István Stumpf

A shameful verdict: The Court finds the new Budapest electoral law consitutional

Now that Viktor Orbán has seen the light and convinced Péter Szentmihályi Szabó to shelve his ambitions to be the next Hungarian ambassador to Rome, I am returning to the domestic scene, which is not pretty either.

Although hardly a day goes by without some horrendous attack on Hungarian democracy, this week’s greatest abomination was the 8 to 7 decision of the Constitutional Court affirming the constitutionality of the new law governing elections in Budapest. Once, back in May, I wrote about Fidesz plans to completely change the electoral system in Budapest. Why? Simple. After the April elections it looked as if Fidesz’s position was not secure in the capital. And naturally, in Fidesz’s view, no election can ever be lost. By hook or by crook they will win. The party and its leader will march resolutely from victory to victory for time immemorial. And so a devilish plan was devised to ensure victory.

Since I went into the details of previous system in May, here let me just summarize it briefly. In the past the lord mayor (főpolgármester) was elected directly by all the eligible voters in Budapest. District mayors were chosen only by the inhabitants of the 23 districts. In addition, there were party lists on the basis of which the 32-member city council was elected. What particularly bothered Fidesz was that the opposition might get a majority on the city council given the fact that numerically more Budapest people voted for the opposition parties than for Fidesz. After some clever mathematics they came up with a solution: simply abolish the city council as it exists today and replace it with a body composed of the 23 district mayors. This body could then be joined by nine people from the so-called compensation lists of the losers. Thus, including the lord mayor, it would have 33 members, just as it has now.

But from day one it was clear that this scheme is glaringly unconstitutional because it violates the one person, one vote principle that is fundamental in a functioning democracy. This disproportionality is due to the varying sizes of the districts. Here are some examples. While District I (the Castle district) has 24,679 inhabitants, District III has 127,602.  District V (Antal Rogán’s domain) has 26,048 while District XIII has 119,275. I guess you will not be terribly surprised to learn that the smaller districts lean heavily toward the right. Thus, the Castle District where no socialist or liberal has ever won will be represented on the city council by one person as will the socialist District XIII.

As soon as this problem was discovered–and it didn’t take long–the Fidesz “election experts” started to tinker with the proposed law and introduced all sorts of amendments that were supposed to remedy the situation. Their attempts eventually made the system extremely complicated without satisfying the constitutional requirements. In a very rare moment of unity, all parliamentary members of the opposition–including Jobbik and LMP–turned to the Constitutional Court for a ruling on the issue. That was in June. On Monday at last the judges handed down their decision. It was a very close vote, especially considering the composition of the court: 8 out of the 15 judges found the law, by and large, constitutional.

One ought to keep in mind that the majority of the judges were appointed by Fidesz after the “court-packing scheme” was introduced. In addition, there are two judges who were put forth by Fidesz earlier. Currently there are only three judges on the court who were nominated by MSZP, one of whom will have to retire in September and two others in March 2016.  After that time there will not be one member of the court who was not a Fidesz appointee. As it is, seven out of the eight judges who were nominated by Fidesz since 2010 found the law constitutional; the one exception refused to concur because he couldn’t agree with the majority on the one side issue it found unconstitutional. So, this is where we stand.

A rather telling picture of the current Hungarian Constitutional Court Source: Népszabadság

A rather telling picture of the current Hungarian Constitutional Court. Source: Népszabadság

Several judges wrote separate opinions. Perhaps the  hardest hitting was that of the chief justice, Peter Paczolay, who is considered by legal experts to be conservative. He was endorsed by both parties and since his term will be up next February I guess he doesn’t particularly care what Viktor Orbán thinks of him. He pointed out that “the present case does not merely touch on constitutional issues but on the right to vote that is the very basis of democracy.” According to him, this Fidesz-created law “is entirely contrary to the fundamental principle of equality.” Moreover, he added that some of his colleagues did not fulfill their professional duties and instead wrote a decision that was dictated by the interests of a political party. Pretty tough words.

