Anikó Lévai

The Orbáns and Hungarian gentleman farmers

I just raced through Krisztina Ferenczi’s new book, Narancsbőr (Orange peel). Since I usually read her articles about the Orbán family’s dubious financial dealings, I was familiar with most of the details. Ferenczi’s earlier book was about the Orbáns’ brief encounter with viticulture in Tokaj. They got burned when it came to light that Viktor Orbán as prime minister used his influence to receive a substantial state subsidy for their newly acquired vineyard. It was only through a clever legal trick that Orbán’s skin was saved. Since then he has been super clever and has avoided any kind of business venture that may get him into a tight spot as a possible recipient of subsidies either from the European Union or from the Hungarian state. It is true that his wife, Anikó Lévai, owns some agricultural land in Felcsút, but officially at least it is leased to János Flier, the former electrician I was talking about yesterday and one of Orbán’s likely front men in Felcsút. Lévai claims that the subsidies she is entitled to actually go to Flier. When Ferenczi asked Flier about it, he replied: “You ought to ask her how it is exactly” (Tőle kellene megkérdezni, hogyan is van ez). Flier is obviously not the sharpest knife in the drawer.

So, the Orbáns who got burned with Tokaj are now very careful. And yet the incredible wealth Orbán’s two close friends in Felcsút, Lőrinc Mészáros and János Flier, amassed made the inhabitants of the village more than suspicious. They are convinced that Viktor Orbán is an active business partner in the growing Mészáros-Flier estates. Perhaps he is the majority owner of them.

Ferenczi found many signs that this is probably the case. She talked at length with people who work on the cattle ranch owned by Mészáros, which Viktor Orbán visits frequently. It seemed obvious to them that Orbán is not just a casual visitor there. “He had something to do with the enterprise.” It also came to light that the charolais cows of Orbán’s new son-in-law are also part of the herd of 3-4,000 animals which, by the way, are kept, according to Ferenczi, under terrible conditions. I might also add here as a footnote that in the past at least the people who worked there officially received only 65,000 forints a month; the rest, 35-45,000 forints, illegally changed hands under the table.

Yesterday an article about the new stadium in Felcsút appeared in The New York Times with a picture of the half-finished stadium right next to the Orbáns’ country home. It is perhaps the best picture I have seen of the two together and leads me to believe that the modest abode the Orbáns built in 2003 will not be there for long. If the stadium is a “jewel box,” as Orbán once described it, the peasant adobe house 20 feet away is a jarring eyesore. And that leads me to the very good possibility that the Orbáns have a very much more elegant dwelling in mind: the former country house of the Hungarian Habsburgs nearby. The building was badly damaged during World War II, but it looks as if the Orbán family has plans to rebuild it in its earlier splendor. Viktor Orbán’s father, Győző, who apparently besides his quarry also has a real estate business, purchased the whole remaining estate a few years ago.

Who were the Hungarian Habsburgs? The founder of the Hungarian branch was Archduke József, the much beloved palatine (nádor) of Hungary (1776-1847), who became a patron of art and an important promoter of the development of Budapest and the country in general. It was he who acquired a large piece of land in Alcsút and built a beautiful palace there. He and his family settled in Hungary for good. The last Archduke Joseph (1872-1962) who played a role in Hungarian politics was actually born in Alcsút. By all indications some of the remnants of Archduke Joseph’s estate are in the hands of the Orbán family and, according to some information Ferenczi received on the spot, work has already begun. The site is off limits to strangers. It is guarded by security personnel as well as by a kuvasz named Nárcisz (Daffodil). Orbán admitted that the family has a ferocious dog called Nárcisz, but, he added, “it is in Felcsút.” I guess he didn’t want to say that the animal is actually guarding part of the Archduke Joseph’s estate owned by his family.

