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MKKP adopting new platform to fight corruption in public procurements

picture of Zsuzsanna Döme and Gergely Kovács

The Hungarian Two-Tailed Dog Party (MKKP) has gained in notoriety since its official registration as a political party in Hungary in 2014. Co-chaired by Zsuzsanna “Suzi” Döme and Gergely Kovács (pictured), the party is certainly better known for its offbeat sense of humor, wicked mocking of typical political slogans, and grandiose promises of “free beer” and “eternal life” than for its sober policy proposals.

However, MKKP seems to be getting serious about at least one thing: combating public corruption. Party members were elected to local municipalities in the 2019 municipal elections, and since then the party has had an insider look at how public procurements are conducted in Hungary.

Although the state spends a significant portion of Hungarian taxpayer money on procurements, the party believes the process is a breeding ground for corrupt practices.

To counter this, MKKP has drafted a 36-page plan on implementing a clean procurement system to limit the theft of public money that takes place when overpriced work is given to “friendly” companies.

As the party writes:

The public procurement system is currently designed so that in many cases only a narrow sliver of applicants can compete. Centralized procurement needs to be open to smaller companies. We are developing a system that automatically identifies and authoritatively manages directed (manipulated) public procurement. We would end low value calls for tender. We would guarantee transparency and the ability to compare bids by publishing contracts with subcontractors and technical specifications.

We would use data sheets that analyze central prices, so that the state knows what the average market price is and can check to make sure that the procurement bid does not deviate from this amount by several orders of magnitude. The evaluation committee will be responsible for comparing the bids that come in with this market price level. In setting up a public procurement research institute, we are creating a professional basis for guaranteeing that it is efficient and verifiable in the long run.

[444]

Two days after deadline, Hungary responds to European Commission corruption concerns

picture of Ursula von der Leyen

The European Commission has received a response to the administrative letter it sent to Hungary, Commission Spokesperson Balázs Ujvári confirmed to Népszava.

The letter that the Brussels-based body sent to Budapest in November referred to suspected corrupt transactions and systemic irregularities. The Commission’s concerns could ultimately lead to launching a procedure that levies financial penalties against Hungary.

Among other things, the Commission inquired about real estate development projects around the Balaton region, state land auctions, public universities being taken over by foundations, the planned sale of Budapest Airport shares, as well as the lack of transparency in public procurements and the risks associated with conflicts of interest.

Although the Orbán government was given two months to reply to the letter, it did not send an answer to the European Commission until this Thursday, two days after the deadline.

The exchange of letters is not part of the rule of law procedure, and at the moment is only an informal inquiry to provide insight to the Commission’s decision-makers, but it indicates the fundamental problems that could lead to the imposition of a new sanctioning instrument against Hungary.

The law stipulates that EU Member States can be fined if their failures to uphold the rule of law are found to directly harm the common EU budget. One example of this could be when the Member State’s judiciary does not investigate or penalize the misuse of EU funds.

The regulation specifying the rule of law procedure has been in force for a year, but the European Commission cannot enforce it until the matter is taken up by the European Court of Justice, which is expected to issue a ruling on February 16. If the court strengthens the rule of law mechanism, the College of Commissioners may initiate the first steps toward sanctioning the rule-breaking country.

In addition to Hungary, the Commission also sent an administrative letter to Poland, which the Mateusz Morawiecki government has recently responded to.

[Népszava][Photo: President of the European Commission Ursula von der Leyen]

Transparency International: Hungary second-most corrupt country in EU

picture of infogram

According to Transparency International (TI), Hungary became slightly more corrupt last year than in 2020.

The NGO generates corruption scores for every country in the world through 13 different surveys and assessments, and releases the annual findings in its Corruption Perceptions Index report. States are scored on a scale from 0 to 100, with 100 indicating the least level of corruption in a country and 0 the highest.

Transparency claims that its corruption index “is the most widely-used global corruption ranking in the world. It measures how corrupt each country’s public sector is perceived to be, according to experts and businesspeople.”

Hungary scored 43 on the index for 2021, which is one point lower than the previous year’s number. Within the European Union, Bulgaria barely edged out Hungary with 42 points to claim the title of the most corrupt Member State in the EU, with Hungary in second place, as ranked by the anti-corruption organization. TI puts Hungary in 73rd place out of a total 180 countries surveyed, with Bulgaria in 78th place.

