Corruption in District V under Antal Rogán, #3 man in the Orbán regime

I have been so involved with the political aspects of the Orbán regime that I have neglected the suspicious enrichment of some of the most prominent Fidesz politicians. If a researcher had half a year (and a team of investigators) he could easily write a whole book about these people’s wrongdoings.

A quick look at the list of names that crop up most often in the media leads me to believe that being the mayor of a city or a Budapest district offers excellent opportunities for corruption. Just to mention a few politicians who have been the targets of journalistic inquiries: Lajos Kósa, until recently mayor of  Debrecen; János Lázár, who was mayor of Hódmezővásárhely until he became head of the prime minister’s office; and Antal Rogán, who in addition to being the whip of the Fidesz caucus was also mayor of Budapest’s District V. Larger towns or cities offer ample opportunities for city officials, including mayors, to extract kickbacks for municipal contracts. Rumor has it that the average bribe is 10% of the value of the contract. In Debrecen, apparently the price was double that amount.

The finances of Lajos Kósa became the subject of scrutiny of late when his explanation for how he acquired a very expensive apartment in Budapest was found less than convincing or when he was found to have traveled to New Zealand for three days for a Rolling Stones concert.

János Lázár also had some hard times of late when it turned out that he purchased an apartment in Budapest for his ten-year-old son for 60-70 million forints. Naturally, that piece of property did not show up on the financial statement he submitted to parliament.

And finally, there is Antal Rogán, the number-three man in Hungarian politics today. His fraudulent financial statements have been the talk of the town. He greatly minimized the areas of his real estate and landholdings and was forced to correct them several times.

Given the limited space, I will spend less time here on Rogán’s fictitious financial statements and more on the possible sources of his and his political friends’ enrichment.

It was discovered back in March that Rogán, his wife, András Puskás (Rogán’s deputy), and his common-law wife jointly own 490 m² (almost 5,ooo ft²) apartments worth 300 million forints. For Rogán, who has never had any job save that of a politician, such a purchase under normal circumstances would have been beyond his means. And this is not the only piece of real estate he and his wife own.

A month after the revelations about Rogán’s luxury apartment(s) and his other rather shady real estate holdings, Bors, a tabloid, found out that the Central Investigative Prosecutor’s Office is looking into possible corruption in District V. A businessman who has several restaurants in Budapest won a tender for a piece of property in Rogán’s district where he wanted to open another restaurant. When he went to sign the contract, he was told in no uncertain terms that they expect several more million forints “under the table.” The businessman refused the generous offer and and pressed charges against the district, naming the man who approached him. By June Népszabadság learned that at least three real estate sales are under investigation.

There have also been some rather strange comings and goings in the mayor’s office. First, András Puskás, Rogán’s deputy who is implicated in the luxury apartment case, suddenly quit his job because he was “badly needed” in the foreign ministry. Almost at the same time the man in charge of the everyday running of the affairs of the municipality (jegyző, a kind of city manager) quit in a great hurry. His replacement a few months later was seen wearing a pair of Amadeo Testoni shoes worth 980 euros. The man’s monthly salary is 433,000 forints.

But the story doesn’t end here. Puskás’s replacement, Péter Szentgyörgyvölgyi, became the owner of an apartment in a stately apartment building in Szerb utca which he purchased for a mere 19 million forints, paying in monthly installments of 63,000 forints. The market value of such an apartment in a historic district is worth many times that amount. Meanwhile Szentgyörgyvölgyi became the new mayor, and on November 21 he decided to give the apartment back to the District. He claimed to be perfectly innocent in the affair; “he just got tired of all the attacks against him.”

Szerb utca 9 where Péter Szentgyörgyvölgyi currently mayor of District V purchased ab apartment for 19 million forints

Szerb utca 9 where Péter Szentgyörgyvölgyi, current mayor of District V, purchased an apartment for 19 million forints

Upon closer observation, investigators found that during Rogán’s eight-year-long tenure as mayor of District V one-third of all the real estate owned by the municipality was sold to individuals. One especially egregious case that surfaced lately is the business real estate that was sold to the common-law wife of Tamás Portik, a convicted murderer, back in 2011. The scheme seemed to have been the following. According to a city ordinance, the tenant of a property owned by the municipality has the right to purchase the property at a reduced price. Portik’s common-law wife became a tenant of a 212 m² business site in October 2011, and by December it was hers for 52 million forints. In July 2012 Portik and girlfriend sold the property for 102 millions, its fair market value.

