Political interference with the Hungarian judiciary

Fidesz politicians have a penchant for creating situations that call attention time and again to the fact that something is very wrong with democracy in Hungary. We have discussed on numerous occasions the many unconstitutional laws enacted by the Hungarian government that have been criticized by both foreign and domestic legal bodies. I don’t think we have to repeat what Kim Lane Scheppele has so eloquently told us over the years about these issues. Instead I would like to talk about a much less complicated case, one understandable even by those who have no knowledge of constitutional law or the intricacies of the legal systems of Hungary and the European Union. I’m talking about the Rezešová case.

Eva Rezešová is a very rich woman of Hungarian extraction from Slovakia. Driving while intoxicated, she had a very serious car accident in Hungary on August 23, 2012. Her BMW ran into another car carrying four people. All were killed. The public outcry was immediate and widespread.

I must say that I didn’t follow the Rezešová trial because I didn’t think that it could possibly have political ramifications. After all, it was an ordinary, if tragic, car accident. But Fidesz politicians manage to muddy (or, better, taint) the legal waters even in seemingly straightforward cases.

Rezešová was brought to trial, found guilty, sentenced to six years, and placed under house arrest until the appeals court re-hears her case. The prosecutor filed the appeal since he believed the verdict was too lenient.

Public outrage followed the announcement of the house arrest. The Internet was full of condemnations of the decision. After all, this woman who caused four deaths while driving under the influence didn’t deserve to live in a comfortable apartment in Budapest. News spread that her two children, who are currently in Slovakia, will join her and will attend school in Budapest while she is awaiting her second trial.

Antal Rogán decided to join the outcry. He took along a cameraman and delivered a short message in front of Rezešová’s residence, which he placed on his Facebook page. He expressed his disgust and, in the name of the Fidesz parliamentary caucus, called on the parliamentary committee dealing with legal matters and on the minister of justice to investigate the outrageous decision that Rezešová could spend her time between the two trials in the comfort of her home. That happened around 10 a.m. on December 4. A few hours later the announcement came from the court, which had originally ordered the house arrest, that they had changed their minds. Rezešová must return to jail because there is a danger of her escape. Observers were certain that there was a direct connection between Rogán’s demand for an investigation and the court’s change of heart.

Antal Rogán in front of Eva Rezešová’s apartment house / mandiner.hu

This may not be the case. The prosecutor appealed the case and also asked the court to reverse its decision on the issue of the house arrest. So, it is entirely possible that Rogán’s instructions to the parliament and the ministry just happened to coincide with the court’s announcement. Whatever the case, it doesn’t look good. It looks as if in Hungary politicians give instructions to the judiciary and these instructions are promptly obeyed.

Why did Rogán try to influence the court’s decision? Is he that ignorant of the notion of the separation of powers in a democracy? It’s hard to imagine. People consider Rogán one of the brighter politicians around Viktor Orbán. Perhaps as the national election approaches the Orbán government is ready to ignore the “fine points” of democracy as long as a gesture like Rogán’s is appreciated by the majority of the people. And, believe me, it is appreciated. On Facebook one can read hundreds and hundreds of comments thanking Rogán for “doing the right thing.” After all, if the judges don’t know what decency is, here is a man who does and who instructs them to make the right and just decision.

The Association of  Judges reacted immediately and pointed out that Rogán’s statement may give the impression of undue influence on the judiciary. The Association felt it necessary to defend the judges against any such interference. It announced that the Association cannot tolerate “expectations expressed by politicians in cases still pending.” The president of the Hungarian Bar Association found it “unacceptable that a politician expresses his opinion on a case before the final verdict.” He called Rogán’s action “without precedent.” And today even the chief justice of the Kúria (Supreme Court) alluded to the case without mentioning Rogán’s name or the Rezešová case. The issue came up in a speech by Chief Justice Péter Darák welcoming the new clerks and judges. He warned them never to fall prey to outside influences.

