How do European Union funds end up in the hands of the Orbán family?

The European Union has been, wittingly or unwittingly, enriching members of the Orbán family. Today, in what is undoubtedly only one story of many, I’ll focus on Viktor Orbán’s eldest daughter, Ráhel.

The last time Ráhel, Rasi to her family and friends, was in the news was more than a year ago when she got married with great fanfare to István Tiborcz, a 27-year-old businessman with a law degree. In 2008 Tiborcz and a friend started a small business dealing with electrical and energy supplies. In 2009 the business had a modest profit of 8 million forints on which they paid 2 million in taxes. Two years later the annual profits of the groom’s business were over 2.5 billion forints.

Ráhel is in the news again. This time on account of her spending a year at the École Hôtelière de Lausanne in Switzerland where she is working toward “an Executive MBA in Hospitality Administration.” Why the interest in Ráhel’s studies? The reason for all the fuss is the high tuition fee she has to pay for the two semesters she is spending in Lausanne. The cost is 60,000 Swiss francs or 15 million Hungarian forints. Because of the recent focus on alleged widespread corruption among Hungarian politicians, this tuition fee prompted questions about the source of the money. Journalists pointed the finger at Rasi’s father, Prime Minister Viktor Orbán. How can he plop down 60,000 Swiss francs?

I, who followed the research done by Atlatszlo.hu at the time of the wedding and reported about the sudden enrichment of István Tiborcz, couldn’t quite understand why Hungarian journalists assumed that it had to be Orbán who footed the bill when Rasi has been married for over a year to a young man who since 2010 has become quite wealthy.

Ráhel became tired of all the questions and accusations and decided to speak up on her Facebook page. She said that she and her husband are paying her tuition, not her father. I’ll bet she regrets that decision now because her Facebook note prompted Atlatszlo.hu to look into Tiborcz’s more recent business affairs. And what they found is not pretty.

The happy couple

The happy couple

Of course there is nothing wrong with being a successful businessman, but István Tiborcz’s success most likely has nothing to do with his business acumen. Before Viktor Orbán became prime minister he owned a very modest business. The meteoric rise in his fortunes can be compared only to that of Lőrinc Mészáros: from 8 million in revenues in 2009 to 3 billion in 2011.

How did he achieve this incredible feat? In 2010 one of Közgép’s divisions purchased the majority of shares in Tiborcz’s business and used it as yet another of its conduits for EU cohesion funds. The customers of E-Os Innovatív Zrt., as the business was renamed, were almost exclusively municipal governments with Fidesz mayors. They contracted with E-Os to do work that was funded by cohesion funds from Brussels.

For reasons that are unclear, in 2012, according to publicly available information, Tiborcz’s business was renamed Elios Innovatív Zrt. and Közgép no longer had a majority stake. Two companies bought out Közgép, one of which, Green Investments, was owned by a former partner of István Tiborcz, Endre Hamar. The change in ownership had a decidedly negative impact on the company’s revenues. In 2012 Elios Innovatív Zrt. grossed only 20 million forints. Three weeks after the 2014 national election, however, Tiborcz bought out his former partner Endre Hamar, and from there on business boomed.

Tiborcz’s firm installs street lighting. Atlatszo.hu lists 2.9 billion forints worth of contracts with different municipalities: Hévíz, Balatonfüred, Kecskemét, Szekszárd, Dunaújváros, Sopron, Hatvan, Kalocsa, Bicske, just to mention a few. Most of these revenues (2.1 billion) were the result of a tender issued by the Nemzeti Fejlesztési Ügynökség (National Development Agency) and financed by the European Union. Local governments could apply for grants to reduce their energy costs; if successful, they received large sums of money to have the appropriate work done.

There are strict EU guidelines that the Hungarian authorities must follow. The most important rule is that the firm that prepares the technical details must not in any way be connected with the successful bidder. However, as Atlatszo.hu discovered, most of the tenders Tiborcz’s firm won were prepared by his former partner, Endre Hamar, who owned another company called Sistrade Kft. It is likely that Hamar and Tiborcz acted in collusion, making Tiborcz’s bid fraudulent. In fact, Atlatszo.hu notes that the arrangement was so bizarre, and presumably illegal, that Hamar was still an owner of Elios Innovatív Zrt. at the end of April 2014 when the firm signed the contract with the city of Héviz.