Rogán’s bad luck is that Péter Juhász (Együtt), who was Szentgyörgyvölgyi’s opponent in the municipal elections in October, is a former human rights activist with vast experience as an investigator of corruption cases. And he is now a member of the District V city council. According to Juhász, under Rogán’s watch downtown Pest was the scene of incredible corruption. By now Rogán is a member of parliament and because of his immunity he himself is untouchable. However, András Puskás and Zoltán Sélley, who actually ran the municipality’s affairs and who prepared the contract with Portik’s girlfriend, can be sued, and Juhász is on their case.

This is only the tip of the iceberg, just one of hundreds. Tomorrow I’ll take a look at the spectacular enrichment of Lőrinc Mészáros, Viktor Orbán’s pipefitting friend from Felcsút. He also seems to be forgetful. Just lately he forgot about more than 1 billion forints he happened to have in his bank account.

No wonder that struggling Hungarians are outraged. Even some of the Fidesz true believers are angry. Yet the people involved don’t seem to realize that their conspicuous flaunting of their riches is not exactly going over well in one of the poorest nations in the European Union.

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36 comments

  1. “By now Rogán is a member of parliament and because of his immunity he himself is untouchable.”

    How extensive is this immunity- are MPs effectively above the law?

    Is this a Fidesz creation or has this been the case in Hungary since the change of regime?

    To a Brit, this all seems very odd. Our MPs have one great freedom unique to them – they can say what they like in Parliament, without fear of being sued for slander – but I don’t think they have any other immunity. If they were found guilty of any other crime, they would be out of Parliament and in jail as quickly as any ‘ordinary’ citizen.

  2. This is nauseating and flagrant corruption. The day of reckoning must come soon, or Hungary will sink further into becoming a Balkan Banana Republic and a “has been” East European historic footnote . . God save our beautiful Hungary!!
    Where is another Deak Ferenc when we need him????

  3. @paul that tradition extends into the Canadian parliament. There have been a few debates that have ended with a comment such as, would you like to step outside an say that. 😉

  4. If Hungarian law shields corrupt MPs from prosecution for corruption, then there is no hope for this country. Maybe one of the ‘new’ laws? Like the one that protects the dignity of the leader. When dignity requires legal protection you know something is awry. Not what I ever expected to witness in Europe. Pyongyang take note.

  5. Hungarian MPs have immunity but this immunity can be lifted by a vote of MPs at the request of the prosecution service. I believe it is true of the European Parliament as well, which is one reason why I’m not hugely disposed towards it.

    In England, the principal is that everyone is and should be equal under the eyes of the law and that includes MPs, with the important exception that Paul pointed out. But a Fidesz could bloke a police investigation of one of its MPs by refusing to lift immunity. I’m not sure this has actually happened yet though

  6. When talking about Szerb utca 9 we should not forget about Árpád Habony who also happens to live in that house. Some two years ago when he still rented the flat from the V. district municipality the built-in sauna caused a fire so that the whole flat burned down.

    No problem whatsoever. The municipailty had renovated the flat of Rogán’s best buddy for HUF 50 million from taxpayers’ money.

  7. Word on the street is that Puskas was successfully wiretapped, with smoking gun evidence. He was not prosecuted, however, and was subsequently exfiltrated to Eximbank, one of the state owned banks, which is also considered to be a solid party cash register. The level of corruption at district 5 is beyond belief. I hope one day there will be some review of the actions there, but it is highly unlikely.

  8. Just a question about this parliamentary immunity: can a former member of parliament be pursued legally for crimes committed while he was an MP?

  9. Today, at 16.00pm another protest on Kossuth Ter. Btw we were invite to join by four different persons (of which two I was not certain their political affiliation two years ago).

  10. I’ve mentioned a few blog entries before the mandated parking spot shopping for commercial businesses in Rogan’s district. If you had a commercial spot (leased form the district or your own), the money for 2-3 or more spots depending on the size of the business had to be paid to a law firm not to the district, and not to a trust! THis did not mean that you had your own parking spot. THese were virtual parking spots. TH practice exist in the 13th district too, and I am not sure about the other districts.

  11. Eva chose to focus on corruption in district five primarily as it relates to real estate deals and kick backs paid to open more less legitimate businesses in the district. She leaves out the extensive legal and illegal prostitution operations in district’s five and six. To see the scope of this go to http://www.wikisexguide.com/wiki/Budapest for a tourist’s guide to these vast operations. This corruption did not start with Rogan.

