Demokratikus Koalíció

What now? Civilians versus party leaders

Tomorrow’s demonstration is being organized by a Facebook group called “MostMi!” (Now us!). The chief organizer of MostMi! is Zsolt Várady, a man who two years before Mark Zuckerberg hit upon the idea of Facebook, started iWiW, a Hungarian site. Later purchased by Magyar Telekom, iWiW no longer exists. Várady tried his luck in Berlin but couldn’t quite make it as a software developer. Now back in Hungary, he has been waging a war for some time against the Hungarian tax system which in his opinion is ruinous for Hungarian entrepreneurs.

Várady’s strategy was bizarre. Sometime at the beginning of October he sued every Hungarian party that has existed since 1990, fifteen all told, for being responsible for the widespread tax evasion effectively foisted upon Hungarian citizens because of the existing system of taxation. Quite clearly, Várady does not like parties. The very name he gave to the organization responsible for tomorrow’s demonstration is telling: “Now us!” It implies that all the parties of the last twenty-five years have failed and that the time has come for him and other unaffiliated citizens to take the reins.

What does MostMi! want to achieve tomorrow? “We would like to experience again the same liberating feeling [of earlier demonstrations] after the holidays. To feel that we are not alone and that we dare to raise our voices against this regime.” I’m afraid this is not quite enough. It looks as if MostMi! will be unable to rouse large numbers of demonstrators. As of now only about 10,000 people have indicated they will attend. Of course, it’s mighty cold out.

But there might be an additional reason for the lack of enthusiasm. Speakers at earlier demonstrations talked about the misery of the last twenty-five years and railed against all politicians, no matter their political stripe, while the crowds demanded: “Orbán takarodj!” (Orbán scram!). The civil organizers and the demonstrators were not in sync. Many of the demonstrators are followers of already existing parties. They would vote for MSZP, DK, Együtt, PM, LMP–that is, mostly for the parties of the old “Összefogás” group. These parties want to remove the present government from power. Várady and his co-organizers, by contrast, are working to eliminate all the existing democratic parties while they wait for a new generation of pristine politicians to emerge from their own ranks to eliminate the present regime.

In the last week or so, several political analysts argued against letting civilians take the lead to the exclusion of parties because they are convinced that if parties don’t join the movement, it will end up just like Milla, another Facebook initiative, did. Milla refused to cooperate with established parties and as a result it disappeared, practically without a trace.

It is usually Ferenc Gyurcsány who makes the first move when he sees an opportunity. The Orbán government has been greatly weakened and, in his opinion, it is time for political action. He was the only politician on the left who announced that the opposition should devise a strategy that would result in an election in 2016 instead of 2018. For that, the parties must come out of hibernation and join the movement that was begun by the civilians. They seem to be the ones who can gather crowds, but the crowds are not as politically unaffiliated as the civic organizers think. The very fact that they go out on the street is a political act. And politics needs parties.

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On December 22, Gyurcsány asked his followers to join the demonstration once again, but this time with party flags and emblems. The reaction from the MostMi! group was predictable. They subscribed to the Milla template: no parties, no slogans. “Now us!” But who are the “us”?  Even a conservative blog,”1000 A Mi Hazánk,” insisted that parties must make their appearance because otherwise the whole momentum of the demonstrations will be lost. On the liberal side, István Gusztos in Gépnarancs was of the same mind. As he said, “the organizers sooner or later must understand that political parties are civic formations par excellence.” Keeping civilians away from parties is an impediment to their renewal, which will make a struggle against the present regime impossible.

A telephone conversation between Várady and Gyurcsány did not resolve the impasse. Gyurcsány said that DK members and sympathizers who have faithfully attended earlier demonstrations will be happy to join Várady’s goup on January 2, but only if they can show their party preferences. The debate between DK and the organizers continued for days. The other parties, whom Gyurcsány called on to join DK’s example, remained quiet. The main reason for their reluctance was that they don’t want to appear to be following Gyurcsány’s lead. After all, József Tóbás, chairman of MSZP, made it clear that the socialists will never work together with any other party. They will the ones that will form a socialist government in 2018. Obviously, they also reject Gyurcsány’s strategy of holding early elections.

Naturally, the right-wing press was delighted to hear that the organizers “fell upon each other” while the liberals who sympathize with Gyurcsány felt that the civilians “screwed it up again.” Defenders of the civic leaders considered Ferenc Gyurcsány’s decision to be a way of usurping a demonstration that someone else organized. Indeed, by the rules of MostMi!’s game, Gyurcsány was trying to do exactly that. But as a liberal commentator said, “perhaps the rules of the game are wrong.”

The debate ended on December 30 when Szabolcs Kerék-Bárczy, a leading DK politician, announced that DK activists had received threats by civilians and that, in order to avoid possible violence, Ferenc Gyurcsány had withdrawn his request for DK sympathizers to be able to display their affiliation and affinity with the party. At that time Kerék-Bárczy still called upon the party’s followers to attend the demonstration. A few hours later, however, DK spokesman Zsolt Gréczy said that Gyurcsány had decided that if DK members and sympathizers can’t show their real colors, they will not attend. Of course, he cannot forbid DK sympathizers from attending, but neither he nor Gréczy will be there tomorrow.

Meanwhile criticism of the MostMi! group continues. Another civilian, Gábor Szabó, who has been demonstrating in front of the parliament building for months, wrote an open letter to Zsolt Várady saying that “it would be time to clear up what the real purpose of the demonstration is because the crowd thinks that the demonstration is against the Orbán regime while it seems that the goal of Várady and his collaborators is the creation of a new opposition.”

