The tax chief Ildikó Vida versus the Hungarian government: Who is lying? Most likely both

Practically daily I hear callers to György Bolgár’s program on Klubrádió, Let’s Talk It Over, ask: “Do these  people think we are that stupid?” ‘These people,’ of course, are the current leaders of Hungary, Viktor Orbán and his coterie.

Well, the answer to this question is a resounding “yes.” Moreover, until recently their assumption was correct. A large percentage of Hungarian society swallowed everything that was shoved down their throats. In fact, not much shoving was necessary. The gullible and often fanatic followers of Viktor Orbán refused to face the ever more obvious fact that members of this government brazenly lie. Day in and day out. The lies are necessary, at least in part, to cover up the illegal acts that are being committed daily.

As we all know, lies by their very nature multiply. A vain woman decides to lie about her age and from that moment on her whole life story must be adjusted, a difficult task. As Abraham Lincoln said, “No man has a good enough memory to be a successful liar.” Well, Hungarian officials are now trying to reconcile contradictory stories. Earlier lies about the alleged corruption case at the Hungarian tax authority (NAV) must be adjusted to square with the new revelations coming from Ildikó Vida, the chairman of NAV and one of the people put on the U.S. travel ban list. I must say that government officials are turning out to be less accomplished liars than one would expect from this experienced crew. The only man who cannot be caught uttering truly contradictory statements is Viktor Orbán. He is a master.

So, what happened today? Ildikó Vida gave a long interview to Magyar Nemzet in which she admitted that she and several other employees of NAV are on the list of six individuals who have been barred by the American government from entering the United States. The reason? Their involvement in corruption cases that hurt the interests of American firms operating in Hungary. This decision couldn’t have come as a shock to the Hungarian government because in the past two or three years the Americans have expressed their displeasure numerous times over the growing corruption in Hungary. Yet the government did nothing, which is not at all surprising because it is my firm belief that corruption is an integral part of the mafia state of Viktor Orbán that has been so aptly described in the two-volume The Hungarian Octopus. 

All right. So we know for sure that Vida is on the list, but as I said earlier, most of us were pretty sure that this was the case. Her sudden disappearance for a two-week vacation only reinforced that suspicion. What was new in this long interview is that Vida told Magyar Nemzet that she informed an unnamed member of the government right after she received the letter about the American decision. That was shortly before she embarked on her vacation on October 22. The problem is that in the last three weeks numerous government members, including the prime minister, have denied knowing any details of the case. They repeated time and again that they would be most willing to cooperate with the American authorities but unfortunately they can’t because they don’t know who is alleged to be involved. In brief, they were caught lying. Besides Viktor Orbán, the list of those who claimed they knew nothing includes János Lázár, Mihály Varga, and Péter Szijjártó.

But, of course, Vida herself is not exactly truthful when she claims that the accusations against her are baseless. The United States government would not embark on such a sensitive bilateral move against an ally without hard evidence. Vida’s threats to seek “legal satisfaction” in court are ridiculous. In the first place, M. André Goodfriend, the U.S. chargé d’affaires and the messenger of the bad news from Washington, did not reveal her name or that of any other person barred from entering the U.S. Moreover, he, as all other members of the diplomatic corps, has immunity against prosecution. Another strange aspect of the case is that Vida’s loud complaints about her ignorance of the American accusations are also bogus. She had and still has an opportunity to find out more about the case at the U.S. Embassy. Up to now she has shown no interest in doing so.

vida ildiko2

Those nasty Internet addicts have a wonderful time with Ildikó Vida

We found out from Ildikó Vida’s interview that there will be an investigation into NAV’s activities. She said that she will investigate the whole organization with “microscopic precision.” The head of the tax office who is accused of corruption will be in charge of the investigation into corruption in the organization. A perfect solution, don’t you think?

