Angela Merkel in Budapest

Yesterday I sketched out a number of hypotheses about Angela Merkel’s objective in visiting Budapest. Almost all Hungarian foreign policy experts were certain that Merkel would not touch on Hungarian domestic issues. Her only concerns would be Viktor Orbán’s compliance with the common EU policy regarding Russia and his treatment of German businesses in Hungary. Since the Hungarian prime minister accommodated on both fronts just prior to her visit, she would have little to complain about. The consensus was that she would remain silent on the state of democracy in Hungary.

I, on the other hand, couldn’t imagine that Merkel could ignore this issue. The German press has been full of stories about Orbán’s authoritarian regime. It has given extensive coverage to Hungary’s anti-government, pro-democracy demonstrations. So there was some homegrown pressure on the German chancellor to stick her neck out and talk openly about the issue. Many people comment on Merkel’s low-key, sometimes vapid style. Those who know her better, however, assure us that in private she can be a tiger. Well, today, we caught a glimpse of that side of her character.

This morning Gregor Peter Schmitz in Der Spiegel demanded “plain talk” from Merkel in Budapest. “The whole of Europe is terrified of extremists, Angela Merkel is meeting one,” he said. It is time to speak out. If Schmitz watched the press conference after a short luncheon meeting between Angela Merkel and the Hungarian prime minister, he was most likely disappointed, at least initially. She did talk about issues that democrats at home and abroad find important: the role of civil society and the importance of the opposition, but her critique was pretty bland. She said, for instance, that “even if you have a broad majority, as the Hungarian prime minister does, it’s very important in a democracy to appreciate the role of the opposition, civil society, and the media.” Merkel had said the same thing many times before.

The real surprise, “the plain talk” Schmitz demanded, came at the end when Stephan Löweinstein of the Frankfurter Allgemeine Zeitung asked Merkel her opinion about Orbán’s “illiberal democracy.” After explaining that liberalism is part and parcel of the ideology of her own party, she added: “I personally don’t know what to do with the term.” In her opinion there is no such animal. Orbán did not back down. He repeated his belief that not all democracies are liberal and that liberalism cannot have a privileged position in the political landscape. I should add that the Hungarian state television station omitted this exchange in its broadcast of the press conference.

Source: HVG / Photo: Gergely Túry

Viktor Orbán was not a happy man. I’m certain that he expected concessions from Merkel after he was so “generous” on the RTL Klub case. It seems that Merkel did not appreciate his efforts to the extent hoped for in Budapest.

During the press conference Orbán talked mostly about German-Hungarian economic relations and thanked Germany for its investment, which resulted in 300,000 jobs in Hungary. But he became more insistent and strident as time went on, especially when Merkel began talking about a common European energy policy. He indicated that in his opinion the European Union doesn’t appreciate Hungary’s utter dependence on Russian gas. He stressed, in a raised voice, that the Russian-Hungarian long-term gas supply contract will be expiring soon and that Hungary must have a new agreement with the Russians. Hence the forthcoming Putin-Orbán meeting in Budapest.

An opposition politician called my attention to the fact that Merkel referred to Orbán as “ein Kollege” instead of the customary designation “friend.” An American acquaintance noted that the new American ambassador also talks about Hungary as an “ally” and no longer as a friend.

The German papers are already full of articles about the trip, and I’m sure that in the next few days there will be dozens of articles and op/ed pieces analyzing Merkel’s day in Budapest. I’m also certain that I will spend more than one post on this visit. Here are a few initial observations.

Merkel spent very little time with Viktor Orbán. Just a little over an hour, including a meal. With János Áder no more than 15-20 minutes. On the other hand, the event at the German-language Andrássy University was quite long where differences of opinion between the two politicians became evident. The introductory remarks by the president of Andrássy University were lengthy as was the speech by the president of the University of Szeged, which bestowed an honorary degree on Angela Merkel. Her own speech was not short either. What was most surprising was the number of questions allowed. Some of the questions were not political but personal. Perhaps the students didn’t have the guts to ask politically risky questions. Her answers showed her to be quite an open person, very different from what I expected. One brave soul did bring up the topic of terrorism and immigration, indicating that Orbán inflames prejudice against people from different cultural backgrounds. Merkel stood by her guns, stressing the need for tolerance, openness, and diversity. Another question was about Russian aggression. Here she used strong words against aggression and condemned Putin’s use of force.

Finally, a few words about Merkel’s final destination, the synagogue on Dohány utca, where she talked to Hungarian Jewish religious leaders. Apparently, the Hungarians first suggested that Viktor Orbán accompany Merkel. The Germans turned that kind offer down. I find it significant that Merkel’s visit to the synagogue was longer than planned. Her plane left Budapest half an hour later than scheduled.

All in all, those people who were afraid that by going to Budapest Angela Merkel would give her stamp of approval to Viktor Orbán’s “illiberal democracy” can breathe a sigh of relief. Nothing of the sort happened.

The European Anti-Fraud Office is a bit slow: The case of the Heart of Budapest project

Well, we are back in Budapest’s District V, which is known by many names: Lipótváros (Leopoldstadt), Belváros (Downtown), or lately for a little political propaganda “The Heart of Budapest.” At least this was the name of the mega-project undertaken within the boundaries of the district that made the historic district mostly traffic-free and repaved the streets between Kálvin tér and Szabadság tér, stretching 1.7 km, with fancy cobble stones. Like everything else, the project was largely financed by the European Union.

It was Antal Rogán, the newly elected mayor of the district, who came up with the idea of revamping downtown Pest shortly after the municipal election of 2006. He convinced the City Council of Greater Budapest to apply to Brussels for a grant, and it seemed that at least on the surface the SZDSZ-MSZP city and the Fidesz district were of one mind. We mustn’t forget that at this time Antal Rogán was considered to be a moderate and reasonable man. Later the Fidesz media praised him as a truly remarkable Fidesz mayor who managed, despite the fact that the city of Budapest and the government were in SZDSZ-MSZP hands, to receive a huge sum of money for the development of his district. Well, the Heart of Budapest project really was impressive. A good portion of District V became something of a showcase.

