The tobacco concessions and their aftermath: Further restrictions on transparency

The tobacco concessions scandal is growing. By now there is even a Google Earth map of the country with a guide to all those places where Fidesz politicians, their close relatives, or known sympathizers received permission to open tobacconist shops. That there were political grounds for these awards is not speculation. János Lázár and Antal Rogán explained to the local Fidesz politicians on what basis the concessions should be awarded. Apparently, anyone with either MSZP or Jobbik ties was out of luck.

When the government first announced the so-called competition for concessions, applicants had to draw up their business plans assuming a 4-5% profit margin. Not exactly a potential goldmine. Yet there were a great number of people who seemed to be interested in this business opportunity. Among them were several who applied for concessions for several stores. The suspicion is that the insiders most likely knew that the government would do something to sweeten the deal. And indeed, after the winners were announced an amendment was tacked on to the bill that suggests a profit margin of at least 10%. A day later Viktor Orbán talked about the desirability of a 12% profit margin. If the amendment is approved, the price of cigarettes will go up.

In one of my earlier posts I mentioned that between the two world wars these concessions were normally given to war widows. This was also the case after World War II. Naturally, even then one had to have “connections” in higher places. Endre Aczél, one of the best journalists of the older generation, recalls that his mother was lucky to be granted one of these concessions in 1948 but only because she was the childhood friend of Júlia Földi, better known as Mrs. László Rajk. As we know, Rajk, after being accused of all sorts of treasonous activities, was executed on October 15, 1949. In 1950 someone discovered that a Rajk-protege still had a tobacconist shop, and she was summarily booted out. But at least, as Aczél says in the article, his mother was a war widow. Fidesz rulers don’t even worry about the stated aims of the legislation. They feel they can do anything. And they are right. They can.

However, now that everybody is up in arms and the media will undoubtedly demand information on the details of the concessions, the government decided in a great hurry to amend a law on data privacy. Here is a quick report from Budapest:

The amendment prevents the FOA (Freedom of Information Act Provisions on Data Privacy) from applying to material that is reviewed by the state audit office and the government accountability office.  The reasoning behind the law is that government agencies are already overburdened and fulfilling data requests would be too strenuous. The amendment also states that if another law already regulates the right to information and to accessing, reviewing or copying the documents then the data privacy law does not apply. [The law seems to] exempt some requests from judicial review by the courts.  Furthermore, the law requests that entities that use public money to provide information to the public. However, the amendment now requires that people turn to the body with legal oversight over the entity with complaints if a data request is rejected. The problem here is that in some cases the legal oversight is practiced by courts specializing in business litigation, which are not equipped to judge matters pertaining to FOA.

http://www.freedominfo.org

For one reason or another this tobacco concession business must be very important to Fidesz and Viktor Orbán himself. But I wonder whether the party and the government might be paying too high a political price for material gain. The number of smokers in Hungary is among the highest in Europe. The statistics I checked mentioned 38% in the population as a whole. That is being translated by others as close to 50% of the adult population. The sharply reduced opportunities to buy cigarettes will inconvenience this large group of people who might not care much about democracy and the constitution but will be mighty upset when in the middle of the night they will not be able to buy a pack of cigarettes at the next gas station. And what about those 1,400 small hamlets where most likely there will be no permanent tobacconist shop? And let’s say that the price of cigarettes also goes up as a result of making the sale of tobacco products a state monopoly. All in all, I suspect that Fidesz will lose voters as a result of this move.

Although the Hungarian government inquired in Brussels about the reaction of the European Union to the concession scheme, I consider it possible that, after seeing that currently functioning tobacconists are being deprived of their livelihood, the lawyers of the Union might not find the concession scheme as innocent as it looked a couple of years ago.

It is also possible that the way Fidesz as a party got involved with awarding the concessions might be unconstitutional. I wouldn’t be at all surprised if Máté Szabó, the ombudsman, turned to the Constitutional Court.

In addition, there are signs of possible cracks in Fidesz’s armor. At least one rebel raised his naive voice about the state of the party. He even went so far as to question the benefits of unlimited power. We will see what happens to the good veterinarian who is worried about his party. In the past he would have been dropped immediately, but today he may be left alone. Perhaps Viktor Orbán will decide that chastising him would only add oil to the fire.