This interview is also interesting from the perspective of Ildikó Vida’s relationship to the Orbán government. Surely, Vida did not have to tell the whole world that she informed the appropriate official sometime between October 17 and 22 that she had been barred from entering the U.S. as a result of alleged corruption. After all, by this revelation she pushed Viktor Orbán and his government into a corner. On the surface her move seems both calculated and antagonistic. Observers of the Hungarian political scene immediately connected the dots: Vida has been a close associate of Lajos Simicska, whose current relationship with his old buddy Viktor Orbán is less than rosy. Orbán would like to curb Simicska’s power over politics while Simicska is fighting back with critical articles on some of the Orbán government’s latest attacks on businessmen.

Ildikó Vida is not too eager to cooperate with Fidesz politicians. Last week the parliamentary committee on national security asked her to appear today at its meeting. She did not show up. Instead she sent one of her deputies, Árpád Varga, who most likely could not provide any information to the committee members. Szilárd Németh, chairman of the committee, perhaps in frustration, announced that they will ask Goodfriend to appear before the committee sometime next week. My hunch is that Németh and his friends will not have the pleasure of the American chargé’s company.

In the meantime the official lying continues. Mihály Varga told an inquiring journalist that Ildikó Vida informed him only yesterday about her misfortunes. When a journalist called Szilárd Németh’s attention to the fact that there are only two possibilities in this case–either Vida is lying or the government is–he announced that he sees no contradiction between the two statements. László L. Simon (Fidesz), a member of the committee, is now asking Vida to please tell the government who the “appropriate person” was to whom she told her story. Perhaps that man “forgot to pass on” the information. There is a saying in Hungarian when somebody tells an especially big lie: “And the ceiling did not fall on him!”

Political observers often express their admiration of the Orbán government’s “communication skills.” This time something went very wrong, which is actually not all that surprising. Viktor Orbán and his crew think that good communication means constant lying to foreign politicians and the Hungarian public. Yet we know the other famous quip attributed to Lincoln: “You can fool all the people some of the time, and some of the people all the time, but you cannot fool all the people all the time.” Or a proverb, which also exists in Hungarian, “the pitcher goes to the well once too often.”

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42 comments

  1. (a) I doubt if the Government knows how not to lie
    (b) Ms Vida is certainly lying, otherwise she would admit being corrupt.
    (c) Even if both Hungarian Government and Ms Vida are investigated, you’ll never know the truth.

  2. I often think of Lincoln’s comment in relation to Fidesz’s hold on power. Fidesz worked out a long time ago that, while you can’t fool all of the people all of the time, it is enough to fool some of the people all of the time.
    You then promote apathy among everybody else – for example by restricting campaign advertising – and you change the rules to ensure that the votes of those who are fooled are worth more than the votes of those who are not.

  3. Luxembourg Leaks:
    Companies associated with Hungary:

    ABS-CBN, AMP Capital,
    Carlyle Group,
    Dubai International Capital, Great A&P Tea Company,
    Vermilion Energy Trust, Weatherford International

    More companies to come to light on November 10.

    http://www.icij.org/project/luxembourg-leaks/explore-documents-luxembourg-leaks-database

    Summary article:

    http://www.icij.org/project/luxembourg-leaks/leaked-documents-expose-global-companies-secret-tax-deals-luxembourg

  4. tappanch

    I guess the issue with Luxembourg is whether these companies belong to oligarchs and Mafiosi or not?

    Luxembourg, like Ireland is considered a legit, if controversial no exactly, but almost tax haven which is chosen by giant, public corporations.

    It never had the reputation of being like Belize or the Cayman Islands or even Switzerland (hell, even Vienna which is an undisputed centre for money laundering services for the former Eastern bloc and SU — it’s not a coincidence that Dmitro Firtas was caught in Vienna at the behest of the Americans). But probably it’s time for Luxemburg to change.

  5. Could someone enlighten me as to why the Hungarian Government is interested in users of Facebook and why does Facebook, unlike Google replies to this illiberal bunch?

  6. Well at least something’s happening now in Hungarian politics!
    Re that Hungarian proverb – it was probably derived from the German:
    Der Krug geht so lange zum Brunnen bis er bricht
    And there is a famous classical play “Der zerbrochene Krug” where a judge gets caught in his lies – maybe some people in Hungary’s mafia will get caught too!

