igor, Olga, or Natasha, and with this invitation he managed to convince the Hungarian consulate in Moscow to issue them visas. There was a 2011 case which came to light during a court proceeding against Kiss where a certain Yevgeny Dubrovin gave him 80,000 euros to acquire visas “for his friends.” At the exchange rate at the time, this transaction alone netted Kiss 20.8 million forints. Apparently Kiss had powerful backers in the government and the local officials could do nothing to stop his activities even if they wanted to.

Consulates in general are run quite independently from the foreign ministry, and the Moscow consulate was considered to be a hotbed of corruption. It was for that reason that some officials familiar with the situation in Moscow welcomed the idea of setting up a visa center. A lot of other countries had established such visa centers, all of them run by an Indian company, VFS Global. The Orbán government doesn’t like “orthodox” solutions, however, and therefore the Hungarian visa center in Moscow, VisaWorld-Center Szolgáltató, is owned by Csaba Tarsoly of Quaestor fame and Yelena Tsvetkova, wife or girlfriend of Szilárd Kiss. In addition, Index found out that Tsvetkova has a joint business venture with the same Yevgeny Dubrovin who earlier wanted to buy visas for his friends. There is a good possibility that both Kiss and Tsvetkova have friendly relations with the Russian secret service.

According to a well-informed source, the VisaWorld-Center in its present form may well be a hole in the “shield of Schengen.” In his opinion, it is impossible that the Russian secret service wouldn’t have a fair idea of what’s going on there. Altogether Hungarian consulates have issued more than two million visas since January 2008. The Russian share is staggeringly high: 400,000. That is, every fifth visa has been issued to a Russian citizen.

I think that even this brief description of the network that exists among politicians, businessmen, and the Russian and Hungarian underworld highlights the dangers the Hungarian government poses to the security of the European Union.

Shady Hungarian wheelers and dealers in Russia

When in February I wrote a post on Ernő Keskeny, “the man behind the Russian-Hungarian rapprochement,” I was planning to write about another key figure, Szilárd Kiss, who was also instrumental in convincing Viktor Orbán of the importance of the Russian market for Hungary. At the moment Kiss is in jail in connection with defrauding the already ailing Orgovány és Vidéke Takarékszövetkezet. The fraud itself involved a loan of 700 million forints that Kiss couldn’t pay back but that, with the assistance of the president of the credit union and a businessman friend, he managed to settle for 140 million, 40 of which went into the pocket of the bank president. It is unlikely that Kiss will be able to wiggle himself out of this very tricky situation because he and his businessman friend discussed all the details of the deal on a wiretapped telephone.

That was in the summer of 2013. Even after that date, however, Kiss remained a member of the Hungarian diplomatic corps. Now that he is in jail nobody wants to take responsibility for having hired him, but it looks as if it was the ministry of agriculture, specifically the minister, Sándor Fazekas, who thought that Kiss would do a bang-up job in Moscow, where he claimed to have important friends in government circles. Kiss spent the larger part of his adult life in Russia and has a Russian wife or a girlfriend of long standing, Yelena Tsvetkova, who also has extensive ties to Russian politicians. She is in charge of the newly established Hungarian visa center in Moscow. This is the office where Russian citizens for a certain amount of money can gain permission to settle in Hungary.

Otherwise Kiss worked as a lobbyist for business people interested in Russian or Hungarian opportunities, while making sure that he received payment for his good offices in these transactions. He usually asked people to invest in his own mostly failing enterprises. It was most likely that kind of arrangement that was behind a deal between Sergey Galitsky, a Russian billionaire, and Péter Szijjártó, then still undersecretary in the prime minister’s office, to establish a large logistical center for Galitsky’s chain of supermarkets, Magnit, in Hungary. In return, Galitsky became a partner in one of Kiss’s businesses, Winexport Kft. The logistical center has been shelved.

It is bad enough that one of the government’s top advisers on Russian agro-business turned out to be a swindler. Quaestor, perhaps the largest of the recently failed financial conglomerates, also had a role to play in the foreign business plans of the Orbán government. Quaestor, the financial empire of Csaba Tarsoly, managed the Moscow and Istanbul branches of the government’s Magyar Nemzeti Kereskedőház (Hungarian National Trading House), designed to encourage and smooth the way for ventures of Hungarian businessmen in Russia and Turkey and Russian and Turkish businessmen in Hungary. Yesterday the Hungarian foreign ministry broke the contract with Quaestor.