The renovated Károly körút – Photo András Földes

As we know, Antal Rogán has had his share of his political trouble ever since Péter Juhász, who was Együtt’s candidate for mayor last October, decided to investigate shady real estate deals during Rogán’s tenure. I wrote about corruption in the district in December and again in January. Juhász, unlike most Hungarian politicians, doesn’t give up. Whether he will succeed in putting Rogán in jail remains to be seen.

What Rogán did not need was another scandal. But he’s under attack yet again, this time in connection with the Heart of Budapest project. The internet site vs.hu reported yesterday that OLAF, the European Anti-Fraud Office working under the aegis of the European Commission, found serious irregularities in connection with Rogán’s project. According to vs.hu, OLAF finished its investigation at the end of last year and called upon the Hungarian Chief Prosecutor’s Office to begin an investigation of the case. Naturally, OLAF’s findings were also sent to the European Commission. The Chief Prosecutor’s Office admitted that they received the documentation that supports OLAF’s case but said that “currently work is being done on the translation of the material.” Knowing the Chief Prosecutor’s Office, they will work on that translation for months if not years. Moreover, some opposition politicians learned that in the last few years the Chief Prosecutor’s Office received several dozen such complaints, but as far as we know Chief Prosecutor Péter Polt’s crew did nothing about them.

This is not the first time that questions have been raised about the project. At the end of 2012 OLAF found that not everything was in order. There was a good possibility that both District V and the city of Budapest would have to pay sizable fines: about 900 million forints each. The charge? The officials of the district and the city who were handling the bidding process demanded such unnecessary qualifications from the applicants that only one combined firm, Reneszánsz Kőfaragó Zrt and Bau Holding 2000, forming the Heart of Budapest Consortium, could possibly undertake the work. The bidding was theoretically open to foreign firms as well, but I doubt that much effort was put into finding non-Hungarian companies for the job.

What kinds of unreasonable demands did the authorities insist on? To qualify, a company had to have references for 1.2 billion forints worth of work on historic buildings even though the new project focused on repaving streets. There was absolutely no restoration of historic buildings. This ploy is commonly used in Hungary to make sure that the “right” company is the successful bidder. In Hungary 40% of all projects end up with a single bidder. Every time such a thing happens we can be pretty sure that corruption is not far away.

In 2012, when this story broke, Rogán and his deputy András Puskás, who has since left the district under the cloud of possible corruption, argued that there was nothing wrong with the project. It was done properly. The problem, they countered, was that the European Commission didn’t like the Orbán government and concocted this case to attack Viktor Orbán and his politics.

Now that OLAF finally got to the point of calling on the Chief Prosecutor, the district is trying to shift the blame to the current opposition. After all, the argument goes, the first phase of the project was finished in 2009 when Gordon Bajnai was prime minister. And Gordon Bajnai was present at the official opening. I guess that, according to the brilliant logic of the editorial offices of Magyar Nemzet, Bajnai had something to do with passing on the job to an earlier designated firm just because he cut the tricolor ribbon at the opening ceremony. For good measure, Magyar Nemzet added that Viktor Szigetvári, co-chair of Együtt and then Bajnai’s chief-of-staff, participated in the negotiations. Szigetvári calls the accusation a lie.

In addition, Magyar Nemzet blames the SZDSZ-MSZP administration of the city of Budapest. “All this happened during the era of Demszky-Hagyó-Steiner.” Pál Steiner was the whip of the MSZP caucus on the city council while Miklós Hagyó was the MSZP deputy mayor. Hagyó was later accused in a vast corruption case, which is still pending. The lurid details of the case tarnished MSZP and helped Fidesz coast to an overwhelming victory, resulting in a two-thirds majority in 2010.

OLAF has been investigating for the last six years. Right now, the Chief Prosecutor’s office is busily, or not so busily, translating. When do you think we will know exactly what happened? If you ask me, never.

 

The newly appointed Hungarian ambassador to the U.S. hangs in limbo

Yesterday afternoon Colleen Bell, the new U.S. ambassador to Hungary, arrived in Budapest. Earlier I devoted several posts to her appointment and to difficulties she experienced before the Senate Foreign Relations Committee. After her nomination I expressed my dismay, not because I had anything against Ms Bell but because I considered the political situation in Hungary so serious that I thought it would behoove U.S. interests to have a career diplomat representing the American government. I am, however, prepared to wait to see what happens. Is the new ambassador a quick study? Will she be able to assess the Hungarian situation in all its complexity in a relatively short time and not succumb to Fidesz wiles? We don’t know. As a former diplomat friend told me, he served under some very bad ambassadors with diplomatic experience and some excellent ones who were political appointees.

By all signs the Hungarian government is greatly relieved that M. André Goodfriend will no longer be running the show. I suspect that they think that with Bell’s arrival American-Hungarian relations will assume an entirely different complexion in Hungary’s favor. From what I gather from comments written about her on Hungarian Spectrum, quite a few readers fear that she will be a pushover. I suspect that a good number of government officials think the same; she’s a woman, after all, and Hungarian society is male-dominated. Gergely Prőhle, former assistant undersecretary in the foreign ministry, specifically referred in an interview to the new ambassador’s sex and her role as a mother of four, qualities which in his opinion might help to improve the atmosphere between the two countries. Prőhle added that by coincidence the newly appointed Hungarian ambassador to Washington, Réka Szemerkényi, is also a woman with four children. So, while one woman will be working in Budapest for good relations between the U.S. and Hungary, the other will be winning hearts and minds in Washington. The charm offensive is on. It seemed to have worked with Bell’s predecessor, Eleni Tsakopoulos Kounalakis. Perhaps it will work again.

