by Paul Lendvai
15
POWER, GREED AND CORRUPTION
Viktor Orbán himself once said, ‘In politics everything is possible.’ This he has demonstrated with his own staggering rise from utter poverty in Felcsút to his supreme and unchallenged position in Budapest. However, the warning given in the House of Lords by the Earl of Chatham, William Pitt (1708–78), is more pertinent than ever in modern Hungary: ‘Unlimited power is apt to corrupt the minds of those who possess it.’ Almost a century later the British historian Lord Acton (1834–1902) put it even more succinctly in his oft quoted letter to Bishop Mandell Creighton: ‘Power tends to corrupt and absolute power corrupts absolutely.’1 The personal attacks of opposition spokesmen and the independent media against the Hungarian prime minister on account of his family’s alleged fabulous enrichment and the notable number of privileged oligarchs among his friends underscore the doubts as to whether Orbán can still learn how to deal with power without succumbing to it completely.
The order that has evolved in the last seven years under Orbán is a system sui generis. Before the election in 2010, for example, Orbán personally vetted and handpicked every candidate (in other words, the subsequent Fidesz MPs) at his home at Felcsút. He leads the party alone, with lightweights as deputies, and without any controlling body. One of his oldest but intellectually shallowest friends serves him as the nominal leader of the Fidesz group in parliament. The annual lists of the most influential Hungarians reflect the ups and downs in the careers of former and current figures in politics, business and the media. Their rise or fall depends not on talent or performance but primarily on their personal relationships with, as well as absolute loyalty to, Orbán. The revolt of his powerful and potentially most dangerous former friend and ally, the impetuous Lajos Simicska, has merely served to increase the prime minister’s general sense of mistrust of associates who have become too powerful or too ambitious. This conflict and the subsequent purge of Simicska’s people from the bureaucracy have without doubt strengthened Orbán’s tendency to skilfully play the strongest figures in his immediate circle off against each other. Even before the 2014 election triumph the Polish author Igor Janke,2 himself a genuine admirer of Orbán, cited unnamed staff members who claimed that the Hungarian head of government is:
a ruthless chess player of power politics, who has concentrated immense power in his own hands, power that he is unwilling to share, and that is extraordinarily dangerous … Inwardly, he is full of passions which are not visible on the outside … He plays chess with the people around him but in such a way that they cannot endanger his own position … He takes good care that all substantive decisions remain in his hands and he is not choosy about his methods.
Quoting off-the-record remarks from other Fidesz insiders, Janke illustrates how Orbán has, step by step, deprived his deputy and former parliamentary leader Tibor Navracsics of power, in favour of the emerging young talent János Lázár, as well as insidiously promoting the rivalry between the two finance ministers György Matolcsy and Mihály Varga.3
These characteristics, pronounced ever more strongly in the course of the seven years in power, have shaped not only the methods employed by the Fidesz apparatus in the struggle against the disloyal Simicska but also the selection, promotion and, if necessary, punishment of favourites suspected of similar disloyalty. There is no better evidence for the impotence of the current opposition parties than the fact that, with very few exceptions, the corruption scandals linked to the Orbán regime have primarily been uncovered by courageous journalists or persistent, independent local politicians.
Everything that has taken place since 2010 within the ranks of the regime elite recalls the famous saying of the French premier François Guizot (1787–1874), who, instead of lowering the income threshold required to vote, formulated the cynical maxim of the July Monarchy by exhorting the French people to ‘enrich’ themselves. Orbán, of course, has not expressed himself in such words. Yet, András Lánczi, a so-called theorist close to him, has provided a profoundly cynical explanation matching Guizot’s for the nature of the regime’s policy, one that has been frequently quoted during subsequent political controversies in Hungary. ‘What is called corruption is actually Fidesz’s supreme policy. What I mean by this is that the government has set for itself goals such as the establishment of a group of domestic entrepreneurs, the building of the pillars of a strong Hungary.’4 Lánczi, president of the controversial Fidesz think tank Századvég, which has received billions from the government propaganda machine, added that ‘if something is done in the national interest, then it is not corruption. For Fidesz it is a matter of strengthening the domestic entrepreneurial class. About this they say that it is corruption itself. This is a political perspective, what has happened here is that the word corruption has become mythical.’ In another interview Lánczi took as an example the post-1948 nationalisations and the post-1989 privatisations, which were not defined as theft. ‘Now too there is a system which may be criticised as corruption, but I maintain that that is the attainment of a political idea.’5
This is also very much the case of the Hungarian National Bank, which has become the focus of alleged scandals barely conceivable in the West. The main responsibility is borne by its governor, György Matolcsy, a man Orbán has never had any hesitation in promoting to new top positions.
