Ten Hungarian businessmen and government officials can never enter the United States

A bombshell: the U.S. government placed ten Hungarian businessmen and government officials on a blacklist of sorts. They are barred from ever entering the United States. The businessmen in question are known to belong to a small circle of people very close to Fidesz. As for the government officials, they are apparently employees of the Hungarian equivalent of the Internal Revenue Service.

As of now there are two narratives of the event circulating in the Hungarian media. One is the government version, leaked to Napi Gazdaság, a financial paper recently purchased by Századvég, a Fidesz think tank. The other comes from the U.S. Embassy in Budapest.

Let’s start with the government version of the story. The Hungarian internal revenue service became suspicious of some American firms doing business in Hungary and launched investigations into their  finances and tax returns. The U.S. government decided to retaliate by barring several Hungarians from ever entering the United States. Behind this “diplomatic duel” are the recent critical statements of former President Bill Clinton and President Barack Obama with regard to the Hungarian government’s attacks on NGOs. The two American Democratic leaders were especially upset over the fate of the Ökotárs Foundation, the distributor of the Norwegian Civic Funds, whose tax number was recently suspended. Why this particular concern? Because, the article contends, the Norwegians are also generous contributors to the Clinton Global Initiative.

At the end of the article Napi Gazdaság casually mentions that because of the link between the American Democratic Party and the Norwegian government, the Ökotárs Foundation “will not go against the interests of the Democratic Party.” So, the Hungarian government’s investigation of Ökotárs will actually have a beneficial effect. It may “place Hungary’s reputation on neutral ground in the political warfare between Democrats and Republicans.” Here Századvég is speaking, the think tank that owns Napi Gazdaság. Századvég just received a huge contract from the Orbán government to engage in public relations/propaganda in Washington over the next few years. But there might be a bit of a problem here; as we will see later, its CEO is barred from entering the U.S., which might crimp its effectiveness.

Napi Gazdaság contacted the U.S. Embassy, where they were told that they know nothing about any investigation of American firms and that the decision of the U.S. government to bar some individuals from entering the United States has nothing to do with alleged probes by the Hungarian internal revenue service. However, they have good reason to believe that the people on the black list were engaged in criminal activities. They tried either to force American firms to give them kickbacks or to extort special favors from them. They cannot release the names because of American laws prohibiting it.

It didn’t take long for one of the people involved to arrive at the doorstep of ATV and to offer some details about the case. According to him, he and nine others were asked to visit the U.S. Embassy where they were administered the bitter pill. ATV was not allowed to reveal the name of the informer, but the article described him as “an especially important partner of the Hungarian government who currently is participating in several important projects. In the last few years his name appeared frequently in the Hungarian media…. He considers himself a businessmen who is very close to Fidesz.” There is a sentence in this report that strongly suggests that our mystery businessman is not entirely innocent. After all, he found “the measure disproportionate, which further damages American-Hungarian relations.” So he did something illegal, but he thinks that the punishment is too harsh.

corruption4

Both the Fidesz parliamentary delegation and the Ministry of Foreign Affairs and Trade reacted promptly to the news. Fidesz sticks to the story leaked to Napi Gazdaság. The United States government is putting pressure on Hungary because they want to avoid the investigation of certain American firms by the tax office. M. André Goodfriend, the U.S. chargé d’affaires, was called into the ministry, but before his appearance Judit Fülöp, the ministry spokeswoman, gave a short press conference. She stressed the Hungarian government’s zero tolerance toward corruption. She announced that they  are ready to investigate the cases but are waiting for documentation from the American Embassy.

Meanwhile investigative journalists were hard at work. From unofficial sources 444 learned that in the last year and a half there were several instances where government officials and businessmen closely associated with the government party approached American firms for kickbacks. In one case a large American firm applied for an EU grant. At first the government turned them down, but in the second round the management was told that they would receive the money but only if they hire a certain consulting firm that would perform no work at all.

