Tag Archives: Századvég

The Hungarian opposition shows signs of life

Momentum’s victory

The major news of the day is the overwhelming success of Momentum’s signature drive for a referendum on holding the 2024 Olympic Games in Budapest. They needed 138,000 signatures; they collected 266,151. Although the young leaders of the movement don’t seem to be overly grateful, about 60,000 of these signatures were collected by political parties on the left. LMP and Párbeszéd were especially active.

Momentum’s plan at the moment is to become a self-sufficient party. But I wouldn’t be surprised if closer cooperation among Momentum, Párbeszéd, and LMP would materialize, especially now that Párbeszéd has withdrawn from negotiations with MSZP and DK.

Viktor Orbán, who a few months ago considered hosting the 2024 Olympic Games “a matter of national significance,” a couple of days ago instructed the Fidesz-KDNP parliamentary delegation to refrain from any comment in the event that Momentum gets the necessary number of signatures. His position now is that the central government supported the idea only after the Budapest City Council, including opposition members, voted to submit an application to the IOC.

Budapest mayor István Tarlós, although initially against holding the Olympics in Budapest, now stands by Viktor Orbán. He complains about “the betrayal of the opposition,” which a year and a half ago supported the idea heart and soul and now portrays itself as the defender of the people and the country. Unfortunately, there is a great deal of truth in this charge. Csaba Horváth (MSZP), József Tóth (MSZP), and Gergely Karácsony (Párbeszéd) supported the application. Even Erzsébet Gy. Németh (DK), who verbally disapproved of it, had the courage only to abstain. The sole person to vote against it was Antal Csárdi (LMP). Bravery and consistency are not the strong points of the Hungarian socialists and liberals.

Granted, given government pressure and the general Fidesz enthusiasm for the project, it was guaranteed to sail through the Budapest City Council. Still, those opposition city fathers who have been so loud of late in their disapproval of the project would look a great deal better if they had not bent under pressure and had instead voted their conscience. MSZP is especially hesitant to take a stand when its leaders believe, rightly or wrongly, that its voters might not approve of the party’s actions.

Tarlós indicated that once the final verdict on the number of signatures is announced, he “will think very seriously about withdrawing the application.” Given the enormous number of signatures collected, there is no doubt that the referendum request will be valid. And if the referendum were actually held, the “no’s” would carry the day. Tomorrow Publicus Intézet will publish its latest poll, according to which 76% of the total population would use the money for something much more important. The respondents could pick from several categories and obviously, since the numbers add up to more than 100%, could choose to allocate the saved funds to more than one urgent need. 65% of them opted for healthcare, 32% for education, 16% for the elimination of poverty, 11% for the creation of new jobs, and 8% for better infrastructure.

András Fekete-Győr proudly displaying the fruit of Momentum’s labor

The leaders of Momentum will embark on a two-month tour of the countryside where they plan to establish local party cells. András Fekete-Győr announced a few hours ago that the new party will have candidates in all 120 electoral districts. It intends to compete against the other opposition parties, although we know that fracturing the anti-Orbán forces is political suicide. Under the current electoral law, which is designed for a two-party system, a divided opposition can only lose. Nonetheless, for the time being Momentum is planning to follow in the footsteps of LMP, which doesn’t bode well for either Momentum or Hungarian democracy. László Bartus of Amerikai Magyar Népszava has already written an opinion piece in which he expresses his fears that Momentum is glossing over the distinction between Hungary prior to and after 2010.

László Botka’s program is shaping up

The anti-Orbán forces got some good news yesterday when Republikon Intézet published its poll on the popularity of current candidates for the post of prime minister. Viktor Orbán and László Botka are essentially neck to neck. Botka is only two percentage points behind Viktor Orbán (46% to 44%). What is especially significant is that Botka is by far the more popular candidate among undecided voters, 44% against Orbán’s 29%, a result that didn’t surprise me as much as it seems to have surprised the media. I have been convinced for a long time that if someone could inspire this group to vote, the majority would vote for a candidate on the left.

Many voters who sympathize with the “liberal” democratic parties in Hungary have been impatient with László Botka’s relative inaction since he announced that he intended to throw his hat in the ring. For example, although he promised to visit the chairmen of the smaller parties, he hasn’t gotten around to it yet. Yesterday I read that the first party he will visit will be LMP, an odd choice, I would say, since LMP’s willingness to negotiate with Botka is about zero.

On the other hand, Botka at last came out with an article, published in 168 Óra, in which he spells out at least part of his program. He embraces the idea of introducing a guaranteed basic income on an experimental basis in the most underdeveloped and poorest regions of the country. I assume that would be the northeastern corner and the County of Baranya along the Croatian-Hungarian border, both with large Roma populations. He also envisages introducing a supplement to pensions that do not provide enough income for survival. He would like to alleviate the difficulties younger people have in gaining access to affordable housing. He proposes that municipalities build apartment complexes, with apartments to be rented out at reasonable prices. He wants to change the flat tax system introduced by the second Orbán government to a progressive one. Moreover, he wants to introduce a property tax on high-priced real estate and luxury cars. In addition, Botka emphasized that education and health will his government’s priority.

