No end to the saga of the Hungarian corruption scandal

The reverberations from the news that six Hungarian citizens are not welcome in the United States don’t seem to subside. The perpetuation of the verbal battle is fueled mostly by the Hungarian side. Some of the attacks come straight from politicians, others from the accused and from so-called “civil groups” that are strong supporters of the Orbán government and operate most likely with generous financial assistance from the public purse.

These latter two sources cannot be taken terribly seriously, and in fact as time goes by their originally very loud voices have quieted down somewhat. The most spectacular retreat came from Ildikó Vida, the president of NAV, the Hungarian tax authority, and her lawyer, Barnabás Futó. As one blogger noted, when Barnabás Futó stands next to someone close to Fidesz, that person is in trouble. Futó seems to be rather good at pettifoggery at home, but he is at sea when it comes to international law. Initially he had ambitious plans for getting satisfaction for his client. Since Vida was told by M. André Goodfriend that she can ask for a visa and, if her request is rejected, she might be able to get information about the nature of the charges against her, Futó decided to do just that. Moreover, while he was at it, he contemplated suing the American chargé. Soon enough someone must have told him that members of the diplomatic corps have immunity and that his dreams of his client having her day in court were illusory. He gave up on his plan to sue. And, upon reflection, Vida decided that, after all, she did not want to know any of the details of her alleged wrongdoing and that therefore she will not apply for an American visa.

The other thread in the continuing saga is the Civil Összefogás Fórum (CÖF), an unofficial arm of the government that has helped bolster the popularity of the government. They were the ones who organized the first Békement (Peace March), which was supposed to defend the beleaguered Viktor Orbán against a dark international conspiracy that wanted to remove him from his post during the winter of 2011-12. Ever since the American revelations, the leaders of CÖF, people belonging to the extreme right wing of Fidesz, have been itching to march out again, this time against the United States. However, their beloved leader, to their great regret, held them back.

CÖF’s spokesman, Zoltán Lomnici, Jr, son of the former chief justice of the Supreme Court and a lawyer himself, shows such ignorance of the law that it is simply staggering. He and “Futó Barnabás,” to whom I gave the nickname “futóbolond” (lunatic at large), bring shame to the Hungarian legal profession. Here is Lomnici’s argument: the American chargé is a foreign national who, as can be attested by pictures and videos taken of him, left the embassy of the United States and therefore stepped on Hungarian soil. According to Hungarian law, if he knew of corruption he was supposed to press charges and provide proof of corruption. Since he neglected to do so, he could be sentenced to three years in jail. Obviously our star lawyer hasn’t heard of the Vienna Convention on Diplomatic Relations (1961). I suggest that Futó and Lomnici study the document, which clearly states that “Diplomats must not be liable to any form of arrest or detention. They are immune from civil or criminal prosecution.” Let’s hope that the text is available in Hungarian because Futó at least does not know any English. Today the organizers of the Peace Marches officially announced that for the time being they will not gather the troops.

Politicians have not shown the same restraint. A few days ago Antal Rogán, the whip of the Fidesz parliamentary caucus, called Goodfriend a liar and announced that Hungary is a country of law, unlike the United States. “We all must declare that Hungary is not Guantánamo, here nobody can be accused without proof.” Rogán’s attack on the United States is most likely part of the game plan dictated from above because not long before Róbert Répássy, undersecretary of the ministry of justice, said exactly the same thing.

Calling everybody a liar who criticizes the Hungarian government is a Fidesz specialty. Diplomats, on the whole, at least in civilized countries, don’t call their foreign colleagues liars. But Hungary’s new foreign minister has no such compunctions. In an interview with Magyar Nemzet he said that “to accuse us of not conforming to the European legal system is a gross lie (orbitális hazugság).” In response to Szijjártó’s charge, the U.S. Embassy in Budapest released a statement today that included the following sentences: “As Charge d’affaires Goodfriend has said, the United States has consistently conveyed our concerns to the Hungarian government about developments that harm the health of democratic institutions, civil society, and media freedom in Hungary – including concerns about corruption,” and “the Embassy remains in close contact with the Ministry of Foreign Affairs and Trade. We will continue to conduct a constructive, diplomatic dialogue with Hungary on all issues across the broad spectrum of U.S.-Hungarian engagement.” In brief, the United States will not stop its current policy of defending civil society, media freedom, and civil liberties. It will also pursue its fight against corruption.

