by Paul Lendvai
The TV2 affair was primarily a battle with the weakened but still active Simicska group, which Vajna won with the help of vast financial means. He admitted himself that TV2 would face a loss of €15 million in 2015, adding that it would first make a profit in three to five years. Nevertheless, at the end of November 2015 Vajna had been granted a credit amounting to €22 million for the purchase of the loss-making channel, and then, in April 2016, a further injection of €4 million for the current programme budget. These sums of money, enormous by Hungarian standards, had been made available to him by the state-owned Export-Import Bank. As this bank is principally intended to promote foreign trade and the exports of domestic entrepreneurs, this more than generous support for TV2 caused a political scandal. However, the government pointed to a 2013 change in the law whereby the state bank is allowed to finance domestic investments if the companies receiving the support are able to use them to improve their international competitiveness. A mere 2 per cent of TV2 revenues come from exports.
With these huge amounts of state money, TV2 proceeded to set up ten new entertainment and sports channels. The dumbed down programming is, however, mixed with hard propaganda and personal attacks on critics of the regime. Typical of TV2’s selective news reporting was, as many media commentators have noted, its evening news devoting just forty-two seconds to the large protest demonstrations attended by thousands of teachers in June 2016.
The new pro-Fidesz media empire is being established with public money and with the aid of massive advertising by firms and organisations close to the party. Thus, for example, the biggest Internet portal, Origo, has been bought from a Fidesz loyalist with the aid of a €4 million credit guaranteed by one of the financial institutions belonging to the National Bank. Another portal, VS.hu, received almost €2 million from one of the foundations connected to the National Bank. (A group of its journalists resigned in protest, saying they had not known about the grants.) Independent media observers point out that the entrepreneurs engaged since the Orbán–Simicska breakup in establishing and financing the new Fidesz media empire are running no risks; they are the recipients of generous credits from state banks and are able to count on revenues from advertising placed by both government institutions and private firms associated with Fidesz. In 2015, for instance, TV2 received 18.2 per cent of the total sum spent by the state on advertising.
The public service and state media must also not be overlooked: these comprise six TV channels, six radio stations and the MTI press agency. According to the communications expert Mária Vásárhelyi, the government pumped approximately €400 million into state TV and radio in 2015, a sum that, together with state advertising, almost equals that of the entire budget for higher education in Hungary.13
Despite his fall from grace, the media controlled by Lajos Simicska still plays a particular role. Though he has fallen on the list of most influential Hungarians from third place in 2014 to ninth in 2015 and sixteenth in 2016, he still remains the ninth richest man in Hungary, with a fortune of €280 million. Politically, it is important that HírTV, a CNN clone, the daily Magyar Nemzet, the weekly Heti Válasz and his radio station, all of which had shamelessly and aggressively spread pro-Fidesz propaganda for years, have often, since the February 2015 breach, broadcast and published more interesting news than the centre-left media. In light of the all-out mobilisation to create a media apparatus unquestioningly loyal to Fidesz, the future prospects of Simicska’s empire are more than doubtful. Thus, in autumn 2016 the frequency license for his highly successful commercial radio, Class FM, which had 2 million listeners, was not renewed and its place was taken nationwide by Radio 1, which belongs to Andy Vajna’s media empire; meanwhile, viewers with non-digital subscriptions can no longer receive HirTV from the UPS cable network.
2016 was the year of a decisive breakthrough in the consolidation of the Fidesz regime’s near total hegemony in the Hungarian media world, guaranteeing the smooth functioning of the ‘illiberal democracy’ propagated by Viktor Orbán and strengthening the prestige of his ‘national liberation struggle’ on the international stage. The most crucial blow struck against the freedom of the press was the overnight closure of what was by far the most influential left-liberal independent daily, Népszabadság. Once the central organ of the ruling communist regime, it became after 1989 a respected and critical voice in its reporting on political, economic and cultural life. Majority ownership was held first by the German Bertelsmann group and subsequently by the Swiss Ringier group. A merger of the subsidiaries of Ringier and the German Springer concerns was allowed in 2014 by the media and competition authorities only on condition that Népszabadsag was sold to Vienna Capital Partners, a private equity firm owned by the Austrian speculator Heinrich Pecina. He was also involved in shady deals in connection with the biggest postwar banking scandal, around the collapse of the Hypo Alpen Adria of Klagenfurt. In mid-2015 Pecina took over the 27.7 per cent stake in Népszabadsag previously held by the Socialist Party.
