Bálint Magyar’s post-communist mafia state: front men, transaction brokers, and gatekeepers

Yesterday we left off with a description of the kinds of oligarchs who play an important role in Viktor Orbán’s mafia state. Today we move on to the front men (stróman/Strohmann) and their function in the system. According to Bálint Magyar’s definition, they are people without formal position either in politics or in the economic sphere who “serve as bridges between legitimate and illegitimate realms.”

Magyar identifies two kinds of stróman, political and economic. The political front men are people who originally came from Fidesz itself and were put in important government and parliamentary positions–for instance, president of the parliament and president of the Hungarian Republic. Soon enough the leader extended the circle from which he could choose people for key positions. They were either relatives or close friends, or friends of friends. Such appointees can be found heading the prosecutor’s office and the National Office of Justice. Eventually, he drew from employees of companies owned by members of the political family–managers, accountants, lawyers–to fill posts in the ministries. These people are front men of the poligarchs, only instruments, not autonomous actors. In this mafia state the majority of government officials fall into the category of political front men.

An originally Fidesz-appointed stróman after a couple of years can be removed and replaced by another Fidesz-appointed individual, as we have observed recently. Magyar’s explanation is that some of the original appointees owed their allegiance to top poligarchs, for example, Lajos Simicska and his business partner, Zsolt Nyerges. Because of the internal power struggle that is currently going on between Simicska and Viktor Orbán, several of Simicska’s front men have been removed from important positions, like the Hungarian Development Bank and the Ministry of National Development. Perhaps the best example of such a personnel change occurred a few months ago in the Ministry of National Development which was considered to be the stronghold of the Simicska-Nyerges poligarchic duo. Here, after the election, Viktor Orbán replaced Mrs. László Németh, clearly a puppet of Simicska, with his own man, Miklós Seszták, a crooked lawyer. Seszták then fired 200 people from the staff of the ministry, which Magyar calls a bloodless decapitation.

The economic front men act like proxies of the poligarchs, although oligarchs can also have their own front men if for one reason or other they want to hide their presence in an enterprise. Some of the money accumulated by these people eventually ends up in the poligarchs’ secret bank accounts.

What are the characteristics of the economic ventures of strómans? (1) With practically no capital or expertise they receive large state orders. (2) The increase or decrease of their economic activities depends not on economic but on political cycles. They often receive tenders when they are the sole bidders. (3) They act as gateways to the state. They collect the profits generated by large bona fide companies which themselves would be able to do the job but which are are forced to work as subcontractors. (4) Profits of these companies are much larger than of companies not politically connected. (5) The managements of these companies pay themselves inordinately large dividends. Normally, especially in the case of a new company, most of the profit is reinvested in the firm. But these companies don’t have to worry about business expansion. It is the subcontractor’s headache. (6) While successful companies without political connections often encounter aggressive takeover attempts by the government, the companies of strómans never have to worry about such an eventuality.

In sum, the basic goal of the mafia state is the elimination of autonomous positions in the political, economic and societal spheres and their transformation into a patron-client relationship. The men whose names appear in the regularly published list of the most influential Hungarians are all dependent on the good will of Viktor Orbán, be they politicians, entrepreneurs or university professors.

In addition to oligarchs and front men, there is another group of people Magyar calls transaction brokers who are mediators between the actors in illegitimate transactions. These people are often lawyers who are involved in writing grant applications, for example. They are the ones who have the personal network that can facilitate the transaction between, let’s say, the government bureaucracy in charge of monies coming from Brussels and the applicants. Transaction brokers, mostly law firms and institutes attached to ministries, by now have taken over some of the functions of ministries. They are the ones who actually write legislative proposals submitted by individual members of parliament.

There are two types of transaction brokers. One is the so-called gatekeeper who works from inside the administration and who defends and legitimizes illegitimate businesses. The other is the representative broker who by the size of his business could in fact be an oligarch but who is only an economic stróman.

Finally, Magyar spends some time on the nature of the family’s guard and the secret services. One of the very first decisions of Viktor Orbán after he became prime minister was to create a large force of personal bodyguards misleadingly named the Anti-Terror Center (TEK). In addition, there are private security firms often owned by Fidesz oligarchs that have the support of the police or TEK. Magyar even includes in this category the infamous soccer fans of Fradi, a club headed by government functionaries. These football fans can be mobilized if necessary as they were in the fall of 2006. Fidesz again called them out in 2013 when a few students surrounded the Fidesz headquarters. TEK itself has practically limitless powers. Sándor Pintér, minister of the interior under whom the police force functions, is a stróman of Viktor Orbán.