The remnant of the Habsburg Palace, Alcsútdoboz Source: Wikipedia Commons

The remnants of the Habsburg Palace, Alcsútdoboz
Source: Wikipedia Commons

As I was reading about the landholdings of Viktor Orbán and Anikó Lévai it occurred to me that this unexpected yearning to be “lord of the manor” (földesúr) is typical of Hungarians who may have achieved great wealth or fame in some other endeavor but think their life is not fulfilled without having some land and preferably a sizable and elegant palace to go with it. One of my favorite Hungarian novels is Kezdetben volt a kert (In the beginning there was the garden) by Anna Lesznai, first wife of Oszkár Jászi. The book is largely based on her own family’s story. The grandfather, a well-known Jewish doctor who amassed a fortune, feels that his life is not complete without owning land. He buys a large estate somewhere in the Uplands (today Slovakia) only to realize that this kind of life is not for him. But then comes his son who finds it very much to his liking. The assimilated well-off Jewish family becomes like their non-Jewish noble neighbors next door. Many of these Jewish gentleman farmers eventually received nobility in the second half of the nineteenth century.

I also read stories about 1956 refugees who made it in the United States or in western Europe and who after 1990 went in search of neglected manor houses and country estates in Hungary. Now they are gentleman farmers. A favorite hobby investment was viticulture. Neglected old vineyards were bought up in Tokaj, and with some state subsidies the new owners planted new vines and are currently trying their hands at producing quality Hungarian wines. A good example of this kind of 1956er is Dezső Kékessy, earlier a business partner of Viktor Orbán. He has a vineyard in Tokaj and also bought a country estate.

In her book Ferenczi recalls a film in which Anikó Lévai talked about her ardent desire to return to the soil. After all, she came from peasant stock. Her father finished only six grades. We don’t know how much land her father had, but she referred to him as a “kulák,” a rich peasant. She hoped, she said, that once her husband retires from politics, she could perhaps start “a somewhat larger organic farm.” I learned while researching this post that the Habsburg archdukes had a “model farm” (mintagazdaság) in Alcsút. Perhaps one day on the old Habsburg lands Anikó Lévai can run an organic farm.

Orbán’s clan is plundering the state coffers: The world is taking notice

The talk in Hungary is about corruption. Corruption that seems to consume every nook and cranny of political life. It is an open secret that one of the main aims of Viktor Orbán, in addition to making sure that he will be the prime minister of Hungary for a very long time, is the enrichment of his friends and family. Thanks to the work of some investigative journalists, like Krisztina Ferenczi and Attila Mong, more and more evidence is surfacing that Viktor Orbán is feathering his and his friends’ nests.

Orbán is not like Viktor Yanukovycz, who lived lavishly in tasteless gilded palaces. Considering his estimated wealth, Orbán and his family live modestly. They have a comfortable but unpretentious house in one of the more elegant parts of Buda and an outright humble-looking house, designed in the style of the adobe peasant houses of yore, in Felcsút. The family’s landholdings are something else. Year after year Orbán’s wife, Anikó Lévai, added cheaply acquired lands in and around Felcsút where Viktor’s family spent some time when he was a young child. Moreover, almost everybody is convinced that the Orbán family’s landholdings are much more extensive than official documents attest to. The rest, perhaps thousands of acres, is held under the names of front men.

Viktor Orbán's country home in style of old adobe peasant houses

Viktor Orbán’s country house

For some time Hungary has been brimming with anecdotes and speculation about the Orbáns and their friends, but the charge of wholesale stealing from the national wealth could not be contained within the borders for long. Only two days ago an article appeared in one of the most influential German papers, Der Spiegel, with the title: “Orbán’s clan plunders the state coffers.” As Krisztina Ferenczi told the author of the article, Keno Verseck, “Hungary has become in recent years a kind of large estate” and the lord of the  manor is Viktor Orbán himself.

One reason for the disguised land ownership, assuming the charge is true, besides the obvious one of undeclared wealth without any legitimate means of accumulating it, is that the landholdings are heavily subsidized by the European Union even if they are left fallow. Surely, it would look bad if the European Union were paying millions for the lands of the Hungarian prime minister. There are several indications that Orbán has two front men in Felcsút, Lőrinc Mészáros and János Flier. Both by now have thousands of acres they received fraudulently from the state on twenty-year leases. Neither has any experience in agriculture. Flier used to be an electrician and Mészáros had a small business bringing gas pipes to the inhabitants of the village a few years back. Now they are in charge of large farms.