Oh, yes, Réka Szemerkényi. She still has not occupied her post in Washington because apparently she has not received the so-called “agrément,” her formal acceptance by the United States as the next Hungarian ambassador. More than two months have gone by since her appointment. It seems that Washington is in no hurry to recognize her as the head of the Hungarian embassy. The official who leaked this information to Népszabadság complained bitterly about the American response, especially since they “waited for Colleen Bell with a bouquet of roses without thorns” at the airport and since President János Áder announced that he would receive her two days after her arrival so she could present her credentials and begin her work as early as possible.

What is wrong with Réka Szemerkényi? Why is the U.S. dragging its heels, other than to express its general disapproval of the Hungarian government? From Szemerkényi’s curriculum vitae she seems to be highly qualified. Upon receiving an M.A. from ELTE (Budapest) in 1991, she spent a year at the Institut Européen des Hautes Études Internationales in Nice (1990-1991). Two years later she received an M.A. in International Relations and Strategic Studies from The John Hopkins University, School of Advanced International Studies in Washington, D.C.  (1993-1995). From Washington she went to London where she spent a year as a research associate at the International Institute for Strategic Studies (1995-1996). From here her career took her straight to Fidesz, where she began as senior foreign policy secretary for the Fidesz parliamentary caucus (1997-1998). Her political career really took off after Fidesz won the election in 1998. She first became undersecretary in the prime minister’s office and later foreign policy and national security adviser to Viktor Orbán (2000-2002).

While Fidesz was out of office she worked at research institutes related to Fidesz and earned a Ph.D.in economics at the Péter Pázmány Catholic University in 2007. After such a distinguished academic career, her decision to attend a university with a less than sterling reputation is somewhat baffling. But she also stooped low enough to become a senior associate in the Institute of Kremlinology at the Gáspár Károli Reformed University which is led by the Miklós Kun, grandson of Béla Kun of Hungarian Soviet Republic fame, who turned from rabid Marxist to rabid right-winger. Szemerkényi’s entire professional career has been tied to right-wing politics, not just as a high government official but also as a party member. In 2009, for example, she was #17 on Fidesz’s EP list but only the first 14 made it.

Réka Szemerkényi / Photo Attila Kovács, MTI

In the last four or five years in her capacity as chief adviser to Viktor Orbán, she was heavily involved in the negotiations over the Southern Stream. In September 2013 when the leaders of the Southern Stream and Gazprom made their case in Milan for the pipeline’s value, it was Réka Szemerkényi and Dragutin Matanovic of Serbia who presented the points of view of the partner countries. When it became known that the United States government listened to telephone conversations of European politicians, it was Szemerkényi’s job to present the Hungarian position on the matter to the American government. According to an MTI report, she demanded answers from the United States, but of course we have no idea what actual steps she took and how the issue was settled between the two countries. At that time she still considered the Trans-Atlantic Trade and Investment Partnership a right step in the right direction “which benefits both sides.” As we know, that is no longer the Hungarian government’s position. As Attila Ara-Kovács pointed out, “the former deeply committed atlantist has become a vehement defender of the new policy that no longer concentrates on Washington.”

Ara-Kovács made his observation at the time it was leaked that Viktor Orbán had no need for Zsolt Németh, undersecretary of János Martonyi, at the foreign ministry. Obviously, he was far too committed to the transatlantic ideas he and Martonyi represented during their times in office (1998-2002 and 2010-2014). Apparently Orbán offered Németh the ambassadorship to Washington but Németh, I think wisely, did not accept. No ambassador can improve relations between the U.S. and Hungary as long as Viktor Orbán is the prime minister. Not even a mother of four. I don’t know of course whether Zsolt Németh would have been more welcome in Washington, but Szemerkényi, although she might be well qualified for the job, is known to blindly follow the party line. In Hungarian these people are called “party soldiers.” One of Index‘s sources said that Orbán and Szemerkényi are so close that her appointment practically means the presence of Viktor Orbán in Washington. I’m sure that the idea of having the clone of Viktor Orbán in the Hungarian Embassy in Washington doesn’t warm the cockles of anyone’s heart in the U.S. capital.

Two narratives of the impending Budapest visit of Angela Merkel

As Chancellor Angela Merkel’s visit to Budapest nears, there is conflicting speculation about the purpose of her visit. Merkel will spend five hours in Budapest, apparently on February 2. This short stint will include a meeting with Prime Minister Viktor Orbán and a visit to Mazsihisz, the umbrella organization representing the Jewish religious community. Why is Merkel traveling to Hungary? According to critics, the trip is ill-advised because, with a visit to Budapest, she is implicitly endorsing the illiberal regime of Viktor Orbán. A few days ago one of the leading MSZP politicians announced that the party expects Merkel “to signal to Viktor Orbán in unambiguous terms that he has no place in the community of democratic European politicians.”

Others seem to be convinced that Merkel is going to Budapest to ensure that Viktor Orbán will vote together with the rest of the European prime ministers to extend the sanctions currently in force against Russia. After all, it wasn’t so long ago that the German chancellor made it clear that sanctions can be lifted only after the agreement reached in Minsk is fulfilled. And nothing of the sort has happened. In fact, just this morning Kiev announced that 700 Russian troops had crossed into Ukraine to aid the rebels fighting for control of the eastern provinces.

