Property swindle in Budapest’s District V

The revelations that surfaced about NET Holding in the last few days, thanks to 444.hu, exposed an intricate network of affiliated companies and described the complicated international trading in natural gas. The corruption case I will be talking about today is a lot simpler. Admittedly, the loss to the taxpayers is also a lot less, about four to ten billion forints over the last eight years. Small potatoes, you might say. But keep in mind that we are talking about the sale of one-third of all real estate owned by the municipality of District V, where property prices are the highest in the country. Moreover, these shady deals occurred during the mayoralty of Antal Rogán, considered to be the third most important politician in Hungary after Viktor Orbán and János Lázár.

Stories of corruption in District V, downtown Budapest, have been circulating for almost a year. Népszava learned in April 2014 that a city official demanded a bribe from a businessman who had just successfully competed for a site to open a restaurant. The brave man refused and went straight to the police, naming names. As is typical in Fidesz country, the deputy mayor who was most likely implicated in the affair did not end up in court but was simply removed from the scene and transferred to the ministry of foreign affairs where an “urgent” job was waiting for him. His replacement was Péter Szentgyörgyvölgyi, who became the district mayor last October. Soon enough it became known that Szentgyörgyvölgyi himself was a beneficiary of the shady real estate deals of the past few years. Under pressure, he decided to give his apartment back because “he just got tired of all the attacks against him.” Details of these revelations can be found in a post I wrote in December.

The force behind the investigations is Péter Juhász (Együtt), who was Szentgyörgyvölgyi’s opponent in the municipal election and who subsequently became a member of the city council of District V. He thus has access to documents that shed light on the means by which expensive apartments or business sites were passed on to political friends for a fraction of their real value. Juhász is a former human rights activist with vast experience as an investigator of corruption cases.

So, how was it done? The key concept in these transactions is preemption, the right of a tenant to purchase something, especially public property, ahead of anyone else. Ever since the 1990s a law has been on the books that allows the state or the municipality to sell its properties to tenants at a reduced price. The rationale behind this practice was that every year the tenants of these public properties were obligated to pay higher and higher rents and received no equity in return. The price abatement thus assumed a long-standing contract between owners and tenants. Moreover, as Antónia Rádi of Átlátszó.hu pointed out, three persons are needed for such a transaction: the owner, the person who intends to buy the property, and the current tenant. Apparently, in practice this particular rule is often dispensed with. That is, no outside buyer is necessary for the transaction. What happened in District V, however, went beyond both the law as it was written and the law as it was practiced. The transactions were, quite simply, illegal.

Let’s say an apartment or store front became vacant. The city officials notified their friends, political or otherwise, that these sites were available for rent. After a few months the happy tenants announced their desire to buy the property. The price was determined by two “independent” appraisers. One of the appraisal firms was owned in part by György Rubovszky, a Christian Democratic member of parliament and father of Csilla Rubovszky, deputy mayor of District V. In addition, Rubovszky, a lawyer, was employed by the district as an “expert” assisting the committee in dealing with properties owned by the district. The assessed prices were very low. They always agreed with the prices on the district’s books, most likely thanks to inside information by Rubovszky. Then came the bonus: a 30% reduction in the price.

Among the many cases Péter Juhász is pursuing, he found a tenant turned owner who within a few months sold his newly acquired property for double what he had paid for it.

Juhász is not only digging through property files. He also organized a walk through the streets where most of the questionable property transfers took place.

And how much did Fidesz steal from you? Péter Juhász leading the walk in District V

“And how much did Fidesz steal from you?” Péter Juhász leading the walk in District V

Rubovszky is just one of several people with Fidesz or government connections to surface in these real estate swindles. Péter Heim also handled some of the deals. He is now head of Századvég and as such may be on the list of individuals banned from entering the United States because of their involvement in corruption cases affecting U.S. businesses operating in Hungary. András Giró-Szász, undersecretary in the prime minister’s office, is also indirectly involved through his brother-in-law and business partner, Péter Serfőző.

Juhász is convinced that the city officials undertook these real estate deals as part of a private business venture and did so in a conspiratorial manner. Between 2008 and 2013 277 pieces of real estate changed hands in District V. The appraisers low-balled the value of these properties at a half or a third of their real worth. On top of that came the 30% abatement. If Juhász, who since then pressed charges against District V, can prove his claim, the people involved might end up in jail for years. Or, they should but, judging from other earlier cases, they most likely won’t.

78 comments

  1. “circulating for almost a year.” – Nop; a bit more.

    However; from this article I am missing a statement of Antal Rogán who said some days ago on -almost every TV-, news and etc… “There is no case at all”, together with this was already explained “the fact”; 2/3 of the Hungarian Nation expressed they wish to carry on what we have started in 2010.