Viktor Orbán is as upstanding in politics as he is in his financial dealings. The electoral law and its execution are based on fraud. Since he has a pathological need for power, he will never allow a reprise of 2002 and 2006 when he lost the elections. This time he is covering all his bases. We talked a lot about the coming elections and concluded that the final results would be questionable, but I still suggest taking a look at some of the comments on the topic by readers of Hungarian Spectrum. Unfortunately, since the Orbán government is in charge of the mechanics of the election we will never be able to prove fraud, however obvious it might be in places.

Orbán is a role model for Fidesz officials, and part and parcel of that model is his outsize accumulation of wealth. The latest official to come under scrutiny for unexplained affluence is Antal Rogán.

Rogán belongs to the younger generation of Fidesz officials. He had just finished high school at the time of the regime change. In college he majored in economics and soon after graduation was heavily involved in Fidesz politics. By the age of 26 he became a member of parliament and three years later one of the deputies of Viktor Orbán. Currently, he is the leader of the large Fidesz parliamentary caucus.

It seems that Antal Rogán was equally successful when it came to enriching himself. We don’t know how, but Rogán, his wife, and two young children live like nabobs in “Pasa Park.” This gated community is in a part of Buda called Pasarét (Meadow of Pasha), hence the name of the building in which many top Fidesz officials live, including Mihály Varga, minister of national economy. The Rogáns have two and a half apartments worth about 300 million forints. People who are investigating the case claim that Rogán’s total career earnings so far amount to no more than 16 million forints. His wife doesn’t work. His current salary is 1.3 million forints a month, but his expenses far exceed his income. He is still paying about half a million forints a month on his 60 million forint mortgage, he has to pay 300,000 a  month for maintenance, he pays 250,000 to lease an Audi 6, and the two small boys go to a private kindergarten for 300,000 a month. And presumably the family doesn’t starve.

Rogán got into trouble because he did exactly the same thing as  Gábor Simon (MSZP): he didn’t tell the whole truth about his wealth on the financial statement he has to provide to parliament. But while Simon is in jail, Rogán only had to “correct” his financial statement. He may have to keep making corrections as new pieces of information surface. It seems he owns property that he inherited from his grandmother and father in his hometown as well as a country house in Balatonlelle.

Given the way Orbán’s “justice” works, we can be assured that nothing will happen even if the accusations turn out to be correct in every detail. Nothing will happen not only because investigation and punishment depend on the ruling Fidesz party but also because all Hungarian politicians made sure that these financial statements are not worth the paper they’re written on. If, for example in this case, Rogán says that the money for the real estate and the lavish lifestyle comes from loans extended by family and friends, the authorities will be satisfied. He will not have to give any proof of actual transactions. Knowing the high moral fiber of Hungarians, I’m sure there would be plenty of people who would gladly swear that they were the ones who extended the money to Rogán.

That’s how things are in Hungary. It’s no wonder that people are not outraged about the rumors of electoral fraud or the plundering of the state coffers. They are accustomed to corruption and think it best to remain silent. They cannot do anything about it in any case.

The Fidesz robber barons. Part III: The Orbán family’s enrichment 1998-2002

Today I will return to József Debreczeni’s book on “The Fidesz robber barons.” This time the topic will be the enrichment of the Orbán family, which included Viktor Orbán’s father, Győző, between 1998 and 2002–that is, while he was prime minister.

Debreczeni, who for years  taught high school history before he became a politician and subsequently a writer on politics, notes that although political corruption has had a long history in Hungary, the highest political dignitaries did not dirty their hands with money grubbing. Not so Viktor Orbán who, as investigative journalists discovered, systematically exploited his position for financial gain.

Just to put things in perspective, here are a couple of figures. In 1998 Orbán and his wife had 5.5 hectares of agricultural land. Four years later they had 11.5 times more. In 1994 the couple purchased an apartment for 563,000 forints in downtown Budapest. In 2002 they purchased a villa in the most elegant section of Buda for 75 million forints, which they enlarged and renovated to the tune of tens of millions.