Szilárd Kiss and Csaba Tarsoly are no strangers. Kiss for years was on the board of at least two Quaestor firms, Quaestor Financial Consulting and Quaestor Energy. The two men had joint business ventures in Russia because Tarsoly believed Kiss’s fabulous stories about his extensive connections in Russia. According to Index, Kiss as usual failed to deliver.

Péter Szijjártó, Elena Tsvetkova, and Csaba Tarsoly at the opening of the Moscow Trading house, November 19, 2014

Péter Szijjártó, Yelena Tsvetkova, and Csaba Tarsoly at the opening of the Moscow Trading House, November 19, 2014

And now enter Viktor Orbán’s friend from Felcsút, Lőrinc Mészáros. While the journalists of Index were looking for Kiss’s Russian businesses, they found a company called Mадьяp that was established in November 2012. Originally it belonged to Kiss alone, but by now he has two partners, a Russian woman and Lőrinc Mészáros. The mayor of Felcsút did not include this Russian business on his financial statement. When confronted by the journalist, Mészáros sounded truly confused. At one point he thought that he was part owner of Verngerskie Produkti, but he was mistaken. That company’s sole owner is Szilárd Kiss.

Mészáros apparently decided to do business with Kiss because Kiss promised him that he would be able to sell his bacon to Magnit, the huge Russian supermarket chain whose owner is a partner in one of Kiss’s businesses. Keep in mind that it was not so long ago that Viktor Orbán himself opened his friend’s mangalica farm. But it is a modest business, while Magnit has 7,500 stores all over Russia. So, the whole thing sounds like a hoax to me, the kind Szilárd Kiss seems to specialize in.

Viktor Orbán’s new type of diplomacy has not only led to Hungary’s isolation. His reliance on shady businessmen who convinced him that old-fashioned diplomacy is a thing of the past has embroiled the country in crooked and/or fanciful business deals. And it seems to me that Orbán hasn’t learned his lesson yet because only a couple of days ago he delivered a lecture to Hungarian diplomats about his philosophy of a new-age diplomacy. Unfortunately, his ideas come straight from swindlers who are already in jail or will be there soon.

Hungary through American eyes

American diplomats have been employing novel ways of communication. For example, yesterday Daniel Fried gave a press conference by telephone from Washington to a small number of Hungarian journalists about the American position on economic sanctions against Russia. Daniel Fried is the State Department’s coordinator for sanctions policy.

Fried is a senior diplomat with vast experience in Eastern Europe. He served as political officer at the U.S. Embassy in Moscow in Soviet times; he headed the Polish desk during the regime change in the late 1980s. After Poland emerged as one of the democracies of the region, he was political counselor at the U.S. Embassy in Warsaw. Later he served as assistant secretary of state for European and Eurasian affairs and special assistant to the president and senior director for European and Eurasian affairs at the National Security Council. So, why does Daniel Fried think that he has to give a long-distant press conference for Hungarian journalists? Surely, because Washington wants the Hungarian public to know the American position on Russian aggression against Ukraine. And it also wants to share its opinion of the current state of Russian-Hungarian relations.

Ambassador Daniel Fried

Ambassador Daniel Fried

Up to this point we have two independent versions of the telephone interview: one from Népszabadság and the other from VilággazdaságI can’t imagine that MTI was not invited, but for the time being there is no MTI report on the event.

The main message was that sanctions will be applied as long as Moscow does not fulfill all twelve points of the Minsk Agreement. A good summary of these twelve points can be found on the BBC website. Russian regular troops are still on Ukrainian soil and “the Russian aggression continues.” The United States wants a political solution to the crisis and is ready to cooperate with Russia in many areas, but Russia must respect the territorial integrity and sovereignty of Ukraine. With its aggression against Ukraine Russia “seriously endangers the European security system that came into being after the 1989-1990 East European events.” If Russian aggression continues, the United States and the European Union are ready to introduce new sanctions.

Fried then turned to specifically Hungarian issues. Hungary and its prime minister should know from Hungarian history what it is like when a country is left alone unprotected in the event of outside aggression. Therefore Hungary ought to realize the importance of the steps that are being taken in this case. Viktor Orbán first claimed that “the European Union shot itself in the foot when it introduced sanctions against Russia” and later at the NATO summit in Wales he declared that “we are hawks when it comes to military security but doves in economic terms.” Fried said that “we all want to be on good terms with Russia, to improve our relations, but this is not the right time for friendship.” Fried cited Russian Foreign Minister Sergey Lavrov’s claim that sanctions only deepen the Ukrainian crisis. “The Russians say all sorts of things, many of them are simply not true. After all, they deny that their soldiers are in the territory of Ukraine.”

