Gábor Simon

Orbán’s clan is plundering the state coffers: The world is taking notice

The talk in Hungary is about corruption. Corruption that seems to consume every nook and cranny of political life. It is an open secret that one of the main aims of Viktor Orbán, in addition to making sure that he will be the prime minister of Hungary for a very long time, is the enrichment of his friends and family. Thanks to the work of some investigative journalists, like Krisztina Ferenczi and Attila Mong, more and more evidence is surfacing that Viktor Orbán is feathering his and his friends’ nests.

Orbán is not like Viktor Yanukovycz, who lived lavishly in tasteless gilded palaces. Considering his estimated wealth, Orbán and his family live modestly. They have a comfortable but unpretentious house in one of the more elegant parts of Buda and an outright humble-looking house, designed in the style of the adobe peasant houses of yore, in Felcsút. The family’s landholdings are something else. Year after year Orbán’s wife, Anikó Lévai, added cheaply acquired lands in and around Felcsút where Viktor’s family spent some time when he was a young child. Moreover, almost everybody is convinced that the Orbán family’s landholdings are much more extensive than official documents attest to. The rest, perhaps thousands of acres, is held under the names of front men.

Viktor Orbán's country home in style of old adobe peasant houses

Viktor Orbán’s country house

For some time Hungary has been brimming with anecdotes and speculation about the Orbáns and their friends, but the charge of wholesale stealing from the national wealth could not be contained within the borders for long. Only two days ago an article appeared in one of the most influential German papers, Der Spiegel, with the title: “Orbán’s clan plunders the state coffers.” As Krisztina Ferenczi told the author of the article, Keno Verseck, “Hungary has become in recent years a kind of large estate” and the lord of the  manor is Viktor Orbán himself.

One reason for the disguised land ownership, assuming the charge is true, besides the obvious one of undeclared wealth without any legitimate means of accumulating it, is that the landholdings are heavily subsidized by the European Union even if they are left fallow. Surely, it would look bad if the European Union were paying millions for the lands of the Hungarian prime minister. There are several indications that Orbán has two front men in Felcsút, Lőrinc Mészáros and János Flier. Both by now have thousands of acres they received fraudulently from the state on twenty-year leases. Neither has any experience in agriculture. Flier used to be an electrician and Mészáros had a small business bringing gas pipes to the inhabitants of the village a few years back. Now they are in charge of large farms.

Viktor Orbán is as upstanding in politics as he is in his financial dealings. The electoral law and its execution are based on fraud. Since he has a pathological need for power, he will never allow a reprise of 2002 and 2006 when he lost the elections. This time he is covering all his bases. We talked a lot about the coming elections and concluded that the final results would be questionable, but I still suggest taking a look at some of the comments on the topic by readers of Hungarian Spectrum. Unfortunately, since the Orbán government is in charge of the mechanics of the election we will never be able to prove fraud, however obvious it might be in places.

Orbán is a role model for Fidesz officials, and part and parcel of that model is his outsize accumulation of wealth. The latest official to come under scrutiny for unexplained affluence is Antal Rogán.

Rogán belongs to the younger generation of Fidesz officials. He had just finished high school at the time of the regime change. In college he majored in economics and soon after graduation was heavily involved in Fidesz politics. By the age of 26 he became a member of parliament and three years later one of the deputies of Viktor Orbán. Currently, he is the leader of the large Fidesz parliamentary caucus.

It seems that Antal Rogán was equally successful when it came to enriching himself. We don’t know how, but Rogán, his wife, and two young children live like nabobs in “Pasa Park.” This gated community is in a part of Buda called Pasarét (Meadow of Pasha), hence the name of the building in which many top Fidesz officials live, including Mihály Varga, minister of national economy. The Rogáns have two and a half apartments worth about 300 million forints. People who are investigating the case claim that Rogán’s total career earnings so far amount to no more than 16 million forints. His wife doesn’t work. His current salary is 1.3 million forints a month, but his expenses far exceed his income. He is still paying about half a million forints a month on his 60 million forint mortgage, he has to pay 300,000 a  month for maintenance, he pays 250,000 to lease an Audi 6, and the two small boys go to a private kindergarten for 300,000 a month. And presumably the family doesn’t starve.

Rogán got into trouble because he did exactly the same thing as  Gábor Simon (MSZP): he didn’t tell the whole truth about his wealth on the financial statement he has to provide to parliament. But while Simon is in jail, Rogán only had to “correct” his financial statement. He may have to keep making corrections as new pieces of information surface. It seems he owns property that he inherited from his grandmother and father in his hometown as well as a country house in Balatonlelle.

Given the way Orbán’s “justice” works, we can be assured that nothing will happen even if the accusations turn out to be correct in every detail. Nothing will happen not only because investigation and punishment depend on the ruling Fidesz party but also because all Hungarian politicians made sure that these financial statements are not worth the paper they’re written on. If, for example in this case, Rogán says that the money for the real estate and the lavish lifestyle comes from loans extended by family and friends, the authorities will be satisfied. He will not have to give any proof of actual transactions. Knowing the high moral fiber of Hungarians, I’m sure there would be plenty of people who would gladly swear that they were the ones who extended the money to Rogán.