András Bragyova (MSZP), who will be leaving the court in September, had nothing to lose either. In his opinion the new “council will not be an elected body although the constitution states that Budapest must have its own self-government.” It is an unconstitutional creation. Moreover, he noted that while the constitution demands self-government for the city as a whole, the election of district mayors is not specifically mentioned in the constitution. As he wittily remarked,  “from here on instead of Budapest having districts, the districts will have a capital city.”

The behavior of István Stumpf, an old Fidesz hand and Viktor Orbán’s former college professor who doesn’t always toe the party line, was the strangest. He voted this time with the slim majority, but he wrote a separate opinion in which he objected to changing the electoral law only months ahead of the election.

NGOs such as the Hungarian Helsinki Commission and TASZ as well as independent electoral law experts are appalled by the poor quality of the opinion that was written by Béla Pokol. Viktor Orbán chose him to serve on the court despite the fact that he is opposed to the very existence of a constitutional court. His judicial views are also extreme.

Csaba Horváth (MSZP), who ran against current lord mayor István Tarlós in 2010, declared that this decision demonstrates that the last bastion of democracy, the Constitutional Court, has been captured by the enemies of democracy. Some people contemplate boycotting the election but most are ready to face the music. Between Fidesz and the totally incompetent opposition a huge Fidesz win seems to be shaping up for October 12.

Viktor Orbán is up to something and that something is nothing good

Index came out with it first. It seems that feelers are being put out, most likely indirectly by the prime minister’s office, about people’s opinion of changing the Hungarian governmental structure from a parliamentary to a semi-presidential system. The client who ordered the survey seems to be specifically interested in whom people would like to see in the post of president.

A few months ago Péter Hack, a former member of parliament and a constitutional lawyer, called the topic of Viktor Orbán as the next president “an evergreen subject” which has been around for at least twenty-five years. Indeed, the topic was hotly debated during the discussions of the opposition in 1989. If it had depended on MDF, a right of center party, the president would have been directly elected by the voters, and they even had their favorite candidate, former member of the Politburo Imre Pozsgay. Fidesz and SZDSZ managed to thwart that plan and Hungary remained a purely parliamentary system in which the president has little power and is elected by the parliament.

After the 1989-1990 debate no one brought up the desirability of changing the constitutional order until 2004 when István Stumpf talked about the advantages of such a system. Four years later in a television interview he specifically spoke of the possibility that Viktor Orbán could become president one day, but naturally only if “the presidency would be reinforced.” Surely, a mostly ceremonial role would not suit Viktor Orbán’s temperament and political ambitions.

As usual, Viktor Orbán changed his mind on the subject frequently. In the fall of 2009 he declared that he is a devotee of the parliamentary system, which has a long tradition in Hungary. Yet when in 2010, after the election, a preliminary committee was assembled to write a new constitution, a change to a semi-presidential system was envisaged. As you may recall, that preliminary constitutional draft was thrown out the window so to speak, and instead the final text was written by József Szájer on his iPad on the train between Budapest and Brussels.

So, in the new constitution that was adopted in 2011 there was no mention of enlarged presidential powers. Yet we know that Orbán preferred the semi-presidential system, as he made clear in a speech delivered in the same year. There was a simple reason he did not agree to the change in the constitution: the timing was not right. No wonder that he vetoed the text of the preliminary committee working on the constitution. Viktor Orbán is no fool. He certainly did not want the immediate introduction of a strong presidency over and above himself.

But the future was something else. In 2012 he gave an interview to the German Handelsblatt in which he praised the advantages of the semi-presidential system which “is more suited for the introduction of difficult reforms.” He added that he is a devotee  of democracy, but the question should be asked whether the management structures of democracy are best for periods of crisis.

It looks as if Orbán now finds the time ripe for making a move toward a presidential system. On May 21 Népszabadság reported that Orbán discussed the possibility of occupying the post of presidency after János Áder leaves in 2017. But he emphasized that he would do so only if the president had real power. As we know, under the present circumstances, changing the constitution and declaring the president head of the government as well as head of the state is a question of only a couple of hours of phony debate in parliament and the deed is done. For that matter, if Viktor Orbán decided to transform Hungary into a constitutional monarchy he would have no difficulty with his super majority of mindless followers.