A few hours later some names also appeared. Among them is Péter Heim, CEO of Századvég, the think tank that was launched by Fidesz in its infancy and that is now tasked with improving Hungary’s image in Washington. The news about the Hungarian internal revenue service seems to have been on target. Ildikó Vida, the head of the office, is on the list. Vida is one of the original founders of Fidesz. She is the same age as Viktor Orbán and was a fellow student in the college where the party was born. This is not the first time that she is in charge of the tax office. She held the same position during the first Orbán administration between 1999 and 2002. One must keep in mind that the Orbán government uses the internal revenue service as a political club. Index reported that in addition to Vida two other employees of the tax office are also involved. And then there is Árpád Habony, the eminence grise of Fidesz. He has no official position, but  he is perhaps one of the most important men behind Viktor Orbán. I devoted a whole post to him a while back. Rumors about his shady financial affairs have been circulating for some time. His source of income is shrouded in mystery. According to the latest information, Habony denies being on the list and is planning to visit the United States shortly.

On the surface the affair is solely about corruption, but the American reaction to these cases is politically charged. One has to assume that in countries with rampant corruption such as Hungary the U.S. Embassy receives reports of bribery attempts often enough. There are several ways of dealing with such cases. For instance, one can pay a visit to the country’s foreign ministry and report that such behavior is unacceptable. At the same time the American official can express his hope that in the future there will be no discriminatory measures against American firms and that extortionist activities will stop. But in this case the United States government came out with the big gun. The Americans in Budapest must have known for years about the high level of corruption in government and its satellite business circles, yet it is only now that they decided to move into high gear. This is, in my opinion, a political message to the Orbán government and part and parcel of a new, more forceful policy being conducted by the U.S. government toward Hungary.

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47 comments

  1. President Clinton’s recent statement on The Daily Show (“Usually those guys just want to stay forever and make money.”) takes on added meaning. No doubt he was referring to corrupt politicians and bureaucrats. Clearly he is well-informed and his comment suggests he was aware of current thinking in the State Department – as you would expect him to be. As you say Eva, the timing is interesting – rather than the awareness of corruption in Hungary – and is clearly part of a well-thought out and considered policy of the US towards Hungary.

  2. “This is, in my opinion, a political message to the Orbán government and part and parcel of a new, more forceful policy being conducted by the U.S. government toward Hungary.”

    But why now? Ukraine?
    Rumours recently have circulated about the regime moving its thugs in against *US financed* NGOs (or one specific NGO)? Perhaps the US Admininistration has just fired a very big shot across the regime’s bows in that regard?

    I have an amusing picture of poodle Szijjaro presently running around like a headless chicken , completely out of his depth about what he should be doing now that he is in the big boys’ league- probably should have grabbed that Nemzeti Dohany Bolt franchise in Kisszentmiklos when he had the chance.

  3. The rampant corruption in circles close to or actually part of the Government has been a constant part of daily life in Hungary, and has gotten far worse and instituionalized in recent years. The seeming indifference of the EU on this matter has been singularly depressing, and the refusal to withhold cohesion funds completely undermining of whatever limited integrity the EU might have otherwise possessed. In this context, the actions by the US Govt is so welcome and surprising. One can only hope more of the details leak out, and the true face of this country is shown to all who care to look.

  4. Really this is evolving into a tragic situation, largely because Fidesz can never admit its officials were involved in systematic shake downs of American firms, and firms from other nations too I suspect. The easy way out would be to turn over on the most corrupt officials and stabilize relations with the United States. But instead we get this fantastic story of the Hungarian internal revenue service investigating US firms for corruption and tax evasion.

    The Russians will love this story and Putin’s arms are open to protect Hungary from the nefarious Americans. There were many ways the Fidesz rulers of Hungary could have dealt with this travel ban against its supporters, but they chose the most aggressive angle possible. The United States is sending every possible type of message to Orban to change course and it is being ignored and refuted.

  5. “Napi Gazdaság contacted the U.S. Embassy, where they were told that they know nothing about any investigation of American firms…”

    What a laughable statement. It is so interesting that nobody questioned the absurdness of this claim. Did Snowden really did not exist? Did he not tell about the US is intercepting every email every phone call? Yet they claim to know nothing. They claim to hear nothing.

    Can anyone take these things seriously? Why wasn’t it enough to say “This case has nothing to do with the investigations of American firms and interests by the tax office”. Why make a claim that is impossible to be true?