On Wednesday 8 June 2016, the parent company, Mediaworks, abruptly closed the newspaper over the weekend without informing the editor or the staff’s union representatives. Access to email and to the website, including the newspaper’s archive, was blocked. The eighty staff, journalists and employees were denied entry to the newsroom that Sunday. Mediaworks replaced the content on the paper’s website with a brief announcement that it was suspending publication immediately because of sharp falls in circulation, amounting to ‘more than 100,000 copies in the past ten years’. Nevertheless, the paper still had a circulation of 43,000 and the losses incurred were considerably reduced. On the Saturday night, several thousand people protested in front of parliament against what the paper’s journalists called a ‘coup’. The foreign press and international insitutions protecting press freedom condemned the ‘contract execution’ of the most important liberal newspaper in Hungary without any attempt at seeking a viable business model.
The reference to the deficit, which had been public knowledge for years and was actually declining, was regarded as little more than a smokescreen, coming as it did just days after the paper had published allegations of corruption against Antal Rogán (the head of Orbán’s cabinet office and the regime’s number three) and revealed new lurid details about the luxurious life style of the National Bank governor, Matolcsy.
Two weeks later, Mediaworks, which ran twelve regional dailies and the national sports newspaper, was sold for an undisclosed sum to the Opimus Group, which is said to belong through middlemen to one of Orbán’s closest friends, the wealthy oligarch, Lőrinc Mészáros, whose fantastic career is described in the following chapter. The editors of six important regional dailies and the sports paper were quickly replaced by reliable Fidesz scribblers. Following this sale the management of Mediaworks was acquired by the director of Magyar Idök, the Fidesz paper founded after the rupture with Simicska. Soon afterwards Echo TV, founded and financed by an industrialist close to Fidesz, was also purchased by Mészáros media holding.14
An editorial in the Frankfurter Allgemeine Zeitung made it plain that nobody should take seriously the claims of the Hungarian government that it had nothing to do with the liquidation of Hungary’s foremost liberal paper. Attacking Orbán by name, it added: ‘The authoritarian rulers of today do not ban media, they take them over or divest them of their economic basis. They start with television and radio, and only then move on to deal with the newspapers and, like every proper evil-doer, take great care to erase all traces.’15
There are unmistakable signs that Habony, Vajna and others operating on Orbán’s behalf also intend to put growing pressure on the hitherto critical TV channel ATV, operated by an evangelical group. They are also prepared to acquire popular dailies that occasionally unmask the scramble for unlimited enrichment within the ranks of Fidesz dignitaries. The few remaining left-liberal dailies and weeklies, as well as Internet news portals, serve only a relatively small segment of the population. The leftist Klub Radio has manage
d to survive despite the lack of advertising, but can only be heard in and near Budapest. The summary execution of Népszabadság, and the devastating echo from the international media and institutions fighting for press freedom, make it almost impossible for the Orbán regime now to provide any credible ‘evidence’ that the freedom of the media is not endangered in Hungary.
16
THE GREAT AND GOOD OF THE COURT
‘Orbán wanted and wants to be at one and the same time the most powerful and the richest man in Hungary,’ concludes economist László Lengyel in his latest book.1 He offers no sources to substantiate his claim, but since the mid-2015 conflict with Simicska (who was, it should be recalled, the architect of Fidesz’s finances) Orbán’s and his family’s enrichment has been openly and frequently discussed in the media and even in parliament. One such occasion was during the parliamentary questions hour on 21 March 2016. The leader of the extreme right-wing Jobbik Party, Gábor Vona, demanded the appointment of a committee of inquiry to investigate the financial affairs of the prime minister; he also accused Lőrinc Mészáros, the mayor of Felcsút, the small village where Orbán had grown up, of having become rich at a breathtaking pace over the last few years and of being nothing more than a strawman for the prime minister. Vona further alleged at a public meeting that media mogul Andy Vajna and Árpád Habony, the ‘unofficial’ communications adviser, were also strawmen for Orbán.