In addition, today new information reached the public concerning the background of the American ban. The Demokratikus Koalíció, the party that seems to have good connections with the Hungarian foreign ministry where there are many disgruntled employees, learned that a week ago the American embassy did give some information to the Hungarians. Today Szabolcs Kerék-Bárczy, a DK politician, made that information public at a press conference. At this point the foreign ministry decided to fess up: yes, they received something, but it was only a “scrap of paper” (fecni) that cannot be taken seriously. However, a few hours later the ministry made the document public.

Undersecretary Levente Magyar waving "the scrap of paper" from the U.S. Embassy

Undersecretary Levente Magyar waving “the scrap of paper” from the U.S. Embassy

The two-page note describes the history of the numerous encounters between the embassy and the government of Hungary since February 2012. From October 2013 on, the American complaints multiplied. They had meetings with the “criminal directorate of the tax and customs office (NAV) on specific concerns about agricultural VAT fraud and tobacco nationalization.” A few months later the Americans were back at the “criminal directorate” but noticed “no evidence of action” on the part of NAV. In January 2014 the Americans had a meeting with the ministry of justice and public administration and they raised issues of VAT fraud, “institutionalized corruption, whistleblower protections, and Foreign Corrupt Practices Act (FCPA).” The whole list of complaints can be found on the foreign ministry’s website as well as in an article published on the subject by Index.

In brief, there were numerous complaints, and the Hungarian authorities refused to investigate. It is also clear from the document that the American authorities were fully aware that corruption is “institutionalized” in Hungary, yet the last word from NAV was that there were “no auditing complaints” and therefore the “Criminal Directorate … was unable to act.” Goodfriend  noted that “NAV’s specialized auditing unit created expressly to investigate trans-border VAT fraud … was systematically undermined and then disbanded.”

It looks to me, and obviously it was evident to the head of the American mission, that not only was no effort made to investigate but that the top leaders at NAV were doing everything in their power to make sure that corrupt activities could be continued undetected.

According to Levente Magyar, undersecretary of the ministry of foreign affairs and trade, this “scrap of paper” cannot be taken seriously. Why not? Because there is no date, no authentication, and above all, no seal. “Missing formal requirement” is a favorite excuse of Hungarian authorities.

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73 comments

  1. Heaven may help to Hungary:

    http://444.hu/2014/11/13/matolcsy-az-mnb-elnoke-ujra-egyetemista-lett/

    In short, he goes for a PhD this time…
    Never mind that normally it happens after one already sufficient at the lower levels…
    Would they teach him to some basic arithmetics too, finally?

    Apparently the Fidesz bigwigs decidedly showing up their excellent education in recent days: Vida her language skills – why, she was completely fluent when she asked for translator, wasn’t she?
    Rogán unbeatable in geography – thank to him now everyone aware of the fact that Hungary isn’t Guantanamo..! Oh, thank you Mr.Rogån, this came to us like a revelation, invaluable indeed!

    Oh dear me.

    Never mind, that Orbán indeed right, there is on need to higher education to be successful in Hungary.
    No sir!
    Just look at his most valued advisor – used to be a car repairman – his closest “associate” formally a plumber, now multimillionaire, and the trend seemingly catching on: recently one very talented footsal-player got a high paid adviser job right by the well seasoned Foreign minister.
    Oh, qualifications? He don’t need any, got an “exception” from such trivialities…

    Yes, ladies and gentlemen, education takes you nowhere in Hungary, only being a loyal zealot what matters, beside of course if you are some of other family member of the chosen few.

