Ten Hungarian businessmen and government officials can never enter the United States

A bombshell: the U.S. government placed ten Hungarian businessmen and government officials on a blacklist of sorts. They are barred from ever entering the United States. The businessmen in question are known to belong to a small circle of people very close to Fidesz. As for the government officials, they are apparently employees of the Hungarian equivalent of the Internal Revenue Service.

As of now there are two narratives of the event circulating in the Hungarian media. One is the government version, leaked to Napi Gazdaság, a financial paper recently purchased by Századvég, a Fidesz think tank. The other comes from the U.S. Embassy in Budapest.

Let’s start with the government version of the story. The Hungarian internal revenue service became suspicious of some American firms doing business in Hungary and launched investigations into their  finances and tax returns. The U.S. government decided to retaliate by barring several Hungarians from ever entering the United States. Behind this “diplomatic duel” are the recent critical statements of former President Bill Clinton and President Barack Obama with regard to the Hungarian government’s attacks on NGOs. The two American Democratic leaders were especially upset over the fate of the Ökotárs Foundation, the distributor of the Norwegian Civic Funds, whose tax number was recently suspended. Why this particular concern? Because, the article contends, the Norwegians are also generous contributors to the Clinton Global Initiative.

At the end of the article Napi Gazdaság casually mentions that because of the link between the American Democratic Party and the Norwegian government, the Ökotárs Foundation “will not go against the interests of the Democratic Party.” So, the Hungarian government’s investigation of Ökotárs will actually have a beneficial effect. It may “place Hungary’s reputation on neutral ground in the political warfare between Democrats and Republicans.” Here Századvég is speaking, the think tank that owns Napi Gazdaság. Századvég just received a huge contract from the Orbán government to engage in public relations/propaganda in Washington over the next few years. But there might be a bit of a problem here; as we will see later, its CEO is barred from entering the U.S., which might crimp its effectiveness.

Napi Gazdaság contacted the U.S. Embassy, where they were told that they know nothing about any investigation of American firms and that the decision of the U.S. government to bar some individuals from entering the United States has nothing to do with alleged probes by the Hungarian internal revenue service. However, they have good reason to believe that the people on the black list were engaged in criminal activities. They tried either to force American firms to give them kickbacks or to extort special favors from them. They cannot release the names because of American laws prohibiting it.

It didn’t take long for one of the people involved to arrive at the doorstep of ATV and to offer some details about the case. According to him, he and nine others were asked to visit the U.S. Embassy where they were administered the bitter pill. ATV was not allowed to reveal the name of the informer, but the article described him as “an especially important partner of the Hungarian government who currently is participating in several important projects. In the last few years his name appeared frequently in the Hungarian media…. He considers himself a businessmen who is very close to Fidesz.” There is a sentence in this report that strongly suggests that our mystery businessman is not entirely innocent. After all, he found “the measure disproportionate, which further damages American-Hungarian relations.” So he did something illegal, but he thinks that the punishment is too harsh.

Both the Fidesz parliamentary delegation and the Ministry of Foreign Affairs and Trade reacted promptly to the news. Fidesz sticks to the story leaked to Napi Gazdaság. The United States government is putting pressure on Hungary because they want to avoid the investigation of certain American firms by the tax office. M. André Goodfriend, the U.S. chargé d’affaires, was called into the ministry, but before his appearance Judit Fülöp, the ministry spokeswoman, gave a short press conference. She stressed the Hungarian government’s zero tolerance toward corruption. She announced that they  are ready to investigate the cases but are waiting for documentation from the American Embassy.

Meanwhile investigative journalists were hard at work. From unofficial sources 444 learned that in the last year and a half there were several instances where government officials and businessmen closely associated with the government party approached American firms for kickbacks. In one case a large American firm applied for an EU grant. At first the government turned them down, but in the second round the management was told that they would receive the money but only if they hire a certain consulting firm that would perform no work at all.

A few hours later some names also appeared. Among them is Péter Heim, CEO of Századvég, the think tank that was launched by Fidesz in its infancy and that is now tasked with improving Hungary’s image in Washington. The news about the Hungarian internal revenue service seems to have been on target. Ildikó Vida, the head of the office, is on the list. Vida is one of the original founders of Fidesz. She is the same age as Viktor Orbán and was a fellow student in the college where the party was born. This is not the first time that she is in charge of the tax office. She held the same position during the first Orbán administration between 1999 and 2002. One must keep in mind that the Orbán government uses the internal revenue service as a political club. Index reported that in addition to Vida two other employees of the tax office are also involved. And then there is Árpád Habony, the eminence grise of Fidesz. He has no official position, but  he is perhaps one of the most important men behind Viktor Orbán. I devoted a whole post to him a while back. Rumors about his shady financial affairs have been circulating for some time. His source of income is shrouded in mystery. According to the latest information, Habony denies being on the list and is planning to visit the United States shortly.