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Ferenc Gyurcsány’s latest political road map

As an illustration of how little Viktor Orbán’s minions understand and respect democracy, it is worth recalling Szilárd Németh’s comment about the “outlandish” announcement of Ferenc Gyurcsány after the municipal elections on October 12 that “he will do everything in his power to defeat the Orbán government.” He added that to this end Gyurcsány has solicited “foreign help” in the person of André Goodfriend, the U.S. chargé d’affaires in Budapest. Németh, by the way, happens to be one of the most unsavory characters in Orbán’s entourage. He is currently the deputy whip of the Fidesz parliamentary delegation.

Well, if Németh thought that for an opposition party to strive to defeat the Orbán government at the next election is tantamount to treason, he and his fellow Fidesz politicians will have a heyday with Gyurcsány’s announcement at the Demokratikus Koalíció’s congress today. There he declared his hope that the Orbán government will fall by 2016, two years ahead of the scheduled national election.

Politicians of the opposition parties have been reticent to express their views on the civic movements that have cropped up lately, with a new cast of characters.Their restraint is understandable given the organizers’ reluctance to be associated with parties. Any party. At the same time we know that there can be no parliamentary democracy without parties and that sooner or later the civic groups and the politicians will have to come to an understanding.

Gyurcsány decided to break the silence. Whether it was wise or not only time will tell, but at least he came out with the outline of a program, which is more than his fellow politicians on the left have done. Here I will summarize the speech he delivered this morning. I am relying on three independent sources–Népszabadság, Népszavaand Hir24because their reporters were on the spot and filed their reports prior to the appearance of MTI‘s summary.

Let me start with some of the new ideas that appeared in this speech. Earlier, Gyurcsány, while admitting the “mistakes” of the past, wanted to return to 1989 and restore the constitution of that year. Now he is thinking in terms of a new constitution and a new republic. That new constitution should decrease the power of the state and widen the rights of the people, who could express their wishes more directly through referendums. To hold referendums was very difficult in Hungary even before 2010, but since then Viktor Orbán has made sure that the governed have practically no opportunity “to interfere” with the work of his government. With this shift Gyurcsány was obviously responding to the majority view that politics even prior to 2010 was misguided and that it does not provide an appropriate model for future governance.

Source: Népszabadság / photo by Zsolt Reviczky

Source: Népszabadság / photo by Zsolt Reviczky

While he was at it, Gyurcsány introduced his own program without calling it that. One may question the feasibility of some of the items on his wish list, but at least he put them out for public response. He emphasized that although it will be the street demonstrations that will put pressure on the government to resign, these demonstrations must be peaceful.  Meanwhile the opposition forces must prepare themselves for the eventuality that in a couple of years they must be ready to govern and not find themselves in “a democratic chaos.” As far as foreign policy is concerned, a clear commitment must be made to the West. The “double dealing,” the shuttling between Moscow and Brussels must come to an end. As far as domestic changes are concerned,  the courts and the prosecutor’s office must become independent again. The media must be freed from its current stranglehold. People should be able to establish churches of their own choosing. NGOs should be allowed to do their jobs. An independent “anti-corruption office” should be set up. And something must be done about the growing poverty of ab0ut half of the population.

He spent some time on corruption and the world of the oligarchs, pointing out that “the number one oligarch is Viktor Orbán himself,” something that, in my opinion, many people don’t seem to realize when they demand the removal of “corrupt officials” only.

He spent a long time analyzing the current political situation and offering possible answers to it. He pointed out that Fidesz’s achievement of gaining a super majority again did not result in “the stabilization of Viktor Orbán’s power.” On the contrary, it roused people’s ire because of the arbitrary decisions of a government whose support has been decreasing over the years. In a democratic country there is “correction” from within, but in a tyranny one can only revolt. “The Hungarian parliamentary system is practically dead,” and therefore national resistance remains the only option.

Gyurcsány, unlike some other former liberal politicians, said that the disappointment, anger, and passion of the organizers of the demonstrations are perfectly understandable. He was happy to see the flags of the European Union at the demonstrations because that means that they opt for the democracy of the West, not the tyranny of the East. One ought not be surprised, he added, that no programs have been formulated by the organizers of these demonstrations because, after all, first one must reject the current political system. The young organizers have to decide whether they are willing to join an already existing party or whether they want to create one of their own. In either case, they must understand that “there is no parliamentary democracy without parties.” Yes, he knows that the civic leaders who organized the demonstrations are suspicious of politics and politicians. But politics is not dirty by itself; only corrupt politicians make it so.

The Fidesz propaganda machine needed less than an hour after the reports on the DK congress became public to react. The short statement has all the hallmarks of classic Fidesz propaganda: Ferenc Gyurcsány only a few days ago pretended that “he was an elegant stranger who kept himself away from the demonstrations, but by Saturday it became clear that he lied. He admitted that in fact it is the Left that is behind the demonstrations.” According to the government party, “the chairman of the opposition party admitted that the only goal of the demonstrations is the overthrow of the government and he is willing to use all means to obtain this end with force.” That short statement says a lot about the propaganda machine of Fidesz. Unfortunately, misinformation, lying if you wish, is the trademark of the present Hungarian government.