The Fidesz leader rejected Vona’s repeated questions: ‘I have never had and I do not now have a strawman and I will never have one.’ He added that, like many other MPs, he had signed a declaration of assets every year for the past twenty-six. He had never been a wealthy man, he wasn’t one now and wouldn’t be one. As in every such situation, Orbán immediately went on the attack, accusing Jobbik of being involved in dubious dealings and of not paying taxes. Some weeks later, the MP Viktor Szigetvári, leader of the centre-left Együtt Party (együtt means together), alleged that the prime minister’s estimated fortune of €650 million made him the richest Hungarian, richer than the nominal number one, OTP banker Sándor Csányi.2 He added that while politicians may formulate what is publicly known of these ‘strawman contracts’, journalists are unable to do so because of the lack of concrete evidence: ‘Just as Putin is known to be the richest Russian alive, we believe Orbán is Hungary’s richest man, but is using strawmen to distribute his wealth.’
‘Is Viktor Orbán, the man who governs [Hungary] singlehandedly and at will as lord of the manor, corrupt?’ In his description of ‘corruption as the glue holding together the Orbán regime’, Zoltán Kovács, the editor-in-chief of Élet és Irodalom, refers to two cases in connection with Orbán’s family going back to Fidesz’s early years and Orbán’s first premiership, which were uncovered by the newspaper and led to a whole series of court cases. These concerned the preferential treatment given to Orbán’s father in the acquisition of a quarry3 and a 1999 remark by the prime minister concerning the degree of state support for a vineyard partly owned by his wife.
Since 2010 the scandalous turn of events at Orbán’s home village of Felcsút have become a focus of media attention both in Hungary and abroad. The quarry company owned by his father and his two younger brothers generated a net profit of more than €4 million in 2015. The Orbán family appears in the Forbes report on the most influential Hungarians with a worth of €23 million.4 In response to a parliamentary question on the almost fairy tale acquisition of wealth by Fidesz clients, Orbán casually replied that he had looked at the list of the ten richest Hungarians and could not find the name of a single Fidesz representative on it. To this a columnist from Népszabadság responded that Gábor Széles, the fourth richest entrepreneur with a fortune of €330 million, might not be a Fidesz man on paper, but did finance extreme right-wing pro-Fidesz newspapers and TV stations.
For several reasons, the real star among the nouveau riche and Orbán cronies is Lőrinc Mészáros, who became mayor of Felcsút in 2010. The one-time gas fitter, three years younger than Orbán himself, went to the same primary school. According to Mészáros they only met again in 1999 though it was through playing football that he actually got to know Orbán well. The close connection was first cemented during the construction of the huge new football stadium opposite Orbán’s house and reinforced after Mészáros’ election as mayor. The turnover of the company owned by the mayor and his wife, registered as MM, has increased tenfold since 2010, the year of the Fidesz election victory. In 2015–16 alone Mészáros was able to triple his personal fortune to €80 million. In 2013 the village mayor appeared for the first time on the list of the hundred richest Hungarians, at number eighty-eight; only three years later he was number thirty-one. At the same time he was ranked as the tenth most influential Hungarian. His explanation for this dizzying career is quite simple: ‘The good Lord, good luck and the person of Viktor Orbán have certainly all played a role that I have come so far. But I have never privatised, never taken anything, I have acquired everything with my own work and with my own brains.’5
The list of state contracts that have come Mészáros’ way have encompassed a multitude of activities, ranging from the construction of a large riding school and horse racing track to the rebuilding of a Danube harbour and the erection of flood defences. Always in consortium with other firms, Mészáros has undertaken the electrification of railway lines, the production of equipment for air conditioning and large agricultural enterprises. In 2015 he acquired a majority shareholding in a Croatian football team (NK Osijek). In addition to his varied activities as an industrialist, he has also become the most powerful landowner in the Fejér region. As private individuals can only hold a maximum of 300 hectares of agricultural land, Mészáros’ wife and three children (the entire family) had by the end of 2015 purchased a total of 1,425 hectares of land for approximately €6.5 million.