    Not surprisingly, if someone professional, educated even and has the funny idea to have a carrier without licking boots and other parts of the ruling elite, must leave the place as long as it still goes.
    Good riddance.

  2. It was stated in a couple of different articles that the document was posted on the kormany.hu website, but I haven’t been able to find it. Any one else have seen it by chance?

  3. “A few days ago Antal Rogán, the whip of the Fidesz parliamentary caucus, called Goodfriend a liar and announced that Hungary is a country of law, unlike the United States. “We all must declare that Hungary is not Guantánamo, here nobody can be accused without proof.”

    Guantanamo is the symbol of lawlessness, lack of due process, abuse, torture, in other words everything that is impossible in a state where there is rule of law.

    Until the United States can set up a system where the rule of law absolute, this unfortunately will undermine the international stature and moral authority of the US. It does not help that President Obama publicly promised in an election campaign to “close Guantanamo within one year” and once he won that election, he walked back his promise and kept it open.

  4. I don’t blame anyone for not having heard of Aide-mémoire, or its today version, a “non-paper” (see more here http://en.wikipedia.org/wiki/Aide-m%C3%A9moire on the subject.) Non-papers are widely used in the EU including by Hungary and are common in the practice of the DoS as well. In substance, a non-paper is valid without stamps or any other prerogatives of an official document. Anyway, it is NOT intended for publication.
    New leaders in the “Trade Department” are either counting on the ignorance of the public or are ignorant themselves. Either way they are playing with fire. Whatever you name it (scrap), by publishing such a document you ruin the confidentiality of a relationship that bears long-lasting consequences (please think in terms of Wikileaks).
    By the way, this playbook is used regularly. New York State is on the forefront of trying to push down the limits of the Vienna Conventions. It is just funny that the US is not a party to it (http://www.state.gov/s/l/treaty/faqs/70139.htm ) I recall the case of a ranking diplomat from India like a year ago who was apprehended by the NYPD at her daughter’s kindergarten on laughable charges. From the point of view of US just the opposite happened in Karachi. An officer (not diplomat) shot three Pakistanis dead. What a difference! Finally J.Kerry (than with the Senate FRC) had to intervene to resolve the scandal. It takes someone utterly naive to think that Hungary is India; or the next Chargé will be a “Better Friend”.
    I tend to believe that this conflict was stared simply to avoid OVi’s visit to the US. Now this saga is growing into something unintended. Some in FDS may still think that this story delivers a strong message to the EU what would happen to their reputation if they were overly ambitious. After all, it was the EU who was supposed to return this government to its senses. Not the other way around. Is the US is making a favor to Angela the Savior?
    I believe that OVi’s recent flip-flop in Munich was far more important that any Aliyev’s non-business in Budapest. Now this non-paper issue overrides it all. I wonder if this millstone can be stopped by anyone anymore.

  5. To do something useful:
    every true commenter on Spectrum should write the State Department that Goodfriend should be kept in Hungary as long as possible.

  6. First replying to Tim, President Obama upon taking office was provided the intelligence reports on the internees at the facility at Guantanamo which clearly slowed him down in thinking about closing the operation. Some of the prisoners are not welcome to return to their nation of origin, simply put they are not wanted and this is yet another problem. President Bush created a quandary for Obama for which there was no simple solution. But since Antal Rogán has such empathy for these terrorists, terrorist associates, and fellow travelers I suggest that he pass a law allowing these fine individuals immediate admission to Hungary.

    Second, I hope Eva had a chance to hear PM Orban on Kossuth Radio from Csuhaj Ildiko’s summary of his comments he seems to have said a great deal. I look forward to her summary of what the PM said.

  7. Istvan, there’s one important thing in the article. Paks 2 and the South Stream are on track to be realized on schedule.

    They are absolutely off the table in any international relationships, except for the Hungarian-Russian one of course.