Viktor Orbán’s father Győző–which by the way is the Hungarian equivalent of Viktor–had two smallish quarries worth 98 million forints. Four years later, he was worth 666 million forints.

The Orbáns were involved in two separate business ventures. Neither is pretty.

Their first business venture took them to Tokaj. Dezső Kékessy, a wealthy Hungarian businessman from Switzerland who left Hungary after the 1956 revolution but returned to Hungary after 1990, was looking for business opportunities. Tokaj seemed like a good prospect. During the socialist period Tokaj, which had had a very good name before the second world war, lost its luster due to the general deterioration of viticulture in Hungary. The stock was old, so vineyards could be had for relatively little money. Kékessy and Orbán met and became friends and eventually business partners. Well, that’s not quite precise. On paper Kékessy’s business partner was Orbán’s wife, Anikó Lévai. I might add that Orbán eventually named Kékessy ambassador to France.

The Orbáns’ share in the company that Kékessy formed was relatively small, but the Orbáns naturally became key business partners due to Orbán’s position. First, he made sure that the grapes the company produced found a market. There was an ailing state company in Tokaj that was still the major buyer of grapes in the region. Since the head of the state bottling company was appointed by Orbán, they had a ready market for their grapes. In fact, in 2000 the state company bought grapes only from the Orbán-Kékessy vineyard. Orbán also made sure that the state bottling company had money to buy their grapes.  In 2000, the government financially strengthened the ailing company with the injection of 1.5 billion forints. In 2001 another 2.5 billion was invested in the company. And it kept buying the prime minister’s grapes, even though there was a glut in the wine market.

Tokaj wine region / Wikipedia.org

Tokaj wine region / Wikipedia.org

The Fidesz government also offered what amounted to a “friends and family” package. István Stumpf, who headed the prime minister’s office in those days, had a large, extended family in the region, some of whom owned vineyards. In 1998 the Stumpf family managed to sell only 5 million forints worth of grapes, but after cousin István became an important man in the government they did exponentially better. In 2000 their sales were 17.7 million and in 2001 30.6 million. Two Stumpfs were actually employees of the bottling company, and it was their cousin in Budapest who approved pumping billions into the state company.

But that wasn’t all. The Orbán-Kékessy company asked for state subsidies for the improvement of their vineyards. The owners got together to discuss business matters, often in Viktor Orbán’s apartment. It was during one of these meetings that Orbán warned his business partners to be cautious about the subsidies: “we shouldn’t be the ones who get the most.” Obviously he was worried about someone discovering his interest in the company. So they didn’t get the most, only the second most. In 2001 570 people received subsidies for vineyard improvements. Only two got over 40 million forints. The first received 44,636 forints, and the second, the Orbán-Kékessy concern, 41,475. In addition, on two other occasions their company received an additional 64.5 million forints in subsidies.

The other setting for the growing Orbán empire was Felcsút, the village where Orbán spent his early childhood. Of course, nowadays we hear mostly about the Puskás Football Academy and the huge stadium for 3,500 in a village of 1,800 inhabitants. But twelve years ago the expansion of Orbán’s holdings was still in its infancy. Here too, the launch of the Orbán empire was shady. In 2001 the Orbáns purchased 54 hectares of agricultural land for half the price of what land sold for in those days in the County of Fehér. Anikó Lévai purchased the land from Sándor Bognár, the head of a large state farm in the vicinity (an Orbán appointee). Two weeks after Bognár sold the land to the Orbáns, the state farm without competitive bidding was privatized. And who became the majority owner of the farm? Sándor Bognár.

But that is not the end of the story. Felcsút and five villages around it received a 2.7 billion forint state subsidy for water control. Apparently flooding is not a problem in the area. In fact, these villages receive less than the average amount of precipitation. The ministry in charge put the Felcsút application in thirtieth place on their list of ranked applications. Sándor Pintér, minister of the interior, stopped the discussion and made the documentation of the parliamentary commission a state secret. Against the recommendations of the ministry he placed the Felcsút project at the head of the list.