I am curiously awaiting the reaction of the media and the general public. I’m sure that most of these goals will meet the expectations of the majority, although I don’t know how people will feel about the idea of a guaranteed basic income. I assume that MSZP will fully support these goals, but they will also have to be approved by those parties that are ready to stand behind Botka. The way things are going, very soon it will be only DK that Botka will have to negotiate with.

We already know the reaction of the government media to Republikon Intézet’s poll on Botka’s popularity. Here are some headlines: “Few people support László Botka on the left,” “Botka is not supported even on the left,” “László Botka is not popular.” The source of this information? Fidesz’s own pollster, Századvég.

February 17, 2017

The siphoning of public funds in Hungary

Today I will outline two cases where public money appears to have ended up in the pockets of favored individuals or in Fidesz coffers. The first case involves the Hungarian National Bank and Századvég; the second, the so-called “settlement bond program” devised by Antal Rogán.

It seems that the scandals swirling around the Hungarian National Bank are never-ending. The current scandal is the award of a tender worth 1.8 billion forints to Századvég. The loser was Koping-Tárki Konjunktúrakutató Zrt. The tender specifically stipulated that the purpose of the project was to study “economic recovery” (or konjunktúra in Hungarian) and its components. Koping-Tárki, as its name indicates, specializes in research into this particular aspect of economic activity.

Századvég’s offer was 1.8 billion forints, while Koping-Tárki would have done the job for 1.12 billion. The contract involved a working relationship with the National Bank for three years, which included monitoring world economic trends and their effects on Hungarian economic conditions. Applicants, as part of their tender, had to submit a sample study based on information released between the time the tender was issued and the time they submitted their bids.

Koping-Tárki chose to analyze the effect of lower oil prices on domestic prices of goods, economic growth, the balance of trade, inflation and, in turn, the Hungarian Central Bank’s decisions on interest rates. The maximum number of points that could be awarded for this sample study was 10. The bank’s “experts” decided that Koping-Tárki’s analysis was worth only 1 point and that Századvég’s deserved a 10. Moreover, Koping-Tárki ended up second in all the other categories, so it roundly lost the bid to Századvég.

At this point Koping-Tárki was entitled to take a look at Századvég’s winning study. In a case like this, the company that loses the bid cannot receive a copy of the document but can take notes. Even a quick glance revealed that the competitor’s work had absolutely nothing to do with monetary policy or even the Hungarian economy. It was about three innovations in the practice of medicine that were introduced in two counties of the United Kingdom: Telestroke, electronic record keeping, and tele-medicine. As for sources, Századvég ignored the demand of the bank for up-to-date data. The few sources that appeared in the study were at least two or three years old. Koping-Tárki asked for a review, which the Hungarian National Bank refused.

When the details came to light in April 2015, atlatszo.hu moved into action, asking for a copy of the public tender submitted by Századvég. Again, the National Bank refused, claiming that it enjoyed some special form of protection. The next step was to turn to the office responsible for freedom of information (NAIH). It, in agreement with atlatszo.hu, called on the National Bank to turn over the material. Meanwhile, Transparency International (TI) filed a complaint, and the Court of the Capital City (Fővárosi Törvényszék) ruled in favor of the NGO. At this point the National Bank attached a declaration by the director of Századvég claiming that the surrender of material would hurt the business interests of the National Bank. The court wasn’t impressed. Initially, it simply asked for the study. When its request was denied, it obligated the bank to turn over the material.

György Matolcsy obviously didn’t want that study to see the light of day. He decided to appeal. By that time more than a year had gone by and the affair was still not over. In mid-June 2016 the case moved on to the appellate court, which ruled on July 30 that the Hungarian National Bank must turn over copies of the documents to Transparency International within 15 days. The whole affair has taken a year and a half. This is typical of the incredible amount of effort it takes to get government agencies to release documents that according to law are public.

As we know, Századvég has the reputation of being a money launderer. Mainly through the award of government grants and contracts, billions of forints move from the government budget into the coffers of Fidesz or the pockets of individuals in high positions. But Századvég is not the only conduit for the creation of private wealth from public funds. The so-called “settlement bonds” (letelepedési kötvények) are another egregious example. As I pointed out in an earlier post, well-heeled foreign businessmen can “buy” Hungarian citizenship for about €300,000. They get €300,000 worth of five-year government bonds and pay a handling fee of €40,000-€50,000, not to government agencies but to private companies. I estimated at the time that on each bond packet the intermediary makes about €70,000. Meanwhile the Hungarian government’s only gain is the purchase price of the bonds, minus the €20,000 or so it pays to the private companies. And in selling these bonds the government incurs a debt, which must be paid back with interest. Such a “business deal” is obviously not favorable to the government. The transaction makes sense only if its primary purpose is the enrichment of chosen individuals at the expense of the state.