    1. There are many US companies in Hungary
    2. There are random tax investigations against them at least a few based on their number and size – big companies are always investigated
    3. It is impossible that the US does not know about these investigations, because it has surveillance on all Hungarians
    4. Even if it didn’t this is probably something the companies report – to the Embassy…

  6. Yesterday I quoted the US law, let me repeat it:

    “Inadmissibility of Foreign Officials and Family Members Involved in Kleptocracy”

    “the Secretary of State shall compile and maintain a list of officials of foreign governments and their immediate family members who the Secretary has credible evidence have been involved in corruption relating to the extraction of natural resources in their countries.”

    So our Hungarian kleptocrats have probably stolen from the citizens of Hungary!

    Mr Peter “Incredulous” Szijjarto should inquire Senators Mikulski & Shelby and Members of Congress Rogers & Lowey about the “credible evidence” in 3 months:

    “Not later than 90 days after enactment of this Act and 180 days thereafter, the Secretary of State shall report in writing, in classified form if necessary, to the Committees on Appropriations describing the evidence of corruption concerning each of the individuals listed”

  7. KTP you write a number of things that are not accurate. 1 The Snowden revelations clearly indicate that my government had the capacity to look at just about anything myself, Eva, or any other US citizen communicates, not that they did or wanted to. In my opinion the Snowden revelations also demonstrate that the National Security Agency exceeded its authority in a number of domestic investigations of US citizens. 2. Your claim that the NSA or CIA has surveillance on “all Hungarians” is to say the least absurd. Do you think they are watching the csikos horsemen who perform at Hortobagy National Park, or the dancers at Budapest clubs, or the Roma of Tatarszentgyorgy? Much of the data Snowden released is now on line please show us any evidence that my government has conducted surveillance on all Hungarians.

    I totally believe my embassy that they had no knowledge of any tax investigations of US firms by the National Tax and Customs Authority (NAV). I also believe that its possible NAV will produce falsified documents of some type showing an investigation, I look forward to reading them. I enjoy good fiction.

  8. Awakenings

    Fidesz foul play has become so flagrant, and gotten away with with such impunity, that I think Orban has the delusion that something like this just can’t happen — and that if it does, he can con and bully his way out of it the way he always does.

    Bravo for President Obama. And let’s hope this at last rouses the EU out of its anosognosia and somnambulance regarding the malignancy festering in the foul depths of its Carpathian basement.

  9. @Istvan

    “…to turn over on the most corrupt officials…”

    What a silly bird you are!
    Who do you think sent them out there?
    Who do you think follows up, personally, if the first
    effort does not work?

  10. Petofi sometimes you have to turn on your own in order to survive, Stalin got that idea. Orban seems to be forgetting how the game is played, or is this his chance to make a clean break with the west?

  11. The government is right. I am sure that the Americans were as much worried after the “The Hungarian internal revenue service became suspicious of some American firms doing business in Hungary and launched investigations into their finances and tax returns” as in 1941 when Hungary declared war on the United States on December 13.

  12. Can we say that the Horthy and Orban regimes beat the Kadar regime in corruption?

    Every Hungarian must work towards liberating Hungary from the orban-finkelstein-simicska-jobbik elements.

    Save Hungary!

  13. OT. Let’s go back to Orban’s overlord for a moment:

    “There’s a ‘Waiting for Godot’ quality to Western analysis,” said Matthew Rojansky, a Russia expert at the Kennan Institute, a research organization in Washington. “It’s always waiting for Putin to blink, to be cowed or shamed or humbled.”

    Mr. Rojansky continued: “He stands for Russian resurgence. Ask yourself: When was Peter the Great humble? When was Catherine humble? That’s not part of the role that they play.”

    http://www.nytimes.com/2014/10/18/world/unbowed-putin-chews-the-scenery-in-milan.html?hp&action=click&pgtype=Homepage&version=HpSum&module=second-column-region&region=top-news&WT.nav=top-news&_r=0

  14. I just realized that Zsolt Molnar, fidesz’ mole at MSZP who’s been tirelessly working to kill MSZP’s campaign from the get go is still the head of the national security committee of the Parliament. Right person for the right job.

  15. “In my opinion the Snowden revelations also demonstrate that the National Security Agency exceeded its authority in a number of domestic investigations of US citizens.”