That’s how things are in Hungary. It’s no wonder that people are not outraged about the rumors of electoral fraud or the plundering of the state coffers. They are accustomed to corruption and think it best to remain silent. They cannot do anything about it in any case.

The strange story of Gábor Simon and Tamás Welsz

It was in early February that Gábor Simon, one of the vice chairmen of MSZP, was discovered to have a large account in an Austrian bank. Magyar Nemzet reported that the socialist politician had made two deposits, of €575,000 and $163,000, in April 2009. The problem was that Simon, who was a member of parliament, failed to include these deposits in his yearly report on his personal finances. In no time Simon was removed from the party and shortly thereafter he resigned his parliamentary position.

MSZP desperately wanted to put an end to this embarrassing revelation; its leaders kept emphasizing that Simon’s financial affairs had nothing to do with the party. Their political opponents, however, refused to let go of the story. Magyar Nemzet published numerous articles in which they tried to connect Simon’s millions to MSZP. Surely, the argument went, Simon was hiding the party’s money in his own foreign bank accounts.

Eventually Magyar Nemzet stopped pursuing that alleged chain of guilt, although for a while they tried to tie the money to an MSZP politician in Budapest’s District XIII. But then came the news on March 6 that Simon’s money most likely had something to do with Tamás Welsz, a businessman with a checkered career whose activities ranged over three continents: Europe, Africa, and South America. Welsz in the past had had some run-ins with the authorities and was (until yesterday) wanted by Interpol. Yet the Hungarian police and prosecutors didn’t arrest him. In fact, last November, after being interrogated, he and his girlfriend Andrea Horthy were released.

Index reported on March 6 that Simon had another bank account in Hungary which he had opened under a false name. Magyar Nemzet, which  has excellent connections with Hungarian prosecutors, seemed to know that the relationship between Simon and Welsz came to light as the result of a search of Velsz’s house in Érd. There in a safe they found a forged Guinea-Bissau passport in the name of Gabriel Derdák. Simon’s mother’s maiden name is Erzsébet Derdák. The authorities allege that Welsz, who had good relations with the totally corrupt government of Guinea-Bissau, got about 500 blank passports which he sold to people who for one reason or another needed an alias or just another passport. Simon/Derdák with his African passport opened an account in a MagNet Bank on Andrássy Street. The deposit was again large: €250,000.

Gábor Simon and Tamás Welsz Source: Index

Gábor Simon and Tamás Welsz
Source: Index

Shortly after the revelations about the safe and the false passports Magyar Nemzet went into high gear. Welsz was described as a man with “excellent” connections to MSZP politicians. They claimed that several  MSZP politicians wanted to buy Guinea-Bissau passports, not just Simon. They singled out János Veres, former minister of finance who seems to be a favorite target of Magyar Nemzet and HírTV, both owned by the same concern. Veres announced that he doesn’t know Welsz and that he has no Guinea-Bissau passport; he sued both Magyar Nemzet and HírTV. Magyar Nemzet retreated somewhat, saying that Veres only “contemplated” acquiring a false passport but in the end changed his mind.

Why did the investigators decide to search Welsz’s house? My hunch is that Welsz offered to give up Simon if the Hungarian authorities would release him. I suspect that the investigators knew about Simon’s bank accounts as early as last November when Welsz and his girlfriend were arrested. And not just the bank accounts in Austria but possibly about the €250,000 under the name of Gabriel Derdák as well. The authorities may have postponed acting on this information so it would have the maximum electoral punch. At any event, four days after the police searched Tamás Welsz’s house, on March 10, Simon was taken into custody.

Once the authorities went public with the information about Simon’s wrongdoings, they dragged the story out for a month, thereby providing political fodder for the pro-government press.  Day after day the public read about the sordid financial activities of this high-ranking MSZP official, activities (so the accusations went) that implicated the party as a whole. Four years ago similar stories helped propel Fidesz to its overwhelming victory. Why shouldn’t the strategy work again?

All seemed to be going according to plan, but then came yesterday’s shocking news. According to the Budapest police, Welsz was sitting in the back seat of a police car heading to the Budapest Central Investigative Prosecutor’s Office in Budapest when he suddenly became ill. He was to taken the nearest hospital, but the doctors couldn’t revive him. Welsz was 41 years old and looked like the picture of health. So far the police have not provided any official information about his death–I assume they are waiting for the results of the autopsy–and as a result all sorts of rumors are circulating.

Leaked police information is contradictory. Some reporters claim that Welsz was already feeling ill before he traveled from his home in Érd to Budapest. Others say that he told the police he had taken poison and would die soon. (But then why didn’t the police immediately call an ambulance?) Some people talk about his excellent health and his upbeat mood; others report his anxiety. One report insists that he was hand-cuffed; others deny it. HVG told its readers that the people Welsz was fingering are not at all those everybody suspects, i.e., MSZP politicians. His revelations, they wrote, will surprise everybody. From this one would surmise that he had information on some Fidesz people. Whatever happened, Welsz is dead under very strange circumstances which means–as Veres pointed out yesterday on ATV–that anyone can use the blank passports to frame opposition politicians. Dead men don’t talk.