According to the latest information, the situation with the “settlement bonds” may be even worse than I outlined in March. The program, it turns out, was designed in such a way that those companies that receive the handling fee also act as representatives of the prospective citizens. They are the ones who actually purchase and hold the bonds. This arrangement offers plenty of room for monkey business.

Hungarian settlements bond / Source: Átlátszó

Hungarian settlement bonds / Source: Átlátszó

Some time ago 444.hu was approached by an informant who claimed that there are more bond buyers than bonds purchased. The online paper asked for details from the Államadósság Kezelő Központ (AKK), the office that is involved in matters connected to the national debt. Surprisingly, AKK obliged fairly promptly and released details of the program. During 2013-2014, 2,347 people received permission from the ministry of interior to settle in Hungary as a result of the bond buying program, but AKK sold only 2,213 packets. That is, 134 packets are missing. That is a lot of money because each bond packet costs €250,000, which means the disappearance of 33.5 million euros. Did the friends of Antal Rogán and Árpád Habony, who buy and hold the bonds on behalf of their clients, stiff 134 foreign businessmen? I don’t know, but somebody has a lot of explaining to do.

August 2, 2016

Criticisms ignored: Advising the Orbán government

I would like to return to the 70,000 pages of polling data and analysis prepared by Fidesz’s own think tank, Századvég. The internet news site vs.hu, the recipient of this enormous data dump, daily releases bits and pieces of information the editors believe to be of interest. In the last three days they have been concentrating on the analysts’ disapproval of some of the Orbán government’s decisions. The reports are full of expressions of doubt about the wisdom of many actions of the administration. The editors rightly point out that these criticisms are not very different from what we have been encountering in the last six years in the anti-government media.

We don’t know, of course, when these documents were written. Since vs.hu has not been able to date them, some may have been written later. We mustn’t forget that wrangling over the release of the documents went on for almost three years, so it is possible that the in-depth analyses were added later to make Századvég’s output seem more substantial. The reason I even mention this possibility is that we know from other sources that Viktor Orbán doesn’t tolerate criticism from experts. A well-known story illustrating this point comes from Tamás Mellár, who was one of the founders of the branch of Századvég that deals with the economy. Mellár recalled a meeting with Orbán, also attended by Mihály Varga, the economy minister. At one point Mellár spoke up and criticized the great man’s wisdom, whereupon Varga stepped on his foot under the table, indicating that this is something one doesn’t do to the prime minister.

It is also possible that these critical warnings never got as far as Viktor Orbán, who doesn’t like to bother with details of governance. But in that case why did the Orbán administration bother to hire “expert” advisers? I even wonder whether anyone in the prime minister’s office took the trouble to read these quarterly reports. Let’s put it this way, the government rarely acted on their advice. The analysts at Századvég worried about the government’s loss of popularity, but the Orbán administration’s way of doing business almost never changed. For example, the analysts were concerned about the “improvised nature” of economic decisions. They pointed out the government’s disregard of the poorest segment of society, which they feared might cause “social tensions.” But there was no change in strategy. In fact, the number of people below the poverty line in Hungary has only grown, and nothing has been done about it.

Századvég kept writing about overly hasty decisions and the absence of careful deliberation, but the performance of government officials didn’t improve. Warnings came about the government’s regimentation of the population, to no avail. Hungarians had gotten accustomed to the practice János Kádár introduced in the early 1960s, which was based on keeping the government out of the private lives of ordinary citizens. It was a kind of unwritten contract between the government and the governed. We don’t poke our noses into your private lives and you let us handle politics as we see fit. Fidesz works differently. Orbán’s government tends to regulate every facet of life, which the analysts thought would eventually backfire. They predicted that this over-regulation would turn people against the government. Interestingly enough, it took six years before people got fed up with this paternalistic behavior and massively objected to the government telling them what to do and what not to do on Sundays.

kartyavar

Századvég apparently warned the government about the dangers of setting up a huge organization (KLIK) that would be the employer of about 140,000 people. If something goes wrong, Fidesz might lose the majority of schoolteachers, the analysts argued. Again, the government paid no attention to the advice. For a while it seemed that no harm had come of this decision, but here we are almost six years later with a huge mess as the result of the overly centralized system dreamed up by Viktor Orbán and Rózsa Hoffmann.

The advisers called attention to the populace’s perception of corruption. When people thought about corruption, they were not thinking of individual office holders on the take but rather considered the source of the trouble to lie in “political decisions.” This is what we call “systemic corruption,” originating with the lawmakers themselves. Yet nothing has been done about it. Obviously, Orbán is not concerned with widely-held beliefs of this sort. He may, however, be sitting on a time bomb. Corruption cases in which he and his closest associates are involved are becoming daily fodder for the media.

The Orbán government paid no attention to Századvég’s apprehension about its heavy-handed interference with the media either, most prominently the campaign the government waged against Klubrádió. The case became an international scandal that prompted worldwide condemnation. It did great harm to the already shaky reputation of the Orbán government. Yet the case dragged on and on. As a matter of fact, the station is still battling in court for compensation for the financial losses incurred as a result of the government’s refusal to grant Klubrádió a permanent frequency.