After Felcsút received this subsidy, the puzzle of the low price of the land that Sándor Bognár sold to the Orbáns was solved. It turned out that Bognár had purchased the land from two sisters who had additional acreage, which now the local government purchased on the government subsidy for the purpose of building rain collectors. The sisters received 10 million forints for about three hectares, seven times the average price of land in and around Felcsút. This is how the two sisters got compensated for selling their land for half price to the Orbáns and the Hungarian taxpayers footed the bill.

As a result of the large government investments in and around Felcsút, real estate prices have skyrocketed. The land the Orbáns bought for 5 million is today worth 34.4 million. It is also possible that the status of this land might be changed from “agricultural” to “land for development.” In that case it could be worth 400 million forints.

And finally, a few words about Győző Orbán’s business ventures. Dunaferr, a steel plant, was in those days still a state company. After Orbán took office the management of the company was changed. Soon thereafter Dunaferr signed a five-year contract with Győző Orbán’s quarry to supply gravel and concrete for Dunaferr. He was the low bidder but later it turned out that the contract didn’t include transportation costs that were separately billed. These costs had to be considerable because Orbán’s quarry was a great deal farther from Dunaferr than the company that had supplied the materials previously.

It turned out that the elder Orbán also supplied material for road construction as a subcontractor. His son later denied his father’s business connection with Vegyészgép, which received the construction job without competitive bidding. But Viktor Orbán didn’t tell the truth. Győző Orbán, in anticipation of the large order from Vegyépszer, managed to get the rights to quarry rock and gravel. Once his son warned him about the dangers of getting state orders, he passed these rights on to one of his men, who established a new company called Femol Kft.

As the saying goes, the apple doesn’t fall far from the tree.

“Is Hungary being ruined by a scoundrel or a fanatic?” A debate

Bálint Magyar’s interview describing the Orbán regime as a post communist mafia state made a big splash in Hungary. The phrases “mafia government” and “mafia state” spread like wildfire. Readers may recall that I gave a fairly detailed summary of this interview in three parts under the title “Bálint Magyar: Viktor Orbán’s post-communist mafia state.”

Given the Hungarian penchant for open discussion it was not surprising that soon enough a critique of Magyar’s thesis appeared in the same publication, Élet és Irodalom, in which the original interview had been published. Gábor Horn, the author of the critique, is, like Magyar, a former SZDSZ politician. Horn disagrees with Magyar in fundamental ways. A week later, Horn’s article was analyzed by Mihály Andor, a journalist whose articles and short pieces often appear on the Internet site Galamus.

I will leave a discussion of  the merits of Horn’s arguments to the readers. I’m sure that an animated debate of his and Arnold’s arguments will follow. Here I will merely add a few new pieces of information that might be relevant to the discussion.

Gábor Horn considers Magyar’s analysis a good starting point, but he himself sees Viktor Orbán and his regime “fundamentally differently.” After briefly outlining Magyar’s thesis, Horn says that Magyar is on the “wrong track.” His findings are the “result of wrong perception.” Because “the situation is worse.” It would be better if Hungary were a well organized mafia state. Mafias work rationally.  Mafia leaders want to gain maximum profit, they leave those who don’t break the rules alone, they are interested in prosperity.

But, Horn claims, “the government of Orbán is anything but rational. … Viktor Orbán is not a godfather, not an anti-Semite, not a racist as so many people want to portray him. None of that is true.” He is not a mafioso, although Horn admits that people close to him “managed to receive considerable economic advantages.”

Instead, “Viktor Orbán truly believes in his own version of a unique third road for Hungarian economic development.” Here Orbán echoes those populist/narordnik/népies writers and ideologists of the 1930s who thought in terms of a third road, something between socialism and capitalism, that would make Hungary a prosperous, mostly agrarian state.

Source: artsjournal.com

Source: artsjournal.com

So, Horn continues, the “mafia-like signs” are not the bases of Orbán’s system; they are only “collateral expenses” of the real goal. After all, Orbán knows that politics costs money. He “tolerates these political expenses but neither individual enrichment, money in general, nor economic gain is the goal of his politics.” This (I guess the mafia-like behavior) is “an important instrument in the service of the GREAT BELIEF.”