Attila Ara-Kovács, the foreign policy expert of Demokratikus Koalíció, is one of those who believe that the trip’s main purpose is to convince Viktor Orbán of the necessity of extending the sanctions. But he goes even further when he hypothesizes that Merkel has another message for Orbán in light of the recent demonstrations: he should end the political conflict at home. Somewhat similarly, Stratfor, an American geopolitical intelligence and advisory firm, is convinced that Merkel’s visit is part and parcel of a U.S. “diplomatic offensive” in the region and can be viewed as putting joint U.S.-German pressure on Viktor Orbán. The aim is to stop the spread of Russian influence in the region.

Is this the truth?

Or this?

The other narrative of the impending Merkel visit comes straight from Fidesz. It is well summarized in the headline of an article by Zsolt Hazafi: “Is Merkel Orbán’s guardian angel?” It is true that the journalist turned the Fidesz message into a question, but the answer is “yes.” The story line goes as follows: Hungary and Germany are very close allies who synchronize all their diplomatic moves. More than that, Orbán’s Hungary is doing Germany’s bidding. Or at least this is what József Szájer, a Fidesz member of the European Parliament, intimated in his interview with Antónia Mészáros of ATV yesterday. As he put it: “Germany sent us ahead” to test the ground vis-à-vis Russia. Berlin, according to him, is just as much against sanctions as Budapest is, but Merkel is constrained, presumably by the United States. Therefore, she secretly welcomes Hungary’s position on the sanctions.

After talking with several high-level government officials, Hazafi gained the impression that in the last few years a Russian-German-Hungarian triangle came into being, a three-way relationship that includes an understanding about building a second reactor at the Paks nuclear power plant. Why would the German chancellor agree to the secret Russian-Hungarian deal on Paks? According to this narrative, Germany, where soon enough there will be no nuclear power plants, will be able to get inexpensive energy from Paks. Fidesz informants pointed out that a German firm was instrumental in making the Russian loan to Hungary possible. They added as proof of the understanding between Germany and Hungary on Paks that Günther Oettinger, former European commissioner for energy matters and a German, raised no objection to the Putin-Orbán deal. Members of the Hungarian government and leading Fidesz leaders consider both visits–Merkel’s and Putin’s–diplomatic triumphs. “Hungary is back on the map,” Orbán allegedly said.

Népszabadság also had its own Fidesz informants. They claim that Germany didn’t object to the Orbán-Putin meeting since Germany and Hungary work hand in hand when it comes to Russia. Some of the more embarrassing statements of Viktor Orbán are no more than trial balloons. One example is the question of sanctions. According to other Fidesz politicians, those who see a connection between the visits of Merkel and Putin “are not far from the truth.” Insiders also claim that the relationship between Merkel and Orbán is close. According to them, the two became closer after their hour-long meeting in Milan last year. Government officials, when claiming close German-Russian-Hungarian cooperation, usually bring up the fact that Klaus Mangold, former CEO of Daimler-Chrysler, was the middleman between Orbán and Putin throughout the negotiations. The informers seem to be pretty certain that “it is no longer in the interest of Germany to talk seriously about the lack of democracy in Hungary.” The author of the article (we don’t know who he/she is because there was no by-line) added that Merkel might have to resort to more serious criticism after “the prime minister’s crude anti-immigration theses” in the wake of the terrorist attacks in Paris.

So, here we have two irreconcilable narratives. I find the Fidesz version of close German-Hungarian relations hard to believe. There are just too many signs that contradict it. Unless, of course, we assume duplicity on the part of Angela Merkel. After all, time and again she expressed her misgivings about Russian aggression and her support of the sanctions, including additional ones if Russia refused to cooperate. Such a double game would make no sense, especially now that Russia is in serious economic and political trouble. Thus, my hunch is that the sudden talkativeness of Fidesz potentates is a concerted effort on the part of the Orbán regime to burnish the prime minister’s image, to point to his diplomatic importance and genius, and to portray him as one of the most important leaders in Europe.

I am inclined to believe that the main reason for the Merkel visit is indeed the question of the sanctions and Hungary’s overly chummy relations with Putin. I am also convinced that Merkel will talk about what Hungarians call “the democracy deficit,” which is something that is hard to ignore given the wide coverage of Orbán’s illiberal state and the latest demonstrations. In brief, I consider this latest tsunami of leaks by Fidesz politicians to be a part of a disinformation campaign.

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

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.

Vladimir Putin’s impending visit to Budapest

Népszava, a social democratic paper, is generally well-informed about the “secrets” of the government. This time it surprised its readers with a front-page article announcing a planned visit by Vladimir Putin to Budapest sometime in March. Budapest, judiciously spurned by western political leaders of late, is becoming a hub of diplomatic activity. Angela Merkel is scheduled for a five-hour visit on February 2 and now the news about Putin.

The newspaper pointed out that this will not be Putin’s first visit to Budapest. He was the guest of Ferenc Gyurcsány in February 2006 when the Hungarian prime minister supported the idea of the Southern Stream to the great annoyance and disapproval of both the United States and Viktor Orbán. Orbán at that time considered such a policy to be the equivalent of treason. The paper also called attention to Viktor Orbán’s about-face when he paid a visit to Moscow in November 2010 and again in February 2013.

Actually Népszava missed an earlier indication that a change in Russo-Hungarian relations was in the works. In November 2009, prior to his becoming prime minister, during a visit to St. Petersburg as one of the vice presidents of the European People’s Party Orbán attended the eleventh congress of the ruling United Russia Party. During this visit he indicated to Putin that he wanted “to put Russian-Hungarian relations on an entirely new footing.” He had made up his mind to conduct a pro-Russian foreign policy once in power.

Viktor Orbán and Vladimir Putin in Moscow, January 2014
Source: Europess / Getty Images / Sasha Mordovets

Perhaps the first person to comment on the news of the visit was László Kovács, former foreign minister, who happened to be a visitor on the early morning program “ATV Start.” He assumes that the initiative for the visit came from Moscow. Zoltán Sz. Bíró, a Russian expert, shares Kovács’s hypothesis. Putin must have been the one to suggest the visit in the hope of convincing Orbán to veto the extension of EU sanctions against Russia, which expire in March. In Biró’s opinion, a veto by Orbán not supported by any other EU country would poison the relationship between Hungary and the West for a very long time. Therefore he doubts that Orbán would dare to go that far.