  7. OT: Ulrike Lunacek won his case against Orban’s best buddy, the infamous Zsolt Bayer.
    Just to recall in 2012 Bayer as usual went on his verbal diarrhoea against someone who does not share his (mostly ant-semitic, and similar) believes, and publishes different opinions about Hungarian events. ” Bayer uttered the following endearing words about Ulrike Lunacek: “Then comes a half-witted impetiginous lying idiot, Ulrike Lunacek, and I expressed myself delicately … The whole rotten filthy lie from the mouth of a rotten filth bag.”
    Since Lunacek was not able to to do anything about the issues in Hungary (the very expensive Media Authority that Orban set-up for this exact reason decided not to pursue), Lunacek launched a civil suit, and she won. Although it is a piddly EUR 2000, I am sure Bayer will appeal. (When I say piddly, I mean in the circles Bayer is a mover and shaker.)

    You can read about the source of the dispute here https://hungarianspectrum.wordpress.com/2012/02/15/fidesz-style-ulrike-lunacek-versus-zsolt-bayer/

  8. @Wolfi re the pitcher. I looked up the English proverb and apparently it is a very old one: 14th century. So, it might be parallel occurrences in several languages.

  9. Two-pronged attack against the foreign-owned grocery chains.

    Beneficiary: the owners of the CBA chain, who are ardent Orban supporters.

    1. The extension of a “food safety” fee from 0.1% to a maximum 6%.

    2. Closure of the large stores on Sundays from March 15, 2015

    Result: another squeeze on the poor by forced price raise on food

    http://www.portfolio.hu/gazdasag/kkv/bezarnak_a_boltok_vasarnaponkent_marciustol.3.206077.html

    http://www.portfolio.hu/gazdasag/tizezrek_veszelyben_magyarorszagon_osszecsap_a_ket_tabor_2.1.206039.html

    http://fn.hir24.hu/penzugy/2014/11/03/a-szegenyeknek-fog-nagyon-fajni-ez-az-adoemeles/

  10. Here is the freshly submitted bill:

    http://www.parlament.hu/irom40/01914/01914.pdf

    Store must close at 10 PM and on Sundays.
    There are five exempt Sundays a year.
    Stores must close at noon on December 24 and 31.

    If a store stays open in the banned days or hours,
    it can be closed for 15, 30, 90 dsys
    Fourth breach of t law results in a 1 year closure of the store.

    This is another example of Orban’s arbitrary governance.

    ———–

    Another bill about what to do if the Budapest Assembly is disbanded.

    (Tarlos previously expressed his desire that no party fractions should be
    allowed in the Assembly)

    http://www.parlament.hu/irom40/01919/01919.pdf

  11. The measure prevents the store employees from earning the hitherto 50% Sunday premium pay and will result in increased unemployment.

  12. @wolfi: French writer Boris Vian once published a funny ‘pataphysical’ text about the French version of the same proverb (Tant va la cruche à l’eau qu’à la fin elle se casse).

    Among other things he noted that Sartre didn’t stand a chance against Heidegger for in the German version the existence (the pitcher) precedes the action (going to the well), while in the French – much like in Hungarian- the action precedes the existence. 🙂

  13. Is it true that he only German states where shops still cannot stay open on Sundays are Bavaria and Saarland?

    Is it true that the following stores are open in Vienna on Sundays?

    “most larger train and U-Bahn stations, as well as Schwechat airport, have small convenience grocery stores in them with staples such as milk, bread, and of course, beer.
    Full-size Billa grocery stores can be found at the Praterstern and Franz-Josef Bahnhof stations on the U-Bahn.”

  14. Germany and Austria have a tradition of severely limiting store hours – this might be a “Christian” idea or even a relic from Nazi times, I’ll have to check.

    Even in the 1970s all shops in Germany had to close by 18.30 – often they closed by 18.00! I remember leaving work in Hamburg in the evening on my first day of a business trip to find the pedestrian zone deserted in the center of the city – 5 minutes past 6 o’clock …

    And on Saturdays most shops closed by 12 – some were open until 14-00 that was the max allowed!

