Scandal after scandal in Fidesz circles. Following on the heels of the revelations about the alleged bribery case involving Roland Mengyi, here is a new one. This time a much more important person is being implicated: the #3 man in the Fidesz hierarchy, Antal Rogán. The propaganda minister’s “financial affairs” are far too numerous and, although he is currently being shielded by his benefactor and boss, Prime Minister Viktor Orbán, and Chief Prosecutor Péter Polt, I wonder how long he can remain in his post without inflicting serious political damage on the Orbán government.
I have often complained about the incomprehensibility of Hungarian investigative journalism when the case under scrutiny has something to do with business. This latest scandal, Antal Rogán’s involvement with Hunguard, is a case in point. Admittedly, the corporate structures some Hungarian entrepreneurs come up with are byzantine by design.
Hunguard Kft., an information technology company, is not new. It was established in 1990 by four mathematicians. It was in the news a lot during the summer of 2014 in connection with the infamous utility rate reduction program. In conjunction with this program, the invoices of every utility company had to be audited by a professional auditor to ascertain that the bills the customers received were calculated accurately. That requirement was suspect from the first, but further amendments raised the suspicion that certain people in the government wanted to guarantee that only Hunguard Kft. could have the job. For some bizarre reason the company entrusted with this task had to have national security clearance. Behold, among the three or four companies that could have been in contention for the contract only Hunguard had the requisite clearance.
A year later Népszabadság reported that Hunguard most likely did exceedingly well with its auditing of 67 different utility companies with an estimated combined earnings of one billion forints. Interestingly enough, all the utility companies passed with flying colors, which only strengthened the suspicion that the audit was superfluous in the first place. It was also more than suspicious that while in the original bill auditors had to rotate yearly, Szilárd Németh, the politician in charge of the propaganda campaign, took this provision out of the final version of the bill.
So, from the very beginning it was clear that Hunguard’s fortunes were closely tied to certain leading members of Fidesz. They even included János Lázár, who when one of Hunguard’s competitors managed to get national security clearance eliminated that particular requirement and introduced something called “telephely-biztonsági engedély,” which I believe is a permit the company gives to those who can safely enter its premises. This was a simple solution to keep Hunguard as the only auditor of state utility companies. They would give permission to Hunguard, not to its competitors. Easy.
This was all we knew about Hunguard Kft. until yesterday when Népszabadság, after doing some further research, returned to the topic. Their research led them to Cyprus where, after paying a fee, they received details about the business activities of Hunguard. And here things become complicated, but I will cut to the chase. The owners of Hunguard Kft. wanted to be certain that their ownership was well hidden, so they engaged the services of the Kinanis Fiduciaries Ltd. in Malta, described by a Hungarian lawyer specializing in international business activities as a well-known “bizalmi vagyonkezelő” or a kind of trustee who for a certain fee becomes the owner of the company on paper. Behind the deal is a secret legal agreement which allows only the true owners to make business decisions. The graph below shows the more complicated structure of the arrangement.
Népszabadság notes that only the bank handling the two owners’ finances and the lawyer who represents them vis-à-vis the “trustee” in Malta know the identity of the real owners. And here is the clue. The lawyer in this case is Katalin Karafiát’s law firm, which has for years been in a close business relation with Antal Rogán. Népszabadság was told by people familiar with the business activities of Hunguard that the man behind the whole complicated business structure “is none other than the Fidesz leader who has been much attacked lately for shady business activities.” He is described by the paper as “a master at operating such company networks.” Well, I guess it is not terribly difficult to figure out whom the paper’s informers have in mind.
At this point a commenter to Népszabadság’s August 9th article came to the paper’s help with another clue. The commenter, who wittily called himself “nokiás kamion” (Nokia truck), called attention to something he found on the internet: a patent was registered for “the method of digitally signing an electronic file, and authenticating method.” The inventors were listed as “Balázs Csík, Csaba Lengyel, and Antal Rogán.”
There are several oddities regarding this patent. The original, which was registered at the World Intellectual Property Organization with headquarters in Geneva, listed the three men as the inventors. But when it came to the registration in the Hungarian patent office (Szellemi Tulajdon Nemzeti Hivatala) the trio didn’t want to be called “inventors” (feltalálók) but only “jogosultak,” i.e. someone who holds the rights. Népszabadság correctly points out that inventors are normally proud of their invention and rarely hide their role in creating a new product. Perhaps Rogán’s presence among the inventors had something to do with their modesty.
In February the three owners of the patent sold their rights to MobilSign Kft., which now markets the product “MobilSign” as “a system capable of recording the dynamics of a handwritten signature, it produces the advanced electronic signature and assigns it to PDF documents.” Until December MobilSign Kft. was owned by Balázs Csík and Csaba Lengyel. Now the owner is someone called Petra Pozsgai.
Once discovered, Rogán with a straight face claimed that he had an active role in the invention of this electronic signature which, let’s face it, is most unlikely. Rogán has a degree in economics and has no information technology experience. Moreover, he is one of the busiest Fidesz politicians around. He couldn’t possibly have spent three years developing a software program, as he claims, even if he knew something about programming.
The most plausible conclusion one can draw is that Csík and Lengyel paid off Rogán for his good offices over the years by forking over a third of the profits from their invention.