No end to the saga of the Hungarian corruption scandal

The reverberations from the news that six Hungarian citizens are not welcome in the United States don’t seem to subside. The perpetuation of the verbal battle is fueled mostly by the Hungarian side. Some of the attacks come straight from politicians, others from the accused and from so-called “civil groups” that are strong supporters of the Orbán government and operate most likely with generous financial assistance from the public purse.

These latter two sources cannot be taken terribly seriously, and in fact as time goes by their originally very loud voices have quieted down somewhat. The most spectacular retreat came from Ildikó Vida, the president of NAV, the Hungarian tax authority, and her lawyer, Barnabás Futó. As one blogger noted, when Barnabás Futó stands next to someone close to Fidesz, that person is in trouble. Futó seems to be rather good at pettifoggery at home, but he is at sea when it comes to international law. Initially he had ambitious plans for getting satisfaction for his client. Since Vida was told by M. André Goodfriend that she can ask for a visa and, if her request is rejected, she might be able to get information about the nature of the charges against her, Futó decided to do just that. Moreover, while he was at it, he contemplated suing the American chargé. Soon enough someone must have told him that members of the diplomatic corps have immunity and that his dreams of his client having her day in court were illusory. He gave up on his plan to sue. And, upon reflection, Vida decided that, after all, she did not want to know any of the details of her alleged wrongdoing and that therefore she will not apply for an American visa.

The other thread in the continuing saga is the Civil Összefogás Fórum (CÖF), an unofficial arm of the government that has helped bolster the popularity of the government. They were the ones who organized the first Békement (Peace March), which was supposed to defend the beleaguered Viktor Orbán against a dark international conspiracy that wanted to remove him from his post during the winter of 2011-12. Ever since the American revelations, the leaders of CÖF, people belonging to the extreme right wing of Fidesz, have been itching to march out again, this time against the United States. However, their beloved leader, to their great regret, held them back.

CÖF’s spokesman, Zoltán Lomnici, Jr, son of the former chief justice of the Supreme Court and a lawyer himself, shows such ignorance of the law that it is simply staggering. He and “Futó Barnabás,” to whom I gave the nickname “futóbolond” (lunatic at large), bring shame to the Hungarian legal profession. Here is Lomnici’s argument: the American chargé is a foreign national who, as can be attested by pictures and videos taken of him, left the embassy of the United States and therefore stepped on Hungarian soil. According to Hungarian law, if he knew of corruption he was supposed to press charges and provide proof of corruption. Since he neglected to do so, he could be sentenced to three years in jail. Obviously our star lawyer hasn’t heard of the Vienna Convention on Diplomatic Relations (1961). I suggest that Futó and Lomnici study the document, which clearly states that “Diplomats must not be liable to any form of arrest or detention. They are immune from civil or criminal prosecution.” Let’s hope that the text is available in Hungarian because Futó at least does not know any English. Today the organizers of the Peace Marches officially announced that for the time being they will not gather the troops.

Politicians have not shown the same restraint. A few days ago Antal Rogán, the whip of the Fidesz parliamentary caucus, called Goodfriend a liar and announced that Hungary is a country of law, unlike the United States. “We all must declare that Hungary is not Guantánamo, here nobody can be accused without proof.” Rogán’s attack on the United States is most likely part of the game plan dictated from above because not long before Róbert Répássy, undersecretary of the ministry of justice, said exactly the same thing.

Calling everybody a liar who criticizes the Hungarian government is a Fidesz specialty. Diplomats, on the whole, at least in civilized countries, don’t call their foreign colleagues liars. But Hungary’s new foreign minister has no such compunctions. In an interview with Magyar Nemzet he said that “to accuse us of not conforming to the European legal system is a gross lie (orbitális hazugság).” In response to Szijjártó’s charge, the U.S. Embassy in Budapest released a statement today that included the following sentences: “As Charge d’affaires Goodfriend has said, the United States has consistently conveyed our concerns to the Hungarian government about developments that harm the health of democratic institutions, civil society, and media freedom in Hungary – including concerns about corruption,” and “the Embassy remains in close contact with the Ministry of Foreign Affairs and Trade. We will continue to conduct a constructive, diplomatic dialogue with Hungary on all issues across the broad spectrum of U.S.-Hungarian engagement.” In brief, the United States will not stop its current policy of defending civil society, media freedom, and civil liberties. It will also pursue its fight against corruption.

In addition, today new information reached the public concerning the background of the American ban. The Demokratikus Koalíció, the party that seems to have good connections with the Hungarian foreign ministry where there are many disgruntled employees, learned that a week ago the American embassy did give some information to the Hungarians. Today Szabolcs Kerék-Bárczy, a DK politician, made that information public at a press conference. At this point the foreign ministry decided to fess up: yes, they received something, but it was only a “scrap of paper” (fecni) that cannot be taken seriously. However, a few hours later the ministry made the document public.

Undersecretary Levente Magyar waving "the scrap of paper" from the U.S. Embassy

Undersecretary Levente Magyar waving “the scrap of paper” from the U.S. Embassy

The two-page note describes the history of the numerous encounters between the embassy and the government of Hungary since February 2012. From October 2013 on, the American complaints multiplied. They had meetings with the “criminal directorate of the tax and customs office (NAV) on specific concerns about agricultural VAT fraud and tobacco nationalization.” A few months later the Americans were back at the “criminal directorate” but noticed “no evidence of action” on the part of NAV. In January 2014 the Americans had a meeting with the ministry of justice and public administration and they raised issues of VAT fraud, “institutionalized corruption, whistleblower protections, and Foreign Corrupt Practices Act (FCPA).” The whole list of complaints can be found on the foreign ministry’s website as well as in an article published on the subject by Index.