Today vs.hu concentrated on cultural matters. Fidesz not only wanted to create its own wealthy business clientele but also insisted from the very beginning on forging a cultural elite of its own. A number of writers, artists, philosophers, etc. are convinced that their careers were stunted because only “liberals” could succeed. They felt discriminated against. So the Orbán government decided to help them along and began actively promoting their careers. The idea in the heads of the Orbán coterie is something like this: “you liberals were on top before, now our time has arrived.” In fact, Századvég’s analysts didn’t see anything wrong with this idea of “breaking the monopoly of the left-wing [literary] canon” and replacing it with a canon that draws its inspiration from the national-Christian idea. One of the vehicles of that change of elites is the Magyar Művészeti Akadémia (MMA/Hungarian Academy of Arts), which is a gathering place of conservative, nationalist literary historians, artists, architects, and musicians. The Írószövetség (Writers’ Union) is today also an organization in which only right-wing writers can be found because the liberals walked out some time ago. By now there is an unbridgeable gulf between the two groups. Századvég was worried that such a division would spread and might also infect university communities, and therefore it criticized the policy pursued by the Orbán government on cultural matters.

I agree with the editors of vs.hu that it is an odd feeling to read comments coming from ardent supporters of Fidesz and the Orbán government that are very similar to the criticisms the liberal media and political critics of the present regime have voiced for years. One’s first reaction is that these comments are in effect an affirmation of the opposition’s view of the nature and performance of this government. The second is: How on earth can this incompetent bunch of people still be in power? I will tackle that problem tomorrow.

April 15, 2016

The Századvég saga: Largely useless studies commissioned by the Orbán government

In the last three or four days the Hungarian media has been fixated on the “Századvég saga.” Századvég in Hungarian means fin de siècle. It began as a periodical published by the members of a youth organization that later became known as Fidesz. Their first publication appeared in 1985. Among the editors of the early issues were such eventual Fidesz luminaries as László Kövér, Viktor Orbán, Tünde Handó, József Szájer, and Tamás Fellegi. Later came the Századvég Foundation, the Századvég Politikai Iskola, the Századvég Gazdaságkutató Zrt, and the Strategopolis Kft. In brief, over the last thirty years the modest student periodical morphed into a multi-billion forint business venture with a political mission. I think it is not an exaggeration to say that Századvég is Fidesz’s exclusive research institute, with a perhaps more sinister role.

Tamás Mellár, an economist who for a while was considered to be close to Fidesz and who was one of the founders of Századvég Gazdaságkutató Zrt., called Századvég nothing more than “a money laundering device.” Business is especially brisk when Fidesz is in power. A tremendous amount of public money ends up in the hands of the Századvég leadership. Where some of this money ultimately finds a home we don’t know for sure, but many people are convinced that a large percentage of the profit, which is substantial, ends up in the coffers of Viktor Orbán’s party.

Here is the Századvég saga in a nutshell. In December 2011 Századvég Politikai Iskola, Századvég Gazdaságkutató Zrt, and Strategopolis Kft. jointly won a tender to provide political advice, to the tune of 1.4 billion forints, for the next two years. In February 2012 another contract was signed that more than doubled the original amount. A few months later yet another contract raised the amount again, until for two years of political advice Századvég received altogether 4.1 billion forints.

Shortly after the contracts between the prime minister’s office and Századvég were signed, Hajnalka Joó, then a journalist with Origo who is by now at vs.hu, sued the prime minister’s office because of its refusal to release documents relating to these contracts. It has taken almost three years, but finally the Kúria, which is the country’s highest court, ruled that there are no legal ways to avoid the release of the documents. In February the prime minister’s office most reluctantly agreed.

Hajnalka Joó received 77,000 pages of documents on 7 pen drives. Either Századvég or the ministry made sure that the studies looked substantial. They used 36-point type instead of the normal 12. Of the 77,000 pages only about 18,000 pages are of any use whatsoever. The rest are “raw data,” which pollsters use to arrive at their results. As vs.hu explained, what researchers at Századvég did was akin to a journalist including his notes in his final article. Again, either the ministry or Századvég made sure that the journalists at vs.hu would have a very hard time with this enormous amount of material. The original documents were written in Word, which they converted to .pdf format in such a way that they were not searchable, not printable, and undated.

Source: Budapest Beacon

Source: Budapest Beacon

Vs.hu’s second article on the subject gives a few examples of Századvég’s so-called research. They asked people whether they frequent a farmers’ market and whether they enjoy its atmosphere. They also asked the same people for their party sympathies. Then they came up with the following nonsense: if someone frequents farmers’ markets and enjoys them, he is most likely an MSZP voter. If not, he might be an LMP voter or sympathize with KDNP. How did they come up with these results? By combining the results of two different series of questions. Vs.hu naturally consulted bona fide pollsters, who explained that this method is called “all by all” comparisons, which takes no work because a so-called SPSS predictive analytics program unearths the patterns.