Atlatszo.hu did a yeoman’s job in trying to make sense of the company’s shifting identity and ownership structure. Unfortunately, many questions remain. One that baffles me is the role of Simicska’s Közgép. I find it more than a little odd that Simicska’s Közgép shows up to support the fledgling business of István Tiborcz, already known to be Ráhel’s boyfriend, only to withdraw from the firm after its spectacular growth. Közgép is not, as far as I know, active in venture capital or private equity. And, as the next year’s revenues showed, Tiborcz’s company was not ready to stand on its own.

I think it would be high time for Brussels to take a harder look at some of the businesses–and individuals–that profit from its largesse. Let’s not forget that in this case we are talking about the daughter and son-in-law of the prime minister. Surely, the goal of the EU convergence program is not to make the Orbán family rich.

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22 comments

  1. Eva, There were other contracts that were awarded without any tender to Rahel Orban’s husband. Of course it was legal since the amount of investment did not reach the 150,000,000 forint (475,000 EUR) threshold. Coincidentally it was short with 17,000 forints (53 EUR). Anything above that limit should of been publicly tendered. “Lucky” for them it was below!

    (A megbízást az Elios Zrt. hirdetmény közzététele nélküli tárgyalásos eljárásban nyerte el, mivel a beruházás értéke 17 ezer forint híján nem érte el a 150 millió forintos értékhatárt – e fölött már nyílt eljárást kellett volna lefolytatni.)

  2. It is a tricky topic. It is very hard to prove someone responsible for what their adult children do. And nobody is responsible for what their husband does legally. Even if there is criminality even if the husband hits someone in the face with fists.. The wife would not get charged with assault. Everyone is responsible for their own actions (adults). So attacks on people’s families are often ineffective and can even be counter-productive. The same goes on with the Obama family too, they are often attacked in the media and it is very ineffective. There is something about families,

    Unfortunately there are much more worrying signs. For example there was a discussion a few days ago on this blog:

    https://hungarianspectrum.wordpress.com/2014/12/18/the-first-state-owned-hungarian-bank-is-already-in-trouble/#comments

    and some deranged individuals lacking a moral compass actually proudly supported torture.

    Gybognar, Stevan Harnad, and petofi proved that they are despicable anti-humans. One of them for example calls brutal torture a “gripe” the other says families of suspects should be tortured as well. When you think humans can’t sink lower, some post or writing always proves that new subhuman levels can be found.

    Torture does not work it produces unreliable information as people who don’t know anything (because they are innocent) are forced to create stories under torture.

    Torture is not only against the law, every decent normal human being is against it, strongly. There was a time when the United States took a strong stance against torture.

    Torturers who used water boarding as torture were executed by the United States and not in small numbers. They were Japanese military torturers and that time, the United States knew the appropriate response to their actions. It was punishment by death.

    Even if someone considers that too harsh a jail sentence would still be appropriate according to many experts and legal scholars.

    And for those of you, like Stevan Harnad who support torture or belittle standing against it, I can only say one thing.

    I hope that you will not get tortured or suffer an illness with similar pain effects. That would make you realize how wrong you were. But there is a much simpler way. You can come to the same realization, that torture is wrong, immoral and inhumane. Simply by being a decent human being. You should try it sometime.

  3. Sam
    December 20, 2014 at 8:29 pm
    It is a tricky topic. It is very hard to prove someone responsible for what their adult children do. And nobody is responsible for what their husband does legally.

    Rahel posted on her Facebook page ” She said that she and her husband are paying her tuition, not her father.” THis made many Hungarians really angry. Simply Rahel does not have the means, and her husband wouldn’t have the means if Rahel’s dad would not be Viktor Orban. Let’s put it that way, Rahel husband w/o so much experience wouldn’t be able to get million forints worth of government contracts. He got it because his father in law. Rahel either is so far removed from reality or so very stupid if she believes that all of that money is coming to them because of her husband has some genius business formula.
    By the way, possessing stolen property, accepting stolen property, knowingly living off of money obtained by crime is a criminal offence. Rahel could also be an accomplice if she does have knowledge how some of those contracts ended up with her husband.

  4. @Sam

    I don’t know who you are, Sam, but putting me in the company of Gybognar and Stevan Harnad…well, I’ll accept that anytime. From their writings, both are honourable men, and independent thinkers. You might try a dose of that ‘independent thinking’ yourself, sometime rather than your knee-jerk, political correctness.

    Unfortunately, strenuous efforts are often times required to prevent much greater harm. There was a good reason why the biblical teachers talked of ‘an eye for an eye’. Perhaps if there was an appropriate punishment meted out to the families of the September 11 terrorists (rather than the thousands of dollars they received) than terrorism may be less popular in the Moslem world.