  2. Back last year I made a comment regarding the parking permits that business owners must buy form the districts. The payment for 2-3 or even more parking spaces were demeaned to be paid to an “independent” law firm.
    An other story that I know form those who were directly involved goes like this. (This is not only a District V. issue by the way). Commercial property is up for lease by the district but for months no-one shows interest. Finally an independent organization bids for the property with a low price, hoping to get a great deal as no one is interested. Suddenly there is an other bidder. Bids must be submitted in sealed envelope. The winning bid is a few thousand forints higher than the bid submitted by bidder number one. Property is leased to the highest bidder, then goes on sale shortly with the privilege to buy for the bidder of the lease.

  3. I think for most of us, who lived most of our life in democracy and in a constitutional state, understanding the people who living idly and inert in the midst of constant and wide ranging corruption is nearly impossible. Yet, on the other hand, a lots of people loose sensitivity, somewhat as we do about senseless killings, drug dealings, robbery, break-ins in some of the large city’s poor neighborhoods. It does not bother us very much on the daily basis, until it happens to us.

  4. I’m glad that Juhász is sticking his neck out on exposing this issue, but I think it needs to be mentioned that Átlátszó looked in Juhász’s own business dealings last year and found several, shall we say… irregularities. He has been involved in numerous companies in the past few years, most of which appear to have disappeared into thin air, possibly owing money to the government.

    I realize that the scale we’re talking about here is nowhere near the extent of theft that Rogán et al are perpetuating, but still, this looks awfully sketchy for someone who is purportedly campaigning against corruption. And Juhász’s excuses, that he moved around a lot over the past 10 years and didn’t get official letters, aren’t exactly convincing either (at least not to me).

    Maybe there’s a good explanation for all of this…

    http://blog.atlatszo.hu/2014/10/utananeztunk-juhasz-peter-fantomcegeinek/

  5. What is the reality behind the conversion of the SF indexed mortgages?
    If the conversion was completed, Orban became untouchable.
    We will never get a divorce from him.

  6. The conversion of Swiss francs was already completed so the Hungarian economy avoided a 700 billion HUF worth of hit. This would have hit the population directly so the avoidance will not only boost Hungarian GDP in an enormous amount it will impact the ability of households to spend and will have ramifications for decades to come.

    It was really an exceptional moment in history.

    But there is another issue that is a cause for great concern.

    In France a comedian was arrested (!!) over a joke posted on Facebook that was a word play on the Je suis Charlie slogan. Even if someone does not like a joke to arrest a comic for a joke is an outrageous violation of not only free speech but really horrible as well.

    But the problem is not the arrest itself. It is the reaction within Hungary. Nobody is standing up for free speech nobody is standing up against this arrest (the arrested person was black skinned, so racism against blacks might have also played a part). So Hungarian society is only concerned with free speech until they agree with the speech.

    If they don’t like a joke, then the comic might as well get arrested by force of the State and nobody is raising their voice, nobody is making a stand or organizing a protest in front of the French embassy.

    Shameful.

  7. ruppo:
    You are dead wrong and there is really no need for false Fidesz propaganda. The exchange of SFr debt of the population to Forints have absolutely no effect on the Hungarian GDP. The statistics given out by the KSH are doctored and false anyway, ordered by the Fidesz, as the hamburgers and french fries at McDonalds.

    As to the additional money remaining in the pockets of the people, that is not going to alter the GDP. First of all, the taxes are higher this year. Then there are new road taxes, which will be built into the prices of consumables. Inflation is running at 10%, but the gas prices and the KSH distorts everything, so it will be a small negative number at year end. This way they may not raise the retirement benefits next year, but only nominally, because retired people are the backbone of the Fidesz voting population. Very little, if any extra money will be realized by the people and with no reserves left, most of it will be kept under the mattress and pillows at home, so they don’t have to pay fees for getting it back from their bank account.

    As to any positive note to the Orbán Government, there is none, they were just lucky with the timing, but even so they were three years too late, so they wasted 1,000 Billion forints of the people in the meantime, because the exchange rate was a lot lower in 2011 and 2012 too.

    The Orbán-Matolcs duo just waited, until they could work out the details, how can the MNB profit from the exchange and ruin the rest of the commercial banks. The MNB will realize about 200 Billion in profits and that is why the matolcs promised to help out the 160 Billion missing from the 2015 Budget.

    The Fidesz maffia, the criminals run the country as a private principality and the corruption is set up and managed by the Government, administered by the tax authority and the city and state governments, along with companies specialized just for this purpose, “preparing applications” and worthless studies for exorbitant prices for EU assistance moneys.