Transparency has been releasing its Corruption Perceptions Index results since 1995, and the latest report shows the lowest score they have ever given Hungary. But it wasn’t an historic year only for Hungary, as Switzerland (84), the Netherlands (82), Belgium (73), Slovenia (57), Poland (56), and Cyprus (53) also received their worst corruption scores since the group began tracking them.

Together with Luxembourg, Poland, and Cyprus, Hungary was also highlighted in the summary as a European country where the corruption situation has significantly deteriorated since 2012. TI states that the Hungarian government has used the epidemic to justify further consolidating its power and restricting freedoms, particularly media freedom and the freedom of expression.

By comparison, Austria, Estonia, Latvia, Italy, and Greece have made progress over the last ten years, although the last three years have seen a decline in Austria’s performance. Their research shows that the most corrupt country in the world is South Sudan with 11 points.

The world’s least corrupt countries are Denmark, Finland, and New Zealand with 88 points each, and Norway, Singapore, Sweden, Switzerland, the Netherlands, Luxembourg, and Germany rounding up the top ten. [444]

[Image: transparency.org]

Corruption not a major problem, say 98% of Fidesz voters

picture of woman shrugging

Only 18% of opposition voters believe corruption is the biggest problem today, according to a new Republikon poll as reported by Népszava. A higher proportion, 20%, said the cost of living was too high, and just over 20% said that wages were too low.

By comparison, 30% of Fidesz voters said that the cost of living was too high, and 23% were troubled by low pay. Barely 2% of them felt that a high level of corruption existed.

A high proportion of opposition supporters think the quality of health care in Hungary is low, and 10% of them called the destruction of democratic norms in Hungary as the country’s most serious problem. However, far fewer of them mentioned the migration of skilled labor aborad as a problem compared to Fidesz voters.

Interestingly, around 2-3% of supporters of the opposition coalition mentioned that we do not do enough to protect the environment and combat climate change, while 7-8% of Fidesz voters felt the same way. Similar proportions of both camps felt that pensions were too low, between 8-12%. They also agreed on the extent of societal differences between men and women, with 2-3% of them stating that the biggest problem today was that these differences were too great.

The poll also measured how much voters in each camp agreed to statements on a five-point scale. As to whether corruption had become much more significant since 2010 than before, political opposition supporters gave the statement 4.5 points, while Fidesz voters only scored it 2.3.

However, many among the latter group said that there was corruption in the country, but it was outweighed by the positive aspects of a Fidesz government. Pro-government voters gave 3.5 points to this statement on average, while it was only 2.7 for those identifying as opposition supporters.

[Magyar Hang]

Most Hungarians think other politicians are involved in Völner corruption scandal

picture of Judit Varga

Most Hungarians believe that Justice Minister Judit Varga (pictured) is responsible for the corruption scandal that has engulfed her deputy, former State Secretary Pál Völner, according to a poll conducted by the Publicus Institute for Népszava.

The Hungarian daily writes that according to the survey, 84% of opposition supporters and 22% of those who support the government felt the minister had some responsibility in the affair.

A surprisingly large number of pro-government voters, one in eight, even believes that Varga should resign. The vast majority of opposition voters, 82%, say Varga should give up her position, while 40% of uncertain voters also share this view.

The Prime Minister’s responsibility in the scandal is also being questioned by many: 40% of respondents think that Viktor Orbán has some responsibility for the affair, a view shared by three-fourths of pro-opposition supporters but also by 41% of Fidesz voters as well.

A majority of respondents, 53%, do not believe that Völner alone was involved in the scandal, while only 8% thought that the state secretary had acted on his own in allegedly receiving bribes from the president of the Hungarian Chamber of Judicial Officers.

[HVG]

Who is the person referred to as the “master” in the Völner corruption case?

picture of György Schadl

Surveillance of György Schadl (pictured) in the Pál Völner corruption case suggests a powerful, unnamed person in the background. According to recordings surreptitiously taken of Schadl’s phone calls by the National Protective Service (NVSZ), the president of the Hungarian Chamber of Judicial Officials refers to his “master” several times, which was someone he typically met abroad.

The person in question is not Pál Völner, who is suspected of doing several corrupt deals with the Chamber President over a number of years, but someone much more influential in the government. However, it is not clear from the documents who that person is, writes András Dezső in HVG based on released documents.

In April of this year, NVSZ apparently began wiretapping the phone of a corrupt tax official that they suspected was allegedly taking bribes in exchange for settling cases of budget fraud. It was through this person that they began listening in on György Schadl, who handled everything from small matters to “big-time crooked deals.” Pál Völner came into the picture through intercepting Schadl’s calls, with whom he talked frequently and avoided using any coded language.