Attila Ara-Kovács, head of the “foreign cabinet” of the Demokratikus Koalíció, told Klubrádió that he knew about the impending visit for about a week but, according to his information, Putin’s visit will take place not in March, as Népszava reported, but on February 9. In his reading, it was Orbán who invited Putin and not the other way around, perhaps to show the world that he is not alone in his battle with the United States and the European Union. If Orbán sensed that Angela Merkel intended to deliver “bad news” during her stay in Budapest, perhaps a looming visit from Putin might temper her disapproval. Ara-Kovács considers this latest move of Orbán a provocation that will only add fuel to the fire in the strained relationship between Hungary and the West.

What are the reactions of the opposition parties? As usual, MSZP is hibernating. Not a word from József Tóbiás, the party chairman, or from anyone else. Együtt somewhat naively demands that the government consult with all parliamentary parties “in preparing the meeting between Prime Minister Viktor Orbán and the Russian president.” Együtt can wait for such a consultation. Együtt joined LMP in its opposition to the construction of the Paks2 nuclear power plant. Both parties want the government, during the prime minister’s meeting with Putin, to break its contract for a 10-billion-euro Russian loan to have Rossatom build the plant. Well, that will not happen either but it is possible, as Zoltán Sz. Biró suspects, that Russia for financial reasons will give up the idea of the project. PM’s reaction was the most sensible: the party would like to see a huge demonstration against Putin’s visit organized by all the democratic opposition parties as well as by the civic groups that were responsible for the recent mass demonstrations.

László Szily, the blogger of Cink.hu, correctly pointed out that, if it is true that Putin is coming to Budapest, Viktor Orbán just did those who have been expressing their anger against his regime in the last few months a huge favor. The most recent demonstration showed signs of fatigue, but Putin in Budapest could resurrect the old enthusiasm of the crowds and just might unite the hitherto anti-party civic groups and the democratic parties into one large and potent group. Moreover, too cozy a Russian-Hungarian friendship might cause a rift within Fidesz itself. A lot of Fidesz voters are adamantly anti-Russian.  In Szily’s words, “The vacillating opposition on the streets can be grateful to the prime minister because kowtowing to Russia, parading with the dictator is the kind of event that could successfully bring together the dissatisfied left, right, and liberal public.”

One party was elated by the news: Jobbik. This afternoon Jobbik published an official statement, the theme of which was “Hungary must represent the interests of peace and neutrality.” Márton Gyöngyösi, the party’s foreign policy expert, said that Jobbik is a supporter of Viktor Orbán’s “eastern opening” and “considers Russia an economic, political and cultural partner of Hungary.” Budapest, because of the Hungarian minority in the Subcarpathian region of Ukraine, shouldn’t side with its western allies. Gyöngyösi went even further than the rather subdued official statement when he told Hiradó, the organ of state propaganda, that “it is unacceptable that the Hungarian government, blindly representing western interests, is ready to throw the Subcarpathian Hungarians as bones to the West.”

It is hard to know what the next couple of months will bring on the international scene. We have no idea what kind of message Angela Merkel will deliver to Budapest on February 2. We don’t know what foreign reactions to Putin’s visit will be. But domestically the Russian president’s visit might just be a potent catalyst for political change.

The Orbán government’s latest “unorthodox solution”: A unique toll system

The Hungarian public is fixated on everything related to cars and driving, especially when it’s a question of money. Announcements about gasoline prices are daily fare in Hungary. If the price of gasoline goes up or down a couple of forints, it’s big news. Hungary is a poor country, we must not forget. Perhaps the most serious crisis since the change of regime occurred when it was announced that gasoline prices would have to be raised substantially. A blockade of all roads nationwide by taxi drivers paralyzed the country for three days and forced a government retreat.

Therefore it’s mighty strange that the Orbán government, already under considerable domestic and foreign pressure, decided to introduce a new toll system–and a badly designed one at that, which is bound to encounter serious opposition.

The system is geographically based. Each county, and there are nineteen of them in Hungary, is a separate toll unit. A driver who plans to drive on a toll road but strictly within the confines of his county need purchase only a single “matrica/vignette.” A few decades ago that might have been reasonable. A trip from Pécs to Harkány was considered to be quite a journey, and going to Hosszúhetény was an outright adventure. But these days, even with lower gasoline prices, people with cars are a lot more mobile.

The maps the government provided to make car owners’ lives easier are confusing. Some of them even had mistakes. If I figure it right, a person driving from Budapest to Pécs on the relatively new superhighway will need four matricas. Admittedly, the new county matricas are a great deal cheaper (5,000 Ft. each) than the former pass that was good for the whole country at 42,980 Ft/year. But what a hassle to figure out what counties you’re going through each time you plan a trip and which passes you’ll have to buy before you venture outside your own county. Even worse, think about those occasions when you have to get somewhere quickly–a family illness, a business emergency, the funeral of a colleague. You don’t just gas up the car and go. You also have to make sure you have the appropriate passes.

Let’s take a not too far-fetched example. A businessman who travels frequently from Pécs to Budapest will have to buy three or four matricas. And let’s say his family also wants to visit an aunt in Somogy or in Zala. The expenses start adding up.

The suspicion is that the government eventually wants to stop issuing those matricas that are good for a limited period of time. They are handy when the family goes on holiday to Lake Balaton or the Mátra Mountains. For ten days they pay only 2,975 Ft.; for a month, 4,789 Ft.