During the press conference it became clear that talks took place between the Hungarian and the U.S. governments concerning the sanctions. It seems that the U.S. listened to Hungary’s objections but was not impressed.  The sanctions hurt not only Hungarian businesses but businesses of all nations, including those of the United States. The European Union made a brave decision which Hungary supported.

The message was that one cannot play the kind of game Viktor Orbán is playing at the moment. On the one hand, he is a supporter of the common cause against Russia, but when it comes to sanctions he tries to make special deals with Moscow. For instance, Sándor Fazekas, the Hungarian agriculture minister, visited Moscow on September 8 where he had talks with Nikolay Fyedorov, his Russian counterpart. There Fazekas agreed with Fyedorov that “the sanctions don’t offer a solution to the Ukrainian crisis, which should be settled through negotiations.”

And according to leaked documents, we know that Vladimir Putin told Petro Poroshenko during one of their telephone conversations that he “through bilateral contacts can influence some European countries to form ‘a blocking minority’ in the European Council.” The countries he has in mind are Slovakia, Bulgaria, Hungary, and Cyprus. I guess Daniel Fried wanted to make sure that Hungarians understand that Washington fully supports the application of sanctions and that the large majority of the EU countries are also on board.

While we are talking about U.S.-Hungarian relations, I ought to mention that U.S. Senator Ben Cardin (D), who is a member of the Senate Foreign Relations Committee and chairman of the U.S. Helsinki Commission, and Senator John McCain (R) introduced a resolution in recognition of the International Day of Democracy on September 15. Accompanying the introduction of the resolution Senator Carden’s press release talked at length about the sad state of democracy in Hungary where “there is an unprecedented global crackdown on civil society organizations seeking to express their voice and exercise their rights. Earlier this week, Hungarian authorities raided the offices of two NGOs in Budapest in what appears to be part of a tightening squeeze on civil society. Such actions not only undermine democracy but chill investigative reporting on corruption and good governance. Now, more than ever, is the time for the international community to push back on threats to civil society and protect efforts by these organizations to build strong democratic institutions.”

In addition, on September 18 Deputy Chief of the United States Mission to the Organization for Security and Co-operation in Europe (OSCE) Kate Byrnes delivered the following speech to the Permanent Council in Vienna:

Three months ago, on June 19, the United States addressed the Permanent Council regarding an apparent campaign of intimidation directed toward civil society and independent media in Hungary. I regret that I must speak to the Council again on this topic.

As we said in June, just one day after the April 6 elections, the Hungarian government accused organizations that conduct legitimate work in human rights, transparency, and gender equality of serving “foreign interests.” Shortly afterwards, the Prime Minister’s Office alleged that NGOs that monitor and evaluate grant proposals for the EEA-Norway NGO fund were tied to an opposition party. On September 8, Hungary’s National Bureau of Investigation initiated a series of police raids on two NGOs responsible for the EEA-Norway NGO grant program in Hungary. With no prior warning, and in a show of intimidation, over 30 officers entered the NGOs’ facilities and seized the organizations’ documents and computers.

These police raids appear to be aimed at suppressing critical voices and restricting the space for civil society to operate freely. The United States again reminds Hungary of its OSCE commitments to human rights and fundamental freedoms, democracy, and the rule of law.

Mr. Chair, we raise these issues to express our concern about actions that appear inconsistent with OSCE principles, and also to encourage dialogue. We intend to continue to encourage the government of Hungary to observe its commitments and allow NGOs to operate without further harassment, interference, or intimidation. The United States believes that such respect for its commitments will help Hungary to become a more prosperous, robust and inclusive democracy.

Finally, here is something from former President Bill Clinton, who appeared on the Daily Show with Jon Stewart. “There’s the authoritarian capitalism model which is Russia and in a different way China, and it has some appeal. Like the Hungarian Prime Minister – they owe a lot to America; he just said he liked authoritarian capitalism, just saying “I don’t ever want to have to leave power” – usually those guys want to stay forever and make money. And there’s the democracy model …”

Hungary is in the news, no doubt. It would be better if it weren’t.

Corruption and anthrax: The sorry end of a “city farm”

On July 4 news spread rapidly that several people had become infected by anthrax, which is called lépfene in Hungarian. “Fene” here most likely means something like “trouble” while “lép” means “spleen.” Apparently the spleens of infected people become enlarged.