    You can imagine my surprise when I took to England by car and found in Dover shops open on Sunday – but then pubs were closed – another strange law.

    Even today there are limits by law though they’re getting more liberal every year.

    In Austria I just realised that many gas stations now contain small supermarkets (like Spar) which are open all week …

  15. I am not worried about the closing times. People will go abroad (Slovakia, Austria, Croatia, Serbia, Romania, Ukraine) to do the shopping. This is just another thing on top of smoking stores (24/7 and even then they are closing down left right and center), hamburger tax, cash machines, an additional retail tax (double taxation?) on income, limited floor space, high VAT rate (27% only).

    Like in 1995 and 1996 I assume somebody will start organizing trips to Esztergom (Slovak side) lots of (international) shops and nowadays very busy, like Romanian and Ukrainians did to Cora and Auchan in 1995 and 1996.

  16. @Ron

    “I am not worried about the closing times. People will go abroad”
    provided you have enough money for gasoline or to own a car.

    [The price of the gasoline is significant in Europe.
    Almost 2/3 of the retail price goes to the Hungarian government:
    excise tax, gasoline tax, 27% VAT, etc.]

    So the price of shopping on Sunday will go up for you too.
    The stores will be crowded on Saturdays.

    The Economics Ministry just said that the junior ruling party head lied:
    the government had not yet agreed to the Sunday closure of stores.
    (Perhaps Orban agreed to it in private)

    http://hvg.hu/itthon/20141106_Vasarnapi_zarva_tartas_nem_mondott_igazat

  17. I don’t think that the real issue here should be wether or not Ildikó Vida should go, she’s only a puppet after all, albeit not without interest.

    The real question is: are the Hungarian people accept such government in place which deliberately lying to them and their allies, which obviously extorting (foreign?) companies and using the NAV as their enforcer?

    Are our allies willing to cooperate with such leaders of such country even in the future?
    Are the EU willing to sponsor all the above in order to keep them in power ad infinitum?

    In any civilised place they would been out of office and awaiting prosecution by now – in Hungary they making the next law, allowing them to rob even more, openly.

    Didn’t I read somewhere that Hungary ‘demand’ more respect, because they deserve it..?
    Ya don’t say..?

  18. So Viktor Orban and his government members lied to cover up illegal activities. What were these illegal activities? You said “Their involvement in corruption cases that hurt the interests of American firms operating in Hungary.“? But why would the NAV do this? Are there perhaps other illegal activities?

  19. OT. Eva had mentioned that one of the reasons Fidesz reacted with concern to the internet tax demonstration was that many non-political citizens got involved. Here’s some proof from Index.

  20. @wonnie89, read a few more older articles and then you will understand. The tax office demanded kickbacks for favors. The money should have been paid for no work performed to a foundation with very close ties to the government party. The Americans decided to act but this is just one case out of the many. It is most likely a common practice going back years.

  21. Telenor is a Norwegian company. Hungary’s been trying to screw with Norway.

    According to Portfolio.hu and Figyelo too it was Telenor which initiated the internet tax which caused immediate political uproar and hit Orban hard.

    Food for thought folks, at Miniszterelnökség.

  22. Milos Branko Milanovic who you linked to is a profoundly honest economist who does not turn capitalism into either a demon from hell or the solution to the world’s poverty problems. More liberals and leftists in Hungary and elsewhere in Central Europe would do well to follow his balanced perspectives. I am so tired of reading that if only Hungary was more integrated into the EU, had more open markets, all would turn out well and income convergence would be at hand. That is as big a fantasy as the Fidesz believing they can build a viable economy internally in Hungary through a combination of nationalizations and links to Putin’s Russia. Again thanks for the link.

  23. What Milanovic does not consider was the terrible economic and ecological state of the economy in the eastern bloc in 1989 – they were destroying their environment with their old inefficient factories and still could not compete with the West!
    The stories that friends from East Germany told me are almost unbelievable! I visited East Germany in the winter 1989/90 – just the pollution and the smell of the two stroke engines and the burning of the lignite (brown coal) was horrible! This could not go on without completely destroying the environment – and the health of their people!