HVG’s sources in the NVSZ doubt that Sándor Pintér, as Minister of the Interior, could not have been aware of Völner’s involvement in the case this past summer, and it is also not likely that Minister Judit Varga had not known about Völner’s involvement by the autumn.

It is not clear from the files whether the NVSZ has investigated the person whom Schadl refers to as his “master,” but insiders well-versed in the case say the individual is a much more influential government politician than Völner and apparently is not in good relations with Minister Pintér.

[444]

Völner accused of receiving 83 million Ft. in bribes

picture of Pál Völner

The Prosecutor General’s Office believes that Pál Völner (pictured), the former state secretary for legal affairs who resigned last week after it was revealed that he was being investigated for corruption, received a total of 83 million Ft. (US $256,000) in bribes, according to information the Office submitted to the Parliamentary Immunity Committee.

The bribes were offered to Völner as occasional payments of 2-5 million Ft. (US $6,200-$15,400) between May 2018 and July 2021 by György Schadl, the president of the Hungarian Chamber of Judicial Officers (MBVK), who is now under arrest due to the case.

The Prosector General’s Office alleges that in exchange for corrupt payments, Pál Völner undertook to abuse his supervisory, official, and administrative powers over judicial officials to rule according to the request of the President of the Chamber, such as when deciding on tenders.

The Prosecutor’s document also reveals that the corrupt relationship between the two officials is suspected to have started at some unspecified date prior to August 2017, and that the two typically met in restaurants or on the street next to Völner’s parked car, where the exchange of money also took place.

The Immunity Committee agreed with suspending the Parliamentary immunity of Pál Völner, who remains an MP in the National Assembly. Parliament is expected to vote on the issue on Tuesday.

Last week, the Prosector General asked to lift Pál Völner’s Parliamentary immunity after claiming that he was a suspect in a bribery case they were investigating. The Fidesz politician resigned his post as secretary of state in the Ministry of Justice, but claimed in a statement that he had not committed a crime.

[HVG]

Hadházy: criminal investigation into another “big fish” underway

picture of Ákos Hadházy

Independent MP Ákos Hadházy (pictured) reported a “great disturbance in the force” on social media, referring to his recent correspondence with the Prosecutor General on their current investigations.

After Pál Völner resigned as State Secretary earlier this week when the Prosecutor’s Office requested revoking his Parliamentary immunity, the office now confirmed to Hadházy that an investigation into another “very big fish” was underway.

Prosecutor General Péter Polt told the opposition politician that not only were they investigating a certain public procurement case, but that they already had a suspect.

Since they admitted that National Tax and Customs Administration (NAV) was investigating “budget fraud committed in a business-like and criminal manner, causing significant damages,” Hadházy presumes that the case may be connected to SYS IT Services Kft. and a contract it won at the end of 2019, during the final months of the previous administration of Budapest Mayor István Tarlós.

Hadházy writes that SYS IT Services received a contract for “computer development and operation tasks” for 19 billion Ft. (US $58.8 million) from the Budapest Transportation Company, which it then subcontracted out to 4iG and Magyar Telekom. However, he writes, “the subcontractors did not complete the work, or not completely, but still billed for it at taxpayers’ expense.”

However, 4iG told HVG that they were unaware of any NAV investigation against them, and T-Systems also claimed not to know any information of a case against them.

According to Hadházy, many details still need to be clarified, but this is again a good example of the fact that “a single decent detective or prosecutor who will not let the case slip away is enough to see it through.”

[Magyar Hang][Photo: Ákos Hadházy / Facebook]

Karácsony will give 1 million Ft. of his own money for actual proof of a corrupt tender

picture of Gergely Karácsony

I will give 1 million forints out of my mayoral salary to anyone who can find any trace of abuse of public tenders regarding the use of property in the capital

-announced Budapest Mayor Gergely Karácsony (pictured) on social media to commemorate World Anti-Corruption Day.

To win the money, you have to provide proof that a public tender was clearly anti-competitive or otherwise tailored to a specific applicant. Karácsony said that they had nothing to hide, and that pro-government journalists, ordinary civilians, and even political parties could all give it a shot.

The mayor’s offer stems from accusations in the pro-government press over the past few weeks that the opposition-led Budapest City Council would sell the City Hall building under corrupt circumstances, but the mayor said no such thing had happened. Nevertheless, a committee was set up to investigate the matter at the instigation of government parties in the city council.