It is possible that Rogán’s ill-considered move  may have serious practical consequences. For example, what if Rezešová’s lawyer eventually decides to turn to the European Court of Justice claiming political influence in the verdict of the appellate court? It will be very difficult to prove that the two events occurring on the same day had nothing whatsoever to do with each other.

And there are other clouds looming over the Hungarian government with regard to its constant interference with the judiciary. Two days ago the Constitutional Court found the practice the Orbán government introduced of transferring cases from one court to another unconstitutional. This is not the first time the Constitutional Court ruled on the issue, but every time it found the law unconstitutional the government smuggled the same provision into either the constitution or some other law. Meanwhile the head of the National Judiciary Office (OBH), Tünde Handó, kept transferring practically all political cases at will to the far corners of the country to courts that she most likely considered to be partial to the government’s position. In 2011 thirteen and 2012 forty-two such cases were assigned to non-Budapest courts. These cases are still pending.

There are two possibilities now. One is to stop all the proceedings and start the cases over again, this time in the courts to which they by law belong. The second possibility is to proceed as if the Constitutional Court never spoke and have the courts hand down verdicts that will most likely be found null and void by the European Court of Justice. If I were the Hungarian government, I would opt for the former.

The troubled tobacco shop concessions

We haven’t talked about the tobacconist shops lately, although there is quite a bit to be said about them. First and foremost, that as the result of the newly restricted availability and the price hikes black market sales of cigarettes have soared in the last couple of months. Fewer and fewer people are buying cigarettes at the designated stores. The fallout? The loss of 23 billion forints in excise taxes for the treasury. Also, the new owners of these shops, although they turn a 10 percent profit on every pack of cigarettes, are not doing well. One needs to sell an awful lot of cigarettes to make a really good living.  And “only an idiot would buy cigarettes in the tobacconist shop,” reads a headline in today’s Origo. 

The troubles started early, with a spate of tobacconist shop robberies. Petty criminals all over the country, hearing about the fabulous profits that could be made by the owners of these shops, found them irresistible. And since the store fronts must be darkened and the doors kept closed at all times, the robbers could be assured of an easy target.

After a few weeks the black marketeers were in full swing, divvying up territories among themselves. They sell inexpensive cigarettes from Ukraine and Serbia for 500 forints a pack, as opposed to 900 forints in the stores, as well as western brands such as Kent, Marlboro, and Lucky Strike. The supply is plentiful. And it’s a terrific deal for both seller and buyer. The Ukrainian seller turns a 100% profit on each pack of cigarettes and the Hungarian buyer gets the pack for almost half the official price.

A man on Kálmán Széll tér (formerly Moszkva tér) explained how the distribution system works. A “very reliable man” brings him the merchandise from Ukraine. This reliable guy has his “reliable customers,” among them the fellow the Origo reporter talked with. The man admitted that what he does is illegal but, as he said, “the laws are wrong.” The black marketeers divide up the square among themselves, and they “defend their turf as jealously as the prostitutes.” Tobacconist shops nearby are hard hit. There are days when for hours they don’t have a single customer. A fair number of shops have already closed.

Making tobacco a state monopoly was most likely the brainchild of the Hungarian-owned Continental Tobacco Company. The owner of the company is a good friend of János Lázár, who was heavily involved in drafting the law. The Continental Tobacco Company also made sure that its employees and board members received a fair number of concessions through front men (Strohmann/stróman). Of the 4,300 tobacconist shops they got about 500 concessions.

One of the main beneficiaries was András Kulcsár, a top manager at Continental. He got 84 concessions. Now, after a few months, he has already had to close 25. The reason? Most likely a lack of business expertise, bad location, and low sales. The law, by the way, states that stores that close must be reopened within 60 days.

