Ferenc Puskás Academy

Lőrinc Mészáros, friend of Viktor Orbán, is a financial genius

I have collected an enormous database on Hungarian politics in the last few years, and my folder on Lőrinc Mészáros–businessman, mayor of Felcsút, and CEO of the Ferenc Puskás Academy–is bulging with articles. The very first one I kept was “Scandal in Felcsút,” which reported that Mészáros and his extended family had received more than 600 hectares of land in the village of Kajászó, 18 km from Felcsút, while none of the locals received even one cm².

Felcsút has come to symbolize everything that is rotten in Orbanistan. It is a typical Hungarian village with a population of about 3,000 where Hungary’s prime minister, who grew up there, first established a football academy because after all this is his hobby and then spent a great deal of money that should have gone into the general budget on a luxurious football stadium with a seating capacity of 3,500 right next door to his weekend house. As for Mészáros, the media became aware of his existence and importance only in the fall of 2010 when, as Orbán’s candidate for mayor of the village, he lost by a few votes against an independent candidate. The lord of Felcsút, Viktor Orbán, couldn’t live with such a situation, so his “friends” on the town council with the assistance of an amendment to the town’s electoral law disqualified Mészáros’s opponent. The election had to be repeated, and naturally Mészáros won.

Why is Lőrinc Mészáros so important to Viktor Orbán? This is what the Demokratikus Koalíció (DK) wanted to know this summer. Specifically, Zsolt Gréczy, the spokesman of the party, was interested in finding out how much of Mészáros’s by now fabulous wealth is his and how much of it actually belongs to Viktor Orbán. This is a legitimate question to which not only DK would like to have an answer. By now, I’m pretty certain that almost everybody who follows the news and is familiar with Lőrinc Mészáros’s name is convinced that the former pipe fitter is the prime minister’s front man or, in Hungarian/German, stróman/Strohmann. From owning a one-man car repair shop to being a billionaire in three years is no mean feat. Mészáros’s explanation is simple enough: he must attribute his financial success “to God, to luck, and to Viktor Orbán.” I think we can discard God from the equation and focus instead on the role of Viktor Orbán.

Mészáros and his wife established a company called Mészáros és Mészáros (M & M) in 2001, which was barely profitable until in 2011 government orders started pouring in. In 2010 the company grossed 900 million forints; by 2013 the dividends the couple received from their company totaled 1,266 billion forints. The business was flourishing: every year M & M doubled its revenues. In 2013 they took in 10 billion forints.

M & M is a construction business and Mészáros, the CEO of the Puskás Academy, couldn’t find a better company to build the new Pancho Stadium in Felcsút than–you guessed it–M & M. Such an arrangement couldn’t have been made without the blessing of Viktor Orbán, the true “owner” of that football academy as well as the stadium. After all, it was his foundation with his meager contribution of 100,000 forints more than a decade ago that created the whole complex in his childhood village.

The 600 hectares the Mészároses received–because the talented Mr. Mészáros is not only a politician, CEO of a soccer academy, and head of a construction company but a farmer as well–cost them nothing. Larger tracts of land owned by the state were leased to people with Fidesz connections. These parcels will most likely end up as the lessees’ very own after twenty years. In addition, the European Union farm subsidies afford the lessees a handsome yearly income. The extended Mészáros family was also the beneficiary of several tobacco concessions. Mészáros’s brother opened five tobacco shops in key locations: in District II in Budapest as well as in Szeged and Kecskemét.

In February of this year we learned about a 7.4 million forint government subsidy that Mészáros had received in 2013 for his pig farm. HVG claimed to know that Mészáros already had 1,000 pigs and that in fact he was selling pork to supermarket chains. The problem was that nary a single Mészáros pig could be found anywhere. The Agricultural Ministry normally gives farmers 2,150 forints per pig, which in Mészáros’s case would have assumed an animal farm of about 3,400 pigs. Needless to say, there were a lot of jokes about the lost pigs in the Hungarian media. Well, a month ago Mészáros’s mangalica farm was officially opened and the ribbon cut in Viktor Orbán’s presence. I have to assume that Mészáros received the 7.4 million forints before he had even one pig. Moreover, the farm he opened is capable of housing only 200 pigs. Something is very wrong here. As it usually is when it comes to Mészáros’s affairs.

Meszaros2

Lőrinc Mészáros’s dividends in billions

Atlatszo.hu tried its best to find out the details of Mészáros’s finances. But although he as an elected official has to make a yearly financial statement which is public, the mayor of Felcsút refused to allow the investigative journalist Katalin Erdélyi to take a look at it. Eventually, however, Mészáros was forced to oblige. According to his statement, he had 400 million in the bank and 20 million in cash, he received 943 million in dividends from his various companies, and he owned a 2008 Audi 5. Details of his real estate holdings and yearly income can be seen on 444.hu.

A few days later, however, several internet sites reported that a few items were omitted from Mészáros’s financial statement. For example, a luxury villa with a spectacular view in Tihany. But that was  nothing in comparison to the discovery by RTL Klub that Mészáros “forgot” to mention 1.27 billion forints worth of dividends in his latest financial statement. He himself phoned RTL Klub to “clarify” the situation.

Recall Bálint Magyar’s characterization of a “stróman” as someone who, instead of reinvesting his profits in his company, takes out enormous sums of money in the form of dividends. In such a case the real business of the company is money laundering.