    The thriving call girl operations which focus on the higher end hotels in district five probably have paid various lower level officials ( including the police ) vast sums over the years and these officials in turn owe Fidesz both money and loyalty for these lucrative jobs. I have never seen an article discussing the scope of corruption relating to the sex trade in district. It seems to be a no go topic in the media.

    The corruption in the sex trade and in the small quantity drug deals in districts five and six is extensive I suspect. When I have asked relatives who live in district five if this extensive prostitution operation is disturbing to them they act as if they don’t know what I am talking about, my younger cousins simply say it just part of the money machine based on tourism and as such it is what it is. It reminds me of Las Vegas here in the USA were the line between legal and the illegal sex trade is totally blurred.

  12. Istvan: This corruption did not start with Rogan.

    You are absolutely right. It started well in the 70-is, but as Polgarmester he did not do anything to stop this. The only thing he did was to make sure that the Ministries had to pay parking fees.

    Btw what started under the previous Orban government (1998-2002) was the tourist rip off by the so-called coffee girls, and with the help of Laszlo Gerspik (Miep) closing of foreign restaurants and bars in the 5th district.

    I also understand that various people working for the 5th district and loyal to Fidesz received quickly and cheaply (cheap rent) apartments reserved for people who are on the waiting list for many years.

  13. I am very happy to realize that the 8th district lost its status as the hooker capital of Budapest and it was given deservingly away to Rogan’s district. I was not aware of the wikiguide Istvan directed us to. lol

  14. District 8’s street girls were mostly women who really needed the cash — not the first-class escorts who ply their trade at Budapest’s classiest hotels. What killed the call-girl industry in District 8 was not law enforcement, not politicians, but the Internet. Now they can advertise on a number of sites, usually with their faces blotted out — no more standing in the cold street on a rainy night where your father’s boss might bump into you.

  15. Istvan Lovas, the foreign affairs correspondent who was fired from Magyar Nemzet apparently found his place at Magyar Hirlap, the “conservative” daily owned by oligarch Gabor Szeles, who in the 1980’s worked together with the KGB (or was a member himself).

    The op-ed spreads the news that many German ‘promis’ apparently oppose sanctions against Russia. Then Lovas goes on to assure the world in a form of weird weaponry porn that Russia’s military might is so unparalleled that even the US weapons systems look like WWII relics in comparison. Just so you know.

    Readers applaud Lovas’s outspokenness.

    http://magyarhirlap.hu/cikk/12252/Ismet_haboru_Europaban

  16. @Ron — The konzum lanyok (which is what I assume you are talking about when you say “coffee girls”) were around long before Orban took power in 1998. They were tolerated, perhaps even supported, by the then-Fidesz mayor, The practice garnered international attention in 1997, when a Danish tourist and his three dining companions got a bill for 1 041 840 forints at the Dreher Halaszcsarda.
    The Halaszcsarda got shut down and other shady restaurants were fined, but not for ripping off tourists. The notary, Judit Xantus, was unable to take direct action because the law did not forbid ripoffs. Instead, she fined them for minor violations such as improper storage of the complaint book. At the time, I was outraged for Xantus’ lack of backbone. Today, I realize she did what she could.
    As far as I know, foreign-owned restaurants were not targeted.
    The konzumlany practice continues to this very day, with girls usually asking horny tourists “Do you know where Becsi street is?” and then inviting them for a drink in a bar called The Galaxy.

  17. Seal Driver is correct – the konzum lányok practice began long before Orbán came to power. My memory of the time is that Xantus started out well, but after a while went overboard and began shutting down bars and restaurants left and right, perhaps a little too overzealously.

    There’s a place on Váci u. near Vörösmárty Sq. that Xantus wanted to shut down by locking the doors. Instead, they tore out the doors, and she was literally unable to close it. They never replaced them and even today, that place has doors made out of glass (it’s called Planet something or other I believe).

    However, I take issue with Seal Driver’s claim that “District 8’s street girls were mostly women who really needed the cash.” It’s been widely believed that organized crime pressured lots of families in that area to turn their daughters into streetwalkers. Organized crime was pretty bad in Dist. 8 in the late 90s, if you’ll recall.