    Or, try imagining a nuclear attack on a city….and what lengths you’d go to to prevent it. You may not see it, but terrorism is spreading, territorially and psychologically. The limits of what can be attacked and how are disappearing (ie. Sydney). We’re not that far from a calamitous reality. You ought to have a look at a film called, “The Day After”…and then decide to what lengths you’d go to avoid that scenario. Wouldn’t you look like a silly bugger sitting on the ruins of our civilization contemplating your learn-by-rote mantra on the evils of torture…?

  5. To Sam and other bleeding hearts: if your child were in a school like the one in Pakistan, where the jihadists killed over a hundred children just for the fun of it, and if you had in your hand someone affiliated with a group that planed an imminent similar attack against the school where your child was, I would like to see the methods you would use to get the timely information required to stop the attack.

    After 9/11 there were intelligent reports that jihadists were on their way to the US with backpack nuclear weapons and that other similar attacks were in the planning stage. The people who took the decision to use inhuman methods to stop these actions are understandable. They did not do it because they liked to torture people. And they did it with the legal opinion of the Justice Department of the US that what they were doing was legal.

    But again, this has nothing to do with the current topic: how the Orban dynasty is syphoning off EU funds. So, please, do not reply to my post.

  6. Reflect a little before falling for every obvious provocation…

    “Those who criticize Orban are CIA partisans and apologists for torture”

    It is so dead-obvious that “troll-Sam” is just another avatar of “troll-questions” that all I can do is re-post what I posted last time:

    December 19, 2014 at 4:30 pm
    The Tu-Quoque Troll Gambit

    Bravo to Marcel Dé for his brilliant <a href="http://www.ciampino-airport.info"Ciampino send-up of the CIA-questions troll!

    But can we not beseech our other HS regulars who usually post such thoughtful information to reflect a little before falling for such an obvious provocation?

    New or occasional visitors will get the impression that HS is for ranting indiscriminately about every ejnye-ejnye gripe or distraction under the sun if you keep playing into the hands of trolls whose objective is precisely to distract.

  7. Totally OT: Yesterday, I was in a traffic jam on the 11 route in Szentendre, and I noticed a statue, which was erected for the 100th anniversary of Szántó Piroska 100 birthday. I do not like it (others may like it), but I nickname it. For me this is the Magyar Polip (Hungarian Octopus).

    More here:http://www.szentendreihirek.hu/2014/12/szoboravatas/
    https://www.facebook.com/szarka.karoly.73/media_set?set=a.1578935705652812.1073741868.100006091921379&type=3&uploaded=27&pnref=story

  8. In their complacency, the European Union has no choice, but to finance the Orban Clan. These marauders are so keen and so fast, that by the time the lumbering auditors look into some of the suspicious transactions, perhaps months and years later, the trail has long gone cold. The entire system is teeming with sharks established and specialized in the milking of the European Union and if I understand correctly the system of National Mafia, approximately 40% of all EU money is siphoned off to private and party pockets.

  9. I’m quite happy to condemn torture and corruption at one and the same time. I’m delighted that the American Senate has revealed CIA torture (where else has a government revealed this?), am disgusted by the details, and hope there are prosecutions of those who violated national and international law (n.b. – for those who think torture is effective: read the Senate’s report, which reveals that virtually no useful information was gathered by the torturers, whereas traditional interrogation techniques revealed much of use.)
    Now, back to Hungary please – those who wish to discuss CIA infamy have all sorts of other fora, and should run off to those. This space is about Hungary.

  10. This is a classic crime family structure. There are the born family members (related to Orban himself or to his wife, Aniko Lévai whose family also benefited fantastically) and then the ‘made’ members (like Garancsi, Mészáros etc.).

    Of course, they are assisted by a host of enablers, like lawyers (they are lawyers themselves), so make sure that there is no physical or documentary evidence supporting allegation of fraud. Although I assume that the US and Russia and potentially other countries have some recorded mobile calls, they will never use those.

  11. Re Sam: ever since Kumin Ferenc was shuffled off to a cushy exile in New York the quality and consistency of pro-FIDESZ comment trolling has suffered immeasurably. Were once the rent-a-trolls were at least fluent in English, now it seems that anyone with high school level English can sign up with the Foreign Ministry or NER and get the daily talking points and per-post pay scale. Upset with Senator John McCain? Well, just attack the issue of torture! Not satisfied with American support for Hungarian civil society? Torture! Colleen bell got your undies tied in a knot? Torture… (Nice try connecting Stephen Harnad to torture – when he’s not advising us to stop eating animals.)