    We don’t need to read lies and nobody should wax about good deeds the Orbán Government does or did, because there was and there is NONE! I take it back, there was one, in 2010, immediately after they won the elections by cheating. The law about distilling large amount of alcohol by private individuals. This readily available, cheap alcohol served the population well, numbing their senses up until the end of 2014. Mr. André Goodfriend had to sober up those, who were not in a complete stupor to be able to enjoy the Fidesz “democracy”.

    Write next time, when Rogán goes to jail for the 500 Billion real estate corruption he set up and ran in the last five years, and that is but just one district of Budapest. Write again when Mr. Lázár, Ms. Németh, Mr. Herényi and a few more shady criminals get their lifetime sentences along with Orbán for the huge corruption business they run with MVM and the MOL together.

    What about the MKB purchase, which was taken over by the MNB (against EU laws) and the now it generates 1,100 Billions of annual loss, (25% more than the 800 Billion annual loss was, before the SFr went up 25%) that will be realized after the bank is “reorganized” and the mattocks showers in the tax money by the truckloads.

    The German owners opened champagne bottles in December, celebrated the good deal they made with the ignorant and callous Orbán last year in July, because even after the €760.0 million capital infusion and the meager €55.0 million purchase price, their total loss was €250.0 million only.

    In July the MKB losses were at the rate of 300 Billion Forints, by December it went up to 800 Billion forints annual rate, but now, since the Swiss Frank got 25% stronger, the rate of losses will be more than 1,100.0 Billion Forints annually.

    The Germans are no dummies, they are good businessmen. If it wasn’t so, they would not have the strongest economy in Europe. By comparison Hungary of course have one big thing going for it. The Fidesz slogan and their voters blind belief. “Hungary Performs Better.”

    Good Fidesz business? Let’s see. What about the MOL stock package bought in 2011, which is now worth Ft11,720.00, much less than half the purchasing price of Ft22,880.00 and originally cost 510 Billion Forints. Today, it is only worth 237.0 Billion, but with the interest on the 510 Billion loan for 4 years which is an additional Ft82.0 Billion, the losses are now over Ft355.0 Billion.

    Orbán is a half-wit ignoramus, isolated and his brown-nosing comrades are feeding him with false information, also saying only “yes” to all his enormously stupid proposals and vote it in for laws. They distorted and control the economy and the working environment of businesses, so they go broke and the Fidesz supporters can buy them for peanuts. Then they change the law, so they can operate it profitably. See what they’ve done with the casinos. Immoral to gamble??? No sireeee! Immoral only to anyone, except Fidesz oligarchs, like Andy Vajna for example.

    Fidesz philosophy:

    Education: The Government only wants to educate blue collar slaves with low mental acumen, so they believe what the new MTV1 propaganda channel tells them day by day and work in the German or other assembly plants in large numbers. They will not have enough skills this way to migrate to the West.

    Healt care: People with major illnesses have to wait a few years for getting treatment, so most of the very ill will die before a penny has to be spent on them. They are a drain on the taxes. The money instead is being stolen by the Fidesz politicians and supporters to get very wealthy.

    Handicapped people: They should stay home, they don’t look like “normal people”, they are no good for anything, the Fidesz/KDNP/Jobbik does not want to see any of them on the streets or workplaces. Have their family support them and hopefully they die as soon as possible, because for the Fidesz, they are worthless.

    Homeless people: Forbidden to be downtown, or in the business districts, so foreign tourists and Fidesz politicians would not see them, therefore they don’t exist. No Fidesz politician ever gives donation, because everyone is worth only as much as his wealth, so they have to keep every penny and homeless people have no wealth, so they are not worth anything. Besides, “Who does not work, should not eat.” Best if the poor die and the sooner, the better.

    Women: Their place is in the Kitchen, in the Bedroom and the Maternity Wards and nowhere else.

    Gypsies: They are NOT Hungarians, they are nationless criminals, hopefully they die of young of starvation and diseases. The Jobbik would like to intern them, like Hitler did.

    One thing should be consider though: All the gypsies combined in Hungary, did not steal as much in a CENTURY, than the Fidesz politicians and their supporters stole in just 5 years.
    On top of it, the Fidesz robbed the entire population of Hungary of a decent, better, democratic life and future and forced them to be a backward, chauvinistic, third rate, poor country, similar to Moldova. This is a greater crime and even worse then the crimes of the Szálasi and the Rákosi regimes were, because it will take decades to correct.

    I could continue for hours. The entire Orbán Government consist of big time, nefarious criminals, the least they deserve is lifetime hard labor and complete confiscation of every penny they, their family and their friends have, those who benefited from their power and none should ever vote in their lifetime.
    =========

    http://www.atv.hu/videok/video-20150116-orban-viktor-politikai-kommunikacioja

    Mr. József Forgács professor, sociopsychologist explains and describes the behavior of Orbán and the majority of the people making up the Hungarian society with uncanny accuracy and proofs. Those who are not Orbán fans will watch the video more than once, it is so true and accurate analysis.

