The family and friends of Hungary’s Prime Minister Orban know all the tricks to enrich themselves with European tax money. A former Habsburg monarchy property that Orban’s father is renovating shows how large their fortune is.
13 hectares of land surround the former Hatvanpuszta estate of Archduke Joseph of Austria, which is located west of Budapest. Built in 1840, it once served the Habsburg monarchy as a model for the development of agriculture. In recent years, it has become a symbol in the Hungarian media for the wealth of Prime Minister Viktor Orban’s circle of family and friends. The property was bought by Orban’s father Gyözö in 2010 and rented by Orban’s childhood friend Lőrinc Mészáros until 2020.
Ákos Hadházy flew over the estate several times to record videos of Orban’s father renovating the property. Hadházy was a member of Orban’s ruling party Fidesz until 2013. He now sits as a non-party opposition politician in the Hungarian parliament, where he uncovers corruption scandals. “Although Orban’s childhood friend transferred 15.5 million forints (approx. 40,000 euros, editor’s note) to his father every year for the property, not much happened there for ten years,” says Hadházy in an interview with ntv.de. The conversion of Hatvanpuszta into a luxurious villa complex, which is now almost complete, only began in 2020. Hadházy suspects that “Mészáros paid Orban’s father’s salary.”
The two have had business relationships with each other for a long time, emphasizes Hadházy. Gyözö Orban owns quarries in Hungary. Mészáros works, among other things, in the construction industry. “Mészáros is given public construction contracts in Hungary, and he buys the stones for them from Orban’s father for a lot of money,” said Hadházy.
Orban’s childhood friend benefited “massively from EU funds”
Mészáros was once a small business owner and gas fitter, but he has now built a business empire with which, according to the US business magazine “Forbes”, he has made a fortune of 1.3 billion euros. He is the richest man in Hungary. When Mészáros was asked in an interview with the Hungarian weekly Heti Válasz what the secret of his success was, he replied that “God, luck and Viktor Orbán himself” contributed to it.
In fact, Orban’s government helped Mészáros’ luck. “The Mészáros construction companies, for which public contracts were tailored, benefited massively from EU funds in building, road and railway construction,” says Miklós Ligeti, legal chairman of Transparency International Hungary, in an interview with ntv.de. Although not all of the projects were co-financed by EU funds, these subsidies and thus also “German tax money played a very important role” in Mészáros’ profits, he adds.
Due to rampant corruption and the dismantling of the rule of law in Hungary, the EU has already frozen funds. It contains Corona aid amounting to 5.8 billion euros and 6.3 billion euros in structural aid to Budapest. Funds from the EU budget were also cut in December last year, a further 6.3 billion. But the flow of money has not yet completely dried up. Hungary received 1.9 billion euros for agriculture last year alone.
Oligarchs hardly face any penalties
In this context, Orban’s childhood friend’s funding for construction contracts was canceled, says Ligeti. But he also works in banking, the telecommunications industry and agriculture. “Mészáros and other oligarchs are owners of cultivated land and are therefore still the biggest beneficiaries of the remaining EU subsidies,” said Ligeti.
The European Parliament is aware that funding continues to trickle away through corrupt channels. “We know about the trickery in the agricultural sector, where state land was given to Orban’s close confidants, who then received subsidies,” says Green EU MP Daniel Freund in an interview with ntv.de. The Commission is now targeting, among other things, the Hungarian government’s tendering practices. She criticizes the fact that only one offer is often submitted for public contracts in Hungary. That’s why she asked Budapest to correct the grievances. The number of cases in which two offers ended up on the table is now increasing. However, these are “fake offers,” says Freund, “because one comes from Orban’s son-in-law, for example, and the other from his childhood friend.”
According to Transparency International’s Black Book, the Hungarian government also cheats when it comes to the budget for public tenders, as it often budgets more money than it actually needs. In addition, non-transparent organizations are being founded in many areas that refuse to provide public information in order to provide tax money to oligarchs. These oligarchs, in turn, hardly have to expect any punishment because Orban has brought the country’s judges and prosecutors under his control in his campaign against the rule of law. The police also usually stop investigating in these cases.
Orban’s son-in-law cheated on subsidies for street lights
An example of this fraud is the corruption scandal surrounding the Elios company, which belonged to Orban’s son-in-law István Tiborcz. He became known through a report by the EU anti-corruption agency OLAF, which was leaked on the Hungarian news portal “24.hu”. The company provided street lighting to dozens of communities between 2009 and 2014, with OLAF accusing it of manipulating public contracts. The majority of the projects were financed with EU funds.
The authority identified serious irregularities in all 35 tenders for street lighting that came from municipalities with mayors from Orban’s ruling party Fidesz. They were therefore tailored to Tiborcz’s company. In addition, profitability calculations for the lifespan of the LED lamps are said to have been manipulated, as the Elios offer would otherwise not have met the tender criteria.
After complaints from opposition politicians, the Hungarian police initiated an investigation in 2016, but stopped it shortly afterwards. Finally, Tiborcz was able to sell his shares in Elios with impunity.
“Orban’s gang of robbers” is buying up entire industries
However, the trickery in public tenders was only the first phase in building a corrupt oligarchy in Hungary, says Freund. “With the money that Orban’s gang of robbers stole in this way, they are now buying up one industry after another,” he says. Foreign companies have been accusing the Hungarian government of trying to force them out of the market using corrupt methods for some time, and German companies are also affected by the harassment. There is a kind of “script” that Orban’s government adheres to in order to exert pressure, according to the Eastern Committee of the German Economy in an interview with ntv.de.
In a first step, special taxes were levied, which ensured that the companies were in the red. Subsequently, Hungarian authorities refused permits that companies needed for their work. Finally, arbitrary regulations are issued that make work processes more difficult. At the end of the process there is a takeover offer from consortia or business people close to the government.
“Deceiving, tricking and camouflage are part of the government’s repertoire”
The European Parliament’s Budget Committee condemned these practices in a recent report in which it recorded its impressions during a visit to Hungary in May this year. It says that economic actors in sectors that are supposed to be in the hands of the oligarchs are being forced out of the market by arbitrary laws tailored to them. A number of entrepreneurs even complained about open intimidation. All of this violates the rules of the EU internal market.
The report also attests to improvements by Orban’s government. He positively highlights the creation of a new integrity office to combat corruption and increased cooperation between Hungarian authorities and OLAF.
Monika Hohlmeier, chairwoman of the budget committee, is nevertheless skeptical. “At times I have the impression that the Orban government, in conjunction with the Orban or government-affiliated oligarchs, has already incorporated the state so deeply that the classic small-scale corruption is less noticeable than the almost expropriation-like machinations in industries that Orban and him and “We see people close to Fidesz as essential to maintaining power,” said Hohlmeier. She wants to wait and see whether the new integrity office can remedy this. In any case, it hasn’t delivered any results yet. After years of false promises, their expectations are vanishingly low. “Deceiving, tricking and camouflage are part of the repertoire of the Hungarian government and its boss,” said the CSU politician.