Corruption and conflict of interest in Hungarian politics

Although Medián came out with a new poll on voters’ party preferences, it tells us practically nothing new. Fidesz is still leading and the united opposition has no more support than before even though a majority of people would like a change of government.

So let’s move on to two embarrassing cases, both involving leading MSZP politicians. The first is the easier to deal with. Gábor Simon, one of the deputy chairmen of the party, is accused of having two bank accounts, totaling €700,000, in an Austrian bank which he didn’t reveal in his financial statement. At the time Simon deposited the money he told the bank officials that the money was acquired by selling a piece of real estate and a firm he owned. The problem is that Simon didn’t own or sell any real estate or a company.

It was only on Monday that Magyar Nemzet published this explosive story, the timing of which was most unfortunate for MSZP. Attila Mesterházy, József Tóbiás, and Csaba Horváth are currently in the United States, but word already reached Budapest that Simon must give up all his important positions within the party. Simon, realizing his untenable position, “suspended his party membership.” A few days ago he was still a candidate in electoral district XIII, but according to rumors Ágnes Kunhalmi will run there in his stead.

Up to this point one could say that Simon was a bad apple and MSZP an innocent victim, but the situation is a bit more complicated. The prosecutor’s office has been investigating Gábor Simon in another case ever since last March. This particular case involved little money, only 300,000 forints. But his immunity was suspended despite MSZP’s protestations in committee. Although the two cases are not connected, the MSZP leadership should have been more cautious early on and not just say that it was a baseless accusation against one of the leading politicians of MSZP.

Apparently Simon’s downfall was caused by his wife, whom he divorced recently. (One has to be careful with estranged wives. Just think of the former wife of Attila Szász, Aranka, who spilled the beans about Viktor Orbán’s questionable business deals in Tokaj.)

The second case is a great deal more complicated. It involves István Józsa, an important MSZP politician who is the energy expert of the party. The background is as follows. Fidesz desperately wants to prove that MSZP always wanted to build one or two more reactors in Paks and that they also wanted to use Rosatom and Russian technology. This is what, they contend, Gyurcsány, Bajnai, and Mesterházy said before 2010, but now that the Orbán government made this fabulous deal with the Russians they are suddenly against it. Yesterday Fidesz came out with another “discovery.” István Józsa, who had a 42% share in a company called Gépkar Kft., received 6.6 billion forints worth of orders from Paks between 2000 and 2010. The Fidesz politician György Balla charged that Józsa’s opinions on Paks changed with his financial interests. Before 2010 he was for building the new reactors but now he is against it.

Józsa, who gave an interview to Hír24 on the fly in one of the many corridors of the parliament building, sees nothing wrong with his company getting work from the state-owned Paks nuclear plant. He pointed out that in 2002 when he became a member of parliament he withdrew from the actual management of the company. The company got the bulk of its orders from Paks between 2000 and 2002 when Fidesz was in power. Moreover, the sum of 6.6 billion forints in ten years may sound like a lot of money but anyone who is familiar with this industry knows that it is not considered to be a large amount. In 2010 they sold the company because they no longer got any orders. Zsolt Nyerges, a close business partner of Lajos Simicska, made their situation untenable. The man who bought the company eventually went bankrupt; under the circumstances the business was no longer viable.

ethics

The reporter inquired from Józsa several times whether selling his stake in the company wouldn’t have been more appropriate once he became an MP, but the politician indignantly refused the suggestion. He is upright man; he had nothing to hide; he didn’t do anything illegal; the company received work from Paks through competitive bidding. He doesn’t understand what’s wrong. I fear Józsa is not the only one who seems to be unable to grasp the inappropriateness of such arrangements.

On this score one could congratulate the Orbán government’s decision to forbid outside business or professional activities for members of parliament. However, as we know, in the political structure Viktor Orbán set up members of parliament are not the ones who truly matter. Fidesz MPs currently function as puppets or robots and most likely will do so in the future as well. The money and power are elsewhere, in the financial and economic circle of oligarchs around Viktor Orbán. They are the ones who matter.

Tomorrow I will investigate a case involving close friends of the prime minister in one of the shadiest business dealings of late.

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52 comments

  1. By the way the interest rate is so extremely secret that it was announced a few hours ago. According to index.hu The interest rate starts at 4% and then it goes up over the years first to 4.5 and then finally to 4.9% over the whole duration of the deal.

    The first loan repayment has to be made in 2025 and the final payment in 2046.

    So by these dates, essentially the Russians build the plant and ask for their loan back only after the plant is already operating. It would be interesting to know if the dates are fixed, or tied into the completion of the plan. In other words if there is a mistake in the dates and construction is only finished in 2030 as it often happens in projects, who takes on that risk?

    http://index.hu/gazdasag/2014/02/05/megallapodtunk_paks_penzugyi_reszleteirol/

  2. To corruption and conflict of interest
    MSZP must clarify both cases mentioned by Eva S. Balogh. I am confident that they will do this (after having already started it, and this time nearly fast enough). Even with risking the resurrection of the “öszöd-effect” – because they could have come out from the trouble much better even then: with more glasnost, faster reactions and accepting all political and personal consequences. They could do it now, provided that they do understand the real problem.
    Because – and I have to admit this bitterly – István Józsa does definitely not (maybe not only him?), and this is bad! Very bad! It is high time to realize for everyone in Hungary, that being a politician must go together with accepting the basic rule: you have to be trustworthy and behave yourself honorable even then, when you think that no one is looking: namely in the loneliness of a (nuclear) men’s room!
    I am sorry for not having found the English translation of the poem of Mihály Váci (“Nem elég jóra vágyni: a jót akarni kell! És nem elég akarni: de tenni, tenni kell!), but I am aware of the Sisyphean task of braking through all kind of walls. Please find attached the link to my attempt: https://www.youtube.com/watch?v=3jfOpNP-Frs

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