    You are very kind in discribing criminality and abuse by “exceeded its authority”, What a polite description!

    “Your claim that the NSA or CIA has surveillance on “all Hungarians” is to say the least absurd. Do you think they are watching the csikos horsemen who perform at Hortobagy National Park, or the dancers at Budapest clubs, or the Roma of Tatarszentgyorgy? ”

    Yes they are absolutely watching them. At least that is what Snowden revealed. If the dancers at the Budapest clubs make a phone call (and they have phones). The call data and the call itself gets recorded and stored in various US databases(once again this is according to the Snowden documents). If they write an email it is also stored in US databases.

    I think the storing itself is the “surveillance” and you think the storing is nothing, it would be only surveillance if they look at it.

    You are following the same line as the NSA pushed during this debate. “Why is it a problem if you have all your emails and calls and store them forever? We don’t look at them much, so it’s all good”

    Istvan, would you send me a file containing all the emails you ever wrote if I promise not to look at it? How about a wiretap of all your phone calls. Is it OK if someone has that as long as they promise not to look? It is not OK, and just the fact of surveillance alters people’s actions even if the US does never look at the data they collected from surveillance of Hungarians.

    And in this case it is not even relevant if they looked or not. According to the Snowden documents, the US has in its posession all relevant emails and phone calls about all the tax investigations against US firms and interests in Hungary. Even if they did not look at them they still have this information in their posession. Not to mention the firms themselves can also report it if an investigation is started against them. And they would report it directly to the embassy.

    And Istvan, be honest:

    You really think there were no tax investigations against any US or US related firm, foundation or association in the past few years?

  16. Our new troll aka KTP is trying too hard to divert using its Kindergarten-Logik, it’s almost funny.

    The news about the “Zehn kleine Negerlein” (Sorry, couldn’t resist making that bad joke) from Hungary is already in the German media too:

    http://www.spiegel.de/politik/ausland/ungarn-usa-verhaengen-einreiseverbot-gegen-offizielle-wegen-korruption-a-997870.html

    PS: There really was nothing at all in the German media about that oh-so-very-important meeting between Orbán and Mrs Merkel! While the meeting next day with the new Polish prime minister was reported intensively – now what does that tell us?

  17. A couple of items. (1) According to an article in HVG, the Merkel-Orbán meeting in Milan was not at all pleasant. Merkel told Orbán in no uncertain terms what she thinks of Orbán’s policy toward Russia. It is likely that the German move was coordinated with the Americans’ new policy toward Hungary. (2) We had a fairly lengthy discussion whether Victoria Nuland’s harsh words about countries in the East-Central Europe were directed against Hungay or perhaps also against Romania. We all thought that the corruption charge was most likely about Romania. Well, it seems that it was also about Hungary because this corruption case has been in the works for at least two months.

  18. KTP All US companies operating in Hungary are subject to the Foreign Corrupt Practices Act of 1977, this means if they pay kickbacks or bribes officials of these companies are subject to prosecution. There have been a number of high profile cases involving the Act that can be publicly accessed. The Securities and Exchange Commission (SEC) and the Department of Justice are both responsible for enforcing the ACT. The SEC has created a specialized unit for enforcement of the ACT.

    So I believe these companies followed US law in order to protect themselves. I also believe that US investigators have knowledge of non-US owned firms operating in Hungary that paid bribes and kickbacks violating fair trade practices.

  19. KTP, if the surveillance includes US citizens or information about them, the US government must get permission from a judge to look at communications intercept. I sincerely doubt that the government would take the time and effort to do so just so that it can get information about whether or not there is a tax investigation of an American firm by the Hungarian government. The US government may very well be aware of the investigations, but it wouldn’t be from communications surveillance, and the embassy does not necessarily know everything the various arms of the US government knows.

    After having spent a paragraph explaining how you don’t seem to know what you are talking about (or are pretending that you have some knowledge that the rest of us don’t), I ask a more important question: what difference does it make? Every embassy and every government hides things from the public, both foreign and domestic, and white lies are the bread and butter of international diplomacy. If they are lying about this, so what? Apparently, this particular piece of information is more relevant to you than the fact that the Hungarian government has angered the most powerful country in the world, which also happens to have a lot of sway with powerful countries here in Europe (some people, probably you, say that Germany, Britain and France are American poodles). Is this not important to you? Do you think nothing more will come of this? Would you prefer that Hungary leave the EU and NATO and join the Eurasian Union? Do you seriously believe that Hungary will be better off as a nation in the Russian Empire than in a group of democratic, relatively free nations? Ask Belarusians if they wouldn’t prefer to be in the EU.