Who would ever have thought that, of all institutions, a central bank—the supposedly unimpeachable custodian of sound finances and the strict controller of banking—would in 2015 become the centre of a scandal that raised eyebrows abroad, caused by the adventurous initiatives and activities of its governor? At the heart of the affair lay the assets of six foundations established by the National Bank worth 260 billion forints (more than €830 million). What aroused the suspicions of the media and opposition was the secrecy shrouding the whole business, made possible by a piece of legislation smoothly enacted by the Fidesz majority in parliament. The government and the Bank’s governor Matolcsy argued that the foundations were private institutions not subject to public scrutiny. After the resulting uproar, President Áder passed the matter to the constitutional court for an assessment. This was one of the rare occasions when he refused to sign a law without any further ado. The court ruled that the foundations’ finances must be made public. They had to publish lists of their bizarre subsidies and curious business transactions. Thus, thanks to some enterprising journalists and the protests of the opposition, the wider public came to learn of some hair-raising details about the way taxpayers’ money is handled in Hungary.6
The six foundations and five further subsidiaries were managed exclusively, hence without any external scrutiny, by National Bank governor György Matolcsy, his confidants and by trusted high-ranking officials of the bank. Particular outrage was caused by Matolcsy’s personal involvement. NHB, a previously insignificant banking house owned by his cousin Tamás Szemerey, became the greatest beneficiary of bond purchases and securities accounts. Szemerey ranks as number fifty in the list of the richest Hungarians. His wife is the CEO of the biggest foundation, of which Matolcsy himself is president. Another son worked for a longer period in a bank owned by the National Bank. Further details have also emerged about the lucrative and often obscure transactions of the far-flung Szemerey family, while Matolcsy has claimed in an interview to have over 100 cousins worldwide.
Public reaction was even more hostile when it was revealed that the book written by Matolcsy’s former secretary about the wondrous policies of her boss as finance minister, together with the foreign language version of a publication from one of the foundations, had received substantial subsidies. Additionally, the foundation of which Matolcsy is president purchased a printed selection of his own newspaper articles at an inflated price. The book incidentally lacked an ISBN number and failed to identify either its publisher or printer.
Much money flowed into the acquisition and renovation of real estate such as office blocks, villas and hotels; the purchase of wine cellars was a
lso considered. Moreover, the foundations turned out to be generous patrons of those authors and journalists who churned out sycophantic articles about Orbán and his government policies, mixed with poisonous attacks on his opponents. The lists of grant recipients also featured an Internet news site, TV stations, construction companies and advertising agencies of the cronies around Matolcsy and Orbán.
It is very unlikely that the protests and complaints about this abuse of public money and the concerns expressed by the European Central Bank in its annual report on the lavish spending of the foundations will be crowned with any success. The wife of Hungary’s chief prosecutor Péter Polt was made director of human resources in the National Bank in 2014; Polt himself, a close confidant of the prime minister for many years, is on the boards of two foundations, one of them as chairman. Confident in his total backing by the prime minister, Matolcsy could allow himself to mock the attacks as ‘blah blah’. Orbán was quick on this and subsequent occasions to declare his unwavering trust in Matolcsy: ‘heaven and earth would have to collide’ before he would condemn the governor. Thus, Matolcsy remains unchallenged in his position as the regime’s number four and can, with the complaisant support of his boss, continue to freely dispose of the parked government securities and the interest earned from them.
The Fidesz ideologue András Lánczi has maintained that the activities of the National Bank regarding the foundations are ‘part of a political concept and do not belong to the world of immorality’. Such a statement is in no way astonishing, but rather quite natural and even logical. The Századvég Foundation, of which Lánczi was until recently president, is said, with its various subsidies, to be the transmission belt for the Orbán regime’s covert communications and lobbying activities. Here too an attempt has been made to keep commissions and documents secret; only after a decision of the Supreme Court did Századvég deign belatedly, and only partially, to publish them. The previous incarnation and forerunner of this think tank (whose name literally means ‘end of the century’) was the student magazine founded by István Stumpf in 1985, which became seven years later an ‘intellectual workshop where research, education, and publication are done simultaneously’.7
After the Fidesz victory in 2010, Századvég evolved, as a private company, into the government’s central planning and communications office. Since then, together with two other sister institutions for economic research and planning (Strategopolis) it has received, according to the estimates of atlatszo.hu, public contracts worth €40 million from the National Bank, the Ministry for National Development, the Ministry for International Development and the Prime Minister’s Office. By the summer of 2016, after the Supreme Court decision on disclosure, contracts to the value of €15 million had been made public. After the all-too-familiar delaying tactics of an appeal, documents of first 30,000 and eventually 70,000 pages were published—far beyond the anticipated 1,600. Critics assume that the projects were usually determined only after the money had been transferred.8 The National Bank, for example, concluded a €6 million contract with Századvég for the provision of various studies, despite the fact that the think tank has at its disposal a large number of experts, and that another prestigious institute had submitted a considerably lower offer of €4 million.
These lucrative institutions maintain a close relationship with the government. A former research director shuttles between the foundation and the government as its official speaker, the vice-president was named the Hungarian ambassador to London and the Fidesz visionary Lánczi was elected rector of the respected Corvinus University in Budapest. His son Tamás remains in a key function as a research director at Századvég. After the purchase of the economic weekly Figyelö by a Fidesz oligarch and the resignation of its senior editors, Lánczi Jnr was appointed its editor-in-chief in February 2017.