Naturally, not all of the material submitted is of such low quality. According to experts, about 25% of the material contains useful information. Moreover, from the opinion polls ordered by the government we can now gauge what information the Orbán administration found politically important. They inquired whether people would be willing to give up, completely or in part, free hospital care or their pension in exchange for lower social security contributions. The answer was a resounding “no.” Or, the government wanted to know whether people would be willing to pay higher taxes to ensure the continuation of good service in healthcare, education, cultural activities, and in local government offices. Almost 60% of the people said “no” to healthcare and education and almost 66% were not interested in culture. Well, with these kinds of answers it’s no wonder that the Orbán government is not pouring money into healthcare and education.

From one of the sets of polling data we learn that, despite protestations to the contrary, the government was thinking of setting up state liquor stores similar to the National Tobacco Shops. Sixty percent of those polled were against them. Interestingly enough, the majority of Hungarians, including Fidesz sympathizers (again 60%), wanted Róbert Alföldi to remain the director of the National Theater, but Orbán decided otherwise–a move that created an uproar. It is also somewhat heartwarming that 86% of the people considered political sympathies irrelevant to the value of an artist. Seventy-four percent of the people considered the establishment of highly regulated tobacco shops useless as a deterrent to young people smoking. The government disregarded their opinion. The Orbán government also got a message from the electorate on building stadiums: 56% were totally or somewhat against building all those football stadiums while only 18% supported the project wholeheartedly. Well, that didn’t make a dent with Orbán.

It is clear from the documents that the government learned a great deal about the people Századvég interviewed: age, sex, profession, income, and political sympathies–information it could use to target different groups of people in its political campaigns. That the government, on taxpayer money, underwrote these studies in some instances blurred what should be a boundary between a political party (here, the government party) and the government itself. In fact, just yesterday DK announced that it is suing the Orbán government because, according to its estimate, the government used 1.4 billion forints of public funds for political advertising over the course of two campaigns, touting the accomplishments of the Fidesz government.

April 12, 2016

The polling game: think tanks in the service of the Hungarian government

A few days ago Index received secret polling data that the Orbán government had ordered from Nézőpont Intézet, one of the two “think tanks” it relies on for information. (The other one is Századvég.) Since it was only yesterday that we talked about Fidesz’s heavy reliance on public opinion polls as a basis for policy decisions, the responsibility of these think tanks is enormous. Their results can make or break the government. If studies are improperly framed or if wrong conclusions are drawn, the government in its currently fragile state could make unpopular decisions and become dangerously vulnerable.

It is for this reason that many of us have wondered in the past about the efficacy of polls produced by Nézőpont and Századvég, whose results, in comparison to the other four or five pollsters, are always way off. Well, now that Nézőpont’s poll on the public’s reaction to amendments to the constitution and the Orbán government’s educational policies is no longer a secret, we understand how the commissioned polling game is played. The modus operandi of at least some of the hundreds of analysts who work at these two institutions can be compared to that of tax evaders who keep two sets of books. They prepare one study for the government that reflects the real state of affairs. Part of that study is then adjusted to take into account political expediencies and released to the unsuspecting public.

A perfect example of this kind of dirty game is the February study ordered from Nézőpont. The Fidesz government wanted to know what the public thought about the two important questions I mentioned above: educational policies and amendments to the constitution in the event of a threat of terrorism. Of course, that information was not shared with the public. Only from a poll by Medián did the public learn that 71% of the population consider the teachers’ demands justified. With a different set of questions Nézőpont arrived at similar results, which indicated that only 33% of the population think that the “educational reforms” have achieved “positive results.” With the exception of introducing daily gym, Hungarians think that the teachers’ dissatisfaction is legitimate and their demands reasonable.

think tank

How much did the public learn about the results of this wide-ranging poll conducted by Nezőpont? Not much. On February 24 Nézőpont released its findings with this headline: “Fidesz-KDNP is securely in the lead: The opposition parties haven’t profited from the teachers’ demonstration.” Századvég came out with the same results. Nothing has changed. It doesn’t matter what has happened in the last few months, Fidesz’s popularity is still soaring.

Other, well-respected pollsters came to different conclusions. Medián’s results were the most dramatic: they measured a 6% drop in support of Fidesz among active voters. Even more importantly, opposition parties gained voters. Publicus Intézet also came to the same conclusion. Fidesz gained considerably before December 2015 but since then has been steadily losing voters. According to their calculations, only 23% of the total population would vote for Fidesz today.

This downward slide is almost inevitable in light of public opinion on education. It is doubly so when we learn from this secret poll that Hungarians were not fooled by the Orbán rhetoric of a terrorist threat. Only 17% of them fully agree that amendments to the constitution are necessary. All in all, the population is divided on the issue. Slightly more (44%) oppose the amendments than support them (42%). Given this split, the decision was made to drop the idea.