Anthrax spores are formed by anthrax bacteria that occur naturally in the soil. These spores remain dormant for years until they find their way into a host: sheep, cattle, horses, and goats. Anthrax is rare in Canada and the United States but common in the developing world. Hungary had several outbreaks of anthrax over the last few years.

One can be affected by the anthrax bacteria by eating undercooked meat from an infected animal, by inhalation when one breathes in anthrax spores, or through the skin. Infection by inhalation is the most deadly way to contract the disease. That’s why we see pictures of health workers covered from head to toe while working at the scene where the infected animals were grazing or were slaughtered.

It seems that the owner of the cattle farm noticed as early as June 21 that something was wrong with some of his animals, and at least one had to be slaughtered due to severe illness. On July 1 there was another sick animal who had to be killed. No veterinarian saw them and no health official inspected the meat of the slaughtered animals.

Once the anthrax outbreak became public knowledge newspapermen invaded Tiszafüred where the first anthrax outbreak occurred. Tiszafüred is a favorite spot for vacationers who want to take advantage of Tisza tó, a large artificial lake second in size only to Lake Balaton. Very few people were ready to talk, but reporters eventually learned that the owner of City Farm in Kócsújfalu is new at animal husbandry. He purchased about 100 cows, a Hungarian variety called “magyar tarka,” only a few months ago. Where the cattle came from is not clear. Zoltán Gőgös, former MSZP undersecretary in the ministry of agriculture, seems to know that the Hungarian owner purchased the animals in Romania. He also claims to know that the owner, instead of  immediately placing the sick animals in the compulsory three-month quarantine, immediately began slaughtering them.

This is what the "magyar tarka" looks like. Excellent for meat and for milk production

This is what the “magyar tarka” looks like. Excellent for meat and milk production

The first five or six people who became ill were butchers who handled the meat. Later it turned out that the meat was sold to a company that supplies food to the municipality of Tiszafüred, which provides lunches for 88 needy children in town. Since then the town of Tiszafüred broke its contract with the company. Another purchaser was a restaurant called “Nemzeti Étterem,” whose owner, I assume, must be a great Fidesz supporter judging from the name of his restaurant.

News spread that the authorities actually kept the anthrax infection a secret for three or four days, something the Ministry of Agriculture hotly denied in a communiqué that appeared on the ministry’s website on July 4. In it Róbert Zsigó, former Fidesz spokesman and mayor of Baja, claims that as soon as the anthrax infection became known the authorities took all necessary steps. Since symptoms of anthrax infection appear about a week after the time of contact with the sick animal and it was on July 2 that anthrax was diagnosed in five patients, it is likely that the infection was spread by the animal that was slaughtered on the 21st of June.

The locals were not too communicative when journalists wanted to know more about the owner of City Farm. They did say, however, that the owner is a well-off man who lives in a big and expensive house. LMP politicians soon discovered that the owner of the herd of cattle is József Nagy, who just recently received 250 hectares from the Hungarian government to raise cattle. His case is similar to hundreds of others where people with good connections to party and government leaders received tracts of land without knowing the first thing about animal husbandry or agriculture.

Soon enough it became known who the “godfather” of József Nagy is: Sándor Fazekas, the minister of agriculture, himself. LMP was not alone in its detective work; Jobbik also looked into Nagy’s government connections. They discovered that Nagy’s other business venture also received government subsidies. Since then it became known that Nagy is on very friendly terms with Mihály Varga, minister of national economy.

Everywhere you look you find corruption. In most cases only the locals know all the details of suspicious land transactions. Only in glaring cases like this one does the news of corruption surface and spread nationwide.

Indeed, corruption is everywhere and on all levels. After following the trail of the infected meat, it turned out that it was not only József Nagy who was guilty of negligence but also the owner of the company that provided meat to the town of Tiszafüred. One corrupt businessman, Nagy, phoned the other corrupt one, Tamás Ábrahám, on June 23 and inquired whether he was interested in some beef at a bargain price. He was and purchased 100 kg of it on the very same day. Ábrahám apparently didn’t ask for the meat inspector’s certification but relied on Nagy’s verbal assurance that all was in order. Ábrahám and Nagy know each other through soccer. Ábrahám established a local soccer club and Nagy was one of its sponsors.

According to the latest intelligence József Nagy’s herd of cattle is shrinking in size. Lately apparently several animals had to be slaughtered, including the bull that was to assure the future of the cattle farm. He ended up in the carcass pit. His ear tag, which should have had the information that would have identified him, was missing. I wonder why.