On the surface the affair is solely about corruption, but the American reaction to these cases is politically charged. One has to assume that in countries with rampant corruption such as Hungary the U.S. Embassy receives reports of bribery attempts often enough. There are several ways of dealing with such cases. For instance, one can pay a visit to the country’s foreign ministry and report that such behavior is unacceptable. At the same time the American official can express his hope that in the future there will be no discriminatory measures against American firms and that extortionist activities will stop. But in this case the United States government came out with the big gun. The Americans in Budapest must have known for years about the high level of corruption in government and its satellite business circles, yet it is only now that they decided to move into high gear. This is, in my opinion, a political message to the Orbán government and part and parcel of a new, more forceful policy being conducted by the U.S. government toward Hungary.

The Hungarian “foreign language examination factory”

For those of you who don’t follow the comments to my blog posts there is a huge debate among readers of Hungarian Spectrum over who is responsible for the video of a fake meeting of six Roma in Baja. Most of us couldn’t make head or tail of the story of R. (Róbert) G.  Since then more information has become available, and there is a good possibility that no political party was involved. Instead, it might have been a private initiative to get some quick cash, although R. G. seems to be a well-off man who owns several houses in Baja as well as in Budapest and the house where the meeting was staged looks substantial and well maintained. The bizarre nature of R.G.’s story didn’t prevent Fidesz politicians from accusing the opposition of hiring the culprits to discredit the government party. MSZP denies any involvement and threatens to go to the police if Fidesz’s accusations continue. DK demands a thorough investigation of the case.

We can be duly horrified at this particular case, but the truth is that corruption is endemic on all levels in Hungary. Quite independently from the fake tape there is proof that Fidesz politicians in Baja bribed the local Gypsies for their votes and that is a crime. Of course, creating a fake video for money is also a crime. But what can we expect in a country where corruption can be found at the highest levels of the administration, starting with the prime minister? It has long been suspected that he amassed his considerable (and under-reported) wealth in not exactly the most honorable way. And it’s better not even to mention the cesspool of party finances.

So let’s turn to corruption in another sphere: phony language proficiency results. Who is involved here? Language teachers, university professors, politicians, high government officials, high-ranking police officers, and people who work for the official language testing center, commonly called Rigó utca after its location in Budapest. We are talking about scores of people at the testing center as well as at the Gáspár Károli Hungarian Reformed University and the Budapest Engineering School. Because, after all, it was not only the proctors who had to be paid but also those who gave out the test questions ahead of time as well as those who came up with the right answers and passed them on to the test takers. The customers were in the hundreds or perhaps in the thousands. It’s no wonder that the Hungarian media talk about a “language-exam factory.”

Blikk, a tabloid popular with the less educated and politically less curious public, broke the original story back in July. Some of the facts later turned out to be not quite accurate. For example, the newspaper called Corvinus University the center of the “exam factory.” Blikk was also wrong when it claimed that the “factory” began its operation only in 2010. Apparently it has been in existence since the 1990s.

Interestingly enough, Blikk‘s revelation didn’t make a splash in the larger Hungarian media, but Blikk didn’t give up. It pursued the scandal. A few days after the original article the paper revealed that about 80% of the people who took advantage of the opportunity offered by the “exam factory” were university students who needed to pass the language exam in order to receive their diplomas. The rest, older politicians and other public employees, didn’t mix with the students; their exams were organized separately. Apparently there were some unexpected encounters when government and opposition politicians ended up taking the exams together, presumably in happy harmony!

Soon enough we also learned that an intermediate language exam cost 300,000 but an advanced one could be purchased for only 500-550.

On October 4 the prosecutors charged 18 people with involvement in the falsification of foreign language examination results. Although by now we know that members of parliament were involved, they will not be charged with fraud because in their case the three-year statute of limitations has expired. However, the prosecutor’s office of Pest County which is handling the case confirmed that at least one Budapest mayor is a suspect. The number of people who will most likely be charged is not 18 as was originally announced but well over 600 if we include those who took advantage of the “exam factory.” As far as numbers are concerned, this will be the largest criminal case in the history of Hungarian jurisprudence.

The chief organizer was András P., owner of a private language school in Győr, whose private fortune as a result of the scam is considerable. Origo estimated close to a milliard forints. Under András P. there were several layers of intermediaries who also got a piece of the pie. Each language teacher received about 10,000 forints per student, which doesn’t sound like big money until you realize that we know of only four language teachers if Blikk‘s information is correct and the number of participants in the scheme was well over 1,000. I guess eventually we will know more because there are detailed lists of all the “customers” stored on the chief organizer’s computer.

Apparently, it was enough to know what “yes”means in English

As long as corruption is as widespread, even in fields that are connected to intellectual achievement, we cannot hope for improvement in Hungarian universities, public administration, and, yes, in politics. A country in which 30-35% of university students admit that they cheat on their exams and 40% of university graduates are unable to pass a fairly simple language test is destined to be second- or third-rate in a highly competitive world.

Fidesz and MSZP are silent. Or, to be more precise, when asked they said that they have no intention of starting an investigation of the matter within their own parliamentary caucuses. Members of  the small LMP delegation triumphantly announced that their language tests are valid. They were either taken in the 1980s or at none of the places where the phony tests were administered. DK also announced that none of their people are involved in the scheme.

When I write about a topic in which members of parliament play some role I usually check the website of the parliament which, among other things, details the members’ language proficiency. I never had much trust in those results from Rigó utca, but after this case I will have even less so.