The mayor recalled that State Secretary Pál Völner is now facing bribery charges while György Schadl, the President of the Hungarian Judicial Enforcement Office, has been arrested.

Now it’s Fidesz’s turn to set up a Parliamentary commission of inquiry on the matter, but they haven’t done so. However, it could uncover interesting connections in the capital. For example, how did the key figure in the Völner case get a valuable piece of property on City Hall Street from a decision by the Fidesz mayor of the 5th district under unclear circumstances? So we have here an actual City Hall case and a good reason for Fidesz to make a real effort at fact-finding

-said Mayor Karácsony.

“Meanwhile,” he said, “The Russian-style ‘kompromat’ continues – Fidesz oligarchs wanted to snatch City Hall, but we won’t let them have it.”

It shouldn’t only be said on World Anti-Corruption Day, according to the mayor, that:

It is in Hungary’s eminent interest that the elimination of corruption be a condition for the country’s prosperity. And we also have to say what is now quite clear after the Völner case: the eradication of corruption begins here and now by changing the government.”

[Magyar Hang][Photo: Gergely Karácsony / Facebook]

Áder officially accepts Völner’s resignation as State Secretary in corruption affair

picture of Pál Völner

President János Áder has formally accepted the resignation of Pál Völner (pictured) as State Secretary in the Ministry of Justice, in connection with the bribery case against him, reports Index.

I find that, with respect to his resignation, Dr. Pál Völner’s mandate as Secretary of State in the Ministry of Justice is hereby terminated, effective December 8, 2021.

-reads the resolution, which was countersigned by Prime Minister Viktor Orbán.

Pál Völner announced his resignation on Tuesday, December 7, after Péter Polt, the chief prosecutor, recommended that his immunity be suspended due to an ongoing investigation into charges of bribery in an official position and other crimes.

In a statement from his legal representation that day, the Fidesz politician denied committing any crimes and said he had performed his duties as state secretary and ministerial commissioner fairly and in accordance with the law, but accepted the political consequences of the case.

According to the legal case against him, Pál Völner regularly received occasional payments of 2-5 million Ft. (US $6,200-$15,400) from the President of the Hungarian Chamber of Judicial Officers over a long period of time in exchange for accepting cases at the President’s discretion, thereby abusing his supervisory, official, and administrative powers.

Not long after that, Fidesz indicated that it would vote to suspend Pál Völner’s Parliamentary immunity, as the politician would need to clear himself in public.

The Dialogue party proposed convening the Parliamentary Immunity Committee on the matter, and the opposition has called for the resignation of Justice Minister Judit Varga as well.

In addition, HVG claims that the National Defense Service has collected thousands of pages of evidence related to the criminal case against Völner, largely taken from surveillance on him.

[Index, HVG]

Facing bribery charges, Fidesz MP István Boldog resigning to spend more time with family next year

picture of István Boldog

I will not run in the 2022 Parliamentary elections, and will work to ensure that the candidate selected by the Fidesz executive and membership wins the election in the district.

-announced Fidesz MP István Boldog (pictured), who has been charged with bribery and other crimes by the Prosecutor General.

Boldog felt that the time had come to consider his family paramount. He thanked everyone for their support and said he would continue to help all who had worked on his behalf.

At the age of 55, after close to 30 years in politics and 12 years in national politics, I had to make the decision to put my family first, at my family’s request and for their benefit.

-said Boldog in a video posted to Facebook titled “Family is most important,” adding that his family had long been asking him to get out of national politics and find work in the private sector instead. Although he believes he has many supporters, Boldog said his family managed to win him over.

The Fidesz politician expressed pride in being the first politician from the Mezőtúr district to be elected to Parliament three times since the change of regime. Tamás Csányi from Jobbik would have faced off against Boldog in the general election as the candidate for the joint opposition.

At the end of June, István Boldog and eight of his accomplices were indicted for crimes that included accepting bribes in an official position. The Prosecutor’s Office asked the court for a six-year prison sentence and a 5 million Ft. (US $15,500) fine for the Fidesz MP, in addition to a five-year ban on public office and 6.6 million Ft. (US $20,400) of his assets confiscated.

Boldog has steadfastly denied the charges against him and maintained his innocence. In January, he claimed to be the victim of “an ugly political campaign.”