But now that Orbán “adopted Brussels’ terror threat,” he decided to try to push through his proposed legislation. The rationale is that “thanks” to the terrorist attacks in Belgium, those who were opposed to the amendments back in February might have changed their minds. It is very possible that Nézőpont is already busily compiling its latest poll to guide the government’s strategy. We don’t know whether public opinion has changed on the subject since the events in Brussels, but the opposition leaders haven’t wavered. They are still united on the issue: no opposition party can ever vote for amendments that will result in what amounts to martial law.

Finally, here is a good example of how government client polling firms try to influence public opinion. We know from two very different sources (Nézőpont and Medián) that Hungarian public opinion is solidly behind the teachers. Yet Századvég about a week ago came out with its findings, which was summarized in the headline as “The majority of Hungarians don’t support the demonstration of the teachers.” Do they cheat outright or do they formulate their questions in such a way as to achieve certain desired results? The answer is most likely the latter.

So, let’s see how these pollsters go about their “task.” Századvég wanted to know what Hungarians think of the quality of education and came to the conclusion that “the Hungarian adult population is divided” on the issue. Forty-one percent think that it is “közepes,” a grade of C, and only 34% would give it an F, while 23% percent think that it is good (B) or excellent (A). Even Századvég felt that it had to say that “the majority thinks that there is plenty to change in the system.” But, according to Századvég, the overwhelming majority of the population “disapproves of the methods by which [the teachers] want to push through these changes.”

It is at this point that Századvég’s analysis becomes murky. It looks as if Századvég researchers reached the above conclusion based on answers to a question concerning the participants’ approval or disapproval of the decision of some parents to keep their children home as a sign of support for the teachers. This seems to me to be intentionally misleading because this particular issue was quite controversial at the time. A lot of people, although they wholeheartedly support the teachers’ demands, were against or ambivalent about involving students, especially small children, in the struggle of the teachers. A negative answer to this one question cannot be generalized to an overall disapproval of the “methods” the teachers employ.

Another misleading question dealt with the negotiations. As Századvég put it: “The percentage of those (78%) who think that results can be obtained only at the negotiating table and not on the streets greatly outweighed the 21% who believe that only demonstrations and ultimatums can achieve results.” The false dichotomy here is, I think, obvious at first glance. Everybody knows, including the teachers, that results can be achieved only at the bargaining table, but it is also clear that without pressure the government will either not negotiate or, if it does, it will do so on its own terms.

These kinds of misleading questions and conclusions are the daily fare of these polling clients of the Orbán government. This is especially so when they add that “these results tally with what László Palkovics and János Lázár said: that difficult technical questions cannot be discussed on the streets.” The conclusion? The government’s position perfectly reflects public opinion. Perfect harmony exists between the government and the governed. That’s why “think tanks” like Nézőpont and Századvég are at their core propaganda instruments of the Orbán government. Moreover, both are described as money laundering vehicles into which billions are poured from taxpayer money.

March 27, 2016

It’s not corruption. It’s national interest

“Political thinkers” are a dangerous lot at times. There was Gábor G. Fodor, the modern-day Macchiavelli of the Századvég Institute, who almost a year ago described Viktor Orbán’s political career as nothing more than a series of manipulative moves devised to improve his standing in the polls. No grand ideas, only mendacious slogans that his stupid followers believe. Here, in politico-speak, is what G. Fodor said: “There are many among the right-wing intelligentsia who have the mistaken notion that the concept of ‘polgári Magyarország’ [a democratic Hungary based on middle-class values] was a political reality, but it was no more than a political product.”

A few days ago another “political thinker,” András Lánczi, uttered a few revealing sentences about Fidesz and corruption.

I’m always surprised when I read the biographies of certain high-placed Hungarians whose road to their present position has taken interesting turns. Here is Lánczi, for example, who majored in English and history and taught high school for five years. Then for five years he was the editor of a philosophical journal called Világosság (Light). With this background he was invited to teach in the newly established political science department of Corvinus University. While teaching full time he received the Soviet-style degree of “kandidátus” in two years (1993), which was then converted into a Ph.D. in 2002. At that point his career took off. Today he is described as a “conservative” philosopher, political scientist, director of the Political Science Institute at Corvinus, chairman of the Századvég Foundation, chairman of the board of the pro-government Nézőpont Institute Foundation, and adviser to the XXI Century Institute, another Fidesz creation. His son Tamás, also a political scientist, is a fervent Fidesz supporter who lately has even been involved in the business activities of Arthur Finkelstein and Árpád Habony.

András Lánczi agreed to give an interview to Magyar Idők which, presumably because of the holiday season, did not make a big splash despite its, to me shocking, message. I guess other interviews, like those of László Kövér, János Lázár, and Ákos, were juicier and thus received greater coverage. Lánczi’s interview elicited only a handful of comments, although what he is talking about is of the utmost importance. Among other things, corruption. Or rather, the lack thereof.