The cronies have all the dough / Photo Index

Today we learned that one of the tobacconist shops that belonged to Tomi Palcsó, a singer discovered on “Megasztár,” has been closed for days. The singer, who is a Fidesz favorite and who often performs at Fidesz events, received five concessions, officially the maximum number. It looks as if business in Csepel didn’t exactly thrive. Mind you, DK demonstrations in front of the Csepel stores over the last couple of weeks probably didn’t help. (László Varju, one of the top DK leaders, has been called into the police station for organizing demonstrations.) Although Palcsó’s store was already defunct, about a dozen DK activists protested in front of it today with signs like “The cronies have all the dough.”

Meanwhile, on popular initiative the National Election Committee gave its blessing to holding a referendum on two questions concerning the tobacconist shops, and the Kúria (formerly the Supreme Court) approved it. If the activists manage to get 200,000 signatures within 45 days the referendum can be held. There will be two questions on the ballot: Do you agree that instead of a 10 percent guaranteed profit, it should be rolled back to the original profit margin of 3.33%? And do you agree that only tobacco products should be sold in the tobacconist shops?

Apparently the Fidesz leadership is furious. As one Fidesz politician told the reporter for Index, “that will not happen again.” At this moment it is not clear whether the government/Fidesz (it really no longer matters what we call it) intends to block such a referendum altogether or whether they only want to prevent its being held before the elections. In either case, I wouldn’t like to be in the shoes of one of the members of the Committee who in the last minute changed his mind on the question of the profit margin and thus made passage of the motion possible.

Viktor Orbán’s answer to the Tavares report

As soon as the vote in the European Parliament went against the Hungarian government, Viktor Orbán announced that a resolution will be introduced for the Hungarian parliament to adopt that will condemn the Tavares report.

And indeed, by this afternoon the proposed text of the resolution was already on László Kövér’s desk. The bill is signed by three Fidesz members of parliament: Antal Rogán, the leader of the Fidesz caucus, Gergely Gulyás, one of his deputies and the alleged constitutional expert of the party, and Máté Kocsis, mayor of District VIII and a very active young member of parliament.

This afternoon I heard an interview with Gergely Gulyás, in the course of which he was asked whether the idea for the resolution came from Viktor Orbán. Gulyás, who is one of the few Fidesz politicians for whom lying doesn’t come easily, paused. It was a very long pause. Eventually he found the right words: the prime minister can certainly identify with it.

What we must keep in mind is that the resolution comes from Fidesz the party and, as you will see, is at  least in part addressed to the government. So, strictly speaking, Viktor Orbán, the party chief, is asking Viktor Orbán, the prime minister, to do certain things.

Decree of Parliament on the equal treatment due to Hungary

1. We Hungarians entered into the family of European nations by establishing a state and adopting Christianity.

We Hungarians often stood up for European values. There were times when we defended these values with our blood against attacks from outside. In 1956 we armed ourselves against the communist dictatorship. In 1989 we contributed to unifying Europe with the demolition of the iron curtain.

We Hungarians entered into the European Union of our own free will.

We did that in the hope that we would join a community based on law, justice, and freedom.

We Hungarians  do not want a Europe where freedom is limited and not widened. We do not want a Europe where the larger ones abuse their power, where national sovereignty is violated, and where the smaller have to honor the larger. 

We have had enough of dictatorship after 40 years behind the iron curtain.

We Hungarians have always respected the desire of European Union institutions for dialogue, and we have always been ready for reasonable compromises. 

Therefore, we rightly expect the respect and equal treatment due to Hungary from the European Union’s institutions.

We expect the European Union to respect the rights that we acquired after our accession just as it would respect those of any other country. 

The Parliament of Hungary is surprised that the European Parliament passed a decree that it had no right to pass, that exceeded its jurisdiction. The European Parliament made demands, introduced new procedures, and created institutions that violate Hungary’s sovereignty as guaranteed in the fundamental treaty. 

With this decision the European Parliament went against basic European values and led the Union on a dangerous path.

The Hungarian Parliament is further worried by the undue influence of business interests that underlie this abuse of power.

Hungary is reducing the cost of energy paid by families. This may hurt the interests of many European companies that for years have had windfall profits from their monopoly in Hungary. It is unacceptable that the European Union tries to influence our homeland to further the interests of these companies.