Drivers had to purchase their matricas by January 1, but as of December 29 no matricas were yet available. The new system was introduced in a great hurry without adequate preparation, as even Gergely Gulyás, the honey-tongued Fidesz politician, had to admit. By Friday (January 2) the computer system handling the issuance of matricas at gas stations crashed. There were long lines of people standing in the cold and rain in front of the headquarters of the office that takes care of the country’s roads. Purchasing passes online was not any easier because the site couldn’t handle the traffic.

And confusion reigns. Csaba Hende, the minister of defense and a member of parliament for Vas County, is furious. Based on the information he received, he promised his constituents that M86, a road between Szombathely and Vát, was going to be toll free. Came the surprise the following day: anyone using this new road will have to get a county matrica.

There are bits and pieces of roads–because this is what we are talking about–where the introduction of tolls makes no sense. Perhaps the most egregious example is the road to the Budapest Airport. A single trip a year to and from the airport would require a Budapester to buy a county matrica.

The attached map gives some idea of what I’m talking about. As you can see, M1 and M0 serve a very important function: to save Budapest from heavy thru traffic, mainly the thousands and thousands of trucks that cross the country toward the north, the east, and the south. It is hard not to notice that certain parts of a single highway are free while other parts are toll roads. The reason is that those sections marked in green were built with EU support, for the specific purpose of ridding Budapest of the heavy truck traffic that is environmentally harmful. The European Union demanded that these roads remain toll free. Well, on the map they are marked free, but the roads leading to these free sections are toll roads, so, contrary to EU intentions, truckers don’t get a free ride around Budapest. You may ask what the orange-colored sections signify. These three short sections are still within the limits of Pest County, but if you drive onto them, you must have a county matrica for Fejér County in the case of M1 and M7 or Nógrád County in the case of M3. The distances are small. The trip from Törökbálint to Pusztazámor, for instance, is only 17.3 km or 10.7 miles.

A civic group that already blocked the M1 and M7 superhighways for a minute in December is threatening the government with an ultimatum. They now promise a total blockade of all roads if the government does not withdraw the new county toll system by the end of February. They will also demand the resignation of the Orbán government. The organizer is Zoltán Büki, a businessman and Együtt-PM activist in the county of Nógrád.

The United States as enemy #1

Bálint Ablonczy, a journalist working for Heti Válasz, a pro-Fidesz publication, wrote a few days ago that “the idea of permanent revolution is not working anymore.” And yet the two most important players on the Hungarian political scene, Prime Minister Viktor Orbán and János Lázár, his chief of staff, resolutely follow a strategy that is in Ablonczy’s opinion “no longer accepted by the voters.”

Most commentators agree that the prime minister is losing his sense of reality. They point out that the present course of action can result only in defeat and the further isolation of the country. After listening to Viktor Orbán’s latest outburst against the United States last night, I must join this chorus of critics. But before I go into some details of his warped view of the world, let me summarize his accusations against the United States, the country that, despite the fact that it is one of Hungary’s allies, is in his eyes solely responsible for his current political problems.

According to him, the United States’ allegation of corruption against certain Hungarian officials is nothing but “a cover story,” as “every thinking man knows.” The United States wants to gain leverage to increase its influence in the country. Currently a CIA operation is underway in Hungary. The United States is not only meddling in the internal affairs of the country but “is in fact an active political actor.” By this he means that the United States is organizing the demonstrations against his government. It’s trying to topple him.

The American interest in Eastern Europe is twofold. The Americans want to gain access to the energy market, and they want to have a commercial foothold in the region. The U.S. is “sore” because they wanted to build the Paks atomic power plant but Hungary chose Russia instead. And now Washington wants to drag Hungary into the Russian-Ukrainian conflict, but the Hungarian government wants to avoid a conflict that will lead to a new cold war. These charges are nonsense. The U.S. not sore because an American company didn’t get the contract to expand Paks, and it was not the United States that dragged Hungary into the Russian-Ukrainian conflict. Just the opposite. It was Viktor Orbán who positioned himself in the middle of the power play between Russia and the Western alliance.

By the way, after the appearance of the Lázár interview, I found only one reaction coming from an “unnamed official” of the State Department that was published by HVG. The State Department urges the Hungarian government to take into consideration “the domestic and foreign misgivings.” Washington would like “to continue a constructive dialogue … about those decisions that are related to the state of democracy and rule of law.” Surely, Orbán has no intention of following the Americans’ advice.

As a Hungarian cartoonist sees it

Turning back to Orbán’s interview, I want to highlight some points that weren’t picked up by the wire services. One was his emphasis on Hungary’s “innocence” and its “loneliness.” One could feel Orbán’s hurt when he said that “we have never harmed anyone” and yet we are badly treated. The attacks on us are unjustified. As for the “loneliness” theme, Orbán returned to the age-old Hungarian lament that “we are alone” in the world. There are the Slavs to the East and the “honest (derék)” Germans to the West. The only thing Hungarians have is the land “where they have always lived,” their language, and their culture.

Note the adjective “honest/derék” in front of “Germans.” We can see from this interview as well as Lázár’s that the new government strategy is to counterbalance the worsening U.S.-Hungarian relations with an increased reliance on Germany. Both men tried to portray Germany as a great friend of Russia. Orbán, who when talking about the United States declared that Hungary will not be a “colony,” two minutes later announced that Hungary is happily following the lead of Germany when it comes to foreign policy. It seems that Orbán is hoping that Germany will ride to its rescue and mediate between Washington and Budapest. After all, since Germany has had its problems with the U.S. and since it is such a good friend of Russia, Hungary should benefit from German mediation.

As far as the Hungarian political leadership knows, Angela Merkel is still planning to visit the Hungarian capital in February. Dávid Trencséni, a journalist for Stop, put it bluntly: Berlin is “Orbán’s last hope.”