  8. This post is about Rogan’s mini-mafia in district 5, not FX speculation.

    By the way I heard already in 2010, when Rogan had been a mayor in district V for 4 years already that Orban threatened him with jailing him.

    Of course that was then, and this is now. Although Rogan was close to the top even then he is an indispensible member of Orban’s innermost circle and best friends (co-conspirator with) Arpad Habony, who actually stands closest to Orban.

    Anyway, the point is Orban new already in 2010 very well how many pieces of real estate Rogan and friends sold below prices, how they extracted what amounted to protection money and so on. But Orban did nothing of course, because this was a good incentive for Tóni to be super-loyal and he didn’t disappoint.

    Also remember that Mr. Andras Puskas (the bagman and enforcer for Rogan) disappeared from his position as deputy mayor to Rogan in mid-2014. It is rumored that there was an investigation already underway in mid-2014 and there was wire-tapped conversation incriminating both Puskas and Rogan.

    This is an interesting story, and Juhash has a point, this is a mafia-like operation defrauding the public to the tune of billions.

    There is ample evidence, and the story is now in the hands of Orban whose friend Polt (who by now has hired hundreds of loyal prosecutors) decide about investigating or bringing charges.

    The trick – even if there was a case eventually – is to bring charges which cannot be supported by evidence so as to engineer an acquittal in the end for Rogan and his friends. There are probably 3-4-5-6 different crimes Rogan committed under the Penal Code and the prosecution will probably eventually choose that which is most complicated for the judges to understand and clarify and least likely to bring damage to Rogan.

  9. Thanks @gybognarjr. I did live most of my life in a democracy and in a constitutional state. I came here a few years before it all turned totally crazy. Very well described by you. To me unbelievable that in the 21st century, even in within the EU, someone is able to build up a criminal syndicate of these dimensions. I often have to bite my tongue not to offend those Fidesz followers i time to time meet on my way too much. A whole nation is used, and they just sit in apathy. As a normal human being, it’s sad to witness, it sometimes makes me angry but it always surprises me. I often hear all the excuses why the people don’t step up and do something about it.

    Since i was a teenager, i was always fascinated by this strange country in the middle of Europe. So fascinated, that i decided to once move here. So i did, many years after. While living here, i saw good things and bad things, just like in any other country, but i did love Hungary for what it was.

    What happened to Hungary while i was here is beyond my imagination. The darkest side of the human race is unfolded in front of my eyes, in pure daylight. As i said, it’s unbelievable to me. After all, Hungary was given a fair chance to move towards a brighter future the last 25 years. Just like it’s neighbors. What we see today, is a Hungary who blew it all away, and in the end, the people of Hungary are to blame. You get what you deserve. My early fascination of Hungary as a strange country proved right. Just not in the loving sense i first thought. Here i’m supposed to say, so, so sad….for Hungary. But i guess the majority is happy with the situation (i don’t buy the argument about the “only” 2.8 million Fidesz voters anymore. Those who don’t vote support the government and the circumstances. You don’t need democratic tradition or education to figure that out, so no excuses. Actually, the constant Hungarian excuses is getting so tiring and pathetic).

    All the best of luck to the good and honest people of Hungary. I know there are a few of you out there.

  10. @Viking:

    Yes, it seems Hungarians somehow didn’t find the way into democracy 25 years ago. Of course I came here as a tourist first so I didn’t see or hear about all those machinations – for visitors Hungary was and still is a nice place. Only in the last years (after I met my wife) did I become more interested in politics but still: What can/could I do?
    Any way we’re too old so we just try to enjoy the rest of our life – and help the younger ones in my wife’s family a bit …

    I’ve written about it before:
    The husband of one of my sisters spent around two and a half years in Budapest in the middle 90s working as a kind of financial controller for one of the big global players and he was so angry (on different levels) after that stay that he won’t come to visit again. Of course he enjoyed the good restaurants etc but business must have been crazy for him, dealing with those crooks! So only my sister visits us here regulary and enjoys the good life …

    A bit OT but maybe interesting:

    He wouldn’t tell me about those business machinations of the Hungarians he had to work with, just some things which were not directly business related.