Following extensive research, the economic and political magazine HVG concluded that by the end of 2016 Lőrinc Mészáros had built up directly or indirectly a network of twenty firms, which had won (in consortium) orders and contracts worth over €1 billion. Additionally, more than a dozen hotels belong to his rapidly expanding empire. The thirty-year-old István Tiborcz, who in 2013 married Orbán’s eldest daughter Rachel, has also become a highly successful entrepreneur. In just a couple of years his company Elios has received public orders worth €65 million for installing LED street lighting in a number of towns and communities. As these contracts were in part financed from EU transfers, the European Anti-Fraud Office is said to have started an investigation. Tiborcz sold his holdings in Elios and then invested in real estate, acquiring some extremely valuable properties. After he paid the stamp duty on a major deal involving a famous castle, reporters alleged that the Orbán family and their business associates were using proxies so that the real owners remain hidden. Close relatives of Orbán’s wife, Anikó Lévai, have also been involved in profitable business transactions. Losses incurred by her close relatives, amounting to £10 million, were also settled by Lörinc Mészáros. Moreover, press reports and photos have documented the contacts between the prime minister’s family and Adnan Polat, a Turkish millionaire and football club president, and with Ghaith Pharaon, a highly controversial Saudi investor on the FBI’s wanted list, whose dealings with Orbán were also the subject of heated parliamentary debates before his death in January 2017.6
When in 1972 the young avant-garde film director Gyula Gazdag made a now famous regime-critical documentary called The Resolution, about a power struggle in an agricultural cooperative in the back of beyond, nobody could have thought that the sleepy little village in which the action took place, Felcsút, and its surrounding area would four decades later become the centre of Hungarian and world media attention, sometimes even heated parliamentary debates. Only somebody who knows of Orbán’s tough childhood and the gruelling ascent of his family7 can understand why Orbán gives free rein both to his fervent passion for football and to his much criticised national megalomania,
shaped by nostalgia. How else is it to be explained that the largest and most expensive stadium in Hungary has been built on the very spot of the small football pitch where he had once played as a centre forward? When in the autumn of 2014 I viewed the large arena with its carefully tended grass, I was, like every visitor, amazed by the contrast. The equation is well known: Felcsút has 1,800 inhabitants and its football stadium a capacity of 3,800. With its arched facades of wood, stone and copper, it is the most beautiful stadium in the country. The style of the interior is also elegant, even if it is overwhelmed by the sheer quantity of photographs, panels and memorabilia of the wonder team—the Golden Eleven captained by Ferenc Puskás, the greatest and most famous footballer in Hungarian history. Next to the €13 million stadium is the large building of the Puskás Academy for young players. There, almost 100 talented boys are educated and trained.
Not only did Orbán’s crony Mészáros play a key role as developer in the construction of this splendid edifice but he is also the president of the foundation supporting talented young players, supervised by the Ferenc Puskás Football Academy. It is said in the village that Orbán, who during his first premiership still played football himself and once postponed a cabinet meeting because of a training match in Poreč, Croatia, had the magnificent stadium built on his own initiative exactly opposite his own little farmhouse with its neat garden.
Football, the prime minister’s lifelong passion, also lies behind the generous tax breaks given to companies that directly support team sports. Between 2011 and 2016, large domestic and foreign firms donated a total of about €1 billion for football, handball, water polo, ice hockey and basketball. About half of this sum went to football. In these five years, through the agency of the Hungarian Football Association 1,200 sports clubs have received over €300 million, of which more than €30 million landed with the Felcsút foundation for young players headed by Lőrinc Mészáros. The legal regulations for this favourable tax regime have been in force since June 2011 and companies are not obliged to make public any information about how much money they transfer from their corporate taxes, or to which clubs. Critics point out that in this way the state loses revenues equivalent to the two-year budget for higher education.8