Ministry of National Development

Viktor Orbán and his oligarchs: Impending power struggle?

I am always amused when I read that this or that politician from the opposition loudly demands the resignation of this or that minister. Equally amusing, if you can call it that, are the demands that President János Áder not sign this or that piece of legislation. It is also becoming quite obvious that hoping to get redress from the Fidesz-appointed constitutional court is equally hopeless.

A couple of weeks ago I introduced the readers of Hungarian Spectrum to Miklós Seszták, the new minister of national development. The title of the post was “Another corrupt official: The minister of national development and his ‘businesses.'” After Seszták’s highly suspicious activities as a small-time lawyer came to light, there was the usual choir demanding the man’s resignation. Viktor Orbán’s reaction in such cases is always “no comment.” As if nothing had happened. Seszták stays. Moreover, it seems that he was chosen to perform some very important tasks in the new Orbán government.

Only a few weeks have gone by since his appointment, but Seszták is emerging as one of the newest “favorites” of Viktor Orbán. More than a year ago a video circulated on the Internet showing Viktor Orbán, Miklós Seszták, and Károly Nemcsák, an actor, drinking pálinka and singing an off-color song about the hussars of Fehérvár. Surely, their relationship was closer than is normal between the prime minister and a very ordinary first-time member of parliament. But, of course, no one could have suspected at that time that Miklós Seszták would become one of the new confidants of Viktor Orbán.

What is Miklós Seszták supposed to do in the next few months? It looks as if one of his jobs will be to change the management of some state companies. The number of state enterprises is very large as is, but Viktor Orbán is planning to have even more soon enough. Naturally, Seszták is eager to accomplish the task. He promised quick action on the removal of certain undesirable people at the helm while he also announced further nationalizations. For example, Orbán wants to have the whole Magyar Villamos Művek Zrt. be taken over by the state. Seszták assured the public that “there is money for it.” It looks as if the Hungarian government also has money for the purchase of Bombardier MÁV Kft, some percentage of which is currently in foreign hands.

It didn’t take long to learn that Seszták has another job to perform which began as early as May: every state enterprise received a letter instructing the management to suspend all contracts with outside firms. The reason? Allegedly to ensure “responsible business practices” at the state enterprises. The suspension order was e-mailed, which the not too smart employees of the ministry sent out with all addresses visible. Since someone squealed in one of these companies, by now we know that the number of companies is greater than 100. This employee also said that in the instructions it was pointed out that some of the contracts “that are necessary for the normal running of the business can be renegotiated,” but he added that it is hard to pinpoint exactly what one can consider the “normal running” of a business. The same whistleblower suspects that in most of these companies both acquisitions and R&D have come to a screeching halt.

oligarchs

László Szily, blogger of Cink, who received the information from the whistleblower, immediately asked the ministry about possible personnel changes either at the ministry or in the companies. He received the following answer:

We are in the middle of analyzing the effectiveness of individuals both at the ministry and in the companies. In case we think that the lack of effectiveness is the result of the incompetence of the leadership we will make the necessary personnel changes. At the same time we do not want to decapitate the enterprises. If there are personnel changes, we will announce them in the next few weeks because we don’t want to keep anybody in uncertainty.

MSZP finds it amusing that Orbán picked a man accused of corruption to check on the allegedly corrupt state company managers. Amusing or not, something very interesting is going on. Rumors have been circulating for a number of years that both Fellegi and his successor, Mrs. László Németh, were Lajos Simicska’s people. As for Lajos Simicska, his business empire is vast and, especially since 2010, he has been the greatest beneficiary of European Union subsidies and state orders for road building and other construction projects. What the relationship is between Viktor Orbán and Lajos Simicska, besides friendship, no one knows. Until now everybody was convinced that what is good for Simicska is also good for Orbán. But now, the latest moves undertaken by Miklós Seszták on Orbán’s orders indicate that perhaps Orbán has had enough of Simicska and his friends.

There are further signs that something else  may be afoot that would weaken the power of some of the oligarchs. Yesterday 444, an online news site, received a copy of a bill the government apparently wants to put before parliament. It would introduce a 15% tax on all companies that have been involved in road building in the last seven years. That would mean a tax of 20 billion forints on Simicska’s company, Közgép. All this indicates to me that Viktor Orbán now feels strong enough (especially with his budget in desperate need of a new source of revenue) to turn against his former friends and put an end to their further enrichment and thus political influence. Cracks seem to be appearing in the Fidesz monolithic wall.