Viktor Orbán's mask in the Institute for the Blind

Viktor Orbán’s mask in the Institute for the Blind

So, what is a semi-presidential system? There are several countries where such a governmental structure exists, but perhaps the best known is post-1958 France. In this system the government is not only responsible to parliament but also to the president. It is the president who appoints the prime minister, so he is the most important political player in the land. The president’s choice of prime minister, however, depends on the composition of the parliament. It can easily happen that the prime minister belongs to one party and the president to another. In this case they split responsibilities. Normally, the president is responsible for foreign policy and the prime minister for domestic policy. This “division of labor” is not spelled out in the constitution; it simply evolved this way. But often the system does not work. There can be bitter and tense stonewalling, depending on the attitudes of the two leaders and the ideologies of their parties. Just think what would happen if Viktor Orbán were president and Ferenc Gyurcsány prime minister.

How do we know that Viktor Orbán is seriously contemplating changing the constitution in order to move over to the Sándor palota, the office of the president? A few weeks ago ATV, the only television station that represents the views of the opposition, learned that Forsense Institute, a polling company that receives many government orders, conducted a survey on the Hungarian people’s attitudes on the subject. It was a telephone survey lasting about 10-15 minutes. On June 26 the station inquired whether such a survey had taken place. At that time Forsense denied the existence of such a poll. Yesterday, however, Forsense fessed up and admitted the existence of the survey to a journalist from Index. They refused to divulge the name of the client who ordered it, but they insisted that it was not the prime minister’s office. I tend to agree. Hungary’s prime minister is far too clever to get involved directly with such an enterprise. Most likely the job was “outsourced” to someone else.

What did the pollsters want to know? Index learned that the subjects were asked very specific questions. For example, what kind of a president they would prefer if they had a choice: Vladimir Putin, Barack Obama, Angela Merkel, or Silvio Berlusconi? Whom would they prefer? Viktor Orbán, János Áder, László Sólyom, or Gordon Bajnai? They wanted their opinion on whether the president’s tenure should be seven or nine years. The pollsters were especially interested in people’s political and religious views: the subjects had to divulge for which party they voted at the national and the EP elections.

It is alarming that decisions might be made on the basis of such a survey. The Hungarian voters’ knowledge of politics is frighteningly limited. How many people know the differences between the German, the Russian, the American, or the Italian system of government? How can they decide?

But the most frightening part of this latest news is that Viktor Orbán seems to be contemplating a radical change in Hungary’s constitutional order and placing himself, most likely for nine years, at the head of the government hierarchy. More than scary.

The Fidesz robber barons. Part II

Today I’m continuing the story of Fidesz’s mafia methods as perfected by Lajos Simicska, the financial wizard of the party. I will pick up the story at the time of the campaign that preceded the election of 1998, which Viktor Orbán with the help of József Torgyán, chairman of the Smallholders Party, won.

For the campaign Fidesz needed money. Lots of money. Enter Gábor Princz, chairman of Postabank, which was a state-run bank. The name of the bank accurately reflected its structure. Its branches operated at post offices and thus could reach a wide clientele. Princz ran the bank in a totally irresponsible manner and handsomely paid politicians on both sides for expected favors. He was also very generous when it came to support of the media and organizations connected to culture. Eventually, Postabank went bankrupt, but before that happened Princz used his bank’s assets to support Fidesz’s election campaign. Gábor Kuncze, chairman of the liberal SZDSZ, calculated that Postabank lent and/or gave 800 million forints to Fidesz. Since a few months later there was no Postabank, it is unlikely that Fidesz ever had to pay this money back.