Viktor Orbán and his old body guard, János Hajdu
From major to brigadier general overnight

Supervision of the secret services, since there are several of them, has always been close to Fidesz poligarchs’ hearts. Magyar recalls that in 1990 when Gábor Demszky became mayor of Budapest he resigned his seat in parliament. The chairmanship of the parliamentary committee overseeing the activities of the secret services thus became vacant. Fidesz insisted that the post should go to one of its own. László Kövér was chosen. Until 2005 Fidesz through this committee managed to keep the secret services under its influence. In 2006 the governing socialists closed the secret services’ avenues to Fidesz by firing a number of people known for their close ties to Kövér and others in Fidesz. These Fidesz loyalists who found themselves without a job established their own private concerns and continued their spying activities through old friends still employed by the government. As soon as Fidesz won the election, these people were immediately rehired. Earlier there was a minister whose sole job was the supervision of the activities of the secret services, but after 2010 Sándor Pintér took over this role. Thus both the police and the secret services report to him.

I still have covered only half of the introductory essay by Bálint Magyar. Time permitting, I will continue my summary sometime in the future. However, I think that today’s and yesterday’s posts give you an idea of how Orbán’s mafia state functions. Dismantling it will not be an easy task when the time comes.

The “ethics” of a car accident

Today’s topic, a car accident, is not the usual fare of this blog. Admittedly, one of the people injured in the accident was the Hungarian minister of defense, Csaba Hende, but that wouldn’t be sufficient reason to blog about it. (Fortunately no one died and the minister’s Audi wasn’t even a total loss.) I decided to write about it because I think it reveals more about Hungary and Hungarians than most scientific analyses of social conditions in the country. It offers anecdotal evidence of Hungarians’ general disregard of the law. It also says something about the arrogance of Hungarian politicians.

Csaba Hende, along with an adviser, was traveling to a meeting with local inhabitants where he was supposed to tell his audience about the blessings of lowering utility prices. Of course, the first question is: What on earth is a minister of defense doing at such a function? The short answer is that in Orbán’s Hungary all members of the cabinet are expected to spread Fidesz propaganda. Several ministers and undersecretaries have already spoken at such propaganda meetings. Viktor Orbán obviously considers lowering utility rates a key point in his election campaign and has enlisted members of his government to sing its praises and thus win over voters.

Hende was heading toward Szécsény, a smallish town near the Slovak-Hungarian border between Balassagyarmat and Salgótarján. Although according to reports the minister’s car didn’t exceed the speed limit, it is likely that they were in a hurry because instead of taking the better road the driver, who also acts as Hende’s bodyguard, chose a sparsely traveled secondary road that shortened their travel time. It is a twisting, winding road. As it turned out, this road is a favorite of race car drivers who don’t have much opportunity to test their cars before rallies. The driver brings along two of his friends who act as flagmen. They ask other drivers to wait a bit until the practice is over. Naturally these guys don’t pay attention to speed limits. The driver of that particular race car was executing a serpentine curve at a speed of 100 km or 62 miles an hour. This practice is illegal but, as I found out from several articles I read on the subject, it is a common practice without much interference from the police.

But let’s not assume that the driver of Hende’s car was any more law abiding. He traveled with his emergency siren on and the blue light on the top of his vehicle flashing. Under normal circumstances the use of the siren and light is strictly forbidden. They can be used only in emergency situations. And surely going to a meeting to sell the idea of lowering utility prices is not one of those.

As for the events prior to the accident, they are not at all clear. According to some descriptions, the driver of Hende’s car simply ignored the flagman. According to others, he did exchange a few words with him but refused to wait until the race driver finished his run. In any case, a second later there was a fairly serious accident in which five people were injured.

Both sides disregarded the law. I was actually surprised to hear that Hende and his companion had used their seat belts. Not like Viktor Orbán who in the March snowstorm could be seen on the video ignoring the seat belt law that was supposed to be strictly enforced.

But that’s not all. There are also the reporters who offered up all sorts of fanciful explanations for why the driver of the minister’s car actually did the right thing when he ignored the flagman. Here is perhaps the most interesting one: “Origo learned from non-official sources that there was no physical barricade that could be construed as a road closure. Moreover, the driver of a person under special protection according to protocol cannot just stop because a person on the roadside waves at him.” Another “expert” advanced the following explanation: “Obviously the driver [of Hende’s car] had to suspect a trap and surely must have wondered what this man wanted.” Whatever the experts say, if a flagman warns of danger ahead, it’s a good idea to stop and inquire about the details. Or, as most people do, simply stop until your car is waved through.

Why didn’t the driver stop? Was he really afraid that on a secondary road in the middle of nowhere someone wanted to set a trap for that very important personage? Or is it perhaps the case that “those idiots on top,”  as a commenter described Hungarian politicians the other day, simply ignore ordinary mortals? I suspect it was the latter. After all, the driver had the blue light, the siren, and the almighty minister. These trump some guy waving on the roadside. The minister’s car will proceed. Unfortunately, hubris doesn’t always pay. In fact, it seldom pays, a lesson the Orbán government has yet to learn.