One of the most mysterious figures in Orbán’s court, Árpád Habony, is said to have played the key role in the ‘informal control’ of the whole group.9 This forty-nine-year-old communications expert is said to be perhaps the prime minister’s closest and without any doubt most influential personal media adviser. More than ever since the rift with Simicska and the government boycott of his media empire, Habony, a man shrouded in secrecy, has been the central and secret controller of all government communications, answerable only to Orbán personally. Nevertheless, he never appears at public events, refuses all requests for interviews and has absolutely no official position. In reply to journalists’ questions, Orbán himself has more than once said that ‘this person’ is not employed in any government post and for this reason he cannot give any information about him. Absurdly, Habony’s activities are treated by Orbán himself and by all government spokespersons as a kind of classified state secret, even though there are photographs and videos of this invariably casually dressed man in the presence of the prime minister. In the list of the most influential people in Hungary, Habony, this ‘not official person’ is to be found in sixth place, ahead of most ministers; among the country’s most important media figures, he is ranked third.
A man who has Orbán’s ear, he has also become a media entrepreneur. Together with the controversial American media guru Arthur J. Finkelstein,10 he recently founded a joint venture in London, Danube Business Consulting Ltd. Its director is Tamás Lánczi, the same Tamás Lánczi who is research director of the Századvég Foundation, which is fed millions of forints by Hungarian government bodies. Almost at the same time, in May 2016, Habony showed up together as co-owner, with a former secretary of state, of a new media concern in Budapest, Modern Media Group.11 This group runs the Internet portal 888.hu and, since the beginning of June 2016, has published a new free daily and weekly newspaper called Lokál with an initial circulation of 300,000. This replaces Metropol, another free newspaper, which was closed following the withdrawal of government advertising. Like its predecessor, Lokál is supported by large advertising contracts from government bodies and from firms headed by Fidesz supporters.
Independent commentators have speculated as to the source of Habony’s money for the funding of the new company: officially he has no demonstrable income. Between 2009 and 2013 the film and media mogul Andy Vajna is supposed to have lent him two instalments totalling $150,000, and another pro-Fidesz businessman $70,000, interest-free for seven years. Habony is doubtless the most colourful personality in Orbán’s orbit. In contrast to the almost pathological secrecy surrounding his true activities as the éminence grise, he has been photographed in a nightclub in Ibiza; his ex-wife, incidentally, set up Orbán’s website. Habony has a weakness for expensive sports clothes and for fast cars. He was three times the Hungarian champion in kendo, the modern version of Japanese sword fighting. He also demonstrated his aggressive propensities in a rather unusual way in 2012 when he attacked a married couple allegedly walking too slowly in front of his car, knocking down the man and hitting the woman in the stomach. A Budapest municipal court gave him a suspended sentence of two years in prison for disorderly conduct. This incident did not prevent his friend, the director of Budapest’s Museum of Fine Arts, from not only acting as a witness at Habony’s wedding but also allowing him to celebrate it in the museum. He also loaned Habony, free of any charge, a number of valuable paintings from the museum’s collection to hang in a flat that he used.12
Even more impressive has been the stellar career of the seventy-two-year-old former film producer Andy Vajna, who today is ranked the fifth most influential Hungarian and the second most important media personality; his estimated wealth of approximately €150 million puts him sixteenth on the list of the hundred richest Hungarians. He left Hungary with his parents in 1956 and grew up in Los Angeles. After an eventful early career as a photographer and hairdresser, he produced wigs and blue jeans with a partner in Hong Kong. Since the mid-1970s, Vajna has been a successful film producer in Hollywood; his action films Rambo and Total Recall were major box office hits. His close personal relationship with Orbán goes back to the 1990s when the young Fidesz
MP stayed with him during a trip to the USA.
Though he had founded a number of companies in Hungary in the years following 1989, Vajna’s meteoric ascent into the ranks of Hungary’s oligarchs began only after Orbán’s 2010 election victory. As government commissioner for the entire film industry with practically unlimited powers since 2011, Vajna contributed to the financing (and thereby to the Oscar triumph) of Son of Saul, the shocking Holocaust film made by the young director László Nemes Jeles. After this success, the prime minister described Vajna, himself a Jew, as ‘one of the most courageous Hungarians’.
In 2013 Vajna succeeded in obtaining (without the necessity of any tendering process) five out of seven concessions for casinos from the Orbán government. His first, Las Vegas Casino Kft., alone brought him a dividend of €10 million. His five casinos are estimated to have earned him total profits of €50 million in 2015, money which, via various offshore companies including some in London, landed in the accounts of the Andrew G. Vajna Revocable Trust, which he controls. Together with his Hungarian wife, Vajna is also (via a financing group registered in Budapest) involved in the purchase of diamonds, in the hospitality industry and in the organisation of beauty contests.
But to date Vajna’s most important and politically explosive project was the taking over of the second largest TV channel, TV2, on 15 October 2015 by his company Magyar Broadcasting Co. Kft., which he had founded only just before this. This transaction seems to confirm the observation that the difference between Silvio Berlusconi and Viktor Orbán is that Berlusconi gained political power through his media empire, while Orbán used his political predominance to set up his own reliable media apparatus (with the active support of compliant oligarchs).