  20. “KTP” is our latest Fidesz FUDmaster Plant…

    May I suggest not playing into the hands of the obvious Fidesz mole/troll “KTP” (just another pseudonym for a single malingerer who has been mal-posting here for years, or a sponsored team of them) by replying to him/her/them as if they were raising valid points, in good faith?

    Reply to him/her/them if you like, but make it crystal clear that you are just trifling with a troll rather communicating with a serious and sincere commentator.

    Watch how KTP now follows up with the signature Fidesz ploys:

    (1) ignore the identification as F-troll and just dig in deeper on the validity of their smokescreen bullet-points,
    (2) parrot back any accusation at their accusers,
    (3) (anonymous) personal attack on non-anonymous commentators (sometimes with some self-pitying indignation about the unwarranted sullying of their pseudonymous selves),
    or
    (4) switch identities and carry on…

  21. “KTP, if the surveillance includes US citizens or information about them, the US government must get permission from a judge”

    After you wrote that, you realized that sounds a bit stupid doesn’t it? How would you know something like a wirteap “includes information about US citizens” BEFORE you read or listened to the information…

    Let’s take the example of Angela Merkel, a German national we know was wiretapped and under constant confirmed surveillance. They listen to the tape and hear Merkel is talking about “information about US citizens”… Then they rush out to a judge and say: “Can we listen to this tape AGAIN, judge?”

    But not only that is the problem. Even when there were some outside involvement in the process they are only “rubber stamp” courts. Who are known never to decline any requests put to them.

    Not to mention the NSA only deals with secret courts in secret, FISA courts or similar. The “judges” in these “courts” don’t have to bother themselves with hearing many arguments though. There are no objections, no witnesses, no lawyers for the defense, nothing that would make a court a court.

    You seem to be a great supporter of the NSA and you have much faith in them. You don’t value your privacy, that is one thing, not many people do these days. But don’t forget what even Istvan wrote::

    “In my opinion the Snowden revelations also demonstrate that the National Security Agency exceeded its authority in a number of domestic investigations of US citizens.”

  22. “The US government may very well be aware of the investigations, but it wouldn’t be from communications surveillance, and the embassy does not necessarily know everything the various arms of the US government knows.”

    Did the embassy make the call about denying entry? Does the embassy have that authority to make that decision without consulting anyone back at the US? If not then it does not matter what the embassy knows about the investigations. Whoever made the decision certainly knows about the investigations against US firms and interests for reasons we already discussed.
    Even though the embassy must have also known about the investigations because the US firms probably report things like this to the embassy.

  23. KTP some what you say about the US FISA courts are true, but some is a radical over simplification of the oversight role of the court. Because many if not most of the requests for domestic survaliance involve potential acts of terrorism or links to terrorist organizations this information is heavily classified. But here is the difference between the United States and the Russian Federation, or even Hungary, we have a public debate about theses issues and try to keep a check and balance system in place. That is why KTP or others who post on this site periodically and who reflect the perspective of Fidesz or even the Jobbik know about public disagreements relating to domestic survaliance within the USA.

    Mr. Snowden and Bradley Manning are a huge tradegy for my country, even the dissident Russian group Pussy Riot recognizes the tradegy of a man who opposed what he believed to be actions on the part of the NSA and CIA that violated democratic principles and ends up seeking safe harbor in Putin’s authoritian Mafia state. Yes, it’s true the USA spied on Merkel, I wonder if we gained any actionable intelligence from that operation.

    My country is far from perfect, we looked the other way for years relating to the corruption of the Orban/Fidesz state when it was perceived to be in our national interest to not look just like the EU has. That’s reality, just like Putin’s Russia supports the Jobbik in Hungary yet denounces nationalist formations in Ukraine as Nazis that are ideologically similar. I am glad for the moment my county is doing the right thing and exposing the corruption of the Orban Mafia state.