  18. Jorn Johannes Marinus van Rij’s doctoral dissertation titled “The trafficking and sexual exploitation of native Hungarian speaking women in the Netherlands” discusses the reality of both legal and illegal prostitutes in Budapest and how they were trafficked by boyfriends, family members,and pimps. It is a very disturbing picture, to read a summary go,to http://ajk.pte.hu/files/Jorn%20van%20Rij%20summary.pdf

    I have a particular hostility to the sex trade, if that isn’t obvious already, as a young Army Officer I had my fair share of sexual exploitation experiences. Then I had two daughters and realized how deeply tragic this entire experience of the sex trade is. Budapest in terms of its sex trade while significantly large is nothing compared to what I saw in Subic Bay the Philippines, which the U.S. Navy, Army, and Air Force turned into a massive whore house during the Vietnam War. The fact that György Gattyán, the so-called ”porn king” who established his wealth by running internet sites with erotic content, and has recently moved his business to Luxemburg, is now considered to be the Hungary’s most wealthy man demonstrates the depth and breath of the sex industry in Hungary. The fact that Gattyán moved his operation to Luxemburg no doubt has to do with taxes and probably various sex industry shake downs by Fidesz operatives.

  19. Istvan:

    Gattyan moved for corporate tax reasons, sure, but also for the fact that – as we can expect from fideszniks – some well-dressed gentlemen close to the government started appear regularly at his company and ask for ‘donations’.

    Like it or not, what Gattyan’s company does is totally legitimate. I’m not sure it is fair to compared it to illegal or criminal activities.

  20. Huszti – Lovas “found” his place at Echo TV too, where he has his own talk show. The topic of his show generally is how evil the US is.

  21. Once I mentioned it, but still: Gattyán provides the technical background – the mainframes for chat-sites and whatnot of the kind – to the porn industry, which is obviously a huge business and a morally despicable as that, but not a producer of the stuff. Moving the business is more than probable business related.

    Pretty much comparable to the weapon-business as I see it, by the way.
    The “respectable” people owns the companies which produce weapons – and the whole sale killing made by the users of their products, – which is morally lays on even lower scale in my book than porn, but that’s the way it is – not by the producers.

    The only difference lays somewhere in the culture, or better to say in the history.
    Producing and using equipments for killing each other worldwide is widely accepted since thousands of years, selling techniques for exploiting and abusing each other worldwide is fairly new in comparison, so it causes a bit more ripples at the present.

    I must stress, however that the sex-trade is totally unacceptable in my point of view, in any form, particularly when it comes to trafficking, as the main part of the ‘industry’ these days even in Europe.
    Would worth to make some evaluation/analys regarding how much the Orbán government contributed to the Hungarian sex-slave export trough its brainless economy, among other things.

  22. Istvan’s wikisexguide link is worth a read. I had absolutely no idea so much of it went on, or that it was so organised (and documented!). The only positive I can think of is that, thankfully, to the average tourist (or even the average semi-resident!) none of this is particularly obvious – at least not in the tourist bits of Bp.

    Knowing, as we have seen proven so often around the world, that the sex trade is always riddled with corruption, and politicians, police, etc making as much out of it as they can, it must be inevitable that local Fidesz are making a fortune out of this.

  23. @Buddy – What I meant was, women who were either raising funds for their drug habits or their pimps. They needed the money because if they didn’t get it, they would get beat up.
    I was approached a few times on Jozsef korut by women who were clearly freelancers, but these were in the minority.

  24. @Istvan

    Considering this is a country capital with an urban area population over 2 million people, the sex trade in Budapest can hardly be considered extensive or vast by European ‘standards’. Note that I’m not saying it’s negligible either, and the economic crisis has most likely made it grow in the last five years (more candidates on the selling and intermediary sides, less opportunities abroad, in richer European cities). But it looks pale in comparison with for instance Barcelona, London, every major German city, or even Prague. And it is now quite discreet.

    Nevertheless, I agree there is something fishy going on with the authorities, and I’m not sure it’s limited to hotels. The Hungarian law obliges women (and men) to register in order to sell sex legally, something most people do not want to do – they do not want to be identified by the authorities of their own country, especially when it’s a small one. So my guess is a majority operate illegally, which places them at the mercy of the police.

    As for the tourist angle, allow me to find it’s a tad easy. At the bottom of the website you linked to there’s a link to a Hungarian website, which contains ‘reviews’ of encounters with prostitutes. Most of these ‘reviews’ seem to be in Hungarian. Consumption by locals seems to be flourishing.

  25. no mention of his relationship to Csetényi Csaba and Krskó Tibor the owners of Hamu és Gyémánt – their notoriously flexible business arrangements certainly helped Rogan to steal lots of money.

  26. oh and Gattyán moved his company to Luxemourg because he resented being “asked” to choose between building a new football stadium in Debrecen or facing a NAV ellenőrzés.

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