The interview is quite long and most of it is a defense of Századvég, which has been attacked as a money laundering arm of Fidesz. As things stand now, there is a valid court order that obliges the government to make public the studies that Századvég prepared under government contract. Naturally, Lánczi insists that the billions and billions of forints the government has been paying to the think tank have been earned honestly. As for the Századvég Foundation’s possible involvement in the bribery charges filed by Bunge, the American firm that produces Vénusz cooking oil, he denied any such involvement. Századvég is a respectable institution whose roots go back to the late 1980s when László Kövér, Viktor Orbán, and István Stumpf launched a periodical and later a foundation under that name.

There is nothing new in these denials, and naturally for the time being we will know the veracity of neither the allegations nor their denial. When the conversation turned to corruption, however, this rather dull interview became charged. Given the importance of the following passages, a verbatim translation is in order.

Magyar Idők: Talking about the elections. It is already clear that the opposition’s main point of attack will be the alleged corruption. How can it handle that?

András Lánczi: Was the communist nationalization after 1948 or the privatization of the regime change after 1989 corruption? What is called corruption is in effect Fidesz’s most important political aim. What I mean is that the government set such goals as the formation of a class of domestic entrepreneurs, the pillars of a strong Hungary both in agriculture and in industry. … That is what people call corruption, which is a political point of view. The word “corruption” becomes something mythical.

Magyar Idők: Is this some kind of broadening of the term?

András Lánczi: Yes, just like the word “left-liberal” in the usage of the radical right opposition. There are thirteen or fourteen sociological meanings of corruption, but among them we cannot find one that says that if we do this or that in the national interest it is corruption. One can call it that, but that is deception. One doesn’t like to assist one’s adversaries, especially not one’s enemies, so I will not tell them that they are in the wrong. That’s why the expression “mafia state” is a mistake. What does one think when one hears the word “mafia”? The physical destruction of one’s adversaries. Who was killed here, I would like to know?

Lánczi’s very first sentence is shocking enough. Does he truly believe that the brutal nationalization by the Stalinist Rákosi regime was in the national interest and therefore justifiable? Well, we might not call it corruption, but surely we can call it robbery plain and simple. The Hungarian Nazis might have thought that the dispossession of Jewish Hungarians was in the national interest, but did this belief make it right? As for the privatizations of the 1989-1990 period, they cannot in any shape or form be compared to what happened either in 1944 or in 1948. Yes, some people with government connections received state properties for very little money, but some of these properties turned out to be worthless. I remember seeing a very fancy government publication describing some of the left-over properties the government was desperate to get rid of. They were run-down, hopelessly antiquated small factories whose worth converged on zero.

thief

Well, if Lánczi insists, we can call what is going on in Hungary today “robbery” if he thinks that it is a more appropriate term than “corruption.” If I were Lánczi and his boss, I would prefer “corruption.” After all, corruption is considered to be a white-collar crime as opposed to “robbery,” which is normally committed by common thieves.

In fact, however, what we are talking about here is more than “corruption,” even more than common “thievery.” It is a political-economic strategy that the opposition will have to attack head on because it has led to a regime that has practically nothing to do with the third republic established on October 23, 1989.

Hungarian prosecutors found the lone culprit in the corruption scandal

Between October 17  and November 13, 2014 I wrote four posts on the corruption scandal that beset U.S.-Hungarian relations and contributed to the loss of popularity of Fidesz and the Orbán government a year ago.

It all started with an article that appeared in Napi Gazdaság, precursor of today’s Magyar Idők, then owned by the Századvég Economic Research Group headed by the economist-businessman Péter Heim. The article accused several American companies of tax evasion and fraud and indicated that an investigation into these companies by the National Tax and Customs Office (NAV) was underway. It turned out later that the information, wherever it came from, was wrong. If anything, the opposite was true. American companies found widespread VAT fraud in the food processing industry, where the VAT is exceedingly high (27%). They were the ones who complained in vain at NAV and other government agencies. The Hungarian government did nothing. The complaints of American businessmen eventually reached the U.S. government, which decided to invoke Proclamation 7750, an executive order signed by George W. Bush in 2004 that gives the State Department power to ban corrupt individuals and their families from entering the United States. The U.S. normally keeps such action quiet, but as a result of either Napi Gazdaság‘s or the Hungarian government’s misjudgment of the situation, the decision was made to reveal that six Hungarian citizens had been banned.

Soon enough it became known that Ildikó Vida, head of NAV, was on the list. We also learned that an unnamed businessman, who in total panic ran to ATV to tell his sad story, was among the six. Vida admitted that some of her high-ranking colleagues at NAV were also on the list. Another man whose name was often heard in connection with the infamous list was Péter Heim, owner of Századvég Economic Research. This suspicion found some support when, a month after the the scandal broke, Heim sold his shares in Századvég. My opinion at the time was that, in addition to Vida and the unnamed businessman, two officials of NAV (both women) and Péter Heim were most likely on the list.

The Hungarian government insisted that they could not investigate the cases of these people because the U.S. government refused to release the names of those on the list. Of course, as we learned from some cabinet members, the upper echelon of the Fidesz team knew full well who had been banned.