In brief, there were numerous complaints, and the Hungarian authorities refused to investigate. It is also clear from the document that the American authorities were fully aware that corruption is “institutionalized” in Hungary, yet the last word from NAV was that there were “no auditing complaints” and therefore the “Criminal Directorate … was unable to act.” Goodfriend  noted that “NAV’s specialized auditing unit created expressly to investigate trans-border VAT fraud … was systematically undermined and then disbanded.”

It looks to me, and obviously it was evident to the head of the American mission, that not only was no effort made to investigate but that the top leaders at NAV were doing everything in their power to make sure that corrupt activities could be continued undetected.

According to Levente Magyar, undersecretary of the ministry of foreign affairs and trade, this “scrap of paper” cannot be taken seriously. Why not? Because there is no date, no authentication, and above all, no seal. “Missing formal requirement” is a favorite excuse of Hungarian authorities.

Potpourri: shifting public mood, protest vote, continued attack on the U.S.

Well, in the two days I spent in Switzerland (alas, virtually), a lot of things happened in Hungary. Since I found it difficult to choose a single topic, today’s post will be somewhat scattershot.

Yesterday we got the first public opinion poll since the unrest caused initially by the planned introduction of an internet tax and later by the corruption cases that surfaced at NAV. The frustration vented at the three large demonstrations that took place over the past two weeks went far beyond these issues, however. The participants seemed to have had enough of the whole political system that Viktor Orbán has been systematically building since 2010.

Of course, we will have to wait for a few more polling results to know whether Nézőpont Intézet, a pro-Fidesz company, is correct in its assessment. A few years ago they were utterly unreliable, but recently their results have been quite accurate. So, what’s the word? It looks as if Fidesz has lost some of its supporters. As Gábor Török, a political scientist who is famous for being noncommittal, noted on his Facebook page, this is the first time since June 2012 that Fidesz’s support in the adult population dropped below 30%. Just between October 14-17 and November 3-7 Fidesz lost 3%, about a tenth of its supporters. Most opposition parties had gains, including Jobbik and DK. MSZP by contrast seems to be in worse shape than before. Among eligible voters the socialists are at 7% while their arch rival, the Demokratikus Koalíció, is at 6%. MSZP’s situation is even worse when it comes to “potential voters,” i.e. people who indicate that they would go and vote if elections were held next Sunday. Here DK would garner 11% of the votes while MSZP would get only 9%. DK doubled its support in the last few months while the socialists are working hard at obliterating themselves. The graph below clearly shows clearly the trends in the last four and a half years.

Source Origo / Nézőpont Intézet

Source Origo / Nézőpont Intézet

Talking about parties, Jobbik had a huge success in Ózd, a kind of Hungarian Detroit, except that Ózd in the socialist period became a center of iron smelting. After the change of regime the coke works became less profitable and many folks lost their jobs. The people of Ózd were victims of the Kádár regime’s forced industrialization that in the new competitive environment was bound to fail.

Ózd was a solidly socialist city until 2010, when Pál Fürjes (Fidesz-KDNP) was elected mayor and the city council had 9 Fidesz members out of 14. MSZP had to be satisfied with one lone seat. The desperate inhabitants of the town undoubtedly hoped that a Fidesz administration would be able the reverse the city’s downward spiral. They were disappointed. Nothing changed. In addition, people noticed with dismay that the new Fidesz administration was “arrogant, condescending and corrupt.” The locals could hardly wait to get rid of Fürjes and his friends. The DK-MSZP candidate was new with little political experience and since Jobbik was strong in town, even the DK-MSZP supporters saw little chance of winning against Fürjes. And indeed, a 27-year-old Jobbik candidate of Polish origin, Dávid Janiczak, won with a margin of 66 votes.

But no Fidesz candidate can stomach defeat after having been in office for a while. In several places losers insisted on annulling the results. In two Budapest districts their efforts failed, but in the case of Ózd, where the case went all the way to the Debrecen Appellate Court, a new election had to be held. As you will see from the results, the people of Ózd revolted. One woman told Népszabadság that in October she did not bother to vote because her feet hurt but this time she would have crawled on all fours to vote for Fürjes’s opponent. The inhabitants found Fürjes’s behavior unacceptable and wanted to “punish him.” Well, they did. First of all, they went out to vote in record numbers. While in October only 10,927 people voted, in November the number was 15,982. While in October Janiczak received 4,214 votes, in November he more than doubled that result, with 10,299 votes. Fürjes got only a few dozen extra votes. The most remarkable aspect of the Ózd situation is that while the DK-MSZP candidate in October received 2,238 votes, in November he got only 520. Even people on the left were so determined that the Fidesz mayor not be reelected that they voted for the Jobbik candidate who had a real chance. In brief, it was a protest vote.

Anyone who would like portray the Ózd results as the beginning of an era of Jobbik dominance in Hungarian politics is wrong. This was a unique situation that was created by the usual Fidesz insatiability. Fidesz politicians cannot bear losing. Moreover, they have the feeling that the whole country should be theirs. They are not satisfied until every hamlet, every position everywhere is in their hands.