Berlin may be Orbán’s last hope but it may also have been partly responsible for his woes with the U.S. He’s been able to get his way most of the time in the European Union, thanks in large part to the German Christian Democrats. Both Fidesz and the Christian Democrats belong to the European People’s Party, a party that stands by its members even when they behave outrageously. By contrast, Orbán has no political ally in the United States. Both Republicans and Democrats condemn Orbán’s illiberal state and his pro-Russian policies.

And finally a few oddities that run through both interviews. Hungary must be respected because it has a thousand-year-old history. Well, Egypt has a much longer one, so should I respect the current Egyptian government? Hungary in the past was successful only when it was independent. Well, actually the opposite is true. The period between 1867 and 1914 when the country was part of Austria-Hungary is considered to be the golden age of modern Hungarian history. Then there are claims that merit no comment. For instance, even Hungary’s enemies have to admit that Hungary has been a success story in the last five years. All the decisions Orbán’s government made were the right ones. Economically, every year was better than the one before. Hungary is a strong country that has weight and “will take an active part in this new era.” Well, maybe these claims do merit comment after all: Who unlocked the gates of the asylum?

Corruption in District V under Antal Rogán, #3 man in the Orbán regime

I have been so involved with the political aspects of the Orbán regime that I have neglected the suspicious enrichment of some of the most prominent Fidesz politicians. If a researcher had half a year (and a team of investigators) he could easily write a whole book about these people’s wrongdoings.

A quick look at the list of names that crop up most often in the media leads me to believe that being the mayor of a city or a Budapest district offers excellent opportunities for corruption. Just to mention a few politicians who have been the targets of journalistic inquiries: Lajos Kósa, until recently mayor of  Debrecen; János Lázár, who was mayor of Hódmezővásárhely until he became head of the prime minister’s office; and Antal Rogán, who in addition to being the whip of the Fidesz caucus was also mayor of Budapest’s District V. Larger towns or cities offer ample opportunities for city officials, including mayors, to extract kickbacks for municipal contracts. Rumor has it that the average bribe is 10% of the value of the contract. In Debrecen, apparently the price was double that amount.

The finances of Lajos Kósa became the subject of scrutiny of late when his explanation for how he acquired a very expensive apartment in Budapest was found less than convincing or when he was found to have traveled to New Zealand for three days for a Rolling Stones concert.

János Lázár also had some hard times of late when it turned out that he purchased an apartment in Budapest for his ten-year-old son for 60-70 million forints. Naturally, that piece of property did not show up on the financial statement he submitted to parliament.

And finally, there is Antal Rogán, the number-three man in Hungarian politics today. His fraudulent financial statements have been the talk of the town. He greatly minimized the areas of his real estate and landholdings and was forced to correct them several times.

Given the limited space, I will spend less time here on Rogán’s fictitious financial statements and more on the possible sources of his and his political friends’ enrichment.

It was discovered back in March that Rogán, his wife, András Puskás (Rogán’s deputy), and his common-law wife jointly own 490 m² (almost 5,ooo ft²) apartments worth 300 million forints. For Rogán, who has never had any job save that of a politician, such a purchase under normal circumstances would have been beyond his means. And this is not the only piece of real estate he and his wife own.

A month after the revelations about Rogán’s luxury apartment(s) and his other rather shady real estate holdings, Bors, a tabloid, found out that the Central Investigative Prosecutor’s Office is looking into possible corruption in District V. A businessman who has several restaurants in Budapest won a tender for a piece of property in Rogán’s district where he wanted to open another restaurant. When he went to sign the contract, he was told in no uncertain terms that they expect several more million forints “under the table.” The businessman refused the generous offer and and pressed charges against the district, naming the man who approached him. By June Népszabadság learned that at least three real estate sales are under investigation.

There have also been some rather strange comings and goings in the mayor’s office. First, András Puskás, Rogán’s deputy who is implicated in the luxury apartment case, suddenly quit his job because he was “badly needed” in the foreign ministry. Almost at the same time the man in charge of the everyday running of the affairs of the municipality (jegyző, a kind of city manager) quit in a great hurry. His replacement a few months later was seen wearing a pair of Amadeo Testoni shoes worth 980 euros. The man’s monthly salary is 433,000 forints.

But the story doesn’t end here. Puskás’s replacement, Péter Szentgyörgyvölgyi, became the owner of an apartment in a stately apartment building in Szerb utca which he purchased for a mere 19 million forints, paying in monthly installments of 63,000 forints. The market value of such an apartment in a historic district is worth many times that amount. Meanwhile Szentgyörgyvölgyi became the new mayor, and on November 21 he decided to give the apartment back to the District. He claimed to be perfectly innocent in the affair; “he just got tired of all the attacks against him.”

Szerb utca 9 where Péter Szentgyörgyvölgyi, current mayor of District V, purchased an apartment for 19 million forints

Upon closer observation, investigators found that during Rogán’s eight-year-long tenure as mayor of District V one-third of all the real estate owned by the municipality was sold to individuals. One especially egregious case that surfaced lately is the business real estate that was sold to the common-law wife of Tamás Portik, a convicted murderer, back in 2011. The scheme seemed to have been the following. According to a city ordinance, the tenant of a property owned by the municipality has the right to purchase the property at a reduced price. Portik’s common-law wife became a tenant of a 212 m² business site in October 2011, and by December it was hers for 52 million forints. In July 2012 Portik and girlfriend sold the property for 102 millions, its fair market value.

Rogán’s bad luck is that Péter Juhász (Együtt), who was Szentgyörgyvölgyi’s opponent in the municipal elections in October, is a former human rights activist with vast experience as an investigator of corruption cases. And he is now a member of the District V city council. According to Juhász, under Rogán’s watch downtown Pest was the scene of incredible corruption. By now Rogán is a member of parliament and because of his immunity he himself is untouchable. However, András Puskás and Zoltán Sélley, who actually ran the municipality’s affairs and who prepared the contract with Portik’s girlfriend, can be sued, and Juhász is on their case.