If Princz thought that his generosity toward Fidesz would save him, he was wrong. One of the very first moves of the Orbán government was to remove him from his post as head of the bank. Princz moved to Austria for a while where he felt a great deal safer. Meanwhile, the government began to take care of the immense debts that Postbank had managed to accumulate. Eventually, they calculated the amount of money which according to their experts was needed to put things in order: 152 billion forints. Naturally, Princz himself doubted this figure, which was not surprising. But even people like Imre Tarafás, at the time head of the Állami Pénz- és Tőkepiaci Felügyelet, the organization that supervised bank and monetary transactions, in his report for the year 1999 claimed that the government spent far too much money trying to straighten out Postabank’s accounts. Tarafás was asked by Orbán to resign. When he declined, the government created a new office with a similar mandate and abolished Tarafás’s organization. Tarafás was not the only one who had doubts about the financial needs of Postabank. In 2006 it came to light that at the time KEHI, the government financial supervisory body, also noticed several very shady real estate deals in connection with the consolidation of Postabank. However, István Stumpf, head of the prime minister’s office, suspended any further probe into the matter. But it looks as if about 50 billion forints disappeared in the process of cleaning up the books of Postabank.

Once Fidesz won the election Viktor Orbán began building his political and financial power base. Corruption now became systemic and centralized. The Fidesz government established a number of entities that siphoned large sums of money from the public coffers. First, they set up something called Országimázs Központ (Country Image Center) whose duty it was to conduct a propaganda campaign lauding the outstanding performance of the country under Fidesz leadership. The man in charge was István Stumpf. This body handed out large contracts to two business ventures, Happy End Kft. and Ezüsthajó Kft. (Silver Ship), to stage large state events. One must keep in mind that the new millennium and the Hungarian Kingdom’s 1,000-year anniversary gave plenty of opportunity for lavish celebrations. Just the New Year’s Eve extravaganza, which by the way was a flop, cost, at least on paper, 3.75 billion forints.  Several more billions were spent on celebrations all across the country, including the smallest villages, during the Hungarian millennium year. It seems that altogether the Országimázs Központ spent almost 13 billion forints on such events, and more than 90% of that amount was received by Happy End and Ezüsthajó.

Hyde and Hyde

Hyde and Hyde / varanus.blog.hu

It would be too long to list all the phony overpaid providers who were naturally members of the Fidesz inner circle or at least people with close connections to Fidesz. It is almost certain that some of the money paid out to these firms ended up in Fidesz coffers handled by Lajos Simicska.

The really big corruption cases, however, were connected to government investments, especially highway construction. Here the key organization was a state investment bank called Magyar Fejlesztési Bank (MFB, Hungarian Development Bank). The bank was supposed to give out loans for promising business ventures.

When Lajos Simicska left APEH, he got a job at this state investment bank and came up with a fiendishly clever scheme. Road construction was not handled directly by the government but by a company called Nemzeti Autópálya Rt., which was created by MFB specifically for this purpose. The beauty of the arrangement was that the rules and regulations that applied to projects financed by public money were not applicable here. For example, no competitive bidding was necessary. The next step was to designate a company to be the beneficiary of government orders. The chosen company was a leftover from the Kádár years called Vegyépszer. The name is typical of the many state companies that existed in the socialist period. But the name of this company indicates that it didn’t have anything to do with construction. Judging from its name, once upon a time it had something to do with chemicals. But that really didn’t matter because it wasn’t Vegyépszer that was going to do the work but hired subcontractors. Suddenly Vegyépszer received orders to the tune of 600 billion forints. From nothing it became as important a company between 1998 and 2002 as Lajos Simicska’s Közgép is today. I might add that Vegyépszer went bankrupt last year.

The question is how much of that money was returned to Fidesz. After the defeat of Fidesz in 2002, an old high school friend of Orbán, Simicska, and Varga told Debreczeni that the reason for Orbán’s electoral defeat was that “the boys were not satisfied with the customary 10%, they wanted 20% of everything.”

Of course, this is a very brief summary of exceedingly complicated financial transactions. I suggest that those who know Hungarian read the book. It is full of details about the functioning of MFB, which acted as a never ending source of government funds and also was involved in selling state properties to friends of Fidesz politicians under highly questionable circumstances. Some of the beneficiaries of these unsavory deals involving large state farms are still members of Viktor Orbán’s inner circle: Sándor Csányi, István Töröcskei, Zsolt Nyerges, and, yes, Lajos Simicska.

As for Fidesz’s current favorite company, Közgép, which gets almost 100% of government investments financed by the European Union, it belongs to Lajos Simicska himself. Or whoever stands behind him in the shadows.

To be continued