Fidesz likes to frighten the West with the specter of Jobbik. The usual mantra is: “Don’t criticize the present government and Fidesz because we are the guarantee that the far-right Jobbik will not swallow up the whole country.” This time too a so-called political scientist of the by now notorious Századvég foundation wrote in his blog: “Telegram to America: Ózd.” In plain English, “Goodfriend et al., get off your high horses. You bother about such trifling matters as corruption at the tax authority when we are the bulwark that holds back the far right. You see what you did? The Jobbik revolt in Ózd resulted from your high-handed behavior.” Of course, this is all nonsense. The people of Ózd said that they had had enough of  both MSZP and Fidesz. Let’s see what Jobbik can do. Not all these voters hold  far-right views and not all are racists. They are just fed up. As for how much the Jobbik mayor will be able to achieve, I fear not much even if he is a talented politician with full of good intentions. In the council there is still a solid Fidesz majority, and we know what Fidesz politicians do in such cases. We saw four years of struggle in Esztergom between a Fidesz-majority council and an independent mayor who defeated the Fidesz candidate in 2006. In District XV, where a DK man won this year, the Fidesz majority has already boycotted council meetings, preventing the election of deputy mayors. They will try their best to prevent the DK mayor from actually running the district. Most likely something like that will also happen in Ózd. The last thing that poor city needs.

Finally, the Orbán government’s attacks on the United States continue. In fact, the volume has been turned up somewhat. According to Antal Rogán, leader of the Fidesz parliamentary caucus, M. André Goodfriend, U.S. chargé d’affaires in Budapest, is “not a truthful man” (nem szavahihető). Even the honey-tongued Zoltán Kovács, one of the many government spokesmen, couldn’t quite manage to explain today that “not truthful” means anything other than “not truthful.”

Then there is the parliamentary committee on national security whose Fidesz majority decided last week to ask André Goodfriend to appear before them. The MSZP chairman had such serious doubts about the advisability of such a move that he refused to extend the “invitation.” Well, the deputy chair, Szilárd Németh, the one I described as a perfect candidate for a bouncer in a shady part of town, decided to go ahead anyway.

But the funniest part of the American-Hungarian tug-of-war was Ildikó Vida’s visit to the U.S. Embassy yesterday. Vida, head of the Hungarian tax authority, is one of the six Hungarians who cannot enter the United States because of their possible involvement in corrupt practices in connection with American firms doing business in Hungary. Vida, accompanied by her lawyer and a reporter and cameraman from HírTV, showed up at the U.S. Embassy unannounced and uninvited. It just happened that Goodfriend was going out for a walk when he was accosted by Vida and her lawyer. The encounter is the object of great hilarity on the internet, especially since Hungarians learned that the almighty head of the tax authority does not know a word of English.

I'm saying it slowly so even Ildikó Vida would understand it: cheers

I’m saying it slowly so even Ildikó Vida would understand it: cheers

In any case, eventually Vida and her lawyer had a fairly lengthy discussion with Goodfriend, during which Vida failed to learn anything new. Afterwards, she said that she considers the chargé totally ignorant of the details of her arduous work uncovering tax corruption. She also announced that she will force the issue by applying for a visa to the United States. Today Vida’s lawyer, Barnabás Futó, who is described as “the Fidesz-mafia’s well-known lawyer,” claimed on Olga Kálmán’s Egyenes beszéd (ATV) that “the American chargé informed him that he had received documents from András Horváth,” the whistleblower who first called attention to the highly irregular practices at NAV. Horváth, who was watching the program, immediately phoned in and announced that he had never met André Goodfriend. After this, however, he said he will have to meet the American diplomat in person to find out what transpired in his meeting with Vida and her lawyer. Perhaps the reason for the misunderstanding was Vida’s and Futó’s lack of language skills.

Mysterious trips of Viktor Orbán and János Lázár to Switzerland

Today I will have to pull up my socks if I want to give even a semi-coherent summary of the growing scandal surrounding a company called MET Holding A.G. with headquarters in Switzerland. The holding company, established only a couple of years ago, is partially owned by MOL (40%) and partially by Hungarian individuals–people formerly employed by MOL and businessmen with close ties to Viktor Orbán.

First of all, it’s hard to decipher the company’s structure which is, as is often the case with enterprises like MET Holding, extremely complicated. Second, since it is likely that MET Holding, in addition to its regular activities, also serves as a money laundering operation for Fidesz as well as Viktor Orbán and his friends, those involved do everything in their power to conceal the company’s business activities, ownership, financials, and so on.

I should go back a few years to February 2010, only a month before the national election and the birth of the two-thirds majority, when the U.S. Embassy in Budapest compiled a report entitled “Allegations of political corruption surround unbundling law.” From the lengthy report we learn that “it is an open secret in Hungary that MVM and MOL provide significant funding to the two main political parties, with MVM rumored to favor the Socialists and MOL favoring Fidesz.”

MET Group predated this U.S. report. According to its promotional material, it began operating in 2007 “in the natural gas retail and wholesale sector benefiting from the market liberalization starting in 2004.” Currently it is active in wholesale gas trading in the European market as well as in the retail sale of natural gas to industrial customers in Hungary, Slovakia, Romania, and Croatia. Five years later, in 2012 MET Holding was established with the objective of being “a central holding organization to manage and support all the subsidiaries of MET Group.” (If you want to know why MET Holding might have been layered on top of MET Group, I suggest you take a look at “How a Holding Company Works.”)