This is only the tip of the iceberg, just one of hundreds. Tomorrow I’ll take a look at the spectacular enrichment of Lőrinc Mészáros, Viktor Orbán’s pipefitting friend from Felcsút. He also seems to be forgetful. Just lately he forgot about more than 1 billion forints he happened to have in his bank account.

No wonder that struggling Hungarians are outraged. Even some of the Fidesz true believers are angry. Yet the people involved don’t seem to realize that their conspicuous flaunting of their riches is not exactly going over well in one of the poorest nations in the European Union.

Restoring the splendor of the Royal Castle in Budapest

It is only on the surface that today’s topic is not about politics. Actually, I believe that in Hungary these days everything has something to do with politics.

A few days ago the Hungarian public learned that billions of forints, part of which will of course come from Brussels, will be spent on the reconstruction of the Castle District (Várnegyed) and the Royal Castle. The whole project might take twenty years. László L. Simon, the undersecretary in charge of culture, is responsible for the project, named the National (what else?) Hauszmann Plan. The plan is grandiose and, in my opinion, unnecessary. Fueling it, I suspect, is Viktor Orbán’s megalomania.

First of all, let’s clear up a few common misconceptions. The Vár is the area that in the thirteenth century King Béla IV enclosed with a city wall. Within that area he built a royal castle, which was enlarged and “modernized” by several of his successors. During the Turkish occupation the royal palace was used for barracks, storage, and stables but otherwise stood empty, decaying. And during the great siege of 1686 when Buda was captured by allied Christian forces, this medieval/renaissance castle was destroyed. In 1715 the whole structure had to be demolished.

In the second half of the eighteenth century, during the reign of Maria Theresa, a Baroque palace was built, but it was a white elephant. Maria Theresa didn’t quite know what to do with it. First she offered it to the Sisters of Loreto, but they left after a year, finding it too extravagant for a convent. For a while it housed a university (today ELTE). Later the palace became the residence of the palatines. In 1849, during the Hungarian troops’ attempt to retake the city from the Austrians, the palace was again badly damaged.

After the revolution of 1848-49 the palace was rebuilt (1850-56) but for the most part stood empty. Franz Joseph visited the Buda Castle only twice, once in 1856 and again in 1857. After the Compromise, when there was an economic boom in Hungary, the decision was made to build a truly magnificent royal castle. The architect was Alajos Hauszmann, the man after whom Orbán’s ambitious plan is named. The construction went on for almost forty years, between 1875 and 1912. To give some idea of the vastness of the place: it had 860 rooms, among them two throne rooms–the Grand Throne Room and the Small Throne Room–and a riding-hall. The rooms were huge and lavish. But it was yet another white elephant. It stood there empty. The emperor-king visited the place only a few times during his long reign.

Between the two world wars at last the royal castle had permanent residents: Miklós Horthy and his family. Their quarters were in the guest wing. But during World War II the castle was again badly damaged and once again reconstructed during the 1950s and 1960s. According to its critics, the changes that were made were not the most fortunate. Currently the palace houses the National Széchényi Library, the Hungarian National Gallery, and the Budapest History Museum. Plans call for the library and the gallery to be relocated.

After the planned restoration what will the building be used for? It will be a palace museum, we are told. Try to imagine reconstructing and furnishing those 860 rooms. The undersecretary in charge has very ambitious plans: even the throne rooms can be recreated. He also likes the idea of rebuilding the riding-hall. I wonder what they plan to do with the horses. It seems that the most important consideration in the project is to remake the royal palace as it was before 1945. Whatever changes were made since then will be obliterated. With 1945 time stopped. It is the same basic principle that was put into practice when Kossuth tér in front of the Hungarian parliament was restored to the way it looked before 1945.

Photo: Sándor H. Szabó / MTI

Viktor Orbán has been eyeing the Castle District for a very long time as the most appropriate place for the seat of his government. Between 1998 and 2002 he practically rebuilt the Sándor Palace, which before 1945 served as the office and home of Hungarian prime ministers. He was planning to move there, but his ambitions were thwarted when he lost the election. His successor did not want to occupy the building, and eventually it was designated as the office of the president.

Orbán still desperately wants to be in the Castle District. His latest plan is to move to another large historic building located not far from the Sándor Palace. All in all, great suspicion surrounds Orbán’s restoration project. There is talk of his plans to become a powerful president Russian style and perhaps move into part of the royal castle. So, on Friday, when he launched the National Hauszmann Plan, he tried to emphasize that the project is not for himself but for the Hungarian nation.

In his speech he called the Hauszmann Committee, which is preparing the details of the plan,”the war council” and his decision to undertake the project “the reconquest of the castle” for the Hungarian people. The castle is an organic part and symbol of the Hungarian nation, the Acropolis of Hungarian culture, he said. The nation needs a “living castle where life is robust.”

Let’s face it, this castle in all its iterations has nothing to do with the Hungarian nation or Hungarian culture. It was a creation of the Habsburgs, who resided in Vienna and spent no more than a few nights in it. Yes, it looked magnificent from the other side of the Danube, but it served no purpose other than housing the Horthy family and being the site of a few balls between the two world wars. How one can possibly create a “living castle” out of this, I have no idea. At least now Hungarian culture is represented within its walls with the National Art Gallery and the National Széchényi Library. They are visited by more people daily than at any time between the two world wars. But making it a palace museum? Where tourists, after paying for their tickets, can wander around the 860 rooms? This is an enormous and on the surface senseless undertaking. One must ask: what are Viktor Orbán’s real plans? To build himself a Hungarian Kremlin?