It turns out that, after all, an investigation of the case began immediately after the scandal broke. And now, after a whole year, the prosecutor’s office of the capital district announced their findings. They didn’t reveal the suspect’s name but gave enough information about him that in no time everybody knew that the man is Viktor Tábor, a successful businessman, the sole proprietor of Advanced Network Technologies (ANT) whose yearly revenue is over a billion forints. ANT has an excellent reputation with a well-known and well-respected clientele. Tábor is being indicted for committing bribery while pretending to have influence over a certain person. And who is this person? Péter Heim, head of Századvég.

According to the story of the prosecutor’s office, Bunge, an American company that produces cooking oil under the name Vénusz, hired a lobbyist to convince the Hungarian government to lower the VAT on cooking oil and other basic foodstuffs from 27% to 5%. The lobbyist turned to Viktor Tábor, whom he knew had many friends in government circles. Tábor informed the lobbyist within a few days that he had approached Péter Heim, head of Századvég. Heim, he said, would be able to help if Bunge deposited two billion forints into the bank account of the Századvég Foundation. (A former employee of Századvég, the well-respected professor of economics Tamás Mellár, described Századvég as a “money laundering operation.”) However, after an investigation that the prosecutor’s office called very thorough, it was determined that Péter Heim didn’t know Tábor and therefore had no role to play in the corruption scandal. The only suspect is thus Viktor Tábor.

Péter Heim of Századvég

Péter Heim of Századvég

444.hu and other media outlets expressed doubts about the accuracy of the prosecutor’s office’s version of the story. They called attention to the fact that Napi Gazdaság, owned by Századvég, was the newspaper that tried to divert attention away any Hungarian involvement in the case by accusing the American companies of wrongdoing. They also found it suspicious that Heim sold his shares in the company within a month after the outbreak of the scandal. And third, they noted that Tábor said he was asked to deposit the money into the Századvég Foundation bank account, not into his own.

Doubts about the veracity of this official story were further heightened by a telephone interview conducted by Antónia Mészáros of ATV with Péter Heim. 444.hu‘s headline read: “Nobody spoke less convincingly about the expulsion case than that.” Heim kept repeating in answer to every question that “he doesn’t pay any attention to such matters.” He knows that he is innocent, and since he didn’t want to travel to the United States, he never inquired from the American Embassy whether he is on the list. He doesn’t know anything about the ban or any corruption cases. Although he is still the CEO of Századvég, he is not involved in the day-to-day running of the business. He has no idea whether lobbyists approach Századvég or not, and he has no idea why his name popped into Tábor’s head in connection with Bunge’s efforts to reduce the VAT on its products.

The most interesting development in the case is an interview with the so-called lobbyist hired by Bunge. His name is Tamás Torba, and he is an economist who has in the past written articles on economic matters for Magyar Nemzet. So, it was not surprising that Torba approached the paper for an interview in connection with the case.

First, Torba was not employed as a lobbyist. He has been a business partner of Bunge ever since 2012. His job was to try to use communication tools against the widespread fraud in the industry. In early 2013 the Orbán government kept signing “strategic partnership” contracts with different companies, and the idea came up within Bunge’s management that perhaps it might not be a bad idea to see whether such a partnership agreement might help their disadvantaged position vis-à-vis those who cheat on VAT and are therefore able to sell their products cheaper. It was at that time that Torba turned to Tábor, an acquaintance of his. Tábor didn’t think that the government wanted to sign a partnership agreement with Bunge, but perhaps they would be able to achieve a reduction in VAT. The price was 2 billion forints. Bunge immediately distanced itself from such an illegal practice. Instead, Bunge developed its own strategy that involved getting together with all the domestic producers of basic foodstuffs to attack the problem. Torba became the spokesman of this organization.

Torba also talked to important people in NAV about the problem at the request of the American Embassy in Budapest. The diplomats were trying to penetrate the wall of silence in NAV, and they hoped that perhaps Torba could do something. The message Torba delivered was that the U.S. would lend all possible help, including financial and technical, to combat VAT fraud. However, if NAV continues stonewalling, they are ready to use sanctions against those persons they consider culpable.

The prosecutors have made it clear that Ildikó Vida is not a suspect. As they put it, “she is not involved in this case,” which of course doesn’t preclude the possibility that she is involved in some other case. But then, why is she on that infamous list, the reporters asked. The only answer the prosecutor in charge of the case could give was that perhaps the “Americans supposed that no investigation was taking place” and that was the reason Ildikó Vida’s name appeared on the list “when in fact behind the scenes an investigation had been going on ever since the winter of 2013.”

I have my grave doubts about the prosecution’s version of events. I can’t believe that the United States on such flimsy evidence would invoke Proclamation 7750 against these six people. I have the feeling that this will not be the end of the story.

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Further readings from Hungarian Spectrum:

(1) “Ten Hungarian businessmen and government officials can never enter the United States”

(2) “American-Hungarian relations are crumbling”

(3) “No end to the saga of the Hungarian corruption scandal”

(4) “The tax chief Ilidkó Vida versus the Hungarian government: Who is lying? Most likely both”