In Horn’s opinion it this zealous belief in an ideal economic and social system that drives him to take on the European Union, the IMF, the multinational companies, the banks, and everything else that stands in his way. Just as he truly believes that the old-fashioned school system serves his vision because it will lay the foundations for a better world. He is doing all this not because of dictatorial impulses but because he is convinced that “individual ideas are common fallacies and fallacies lead to blind alleys.” Orbán truly believes that the steps he is taking will lead to “the salvation of the country.” They are “not for his individual enrichment and his family’s economic supremacy.” Horn quickly adds that naturally Orbán has no objection to “doing well himself, but that is only a secondary question for him.”

Horn is also certain that “not for a moment does Orbán think that we don’t live in a democratic country. He just thinks that interpreting the law according to his will also serves the interests of the people. As all followers of the third-road ideology, he moves in a system completely outside the realm of reality, except in his case he manages to receive unlimited authority to execute his ideas.”

This is more or less the gist of Gábor Horn’s argument which, it seems, didn’t convince everyone. It certainly didn’t convince Mihály Andor. After reading Bálint Magyar’s interview and Gábor Horn’s article, he posed the question whether “the country is being ruined by a scoundrel or a fanatic.” That question can be answered definitively only by looking into Viktor Orbán’s head. Since we cannot do that, we have to judge from his actions, and from his actions “a cynical picture emerges of a man who wants to grab and hold onto power at any price.”

Andor outlines a number of Orbán’s moves that aim at sowing hatred between different groups in order to ensure his own unlimited power. If it were only great faith that motivates him, he wouldn’t have to turn man against man. When it comes to ideology, the originally atheist Orbán “paid off the churches that would take up the work of educating obedient servants of the state.”

If Orbán is not primarily interested in his own enrichment, what should we do with all the information that has been gathered over the last ten or fifteen years about the shady dealings of the extended family? Andor finds it difficult to believe that Orbán’s attitude toward money is no more than “collateral expenses in the service of politics.” Andor, like so many others, including Ferenc Gyurcsány and Mátyás Eörsi, believes that the Orbán family’s enrichment is one of the principal aims of the prime minister of Hungary.

Andor brings up a recent news item. Lőrinc Mészáros, mayor of Felcsút and chairman of the Puskás Academy, just took out 800 million forints worth of dividends from his construction company that employs 250 men. I wrote about this mysterious fellow who not so long ago worked as an artisan. He used to lay down gas pipes going from the main into the houses of Felcsút. Today he is obviously a billionaire. And, by the by, he also received 1,200 hectares of land through the land lease program of the Orbán government. Some people think that the connection between Orbán and Mészáros is more than meets the eye. They suspect that Mészáros is a “stróman” (the Hungarian spelling of the German Strohmann, dummy, front man) in Viktor Orbán’s service.

And more news about the strange financial dealings touching on the Orbán family appeared only yesterday. In 2008 Mrs. Orbán (Anikó Lévai) purchased a 90m² apartment on Gellért Hill where Ráhel (24), the oldest Orbán daughter, lives. Krisztina Ferenczi, an investigative journalist who has been looking into the Orbán family’s enrichment for at least ten years, found out lately that the apartment right next door was purchased by István Garancsi, who just happens to be the owner of Viktor Orbán’s favorite  football team, Videoton. He is also the man who owns the only credit union that will not be nationalized, ostensibly because he is in the middle of converting it into a full-fledged bank. Most likely Orbán told Garancsi about the impending nationalization and advised him to begin converting his credit union into a bank to save his business. By the way, it was Garancsi’s credit union that lent a considerable amount of money to the Puskás Academy.

It turns out that Orbán’s only son, who plays for Videoton, has been living in Garancsi’s apartment ever since 2011. Apparently the young Orbán is neither a good football player nor a particularly enthusiastic one. He played only once last season. But Garancsi doesn’t seem to hold that against him. He is renting out his apartment to the young Orbán. The financial details are of course not a matter of public record.