    He was responsible for the company cars and almost every day one was stolen so what did he do: He ordered mechanical locks on the gear boxes made of strong steel (Volvo used to have them factory installed) so the cars couldn’t be moved even if you short circuited the ignition – and the number of stolen cars dropped to (almost) zero …

    Only one car was stolen later – a sad, but in a way really funny story:

    His boss came out of a restaurant and saw people loading his shiny BMW (7 series) onto a lorry. He was able to read the lorry’s licence plate and immediately phoned someone higher up in the police which he knew very well, so there was a general alert all over Hungary.
    The lorry was found and stopped – it was almost near the border to Romania or Ukraine. And when the police opened the lorry they found the BMW already half dismantled – and one of the people working on it was a mechanic from a BMW garage in Budapest …

  11. I think every Hungarian patriot can be happy that the mortgage loans were converted before the Swiss franc disaster. Not because it had anything to do with the government, but because it would have been Hungarian families that could have been ruined.

    This event without the conversion would have created many collapsed house mortgages, leading to higher homlessness, decreasing house prices (bad for every property owner) and many other negative consequences for the country of Hungary.

    This conversion will help Hungary as a country an enormous amount, the conversion issue will even help banks (the lenders) :

    ““Even though the government’s intention wasn’t to save local banks, the loan conversion is a huge relief for lenders as they would have seen their risk cost skyrocket had these measures not been put in place,” Zoltan Reczey, an analyst at Budapest-based brokerage Buda-Cash Zrt., said by phone. “There would’ve been mass hysteria.””

    http://www.bloomberg.com/news/2015-01-16/hungary-s-orban-makes-world-s-best-trade-on-swiss-franc-loans.html

  12. @Viking
    Hello, I have a few questions for you:
    As a foreigner, who has lived in more then one country, what are your views of the future of Hungary? What do you suggest to a hungarian – who share your thoughts – thinking about leaving this country?

  13. Special announcement. A fascinating documentary was aired a few days ago on Frontline (PBS) on Putin’s career. It is based on a new book by Karen Dawisha entitled Putin’s Keptocracy. Anyone interested in Orbán’s syndicate should watch it. It is a must. Luckily, it is available on the Internet in excellent quality:

    http://video.pbs.org/video/2365401766/

  14. Thanks for the link Eva and thanks for your work. Very appreciated.

    To “Wolfi”, you do your duty already, by speaking up. Hungary is still a nice place for indeed tourists, that’s my business.

    To “The Clash”, i believe i’m needed in Hungary, so i’m not leaving. I also have son here now though, and if i experience, that his future and possibilities is at risk because of the conditions in Hungary, then it’s another thing. We speak three languages at home, preparing him for a globalized world, teaching him to distinguish, to be tolerant and to have a critical sense. If all this is threatened during his future education in Hungary, then we are out. Eva’s articles about Orbans crackdown on education is not too uplifting, but we don’t give up that easily.

    For the good people of Hungary, the first move should be to put the fear away. I always hear, that people are scared of loosing their job and therefore just have to accept the situation. Those who fear have to realize, that things will only get worse, and the longer they keep quiet, the more there is to fear about. I’m fully aware, it’s easier said than done. When someone breaks the ice, more will follow, and if the people really want a change, the history proves, that they will get it, sooner or later. It’s hard work, but you sometimes has to work out to repair things you screwed up. Quite a few regimes were overthrown during history, even the most violent ones. Here it makes even more sense to talk about fear. I don’t believe Fidesz will dare use any violence. If they do, their departure will be even faster. The people and Europe can’t afford to let it happen.

  15. Interesting post about the corruption in district 5 as it relates to property sales. Here in Chicago American Hungarians got sucked into what they thought was cheap Hungarian property only to see the values collapse. There are numerous outfits marketing in our community again, here are two http://www.gatewayproperties.co.uk/node/why_budapest , http://www.tower-investments.com/ and there are many more including Capital Real Estate Budapest.

    In general my community here is not being sold on the idea of a quick turn around in values, but rather in rental incomes. The expectation is a 6% rental yield which is a good amount for these small investors owning only one or two units. If Orban continues his hostility towards the EU the large number of ex-pats who work in Budapest for multinationals will drop and this rental market will crash.

  16. @Istvan

    Everything is being upended by Airbnb. It’s like Über for empty apartments for tourists. It’s tax free money and I hear up to 10,000 Budapest apartments are already on Airbnb.

    You advertize your apartment on Airbnb and rent it in 3-4 day instalments for tourists. Actually the prices are not much cheaper than hotel room rates.

    Airbnb works and brings in a much higher yield on your investment than normal rentals do.

    It’s actually such a phenomenon that in district VII prices went up 20-30% last year and even the smallest, darkest, coldest apartments overlooking the inner yard could be sold quickly. The low-wage tourists coming to Budapest for a few days to get drunk cheaply (district VII is famous for its bars) just don’t care.

    District V has also tons of these apartments, but arguably the bigger apartments are very expensive. The sellers are waiting for rich Russia and Italian investors who tend to like the district and have money to invest in real estate.