    Sometimes I wonder what would have happened if the system change had not happened.

  24. Wolfi i would recommend you raise this issue with Branko Milanovic I would bet given his background with the World Bank he would know of an index that actually has measured air and water pollution in Central European nations before and after transition. He might even do a post on it.

    I would also recommend going back just to 2010 and the toxic spill into the Danube from the Ajkai Timfoldgyar aluminum-processing plant in the town of Ajka, Hungary. See
    http://news.nationalgeographic.com/news/2010/10/101012-toxic-spill-hungary-danube-river-water/

    Russia’s air today is still among the most polluted in the world, but its quality has been improving since the 1990s. None the less 43.8 million tons of pollutants were released into open air in 1993, of which 24.8 million came from industry and 19 million came from vehicles. Moscow, St. Petersburg, Yekaterinburg and Volgograd, as well as other major industrial and population centers, are the highest concentrations of air pollution. Currently, over 200 cities in Russia exceed pollution limits, and this is increasing as more vehicles appear on the roads. Before the 1990s, most air pollution came from industries, now its more and more coming from cars and trucks.

  25. wolfi: I’m afraid wrong approach. The system change couldn’t have Not happened. The system collapsed – among others – because Hungary (but also the DDR and Russia) became hugely indebted and the same time had a terribly run economy characterized by astonishing internal unemployment and the production of useless products of bad quality and the not production of useful products (such as high-tech) at competitive prices. The only reason this economy could have existed at all (and was able to satisfy certain needs at all) was because the bloc was significantly cut off from the rest of the world so it didn’t really matter for a long time (at least as far as the economy was concerned) that the output was uncompetitive on several levels (quality, energy content, brand, design etc.), there was just no substitute. It was a totally artificial way of organizing the economy and it couldn’t last. When someone talks about Hungarian Socialism one has to mention debt in the very same sentence — Hungary’s economy just wasn’t and couldn’t be a self-sustaining system without foreign debt. Hungarians didn’t want to endure poverty for Socialism (see also 1956), hence their demand for gulash communism which was made available via foreign debt. They wanted it, they got it, but it just couldn’t last. Note also that in a normal world this external finance situation of Hungary would be the only thing that could keep Orban in check — too bad that the ECB and the BoJ keep printing money like crazy. And if Japan has been doing it for ever without much immediate results, I think this will be the fate of ECB too. (Let’s put aside the fact that the capitalist world is also addicted to debt).

  26. Istvan, Hungary IS very integrated into the EU, look at the exports to and imports from the EU. The point is whether it has managed to use this integration to further wage growth of the “small” people and higher living standards. It has not, but it is also due to internal policies, starting right in the early 1990s if not earlier. For me an important aspect is the incomprehensible failure to see society and the state and the “rules of the game” as something that concerns all Hungarians and that merits according interest and dedication. Instead, people feel responsible for themselves (only), consider the government evil (continuing in what Czechs called “if you do not steal from the state, you are robbing your family”), expect nevertheless that the government fixes all, find sticking to rules “weakness”, and fully support (and even demand that) their policians’ disgust with “compromise” (also weakness, or due to “personal gains” only). And considering what Orban has so far accomplished with state intervention in the economy, what type of economic policy would be advisable for a country so full of mistrust towards anybody including themselves?

  27. Kristen I am not arguing that the root of Hungary’s low wage level,is due to,a failure of deeper intergration in the EU, but I read such arguments made to explain away the failure of convergence. I think Milanovic correctly depicts the situation Hungary is in along with the majority of post communist states. His approach to capitalism is balanced, he has stepped beyond the huge problems of the command economy in the past and looked at the limited progress that has been made. In order to go forward liberal, leftists, and people who value basic freedoms need to,understand the limits of entering the capitalist game. The options for Hungary are limited.