Shortly after the election in 2010 Orbán promised cheaper energy to consumers. In order to lower prices the state-owned MVM (Magyar Villamossági Művek) was allowed to dip into its gas reserves which it could then replenish with cheaper gas from the open market. MVM could have bought the necessary gas directly from Austria, but instead it purchased gas through MET. According to the figures that are available about the transaction, MVM gained little while MET made about 50 billion forints on the deal.

The owners of MET, in addition to MOL, are István Garancsi, a personal friend of Viktor Orbán and owner of Orbán’s favorite football team, Videoton, and György Nagy, one of the founders of Wallis Asset Management Co., a private equity/venture capital firm. Both men have close ties to Zsolt Hernádi, the beleagured CEO of MOL who is accused of bribery in Croatia, and to Sándor Csányi, his deputy and the CEO of OTP, Hungary’s largest bank. Heading MET Holding is Benjamin Lakatos. He expects sales this year to total some 3.8 billion euros.

Most likely nobody would have cared about this Hungarian company with headquarters in Zug, Switzerland, if Hungary’s prime minister hadn’t been so involved in negotiations with Putin as well as with Russian energy companies, in particular Gazprom and Rossatom, the Russian company that specializes in building nuclear power plants. Rossatom was chosen to construct two extra reactors at the Paks power plant. Given the widespread concern over Viktor Orbán’s dealings with the Russian autocrat, Swiss journalists started probing into this mysterious MET. A  well researched article appeared on November 3 in TagesAnzeiger, which was later reprinted in Basler Zeitung. According to the Swiss paper, MET Power, MET Marketing, MET International, and MET Holding all share the same Zug address. Benjamin Lakatos is the CEO of all of them. Zug, by the way, is about 20 km south of Zurich.

I understand that the company’s management is made up of former MOL employees who know the energy business inside out but who found greater opportunities outside of MOL. Lakatos is very proud of his achievement of building MET Holding in two years from practically nothing to a sizable player in the energy business, though one cannot help but be suspicious of a such a sudden rise in fortune. Moreover, given the cozy relationship in the past between MOL and Fidesz, one wonders what role MET may play in the possibly continued reliance of Fidesz and Viktor Orbán on MOL as a source of illicit money. With István Garancsi’s name in the cast of characters, one becomes doubly suspicious since he is often portrayed in the Hungarian press as Orbán’s front man.

And now let’s move to more recent events that might have something to do with MET Holding. I’m patching the story together from several sources. You may recall that the editor-in-chief of Origo, an online news portal, was dismissed because one of the reporters of the internet site was too curious about a couple of very expensive trips János Lázár, the most important member of the Orbán government after the prime minister, made to Great Britain and Switzerland. Lázár for a long time resisted revealing any details of these trips but eventually after a court order the prime minister’s office released some information. Among the bits and pieces of information that Origo received, there was one item that might be relevant. Origo was informed that János Lázár during his Swiss trip “held conversations with a German citizen about German-Hungarian and Russian-Hungarian relations.”

More than a year later there was another trip to Switzerland. This time it was a private affair. Viktor Orbán and his wife and János Lázár and his wife spent a weekend in Zurich. First they stopped in Germany to visit a “family friend” and then off they went to Zurich, allegedly to attend a concert given by a children’s choir from the Szekler areas of Romania. Quite a lame excuse for traveling to Zurich because earlier this same group gave three concerts in the Hungarian Parliament in Budapest. There was also a side trip to visit a friend in Germany. Is he perhaps the same man Lázár held talks with in March 2012?

About a week ago Viktor Orbán made another trip to Switzerland. This time the occasion was a family visit (including his wife and their two youngest daughters) with Rachel, who is enrolled in a fancy, expensive hotel management course in Lausanne. Since, again, this was a private visit, the prime minister’s office refused to release any information about the trip. However, thanks to an eagle-eyed person, Orbán was spotted at the  Zurich railroad station having a beer with an unidentified man. Since the Orbáns decided to travel back to Hungary by train, a stopover in Zurich was unavoidable since there is no direct train from Geneva, a forty-minute train ride from Lausanne. But why did he choose to go by train from Lausanne all the way to Budapest, a trip that takes altogether 16 hours and 22 minutes? He said that wanted to spend more time with his children. Well, I could imagine many more pleasant ways of spending time with my family than sitting in a second-class train compartment. Suspicious Hungarians already have their own theory: for one reason or other, Orbán chose to travel by train because there is no inspection of either persons or luggage on trains. I find that difficult to believe. I hope that we are not at a point that the country’s prime minister is carrying millions of euros in his suitcase.

Although one can probably discard such speculation, one should take more seriously the information received by the Demokratikus Koalíció that while in Zurich Orbán met representatives of Credit Suisse and Pictet Bank. Pictet is a private bank which in 2012 was the target of a U.S. probe into the use of foreign banks by wealthy Americans seeking to avoid paying taxes. Pictet specializes in “wealth management.” As for Credit Suisse, which is one of the most powerful banks in the world, it also had its problems with the law. In July 2014 Credit Suisse reported a loss of $779 million because of the settlement of a tax evasion case in the United States. Zsolt Gréczy, the spokesman for DK, emphasized that they are not accusing Orbán of anything; they simply want to know whether he met with representatives of these two banks as the prime minister of Hungary or as a private individual.

All in all, the picture that emerges from the few pieces of information we have is not pretty. Orbán has enough trouble as it is. Tonight another 10,000 people demanded Ildikó Vida’s resignation–and his as well.