The Hungarian Parliament believes that Europe is in danger if the interests of multinationals are realized at the expense of the rules laid down in the fundamental treaty.

Today we adopt a resolution to defend Hungary’s sovereignty and the equality of Hungarians in the European Union.

We call on the Hungarian government not to give in to the pressure of the European Union, not to let the nation’s rights guaranteed in the fundamental treaty be violated, and to continue the policies that make the lives of the Hungarian people easier.

2. This decree of Parliament will enter into force the day after its publication.”

The embellished historical commonplaces that introduce this resolution are to be expected. Hungarians always drag them out when they want to prove their European roots and vaunt their accomplishments in defending Europe from the eastern peril.

What is much more interesting is the government’s attempt to establish a connection between the Orbán government’s lowering of energy prices and the Tavares report which, after all, is about the Hungarian government’s transgression of democratic norms and not about economics. This alleged connection is ludicrous in and of itself, but if we consider that Rui Tavares has been working on this report for at least one and a half years and the Orbán government came up with the political masterstroke of lowering energy prices only a couple of months ago, it should be clear to everybody that there is absolutely no link between the two.

The attempt to cast business interests as a motivating force behind the Tavares report and its acceptance is more than tenuous. Support for it came largely from the left–the socialists, greens, and liberals who are not exactly known for their support of big business. The right- and right-of-center parties are by and large more pro-business. And a majority of their representatives stood by Viktor Orbán.

In his speech in parliament today Orbán again attacked the multinationals and the banks, but some Hungarians, it seems, want more than bellicose talk. Here are the first signs.

Today the verdict was handed down in a case that has been been in and out of court for two and a half years.  The plaintiff took out a foreign currency loan which he now finds impossible to pay back due to the weakening of the Hungarian forint. He claimed that he shouldn’t have to pay the loan back because the bank did not mention the bid-ask spread in the contract. Two lower courts decided in favor of the plaintiff. The case then moved up to the highest court, the Kúria. For a number of days demonstrators have stood in front of the building, waiting in a rather ugly mood. The verdict finally came: OTP, Hungary’s largest bank, is not liable. The plaintiff will have to pay his loan back.

Scuffle in front of Viktor Orbán’s house – Népszabadság, Photo Árpád Kurucz

The crowd outside was outraged at the verdict. One would have thought that the crowd would go OTP headquarters to vent their anger. But no, they headed toward Viktor Orbán’s private residence in Buda. One could see gallows and red-and-white striped flags (the favorite symbol of the Hungarian extreme right), interspersed with the Hungarian tricolor.

So, if Orbán thinks that by whipping up anti-business sentiment he will gain great political advantage, he might be mistaken. These dissatisfied people, it seems, blame him for being unable to “solve their problems.” After all, he promised that he would take care of those hundreds of thousands of people who lost their homes as a result of the collapse of the Hungarian forint over the last few years.

As for Viktor Orbán’s speech in parliament, he didn’t add much to the content of the proposed resolution, except for getting close to calling those Hungarian MEPs who voted for the Tavares report traitors. However, Attila Mesterházy in a forceful speech condemned the Orbán government, the prime minister’s “business interests,” and his “majoritarian rule.”

The Fidesz back benchers are the noisiest ones on the right and unfortunately they are also ignorant. For example, when Mesterházy reminded Viktor Orbán that when he was in opposition he went so far as to ask the European People’s Party to use its influence in the European Union to stop any payment to Hungary, they tried to drown out Mesterházy. I’m sure most of them thought that this was a lie. It was, however, absolutely true. Orbán rarely if ever thought about collateral damage to the country as a whole in his relentless attacks on the socialist-liberal government.

In addition, Attila Mesterházy and Gábor Harangozó on behalf of MSZP turned in amendments to the proposed resolution. Since there is no chance of Fidesz ever accepting any amendment coming from the opposition, by now parties on the left write these amendments in jest. It is an amusing piece that is worth reading.