Today an intriguing article by Miklós Hargitai appeared in Népszava titled “Tightening noose—The Microsoft scandal reaches the Orbán family.”
I’m certain that relatively few people have ever heard of this scandal, which became known to the public only last December. High officials of Microsoft’s Hungarian subsidiary were found to be have engaged in unethical business practices and, as a result, they lost their jobs sometime during the summer of 2017. In December Microsoft took an even more drastic step. It cancelled its working relationship with three of its “large account resellers.”
The likely reason for this extreme measure was the hiring of one of the officials Microsoft had fired a few months earlier by the prime minister’s office. Since Microsoft is the exclusive supplier of software to the entire government apparatus, the suspected corruption case most likely involved the government. As I said at the time, this man’s hiring as the ministerial commissioner entrusted with the supervision of all domestic and EU projects “must have been the last straw for Microsoft.”
This much we knew already last December, but now Népszava claims that Microsoft Hungary’s parent company is under incredible pressure by the U.S. Department of Justice because of its breach of the standards of business conduct and ethical rules. Microsoft is readily cooperating with the authorities, which means that it has most likely revealed all of the information at its disposal regarding the details of the Hungarian corruption case. And, unfortunately for Viktor Orbán, it looks as if his son-in-law István Tiborcz is implicated in the Microsoft scandal.
After it became known that the European Commission’s Anti-Fraud Office was investigating possible corruption at István Tiborcz’s street lighting company, the young man abruptly sold the company. He was looking for a business where he could not be accused of getting involved with government procurements. After a while the newspapers were full of his real estate ventures. Almost nobody paid attention to a company he had purchased in March 2014, HCS Experts Kft. In 2016 Direkt36 wrote an investigative piece on this small company, which had been established in 2011. It was basically a communication consulting firm. A year after Tiborcz bought the firm the company’s revenues were up tenfold, to almost half a billion forints. All of the profits for that year, nearly 400 million forints, were taken out as dividends. Despite its great success, HCS Experts’ office is described as being staffed by very few people, mostly secretaries.
We know relatively little about the business activities of HCS Experts Kft. An earlier article by Népszava described it as a company engaged in “somewhat mysterious business activities.” Opposition politicians certainly suspected Tiborcz’s business of once again having some kind of illicit and/or unethical connection with the government. In February 2016 Szabolcs Szabó, an independent member of parliament, asked János Lázár in writing about any government procurements of HCS Experts. Lázár most likely truthfully answered that there was no direct business relation between Tiborcz’s firm and the government. And yet, the incredible rise in revenues was more than suspicious to outsiders.
The nature and extent of the corruption charges have not yet been fully revealed. At the moment the talk is about “overpricing” or the state purchase of unnecessary software. I doubt that this is the full extent of the crimes allegedly committed, however, because the claim that is circulating at the moment is that the Hungarian case is even more serious than the Romanian one ever was. At least this is the word Népszava received from Microsoft auditors. That would be very serious indeed because in Romania large bribes were paid to members of the Romanian government in exchange for their approving increased license fees for Microsoft products. According to information received, in addition to the Justice Department, the FBI and the Security and Exchange Commission are also involved. Ordinary overpricing wouldn’t need such an army of heavyweights.
On the exact role of István Tiborcz and his brother Péter, who is actually running HCS Experts Kft., the Hungarian sources are extremely vague. My suspicion is that the journalists have more information than they are willing to share with the public. Hargitai of Népszava talked about “the informal but key role” the Tiborcz brothers played in the development of the government’s information technology, financed by the European Union. It seems impossible to escape the conclusion that Viktor Orbán, who was naturally aware of the administration’s plans to upgrade the information technology of all government offices and state companies, suggested to his son-in-law that he buy a company in that business sector.
According to the Hungarian sources, the Tiborcz brothers “had an influence” on Microsoft Hungary’s decision about which “large account resellers” it would use. That could be done, in my opinion, in only one way: through collusion between the Tiborczes and István Papp, CEO of Microsoft Hungary between 2011 and 2015, and Viktor Sagyibó, who was in charge of all sales of Microsoft products to the government. These were the two people who were sacked in 2017. It is likely that some of the money from the overpriced products ended up in the pockets of the two Microsoft employees and the Tiborczes.
As far as I can see, the Tiborcz brothers were not direct parties to these transactions. Instead, they arranged the deals between the corrupt officials and the corrupt owners of the “large account resellers.” I assume, however, that more details of this sordid story will be made public in time. One thing is sure. Viktor Orbán found the perfect person to marry his daughter. All in the family.