The Budapest elections and politics of the democratic opposition

The appearance of Lajos Bokros as the official candidate of DK, Együtt, and MSZP of Budapest under the leadership of Ágnes Kunhalmi has redrawn the political landscape on the left, despite protestations to the contrary. Ágnes Kunhalmi can send the message to Magyar Nemzet, the paper that said she would decamp to Ferenc Gyurcsány’s Demokratikus Koalíció after the election, that “I love my party,” but the fact remains that she and the people around her decided to defy the central leadership of the socialist party. And that might have serious repercussions in the future.

Ágnes Kunhalmi is a relative newcomer on the political scene, having joined MSZP only in 2006. Until 2010 she served as a member of the Budapest City Council. In 2010, because of the female quota, she was chosen to be a member of the top party leadership. From there on she was the face of MSZP on matters of education. Her day arrived during the 2014 national election when, as a last-minute replacement candidate in the 15th electoral district, she lost the election by only 56 votes. This performance showed that Ágnes Kunhalmi is someone to reckon with inside the party.

Since I know next to nothing about the internal workings of the socialist party, I have no idea how this sudden fame of Ágnes Kunhalmi was received by the top leadership. I’m almost certain, however, that the Budapest MSZP leaders’ decision to endorse Lajos Bokros and thereby go against the wishes of József Tóbiás, the new party chairman, couldn’t have gone over too well. Although Tóbiás keeps repeating that local politics should be left to the local party leadership, I’m sure that this open defiance didn’t endear Kunhalmi to the more leftist leaders of MSZP.

But the real bone of contention, in my opinion, is not so much Lajos Bokros and his conservatism as it is Ferenc Gyurcsány, who allegedly masterminded the retirement of Ferenc Falus and secured the democratic parties’ support for Lajos Bokros. Thus, I suspect, in the eyes of József Tóbiás and his men Ágnes Kunhalmi is a traitor to the socialist cause not because she decided to stand behind Bokros but because she sided with Ferenc Gyurcsány. MSZP leaders suspect, not without reason, that Gyurcsány wants to gobble up MSZP. And the other smaller parties on the left are convinced that he wants to amalgamate them into one large “union party,” which would mean their disappearance.

Ferenc Gyurcsány and Ágnes Kunhalmi

Ferenc Gyurcsány and Ágnes Kunhalmi

One doesn’t have to be an eagle-eyed political scientist to come to that conclusion: Gyurcsány makes no secret of his plans. In fact, he repeats on every possible occasion that, given the political landscape and the current electoral law, there is no hope of winning an election against Viktor Orbán without one large party that includes all anti-Orbán forces. Although there are people, for example Gábor Demszky, who believe that even the formation of such a single party can’t dislodge Viktor Orbán’s mafia state, it looks as if Gyurcsány still believes that one “does not have to stage a revolution, one just has to go and vote.”

What are the chances of forming one big democratic umbrella party in Hungary? At the moment nil, but Gyurcsány is thinking long-term. If I understand him correctly, he would like to see an inclusive democratic party established well ahead of the next national election in 2018. Can it be done? At the moment there are only a handful people who think so, but I would wait until we learn the results of the upcoming municipal elections. Not that I anticipate some spectacular victory or even progress as far as the fortunes of the democratic opposition are concerned, but after the elections we will be able to weigh the relative strength of the different democratic parties. Most observers are convinced that Együtt-PM, together and separately, has a very short life expectancy. MSZP has been losing voters since the national election in April. If, however, DK repeats its outstanding performance in the European Parliament election, Gyurcsány may be able to expand his base among the democratic forces.

One of the people who believes that “Gyurcsány has a chance” is Endre Aczél, a veteran journalist and a good political analyst. He thinks that deep down the ordinary MSZP membership believes that it is only Gyurcsány who can save the party, and Gyurcsány, who understands the thinking of members of the party’s lower echelon, makes sure not to alienate them. In fact, a fair number of these people have already deserted MSZP in favor of DK. Aczél wouldn’t be surprised if some “big fish” was also caught by Gyurcsány. He wouldn’t be surprised if both Kunhalmi and Bokros eventually ended up in DK. After all, Gyurcsány’s party is already an interesting political mix: former members of MSZP, SZDSZ, MDF, and previously unaffiliated voters who are against Orbán’s mafia state.

Perhaps, but at the moment DK is still a very small party. Only the collapse of MSZP and the disappearance of the other two small parties would give Gyurcsány a chance to create the kind of party he has been envisioning ever since 2006.

Gábor Demszky on the illegitimacy of the Orbán regime and on civil disobedience

With municipal elections to be held this Sunday, I decided to devote a post to the political reactivation of Gábor Demszky, lord mayor of Budapest between 1990 and 2010.

After Demszky’s fifth term ended, he not only left political life, he left the country. Prominent members of former administrations learned soon after the 2010 election that avenues for gainful employment in the public sector were blocked. Demszky therefore applied for grants and scholarships abroad and spent three and a half years in Germany, the Netherlands, and the United States. Once he returned, he decided to share his opinions on the present state of politics in the country and in the city.

In early August, when Lajos Bokros was just one of the many candidates for the mayoralty of Budapest, Demszky announced that he would support him since he considered Bokros the best person for the job. Then in Élet és Irodalom he gave a long interview to Eszter Rádai just a couple of days before the democratic parties decided on Bokros as their candidate instead of their original choice, Ferenc Falus. Here he not only talked about why he considers Bokros to be the best man for the job, he also elaborated on the political importance of the mayor of the capital city in the regime change that will eventually take place. In addition, he talked about his conviction that the present regime can be removed only through civil disobedience. Finally, he did not hide his contempt for most of the opposition parties.