  24. @KTP, I think you take this issue a bit too seriously, don’t you think? Why is it such a big deal that ten people can’t travel to Miami or New York? Any sovereign can decide at any moment without the need to give any explanation not to let foreigners in. This is what happened. Don’t get so worked up by this. Let’s just wait what happens next. Maybe the Americans are bluffing. I think if you talked to your Russian advisors, they would say the same thing. It’s anyway the weekend. Don’t you get the weekends off?

  25. @kuka:

    And in Hungary they murder Roma families – or should I write “Gypsy”?

    And if you read the threats made on some elderly Jews you might think that Hungary is still living in 1940 …

    Jobbik asking for the death penalty is the logical conclusion!

  26. wolfi do you come from a nazi family? you still live in the 1940? those were the good times for the likes of you. under your leader, Hitler. but normal people do not want those times back.

  27. @kirpo (clone of a Fidesz troll?):

    I’m happy to say that my parents were no Nazis (even got it in writing from the French authorities because we lived in the French Occupied Zone …) but maybe you are part of the right wing extremists in Hungary?

    Btw there’s another scathing article on the (lack of…) media freedom in Fidesz’ Orbánistan:

    http://www.spiegel.de/politik/ausland/ungarn-was-aus-dem-mediengesetz-von-victor-orban-wurde-a-996340.html

    It describes the “Gleichschaltung” of Hungarian media – we call M1 etc “North Korean state tv” …

    and how the small number of independent media are under pressure …

  28. @gedance:

    Der SPIEGEL also has a lot on HungaryFidesz/Orbán on its English site – if you’re interested on the German perspective on Hungary look here:
    http://www.spiegel.de/international/europe/hungarian-leader-viktor-orban-warns-of-german-dominance-a-911560.html

    And if you search the site for “Orbán” you find lots more from this year and last year which shows the deterioration of the poltical system in Hungary under Fidesz, kind of parallel to what Eva (thanks, btw …) is reporting on here!

  29. V. Orban and his brain trust are thinking hard about retaliation as we speak. They absolutely agree that he can’t appear weak. The American offended him and he must reply accordingly. Orban is weighing two options: either B. H. Obama will be barred from entering Hungary or all American blacks. It’s still a toss up at the moment, I’m told.

  30. Hey people, I hope you are all realise, that the only surprise here that finally somebody acted upon the rampant acts of Viktor&Co., not that they really are thief and embezzlers, are you?
    Finally someone starts to put felons to their well deserved place, that’s it.

    One of the funny – my opinion – things what I’ve read about the events:

    “Szijjártó asked the americans for a proof of corruption – and he received a photo of his newly acquired property…”

    Of course, it supposed to be a fictitious joke, but fits rather well, in my opinion.

    Hungary performs better – so far none of the other EU-members managed to achieve this status!
    It really something, come on!

  31. @F. Kumin, jr.
    Furthermore, from now on they will rename the “Fütyülős Barack” to “Fütyülős Viktor” too!

    No one, I say no one can publicly humiliate our beloved leader like this..!

    – After all this years of peaceful plundering…!

  32. There is some corruption and they are very interested in combating corruption. To help combat corruption they will not say who is corrupt or what case was s/he corrupt in. In this way helping the public not to learn the identities of the people accused and ensuring the people responsible will not be charged or shamed by the public, because they refuse to reveal what they say they want to help by revealing.

    It is really simple.

  33. Apparently the Hungarian government plans no investigation whatsoever, according to the AP (http://globalnews.ca/news/1622135/hungary-not-investigating-u-s-claims-of-corruption/ ).

    My favorite quote from the article is the last sentence below:

    “We continue to await the credible information from the U.S. government on the basis of which it made accusations of corruption against Hungarian citizens,” Szijjarto told reporters. “Hungary and its government are on the side of openness and transparency.”

  34. Pannonian Pariah

    Orban’s well on the way to making Hungary the butt of jokes everywhere on the planet (including Mother Russia). The challenge for future biographers of this Genius of the Carpathian Basement will be to figure out whether he could have dragged Hungary this low on his own, or whether he couldn’t have done it without the longstanding national culture of self-pity, scapegoating, swagger, and winking at corruption.

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