[Telex]

Dialogue calls for immediate Parliamentary action over Völner

picture of Olivio Kocsis-Cake

Opposition party Dialogue has called for the Parliamentary Immunity Committee to convene over the case of Pál Völner, who resigned as State Secretary in the Ministry of Justice on Tuesday.

Olivio Kocsis-Cake, deputy chair of the party (pictured), highlighted in an online press conference on Wednesday that Pál Völner resigned only as deputy minister and state secretary, but not as a Member of Parliament. He stated that Völner could not be prosecuted until his immunity was waived.

If the committee does not meet this week, Parliament’s plenary session next week will not be able to rule on the suspension, and the decision may be delayed for several months due to the Christmas break.

-said the opposition politician.

Kocsis-Cake also thinks that the role of Pál Völner’s superior, Judit Varga, should be examined, since the Minister of Justice “deeply trusted” her former State Secretary. For that matter, criminal proceedings should be investigated “all the way to the Prime Minister, as he was involved, and had known about it for a long time,” claimed Olivio Kocsis-Cake.

On Tuesday, Chief Prosecutor Péter Polt requested waiving Parliamentary immunity for Pál Völner, stemming from an ongoing investigation into accusations of bribery and other crimes against the Fidesz politician.

That same day, Völner released a statement announcing that he would resign as state secretary, although he did not acknowledge any criminal responsibility.

Fidesz later announced in an official statement that it would vote to waive Pál Völner’s immunity.

[Index]

Business owned by family of scandal-plagued Pál Völner worth nearly 1 billion Ft.

picture of Pál Völner

Pál Völner, the Fidesz politician who resigned as State Secretary after an investigation into bribery charges against him by the Prosecutor General’s Office heated up this week (pictured), earns a gross monthly salary of 1.3 million Ft. (US $4,019) as state secretary, and a further 1.2 million Ft. (US $3,710) as a Member of Parliament. In addition, he owns property in Győr and Nyergesújfalu, where he also has a law firm, as well as bank deposits worth 15 million Ft. (US $46,400), reported Népszava.

However, the paper wrote that Völner’s immediate family have far more valuable economic interests, which became profitable following Völner’s appointment as state secretary.

Tagba Kft., a company owned by the politician’s wife and son, is registered as a real estate company. Founded just in 2015, the company very quickly reached turnover of hundreds of millions of forints, while the company’s assets have grown to nearly 1 billion Ft. (US $3.09 million), of which 552 million Ft. (US $1.71 million) are cash.

Völner’s family also has a foothold in the shipping industry, according to Népszava. When Völner was State Secretary for Infrastructure in the Ministry of National Development, the shipping industry was under his portfolio, and his family’s company has also profited since then.

[Magyar Hang]

More Budapest companies and local councils investigated compared to previous mayor’s term

picture of Gergely Karácsony

Since Gergely Karácsony was elected Mayor of Budapest two years ago, the capital’s Procurement Committee (KDB) has launched more than twice as many investigations of companies and district councils than during the term of previous Mayor István Tarlós.

The KDB launched 21 investigations connected with Budapest’s local district councils and contractors during Tarlós’ last year in office, while 42 similar investigations were instigated in Karácsony’s first full year as mayor, according to Népszava.

The newspaper writes that not only have the number of investigations against companies in the capital risen since local council elections were held in 2019, but that the fines levied against them have also increased. Among these have been tens of millions of Forints levied against local Budapest councils for public food tenders, while fines of such magnitude were uncommon under the previous mayor’s term.

Just this year alone, the Budapest Transporation Center (BKK) has had several of its tenders reviewed by the procurement authority, and has been fined tens of millions of Forints for procurement infractions.

[Népszava]

Karácsony prompts investigation on Csillaghegy Árpád mineral spa renovations

Budapest Police are investigating suspected corrupt activity related to the Csillaghegy Árpád mineral spa that apparently involves previous city government leaders. Budapest Mayor Gergely Karácsony posted the official notice of the launch of the investigation on his Facebook page, saying that holding leaders accountable for their actions is “not a communcations trick, but hard legal work.”

Police suspect embezzlement around renovation work on the spa, leading to a significant monetary loss. Karácsony wrote that “it’s the same old story: a ‘friendly’ company undertook renovation work for more money than in the contract, and paid out subcontractors who didn’t do any work at all.”

The Mayor added that his office has reported many crimes in the past two years since assuming office, but that he doesn’t have an easy time at it due to the Hungarian justice system refusing to act on suspicious activities connected with the government. [HVG]