    Orban is actually talking quite openly in most cases. He said that these will be built, and given his absolute resoluteness I am afraid he will succeed. No amount of legalese from the EU or the US will be enough to stop him.

    The Russians will make sure that this will be so, but Orban and many oligarchs around him are so deep into this already, he won’t back down. Russia is getting more belligerent by the day (see the recent pravda articles about its supposed superiority in nukes on the EOT) and this gives Orban all the reassurance he needs.

    At most Orban will perform his time-honored peacock dance and by the time it’s over, Orban will have spent the Russian loans, so Hungary will be in Moscow’s pocket for decades even if we have only a half-built shell (we will finish it anyway).

  8. I’m afraid that some really ignorant bunch is leading Hungary vehemently down the sewer.
    For some reason they’re absolutely sure that arrogance can substitute civilised manners, apparently they even proud of themselves
    Rather tragicomical how they keep digging deeper and deeper in the mess.
    They just couldn’t comprehend, that this time they just done it once too often, tipping the proverbial bucket right over and smearing the content vigorously all over themselves.

    The ruling elite of Hungary, ladies and gentlemen!

  9. Viktor Orbán this morning on Kossuth Radio:
    America is conducting a slander campaign against the innocent citizens of this country.

    Viktor Orbán this evening in Parliament at a celebration of Amcham Hungary:
    Allies, partners, respect – this is the essence of the American-Hungarian friendship.

    All in the same day!!

    I guess he figures no one will notice.

  10. Buddy, the AmCham has long ceased being a major forum for US interests, probably beginning when they were unable to find a US citizen to serve as President and had to recruit a Hungarian-Canadian (who is a good man and was a very good President, but nevertheless not an American!) Look at the current roll of officers — it’s basically a club for Hungarian managers of local US subsidiaries. And the current staff is entirely Hungarian.

  11. The Hungarian Prime Minister’s mention that the Aide Memoire received from the US Embassy in Budapest is just a “fecni” (loosely translated into a “scrap paper”) shows his ignorance of what is standard in diplomatic circles. Maybe his 36 years old Foreign Minister could have been of assistance, although he is more versed in explaining how he can save out of his salary more than he ever received. In any case the scrap paper has listed the alleged crimes of the person accused and disallowed to visit USA and yet there is no investigation into what the head of NAV (the Hungarian Tax Office) is being accused.

  12. Zoltan I agree that PM Orban was very clear that he was not going to abandon the Russian reactor project. I did not listen to the interview so I don’t know his tone, but he seemed from the quotes very defiant in relation to Hungary’s obligations as a member of NATO and the EU to support the scantions against Russia. How long this all will take to come to a crisis level I don’t know, but I am sure it will start with an education campaign for the American public on the evolution of the Orban government towards a pro-Russian orientation.

    Up to now Hungary has not made the major network nightly news and most people who are not Hungarian or from Central Europe, or close followers of international relations are unaware there are any problems between Hungary and the USA. The focus is on the Islamic State, Russian bombers buzzing around off our coasts, and the Ukraine. Most US citizens who are not Hispanic do not fluently read or speak a second language. Former college students who study a foreign language for two years rarely use it and their skills deteroiate. The mass of Americans are very limited in their understanding of foreign affairs, even US bussiness leaders who vist China regularly have a limited understanding of how the CCP operates and the scope of its corruption, beyond what they have to deal with.

    So before serious action is taken in relation to Hungary, like suspension from NATO I expect Hungary will become a news story. In the popular media.

  13. Eva it’s true that there have been newspaper articles about Hungary, but none of the 1 minute reports on the national TV news shows and as far as I can tell not one story of significance on the National Public Radio network or the nighty news hour of the Public Broadcasting System. It will come eventually if we stay on this path and I wouldn’t be surprised if you became a TV star because without question you actually speak your mind instead of hedging about the Orban government. Aside from the fact you are amazingly knowledgeable.

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