    In Sweden trolls don’t have such a good time. http://www.technologyreview.com/photoessay/533426/the-troll-hunters/

  12. @Sam, If this kind of talk doesn’t stop, your comments will not be accepted here. And one more thing. Stick to the topic of this blog which is not CIA agents or torture but Hungarian politics.

  13. Hungary has got a problem.
    This nation, like many others has been infected by a historical barrage of lies and crimes.
    We can meet the resulting sick products of human species in politics, in journalism, in churches, in blogs, in our families and among our classmates.
    I can not trust many old friends any more.
    The corrupt regimes of the last 100, or maybe 1000 years left their marks on the people.
    Cure for Hungary is not around yet.
    Let us hope that this Christmas will not make the Hungarian life much worse.

  14. True or not, rumor has it that when Orban decided to obtain his own personal construction company with usable public procurement credentials (in order to have the option to compete against Simicska’s Közgép), that is when Istvan Garancsi acquired Market Zrt. Garancsi did not actually pay the sellers a real purchase price (regardless of any contrary statement in the sale and purchase agreement) but rather Garancsi promised to allocate EU funds or state subsidies to a project of the sellers’ choosing.

    I mean why would you actually pay if you can pay by using the money of Hungarian or German taxpayers? Are you crazy or what?

  15. I tried to remind readers about Viktor Orbn’s wife (Rahel’s mom) amazing, fast enrichment by the Tokaj land deals. Eva wrote several great articles in the past, and one that explained how a Hungarian magazine proved that Viktor Orban made sure that his wife’s business will receive as much (Paid by Hungarian taxpayers) fromTokaj as possible. Orban took the magazine to court. He lost it in the first round, but won in the second round.. NOT because he did not cheat, but because the magazine falsely stated that the promises from Orban came at general meeting. So, how the Orban/Fidesz PR breaks the news? Orban won against the magazine that lied. THe retraction is not about the cheating but about how it was not an official meeting. (Eva’s previous articles cannot be reached unfortunately, or I cannot find them.)
    From the minutes of the “non-official” meeting was prepared by the only man who was was able to write shorthand. He was a witness, but hen again the lawsuit was not about the promises made to Levai and her husband, but if it was promised on an official meeting or not.

    It was never contested n that Viktor Orban said the following:
    „Ne nyerjünk annyit, amennyit kértünk, ne mi kapjuk a legtöbbet”
    “Let’s not win as much as much we asked for, let’s not receive the most.”

    THere was an investigation conducted by the Parliament that also found that Viktor Orban and his family’s enrichment is highly suspicious, and at some points were totally against the law.
    Here is the Official transcript from the library of the parliament, The Orban family enrichment from public sources, in particular with regard to the Vineyard: http://www.parlament.hu/irom37/18470/18470.pdf

    Below is the text that shows that the plaintiff only requested that the retraction should state that there were no general meetings, so the minutes were not “minutes”.
    A felperes olyan tartalmú helyreigazítás közlésére kérte kötelezni az alperest, amelyből kitűnik, hogy a felperesi gazdasági társaság 2000. szeptember 6-án, 2001. június 4-én, illetve 2001. december 2-án nem tartott közgyűlést (illetve ennek ellenkezőjét a cikk valótlanul állította), így ilyen taggyűlésekről jegyzőkönyv sem készülhetett. A felperes vitatta az alperes által csatolt iratmásolatok valódiságát, és előadta azt is, hogy azokból így is megállapítható, hogy a leírtak nem feleltethetőek meg egy kft. taggyűléseivel szemben a gazdasági társaságokról szóló 1997. évi CXLIV. törvény (továbbiakban: Gt.) által támasztott pontos követelményeknek.

  16. If Rahel Orban or any of her apologists are reading, I’ve just spent a lovely evening at the Pal Heim kid’s hospital. One of Budapest’s best, apparently.

    Unfortunately, the reception desk in the ’emergency’ dept closed at 9 because there was no one to staff it. And a three-hour waiting list for a room full of sick toddlers because there aren’t enough doctors on duty. Oh and half the light bulbs aren’t working. Lots of very angry parents.

    But never mind! As long as we have lots of money for football stadiums and gucci bags for the faithful!

  17. Dear Ron, The Szentendre memorial sculpture by Zsófia Farkas dedicated to Piroska Szántó is actually a very good piece of art. Otherwise, I have nothing to add to the above topic except that the Hungarian poor will face terrible times this upcoming year. maggie, Éva’s fan, Budapest

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