A new year, a new example of systemic corruption in Hungary?

One of the defining features of Hungary’s Orbán regime is the systemic and wanton corruption. The new year brings yet another example of what appears to be brazen turpitude when it comes to how state funds are used on a massive scale to reward those close and loyal to the ruling Fidesz party.

István Garancsi, a close friend of Prime Minister Viktor Orbán and the owner of the Videoton soccer team, recently purchased the company that owns the Kopaszi dam, a narrow peninsula located in the south-end of Buda, which was once a neglected area, but today is a popular public park, with restaurants and entertainment venues. As is the usual routine in these types of transactions, a firm closely aligned with Mr. Garancsi, called Market Asset Management Kft, as well as another firm called River Dunainvest Kft, are what ended up acquiring the incorporation that owns the Kopaszi dam. The state-owned Eximbank provided a 16.5 billion forint loan for the business transaction.

István Garancsi (right) with Prime Minister Viktor Orbán at a Videoton soccer competition in Székesfehérvár.

István Garancsi (right) with Prime Minister Viktor Orbán at a Videoton soccer competition in Székesfehérvár.

What is especially odd, is the fact that Eximbank’s mandate is first and foremost to support Hungarian companies in their export ventures, and not to provide loans for real estate purchases in Hungary. But this is not the first time that Eximbank provides major financing to individuals who are within the prime minister’s inner circle and who are requesting a loan for ventures that have absolutely nothing to do with export activities. For instance, Hungarian pro-government filmmaker and businessman Andy Vajna obtained 6.7 billion forints to purchase TV2, one of Hungary’s main privately-owned television channels, focused on light entertainment and widely seen as the main rival to the German-owned RTL Klub.

Mr. Vajna’s purchase of TV2, however, has turned into a dark parody of just how inbred the Orbán regime can be. There has been an on-going battle between two Fidesz oligarchs – Mr. Vajna and media mogul Lajos Simicska, who was Mr. Orbán’s roommate in college and close friend for decades, but had a nasty and public falling out in 2015 – over who has actually purchased TV2. Mr. Simicska’s circle claims to own TV2, as a company affiliated with him, called Megapolis Media Zrt., apparently had an agreement years ago, in which it would have the right to purchase the channel, should it ever go up for sale, at a previously agreed-upon price. As such, Megapolis Media claims to have de facto purchased TV2’s parent company, TV2 Media Group Holdings Kft, back in October 2015. Meanwhile on Sunday, Mr. Vajna declared yet again that his firm is the rightful owner of the television station and he has already confirmed that Dirk Gerkens will be TV2’s director under the new ownership. Mr. Gerkens was previously the executive director at the rival RTL Klub station.

The Orbán government’s preferred oligarch is effectively in a legal battle with the oligarch who fell out of favour with the regime, over the country’s second most popular commercial television station. And taxpayer funds are involved.

Millions of euros in Hungarian public funds are being used to finance shady, convoluted transactions among those closest to the regime and in this case, transactions which will end up bogged down in court for months, and possibly years.


  1. Avatar András B. Göllner says:

    The corrupt, mafia-state in Hungary shows no signs of diminishing, nor is the acquiescence and support of that state by some of Canada’s leading businessmen and women. IT’s refreshing to see articles like the above, that remind us of the true state of affairs in Hungary. If only more Canadian opinion leaders would have the courage and backbone to speak up, to state openly, and loudly, that this is not the kind of governance that Canada, and the north-Atlantic community should be applauding. This is not the type of regime the heroes of 1956 wanted.

  2. Avatar Pierre Divenyi says:

    Great article, Christopher! I wish it appeared in one of the few remaining worthwhile papers in the U.S….

  3. Avatar David Robert Evans says:

    Excellent article and exactly the kind of thing someone outside Hungary needs to understand what is going on: a succint piece on cleptocracy, which is the essence of the system in Hungary today, rather than another prolonged piece about ideology, which is all too often its smokescreen. Look around Budapest today (say at Szell Kalman Square or Nyugati Square) and the renovation work done largely with EU cash and you can see this at work: there’s no ideology to it except the ideology of submitting the most minimal job while allowing cronies to swallow the rest of the cash. It didn’t start with Fidesz, but Fidesz have shoved it through a paradigm shift in terms of its temerity and scope.

  4. Repeat a message often enough and it becomes the truth. At least, it seems that it is what the Hungarian left is hoping for.

    Fact: According to transparency international, Hungary was ranked 47’th last year in terms of corruption. In 2010, when Fidesz took over, it was ranked 50’th. So, in fact, there is a marginal improvement, yet for the past five years, the Hungarian left has been busy dragging Hungary’s reputation through the mud.

  5. What a pile of bull! The author of the article says that Hungary is corrupt. And we should take it on faith.

    In reality the life of Hungarians, that was ruined earlier by the left in 8 short years, have improved tremendously, the government had paid off the most debilitating debts, spent huge amounts of money to bail out those borrowers, who got trapped because of the previous leftist government, gave unheard of generous support and help to families, underpaid teachers, etc. and in turn enjoys the support of the WAST MAJORITY of the population.

    Such a success doesn’t come by accident. Since the left has dropped out of governance, the corruption and stealing stopped, the country is able to pay for all these social programs.

    Because this the left has lost all credibility, it is in a total disarray – to the dismay of Mr. Soros -, and will never again regain the trust of the people.

    This smarta$$ “analysis” doesn’t worth of the value of the paper it was printed on (which is not much being on the paperless internet). It has nothing to do with the realities. It is wishful thinking and hope against all odds to ever get back in power (and continue stealing where they left off).

  6. Zoli – 47th is nothing to be proud of. Just to say ‘we are not as corrupt as the left’ is not really an answer.
    Hedy – ‘unheard of generous support and help to families, underpaid teachers, etc.’ is not factual and even if it were it does not excuse the corrupt use of state funds for cronies.

  7. Liar.

  8. Avatar András B. Göllner says:

    For the trolls above, especially Zoli, here are the true figures:

    According to Transparency International’s 2015 study (Lobbying in Europe: 2015) Hungary is the most corrupt country among 19 European countries surveyed. It gained this status AFTER Orbán came to power, not by accident, as the authors point out but by a series of conscious, strategic policy initiatives.

    Here is another figure: The Organized Crime and Corruption Reporting Project (OCCRP) declared Russian President Vladimir Putin the world’s most corrupt politician in 2014. The organization also named Hungarian Prime Minister Viktor Orbán and Montenegrin Prime Minister Milo Djukanovic first and second runners-up.

    I guess the authors of these reports are all anti-Hungarian Jews or Liberals, huh ?????

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