Finally, during today’s demonstration Mészáros’s lost billions were held up as a symbol of Viktor Orbán’s regime. László Szily, the blogger of cink.hu, wrote an article a few days ago with the title “Let’s erect a statue to the lost one billion of Lőrinc Mészáros!” He began his piece with the following words: “The government hasn’t fallen yet and Viktor Orbán has not escaped yet in a second-class railroad carriage to Switzerland. But the regime has been seriously weakened and the Lőrinc Mészároses who have lost all sense of reality will be responsible if one day this regime is swept away by revolution.”

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The Hungarian far right today and in the 1930s

Not much of any political relevance happens over weekends in general but on a long weekend, as Easter is in Hungary, politics takes a real holiday. Today’s highlight was the resurrection of Hungarian football and the “great game” at Felcsút, with 4,500 fans in attendance. Ferenc Puskás Academy went up against Real Madrid’s football academy; both teams were made up of seventeen-year-olds. The final score was Real Madrid 1, Puskás Academy 0. At least it wasn’t a rout. Earlier Real Madrid beat Melbourne 10-1.

I’m taking advantage of the holiday to take a historical trip back to Hungary in the 1930s. Not that these were happier times. On the contrary, then just as now the Hungarian extreme right made considerable gains. One often hears from Horthy apologists that the governor and his conservative governments were just as hard on the extreme right as they were on the extreme left, i.e. the communists. This wasn’t the case. Politicians of the Horthy era were much more zealous when it came to the few hundred illegal communist party members than they were with representatives of the extreme right. Horthy and his friends had a blind spot when it came to the extreme right even though by all measures they were the ones who posed  a much greater threat to the regime than the weak and ineffectual communists did. Yet men like Mátyás Rákosi or Zoltán Vas received very long prison sentences while extremists on the right were rarely jailed. The longest sentence ever handed down for a right-wing extremist was three years, in the case of Ferenc Szálasi. Zoltán Vas, on the other hand, spent sixteen years in the infamous jail of Szeged.

Why did the interwar regime wage a half-hearted battle against the extreme right? Certainly not because government politicians found their racist ideas abhorrent. After all, more often than not they shared these people’s anti-Semitism. They found nothing wrong with nationalism; on the contrary, they pursued an openly revisionist foreign policy. What they found unacceptable was the socialism in “national socialism.” Official Hungary considered these men “revolutionaries” who wanted to turn the existing order upside down. Mátyás Matolcsy, a talented economist of extreme right views who died in jail after the war, didn’t mince words: “we must give up the idea of the sanctity of private property,” and “everybody can dispose of their property only so long as it does not infringe upon the universal interest of the nation.”  The Arrow Cross party program called for the introduction of  the Soviet system of a centrally organized planned economy. Their program also included total state control of the banking system. While Matolcsy wanted to expropriate only Jewish property, the Arrow Cross party was more  “egalitarian.” They would have taken away, for example, all agricultural lands from large landowners, including lands owned by the Hungarian Catholic Church. In 1938 the Arrow Cross party published a pamphlet on the fundamental principles and beliefs of the movement, which was intended to serve the needs of the swelling numbers of followers. In it the author explained that the party wants to exchange the liberal capitalist regime for a “collective economy.” So, it’s no wonder that contemporaries labeled the Arrow Cross leaders Bolshevik revolutionaries who presented a danger to the existing order.

Krisztián Ungváry in his latest book, A Horthy-rendszer mérlege: Diszkrimináció, szociálpolitika és antiszemitizmus  (The Balance Sheet of the Horthy Regime: Discrimination, Social Policy and Anti-Semitism in Hungary), quotes from a speech by the legitimist (opposition) Hugó Payr who visited a slum area full of unemployed workers. One of them said to him, “Sir, we are all Bolsheviks here.” When Payr inquired whether they were followers of  the Arrow Cross movement, the answer was in the affirmative. Payr warned his fellow members of parliament that the middle classes who had been stirred up to embrace anti-Semitic passions didn’t realize that they were in fact helping to establish a new proletarian dictatorship. He invited them to accompany him to working class neighborhoods where “people already talk about which apartments they will requisition or rob.”

I think that while we are grappling with the growing influence of the neo-Nazis in today’s Hungary we should keep in mind what transpired in Hungary in the 1930s. There the result of the economic crisis was not the growth of the Hungarian Social Democratic Party but the incredible spread of the ideas of national socialism’s local version, the Hungarism of Ferenc Szálasi.

Jobbik zaszlo

One has to assume that Viktor Orbán is unhappy about the growth of Jobbik because it may become a threat to his own party’s position, as was already seen at the election. If he has any sense, he will turn his attention to the poorest segments of Hungarian society and offer them tangible economic incentives. Until now he competed with Jobbik in the domain of nationalistic humbug, but surely that will not be enough.

The socialists have also neglected the poor and frustrated masses, whose numbers are growing. People talk about four million people under or very close to the poverty line. If one of the two major parties doesn’t take the initiative, Jobbik may triumph.

Moreover, until now the socialists and liberals refused to engage in a dialogue with Jobbik. After all, they are a racist and neo-Nazi group with whom the “better half” of society should refuse to conduct business. But this also meant that there was no public forum in which the ill-conceived ideas of Jobbik politicians could be confronted.

The socialists must pay more attention to Hungary’s poor as well as to the Hungarian extreme right. Those who voted for Jobbik must be convinced that Jobbik’s remedies are no remedies at all. On the contrary, they would mean a total collapse of the Hungarian economy and society. But at the same time the socialists have to offer about half of the citizenry a way out of their present misery.