Today I will report on two corruption cases. The first is Microsoft Hungary, which was widely covered in the international press. The second is a strictly domestic affair, which involves a Fidesz member of parliament.
On August 24 The Wall Street Journal published an article about a U.S. Justice Department investigation of Microsoft over “potential bribery and corruption related to software sales in Hungary. The investigation is being carried out under the U.S. Foreign Corrupt Practices Act, a law that prohibits businesses from paying bribes to officials in corrupt governments in order to conduct business in those countries.” According to The Wall Street Journal, yearly about $30 million worth of software was sold through intermediaries to the Hungarian government, “sometimes at discounts that could run as high as 30%,” with the permission of “rogue Hungarian employees” of the firm. These discounts were not passed on to the government agencies but most likely landed in the bank accounts of the middlemen.
Without going into the details, the U.S. Justice Department seems to have a pretty strong case, and in Hungary investigative journalists uncovered key details about the characters involved on the Hungarian side. It seems that sometime after the CEO of Microsoft had a meeting with Viktor Orbán, István Tiborcz, the prime minister’s son-in-law, established a company that might have been the conduit between the favored Hungarian “large account sellers” and the Hungarian managers of Microsoft Hungary. So, if a serious investigation were conducted, both the prime minister and his son-in-law might be implicated.
Well, such a calamity couldn’t happen in Hungary. On October 3 Attila Mesterházy, a MSZP member of parliament, demanded a written answer from Chief Prosecutor Péter Polt on the status of the investigation of the Microsoft case. According to the answer that became public yesterday, a complaint arrived at the prosecutor’s office, but “in the absence of suspicion of a criminal offense” the case was dismissed on April 24 of this year.
The second case, involving György Simonka, a Fidesz member of parliament, is more complicated since it goes back years and is, as with all these Hungarian corruption cases, intentionally hard to unravel.
György Simonka’s educational attainment might be modest, but when it comes to tricky business deals he is a winner. Or, at least with lots of help from Fidesz, he was until now. He started off as an electrician and then pursued “intermediate commercial and agricultural studies.” I have no idea what that is. It seems that he tried his luck abroad (he allegedly speaks Russian, Romanian, and Slovak), but after not succeeding, he returned to Hungary. As Simonka wrote about himself, in the third person: “After gaining experience abroad, he became an entrepreneur who provides opportunities to his village and the whole region.” As we will see, he also provided for himself, embezzling at least 1.4 billion forints from mostly EU funds.
Simonka is known to be an absolutely silent member of parliament, although he has been seated ever since 2010. On the other hand, when it comes to primitive homophobic Facebook comments, he doesn’t hold back. After the Budapest Pride march he expressed his strong belief that “the majority of these faggots are not Hungarians. They come here from abroad to provoke. One shouldn’t just let that go.” The comment soon vanished; it is hard to know whether Facebook removed it or whether Simonka thought the better of it and deleted it.
And now to the case that, after so many years, is finally being prosecuted. Péter Polt, the chief prosecutor, initiated the withdrawal of György Simonka’s immunity in a statement addressed to the president of the parliament, László Kövér. Simonka is charged with “fraud committed in the framework of a criminal organization, creating substantial loss to the national budget.” Actually, most of the stolen money came from the European Agricultural Guarantee Fund, which consumes a large portion of the general budget of the European Union. In 2009 the eagle-eyed Simonka discovered that large amounts of money would soon be available, and he worked out a scheme by which a group of like-minded people in a coordinated fashion would use free EU and state subsidies illegally.
According to the spokesman of the prosecutor’s office, the amount of money Simonka has pocketed over the years is 1.4 billion forints. However, Tamás Bod, a journalist who has been on Simonka’s trail for years, claims that this number is far too low because it doesn’t include his hidden assets. Bod’s guess is that his private fund is close to 2 billion forints.
I have neither time nor space to detail how the fraud was committed, but in general the members of the group reported false values for land on which they made very few improvements and they overcharged for everything that was billed to the EU funds. The privileged “businessmen” Simonka favored with “his” grants had to pay their dues by passing on 49% of the free money to him. Tamás Bod, who learned about the dirty scheme years ago but whose articles didn’t make the slightest difference as far as an investigation of the case was concerned, said today that the only thing that surprised him was how large a payment Simonka demanded from his men.
This melon tasting cost the European Union €68,302
Simonka’s case has been in the media since at least 2016, but the prosecutor’s office was not in any hurry to pursue it. Besides Tamás Bod, Ákos Hadházy, former LMP co-chair and now an independent member of parliament, often reported on Simonka’s suspicious business affairs on his weekly “Corruption Infos,” but no one cared. Now Hadházy thinks that the prosecutors wasted a lot of time, which may have been intentional. “This man should have been arrested years ago, but (1) [the prosecutors] left him plenty of time to cover his tracks and (2) once it became clear that this was not possible, they waited until after the election.”
I perfectly understand the reasons for postponing the investigation until Simonka manages to hide his money and his activities, but I don’t quite understand Hadházy’s second point about the election. If it was clear before the election that no cover-up was possible and that sooner or later the case would become public, why did Orbán allow Simonka to run again? Such a strategy makes no sense to me.
Instead, I propose that the decision to move against Simonka has nothing to do with either a cover-up that failed to materialize or the election. I suspect that Viktor Orbán came to the conclusion that, after so many failures of the Hungarian prosecutor’s office to investigate serious fraud cases, he must finally show the European Union that Hungarian prosecutors do their job. Therefore, he was ready to sacrifice Simonka. Because, let’s face it, Polt and his associates did nothing for years and easily could have continued to do nothing forever, if they had so wished. There have been hundreds of cases like Simonka’s, and usually nothing happens.
Although we don’t know the real reasons for the sudden activity on the part of Polt’s office, most likely it has something to do with EU-Hungarian relations. I heard one hypothesis that might explain the sudden hustle and bustle at the prosecutor’s office. Ákos Hadházy, as I mentioned briefly earlier, began a nationwide campaign to collect one million signatures demanding that the Orbán government join those 23 member states that have already agreed to allow the European Public Prosecutor’s Office (EPPO) to have jurisdiction in their countries. The EPPO will have the competence to investigate, prosecute, and bring to judgment crimes against the EU budget, such as fraud, corruption or serious cross-border VAT fraud. Hadházy’s campaign is an ambitious undertaking, but I read just today that the drive is going surprisingly well. The campaign started only about a week ago and he has already collected 100,000 signatures. It is possible, goes the speculation, that Orbán wants to show that such outside “interference” in Hungarian affairs is totally unnecessary. Péter Polt’s outstanding prosecutor’s office does its job. This hypothesis sounds plausible to me.