  17. @ruppo: Thank you that is great! Now, if you have the time can you explain to my parents why did their pension only rise about 1% when their medication cost almost doubled on the same stock since last year? Why do they have to pay extra fees to drive on the highway? Why did the line at the Blaha is getting longer and longer for free food? Can you explain this spreadsheet by the Hungarian Central Statistics Office on Household income and Consumption? It looks to me that the “best time” Hungarians had was under Gyurcsany. THey made more money, they purchased more items, etc. But that is just me, I am sure you can tell us the truth. Here we go https://www.ksh.hu/docs/eng/xstadat/xstadat_long/h_zhc001.html

    Please use facts to prove your point. I am not sure why but the not to smart people who come here and throw in things like “Hungarians never had it better” without any factual support just rub me the worn way. You sound so smart, so in your next post please reply to the other questions, so people on this board would not think that you are shill.

  18. @gybognarjr

    Your points are spot on, but you have yet to bring the cosmic reality of what Orban is doing into focus. To do this, one has to accept this reality: Orban is not a goof or an ignoramus who knows not what he is doing: Orban is fully intent on his two purposes, one grandly more important him than the other–

    a) To rob the country for as much as he can, mostly for himself;

    b) To ruin Hungary and Hungarians.

    I’ll let you work out which is more important to him…

  19. I lived in the Fifth District for much of the 2000’s. Even in the 90s, it had a dreadful reputation for corruption with all political sides collaborating behind the scenes. There was a time when the Fifth District had a great many inexplicably empty shops and it was explained to me that in order to secure a rental contract, 10 millions forints had to be delivered to the council in an envelope. Which naturally had an inhibiting effect on people opening new shops. This was confirmed to me by several shopkeepers when I moved there in 2001. So I’m not at all surprised to see names quoted whose tenures have spanned both MSZP and Fidesz led councils. It truly is a “rotten borough” and I’d like to see not only Antal Rogan in jail, but also the egregious Pál Steiner (MSZP).

    Underneath where we lived, we discovered an enormous unused hall that extended through an entire block (100 meters by 20 by 20 high.) I persuaded the monument crusader, Mihály Ráday to come and make a TV report about it, in the hope of getting it used and known about. He was staggered by it. And yet we found out that it was being rented from the local government for something like 10 thousands forints a month by a dodgy “businessman” who clearly was hoping to sell it for its market value eventually. He once came to a house meeting to explain he was hoping to sell it to an up market Italian furniture company, which never happened and the meeting did little to dismiss our prejudices he was a crook (this was when Pál Steiner was mayor. But he continued to rent it during Rogán’s reign…) My impression was that corruption is so deeply embedded that there was remarkably little discretion in either the deals that were done, or the details that emerged.

    Corruption may have accelerated under Rogan. But it is the continuation of a strong Fifth District tradition in which the local MSZP was as greedily involved as Fidesz and earlier, the MDF. And when corruption is cross-party, it is unlikely that there will ever be prosecutions because just too many people on all sides have turned blind eyes.

  20. Dear Petofi.
    At the end of my comment, I listed the interview with József Forgács professor, political sociologist with Egon Rónai on atv.
    http://www.atv.hu/videok/video-20150116-orban-viktor-politikai-kommunikacioja

    Mr. Forgács delineates the two possibilities, for the motivations of Viktor Orbán. He is ruining Hungary, either consciously with knowledge, simply for maintaining his power and amassing wealth, or he does not understand democracy, the western culture, hates free enterprise and free markets, since he never lived in democracy and western culture and he is isolated and fed false news by his cronies.
    At any rate, Mr. Forgács gives a perfect analysis of the Orbán Government and the Hungarian society. It is not a pretty picture and it does not provide much hope for the near future.
    The underlying problem is not only the Government, which is made up of gross criminals, but the Hungarian people, their lack of democratic culture and behavior, their lack of self reliance, self assurance, ability to behave with authority and individualism and unite for good causes.
    Hungarians rather stay in self pity and boast of non-existent achievements and will not accept teaching from foreigners, they will not imitate good examples from nations which are very successful.
    Hungarians will rather sideline pre-eminent and successful people, scientists, engineers, from envy and insecurity, because they are living in a moral and financial corruption, get jobs, based favors from people they know and not for knowledge and competence.
    In Hungary there has never been democracy and because of their position in the Austro-Hungaria Monarchy, and the retribution for the 1848 Revolution, the citizenry did not develop in large numbers, except in a short period between the Compromise of 1867 and WWI, 1914. Since then, Hungary was under domestic or foreign dictators, and/or oppression.
    Please see the interview with Mr. Forgács, he is describing the problems of Hungary million times better than I and with complete understanding and explanations.