So, where should we start? In Demszky’s opinion, the candidate for the job of lord mayor of Budapest must not promise much to the electorate because under the circumstances the city is entirely at the mercy of the central government. The situation was also bad during the first Orbán government between 1998 and 2002, but then at least the city still had some assets. By now, the city has been stripped of all its former wealth as well as its autonomy. What we have now, instead of self-government, is “a modernized form of the council system” that existed in the Kádár regime.

Yet the role of the mayor of Budapest is an important one because the post can be used as a bully pulpit, which gives the mayor an opportunity to represent the opposition toward the central government. He will have to act as a kind of ombudsman who stands up for the interests not only of the inhabitants of Budapest but of all citizens. The mayor of Budapest can have a powerful voice, which gives the man who holds the position political leverage. If the next mayor is a spokesman for the opposition, he might be able to challenge Viktor Orbán for the premiership four years later. And it is only Lajos Bokros who would be able to do that. After all, he once saved the country from bankruptcy. He is an internationally known economist who is strong enough to take up the fight against the mafia state.

Lajos Bokros and Gáboe Demszky at the book launch of Hungarian Octopus, vol. 2

Lajos Bokros and Gábor Demszky at the book launch of Hungarian Octopus, vol. 2

At this point Eszter Rádai reminded Demszky that Viktor Orbán in this case would make a second Esztergom out of Budapest. Esztergom is the place where an independent mayor was chosen instead of the Fidesz candidate for mayor in 2010. The city was punished for it. Not a penny came from the central government to rescue the city that had become hopelessly indebted under Fidesz management in the previous years. Demszky’s answer was that Viktor Orbán did the same thing with Budapest between 1998 and 2002 and yet it was Budapest that won the election for the opposition in 2002. Demszky is not exaggerating. I remember vividly that Fidesz was leading all through the early hours when the votes were pouring in from outside of Budapest but then the late Budapest results started coming in and suddenly everything changed. Fidesz lost the election. Viktor Orbán certainly did not forget the disloyalty of the city.

The conversation moved on to the opposition. In Demszky’s opinion, “the opposition is an integral part of this regime” and all of its sins because it has not stood behind its twenty years of democratic achievements. Since it is not ready to take responsibility for its past, it does not have a future either. It accepts the Fidesz narrative of the “muddled twenty years of transition,” the way Viktor Orbán likes to describe the period between 1990 and 2010. This is the greatest sin a political opposition can commit in confronting a dictatorship. Giving up the praise of democracy and freedom. It denies its most important tradition, liberalism. In fact, the leaders of the opposition want to free themselves of the liberals. The opposition parties “only act as if they are the representatives of the democratic opposition while they have nothing to do with either democracy or opposition.”

Out of the five opposition parties Demszky considers three to be Fidesz appendices: Jobbik, MSZP, and LMP. I guess the relationship of Jobbik and LMP to the governing party does not need further elaboration, but I think MSZP’s inclusion in this category does. In Demszky’s opinion MSZP is not really a party of the left. It never was. The MSZP leaders united only to grab power, but once they lost it they became helpless. That leaves only two parties, Demokratikus Koalíció and Együtt-PM, that Demszky considers bona fide opposition parties. Együtt-PM is so small and weak that it cannot be taken seriously while DK will be, in his opinion, unsuccessful in the long run because it is led by Ferenc Gyurcsány, who is the most divisive politician of the opposition. Gyurcsány is correct when he emphasizes the necessity of a unified opposition party, but one needs more than that.

Those who believe that the Orbán government and its mafia state can be removed by ordinary parliamentary elections are wrong. Naturally, Demszky does not advocate the violent overthrow of the government, but he recommends civil disobedience. One should study Mahatma Gandhi as the Polish opposition did in the 1980s. One must realize that Orbán’s regime ruined the constitutional order, took away political and individual rights, and ruined democratic institutions. The present political system has thus been rendered illegitimate. One needs more than a change of government; just as after Kádár, Hungary needs a regime change.

Demszky admits that at present very few people are ready to stand against the regime openly, but he is convinced that the situation will get to the point that people in large numbers will be ready to resort to civil disobedience. Poverty will only grow and, although at present there are no political prisoners, there will be. Dissatisfaction with the regime will grow. Demszky excludes the possibility of Fidesz’s tight ranks breaking up under the weight of outside pressure: “what holds these people together is power and fear because they know that they could lose everything. They put all their money on one card.”

I think most of us can agree with Gábor Demszky–and Bálint Magyar–that the opposition must concentrate on regime change because by now Viktor Orbán’s system has solidified into a full-fledged regime that Magyar calls a post-communist mafia state. Many of Hungarian Spectrum‘s readers, to judge from the comments, have a very low opinion of MSZP and few believe in its survival. However, when it comes to Lajos Bokros’s role in the regime change, few would bet on him as a contender to replace Viktor Orbán as prime minister of Hungary. Not because he would not be an outstanding prime minister but because a political career cannot be built without a viable political party and Bokros at least at this moment does not have such a party behind him.

But when it comes to Demszky’s main thesis about the illegitimacy of this government and Orbán’s state he is certainly right. The opposition forces should pay serious attention to this fact. As long as they collaborate with the government and with Fidesz in parliament they only help to ensure the survival of the regime.