Many people think that Welsz may have been a Hungarian national security agent. József Gulyás, formerly an SZDSZ member of parliament and now a supporter of Együtt 2014, is demanding that the parliamentary committee on national security convene to question representatives from the Office of the Defense of the Constitution and other organizations dealing with national security.

This whole story is too bizarre for words. And extremely suspicious. But the more convoluted the story is and the longer it takes to decipher, the more it would seem to serve Fidesz’s political purposes. This will be a front-page story for quite a while, unless Fidesz has something else up its sleeve. They did promise three surprises: the Simon case was first, then came Zuschlag. Who will be the third?

Corruption and conflict of interest in Hungarian politics

Although Medián came out with a new poll on voters’ party preferences, it tells us practically nothing new. Fidesz is still leading and the united opposition has no more support than before even though a majority of people would like a change of government.

So let’s move on to two embarrassing cases, both involving leading MSZP politicians. The first is the easier to deal with. Gábor Simon, one of the deputy chairmen of the party, is accused of having two bank accounts, totaling €700,000, in an Austrian bank which he didn’t reveal in his financial statement. At the time Simon deposited the money he told the bank officials that the money was acquired by selling a piece of real estate and a firm he owned. The problem is that Simon didn’t own or sell any real estate or a company.

It was only on Monday that Magyar Nemzet published this explosive story, the timing of which was most unfortunate for MSZP. Attila Mesterházy, József Tóbiás, and Csaba Horváth are currently in the United States, but word already reached Budapest that Simon must give up all his important positions within the party. Simon, realizing his untenable position, “suspended his party membership.” A few days ago he was still a candidate in electoral district XIII, but according to rumors Ágnes Kunhalmi will run there in his stead.

Up to this point one could say that Simon was a bad apple and MSZP an innocent victim, but the situation is a bit more complicated. The prosecutor’s office has been investigating Gábor Simon in another case ever since last March. This particular case involved little money, only 300,000 forints. But his immunity was suspended despite MSZP’s protestations in committee. Although the two cases are not connected, the MSZP leadership should have been more cautious early on and not just say that it was a baseless accusation against one of the leading politicians of MSZP.

Apparently Simon’s downfall was caused by his wife, whom he divorced recently. (One has to be careful with estranged wives. Just think of the former wife of Attila Szász, Aranka, who spilled the beans about Viktor Orbán’s questionable business deals in Tokaj.)

The second case is a great deal more complicated. It involves István Józsa, an important MSZP politician who is the energy expert of the party. The background is as follows. Fidesz desperately wants to prove that MSZP always wanted to build one or two more reactors in Paks and that they also wanted to use Rosatom and Russian technology. This is what, they contend, Gyurcsány, Bajnai, and Mesterházy said before 2010, but now that the Orbán government made this fabulous deal with the Russians they are suddenly against it. Yesterday Fidesz came out with another “discovery.” István Józsa, who had a 42% share in a company called Gépkar Kft., received 6.6 billion forints worth of orders from Paks between 2000 and 2010. The Fidesz politician György Balla charged that Józsa’s opinions on Paks changed with his financial interests. Before 2010 he was for building the new reactors but now he is against it.

Józsa, who gave an interview to Hír24 on the fly in one of the many corridors of the parliament building, sees nothing wrong with his company getting work from the state-owned Paks nuclear plant. He pointed out that in 2002 when he became a member of parliament he withdrew from the actual management of the company. The company got the bulk of its orders from Paks between 2000 and 2002 when Fidesz was in power. Moreover, the sum of 6.6 billion forints in ten years may sound like a lot of money but anyone who is familiar with this industry knows that it is not considered to be a large amount. In 2010 they sold the company because they no longer got any orders. Zsolt Nyerges, a close business partner of Lajos Simicska, made their situation untenable. The man who bought the company eventually went bankrupt; under the circumstances the business was no longer viable.

ethics

The reporter inquired from Józsa several times whether selling his stake in the company wouldn’t have been more appropriate once he became an MP, but the politician indignantly refused the suggestion. He is upright man; he had nothing to hide; he didn’t do anything illegal; the company received work from Paks through competitive bidding. He doesn’t understand what’s wrong. I fear Józsa is not the only one who seems to be unable to grasp the inappropriateness of such arrangements.

On this score one could congratulate the Orbán government’s decision to forbid outside business or professional activities for members of parliament. However, as we know, in the political structure Viktor Orbán set up members of parliament are not the ones who truly matter. Fidesz MPs currently function as puppets or robots and most likely will do so in the future as well. The money and power are elsewhere, in the financial and economic circle of oligarchs around Viktor Orbán. They are the ones who matter.

Tomorrow I will investigate a case involving close friends of the prime minister in one of the shadiest business dealings of late.