  21. Dear Eva. Egon Rónai mentioned, the Mr. Fogács wrote a report, recently on the Hungarian/Orbán autocracy and social behavior. I could not find any NEW publication listed either in Hungarian or in English by Mr. Forgács. Do you have any information on this?

  22. And here’s what he thinks about democracy in today’s Hungary – I’ll have to read and digest this myself first …

    Click to access ForgasSSSP2014.pdf


    The introduction looks promising already:
    ” However, the transition from dictatorship to democracy has been far from simple, and in some countries, such as in Hungary, there are worrying recent signs of popular support for a newly emerging autocratic system. “

  23. From the document p.16:
    “This empirical analysis is confirmed by Bibo (1991), a prominent Hungarian political thinker .
    He argued that repeated historical traumatisation and the permanent threat to national existence lead to pervasive fear which in turn produced cognitive and emotional regression. Traumatic collective experiences produce distorted perceptions of reality and political illusions resulting in a psychological state resembling characterized by collective victimhood and ‘political hysteria’”
    That doesn’t sound so good …

  24. @gybognarjr

    Thanks for the link: I just watched the interview.

    Of course, you know that no Hungarian living in Hungary would have had the nerve to say what
    the professor said. (In fact, the future might hold a law where such foreigners will be branded
    as undermining the state and be barred altogether.)

    Inspite of his outspokenness, I might suggest that the Professor was not strong enough–he might well have suggested that Hungarians suffer from a mass psychosis and a fundamental
    inferiority complex which can only receive succor or relief in lies detailing Hungarian ‘exceptionalism’ and the various conspiracies by outsiders to sideline the ‘Great Hungarian’
    potential. Truth is no longer a factor: the average persons mental stability depends on being
    fed lies to maintain the veneer of supremacy. Of course, Hitler not too long ago had done the same.

    What I find damning in all this is that the ‘good’ and ‘decent’ have gone underground. They’re
    not to be seen or heard. And of course, what can be said about the Fidesz underlings who may know what is happening but disregard it for their own advancement.

    The country, in time, will pay for all this. I hope that those who have aided and abetted will
    receive their due, too.

  25. @petofi:

    Just read my comments above – in his works the prof uses very strong words – scathing is my name for this!
    “Corruption has become endemic, yet the newly rich ‘kleptocracy’ has largely escaped punishment.”
    I haven’t really read that article from start to finish – don’t want to spoil my good mood for the weekend …

    @Éva:
    Could the ideas and works of József Forgács be the base for a post of yours? The results of those surveys – especially the comparisons between “regular people” and lawyers are fascinating!

  26. Thank you so much for all the links….and thank you for all the very the high quality comments. You are the prove, that this nation is not yet doomed.

  27. Petofi: We agree on all points. Thank you.
    Éva put up a link about a PBS documentary on Putin’s carrier. (Thanks Eva, I already watched it twice, will watch again and make notes)
    Orban is copying Putin’s kleptocracy as close as he can, and he is almost completed the task.

    I fear, that the gypsies will be Hungary’s Chechens and Orbán will do the same as Putin did against the Chechens, (and as Hitler did against Poland) to stage a fake gypsy uprising or a very bad, bloody incident, blaming the gypsies for it and make war on them, raising his popularity even within the ultra-right wing Jobbik voters and be elected, when otherwise he would have lost even an election full of cheating.

    Orban had lost all humanity completely, megalomaniac and just amassing wealth, robbing everyone he can. He is not as talented for deceit and international political intrigue his timing is lousy not as good as the reigning Grand Master of dictators, Mr. Putin. It is a fact, that few Hungarians in Hungary reach World class status in anything but sports. The good professionals, artists go abroad and achieve their success there.
    Unless there is a bloody uprising by Hungarians, there is no solution for Hungary and under these circumstances, I wish the EU would stop giving Orbán the money to build his kleptocracy and ally himself with the Russians against Europe.
    Hungary is as good example as any: “You make the bed you lie in.” same as the Hungarian equivalent “Ki mint veti ágyát, úgy aluszza álmát.” (Denn wie man sich bettet, so liegt man.)

  28. Viking, Thanks, but many of us don’t live in Hungary and most Hungarians living in Hungary would not listen to any suggestions, solutions we could offer them. The prevailing sentiment is, that nobody understands their problems and nobody can solve them better then they do. The results speak for themselves.

  29. Social cognition and democracy: An eastern European case study
    Joseph Paul Forgas,
    University of New south Wales
    Laszlo Kelemen and Janos Laszlo,
    University of Pecs, Hungary
    Abstract
    The collapse of communism over two decades ago provided one of the most dramatic opportunities
    for new democracies to emerge in Europe. However, the transition from dictatorship to democracy
    has been far from simple, and in some countries, such as in Hungary, there are worrying recent signs
    of popular support for a newly emerging autocratic system. This paper will discuss some of the
    psychological mechanisms responsible for the apparent weakness of democratic systems and
    institutions.