    Neither the EU nor the USA will promote Hungary’s development into a high wage competitor. Clearly all most all of us on this blog seem to grasp that Russia is an even worse economic partner. My family in Hungary gets that, but to be honest they believe PM Orban is clever in that he is trying to play all the sides in this economic drama to get Hungary out of its low wage trap. Which is why they have been supporting Fidesz from what they told me in March, they seem to think the left, liberals, and greens have sold their souls to the EU. Because I am an American they politely avoid attacking the USA. around me. They seem to fully accept that PM Orban and company are corrupt, but they are little crooks – kis bűnözők compared to the German big crooks.

    I will be back in Hungary in December and I will be interested to see if their perspectives have changed given everything that has happened in the last five months or so.

  28. I@Kündü:

    I totally agree with you re the artificial economy in the Eastern bloc, couldn’t have it said better. What I was wondering at the time and even now – what would have happened under a different leader instead of Gorbacsov when this system had tried to continue for a few more years, like not opening the borders for the East Germans, trying to “develop” further etc ?
    Of course it’s irrelevant now …
    And also I’m still angry in a way at our politicians in the West who did not know or rather claimed not to know how bad the situation in the East really was. I remember Kohl promising “Blühende Landschaften” i e prosperity like in the West in a few years – while Milanovic shows that there still a long way behind.

  29. Great discussion starting from the fascinating Milanovic article (I’ll have to read more of his stuff…).

    I was still pretty young when the wall came down, but found the trumphalism of the West’s economic cheerleaders very suspect. I wonder how much people on the ex-East side of the divide realised or realise that these economic cheerleaders (and the “historical” apotheosis of their very fashionable, faddish ideas thanks to e.g. Fukuyama) were not even representative of a long-established consensus even on “our” side, but were the side in a long-running dispute about political economy that happened to be in the ascendant in 1989?

    Let’s not even get into the question of how our Western organisation of political economy rested in part, for its moral foundation, on the continued existence of the Communist bloc and what people were going through there: both as a bogeyman, the more threatening if the generally-respected notion of political freedom is cynically conflated with particular ideas about economic freedom, but also as a corrective: because part of our Western political “virtue” was perhaps more about remaining superior without having to resort to Communism; and this was achieved by means of “communist-lite” concessions to the population which have become obvious only in their ever-increasing absence, especially since 2008.

    I’m certainly not “anti-Western”; but I vividly remember, after working as a contractor for PwC in the 90s, hearing about their wise men flying over to Moscow (no doubt at a daily rate commensurate with the refulgence of their eternal wisdom) to make everything OK over there for these suddenly-free and attentive ex-Communists – which meant applying the same knuckleheaded “privatise and financialise everything” solutions which were already attracting a lot of criticism back home. A facepalm moment.

    Milanovic seems to hold a middle position, very interesting: I look forward to reading more of his writing, through the lens of my conviction that not much has ever been implemented so badly (or been co-opted as cynically by self-servers with a historical perspective measurable in days at best) as the “liberation” of the Communist bloc.

  30. @ Reality Check,
    I don’t know this language. Does “Nincs Amerikai Vizumunk“ means “No US visa”? What does this mean?
    Thank you for that visualization, but because of my lack of language skills I can not understand the graph. Can you tell me briefly what you can see?

  31. @ Eva S. Balogh
    I have definitely read more in the last time, but it is not enough to understand the whole story. There in so much information. I have one little Question to you. You said “The tax office demanded kickbacks for favors“. Did the tax office demanded kickbacks for favors from american firms?
    regards

  32. @wonni89. Of course, we don’t know the whole story but what we know is that Bunge, an American company complained to the Hungarian tax authorities that its competitors cheat on the VAT (value added tax) which is very high in Hungary (27%). Therefore they can sell their products cheaper than Bunge that does not cheat. Apparently, the Hungarian tax office promised Bunge to fix the problem if they pay 2 billion HUF to a foundation with strong ties to the government party, Fidesz. This particular foundation called Századvég (Fin de siècle), according to some people, is a kind of money laundering operation through which public money and kickbacks from foreign and Hungarian companies are channeled into the government party’s coffers. This is the story in a nutshell. Bunge must have gone with the story to the American Embassy in Budapest.

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