    ==========================================

    I have tried to read it. Not able to follow. But, I dare say that the authors should concentrate on the misinformation, confusion creation of well funded electoral campaigns.

    The rich candidates usually win, and open the door to their sponsors. To the local economical powers and to the foreign allies. Putin, Erdogan, Khaminei.

  30. @gybognarjr re the documentary on Putin. I’m so impressed with the documentary that I’m planning to put up a short note tomorrow morning calling everybody’s attention to it. This way it will reach about 3,000 people who are currently subscribing to Hungarian Spectrum. My note in the comments reach only those who visit the comments section.

    The documentary is based on a newly published book by a professor of political science at Miami University in Oxford, Ohio which got excellent reviews.

  31. gybognarjr:

    I don’t think Orban could orchestrate anything like the residential bombings, Beslan etc. Those inside-job bombings were done way more than a decade ago. Now everything is full of CCTVs and Hungary is a small place so rumors may spread rather quickly.

    Orban, however, could orchestrate something similar than the 2006 Budapest events which worked perfectly for him (though in the new scenario he would be in a different position). I think the strategy employed then, in that situation can be taught, it was so “professional”.

    In any case, I am convinced and I’m not alone that Orban will not, under any circumstances, give up his power.

    The opposition can play around as much as it wants, but if there was even a remote danger Orban would act, the more danger the opposition would pose to him, the more violently. The present assortment of opposition parties and formations are utterly lightweight, no match to the legal – security complex headed by Orban, so for the time being they are calm. Orban anyway loves to escalate, never backs down and he feels himself entitled to the position of the sovereign, so he won’t give that power up without a dead serious fight.

    Only the naive idiots (hey, we’re in the EU, he surely won’t do THAT) may think that he wouldn’t use the army or the police if needed for his staying in power. The clueless Hungarian communists didn’t in 1989 and look where they are now. The Chinese did and look where they are. Orban won’t make that mistake.

  32. I highly recommend Masha Gessen’s book: The man without a face.

    Personally I think it’s better than Professor Dewisha’s book, plus Gessen is of Russian origin so her understanding of this world is deeper, though it’s true she is not a scholar (“just” one of the best journalists currently working in the US).

    It’s fantastic story-telling containing almost unbelievable, absolutely hairraising, bone chilling stories, which gave me the creeps.

  33. INTERP: We agree. I did not mean an exact replication of the Russian apartment explosions, that is too obvious. I meant some form of a bloody “terrorist” attack a really gross event done as the secret police cooks it up in some form of imagined “gypsy style” atrocity.
    At any rate. There is no serious political opposition to the viktor, the MSZP is sleeping with them in the same bed, helping them by loosing elections purposely. This way, they are not attacked and they still make the money of their companies set up during the time they were in power and nobody goes to jail for all the crimes and corruption, they committed.
    Since 1990, in Hungary, only one man was convicted, sentenced and he served serious jail time for corruption, János Zuschlag. Today it is surprising, because most of the Fidesz reps are many times more stupid, callous, ill mannered, rude and senseless, base people than Zuschlag, but in his day, he was near the top, a bad boy.
    We, who are following the events, make our predictions, mostly on previous historical examples, but Hungarians are inventive, so we may be in for a surprise, what method will they choose to dispose Orbán.

  34. Dear Eva S. Balogh: I sent the weblink to my friends in Canada (you know all of them also) and they indicated that the video cannot be seen on this link for copyright purposes. I guess PBS released it on the web for the US only?

  35. @gybognarjr

    Gypsies (ie. Roma)

    We differ on this count 180 degrees: I think Orban, by birth, is at least 1/2 Roma. (His original name was ‘Orsos’ which he changed a long time ago.) Orban’s shenanigans–his complete
    neglect of rule of law…of traditional practices…of accepted etiquette…smacks of the rebellious, traditional, Roma ways.His mission is several, but in his heart of hearts, I suspect he wants to punish Hungarians fora 1000 years of abusing gypsies. He wants to be the Vajda who has hit back for the many injustices perpetrated on his people. It’s not the king of Hungary that he wants to be remembered, but as the great Vajda who brought vengeance and retribution for his people. He knows that if he destroys Hungary–and he’s well on his way to doing it–he will be
    remembered by gypsies the world over for the next 1000 years.

  36. @gybognarjr re copyright. That would be a shame. Maybe we could ask one of the commenters from Europe to try to watch it.

    Of course, we have a lot of readers from the United States too, but still I was especially eager to show it to people who have no access to PBS.

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