Clear evidence shows that Hungary’s Fidesz abuses EU funds

The small Politics Can Be Different (LMP) green party has decided to air new, concrete information on corruption within Hungary’s governing Fidesz party each week, and the first such example of the misuse of funds was presented on Thursday, complemented by a secret tape recording, as evidence. Ákos Hadházy, a former municipal politician in the town of Szekszárd, left Fidesz in 2013, after he became critical of massive corruption around the redistribution of tobacco concessions amongst party stalwarts. Mr. Hadházy is now behind LMP’s campaign to provide the population with concise, easily-understood weekly updates on examples of corruption within Fidesz…ones that the “average” voter can understand.

Ákos Hadházy. Photo: Lajos Soós.

Ákos Hadházy. Photo: Lajos Soós.

The first such example is from Mr. Hadházy’s hometown and involves a secret tape, made public for the first time on Thursday, in which the city’s Fidesz mayor, Rezső Ács, explained in no uncertain terms the importance of deliberately overestimating the costs associated  with European Union-funded projects. Normally, when local municipalities request EU funding for projects, they are expected to fund at minimum 15% of the costs of the project, while the remaining 85% comes from the European Union. Based on this tape from 2012, leaked by LMP today, Mr. Ács explained to other municipal politicians that by deliberately inflating the costs of a project and by doing this in collusion with contractors and third-party companies, the town could avoid paying a single cent.

This was the approach taken during the construction of a new kindergarten in Szekszárd, in 2012. Mr. Ács delved a little further into the details of the corrupt regime:

“This is how Hungary’s granting process works. [A company] comes down and says that I’ll do the complete project for you, I will win the grant for you, but I will bring everything needed for the project. And if you don’t agree with this, then I will just go on to the next town. Because I have a quota that I can distribute, but if you don’t agree, then I will go over to the neighbouring town. Unfortunately, this is what happens behind closed doors.”

The manner in which EU funded grants are distributed in Hungary is entirely backwards, compared to how a process like this should unfold. Based on Mayor Ács’s account, certain companies (almost certainly those close to the ruling Fidesz party) are effectively given promises of funds, or perhaps the funds themselves upfront, without any application or proposal having been submitted in advance. They then offer municipalities various projects that they could complete, without any input from the “client,” with no tendering and no ability to ask questions or obtain details on how the funds are being spent and invested in the town in question.

Essentially, companies associated with Fidesz control the EU purse strings, make no secret of this fact, and spend this money in rural Hungary as they see fit.

As Mr. Hadházy noted, in 2015, fully 7% of Hungary’s GDP was directly tied to EU subsidies. And these subsidies are being systematically abused, to fill the coffers of companies and clients of the ruling party, with the full collusion of Fidesz politicians.

LMP is doing a service by launching its anti-corruption campaign and by airing concrete instances of corruption each week.

And the EU is doing Hungarian democracy a huge disservice by continuing to fund and prop up the ruling regime.

3 Comments

  1. Avatar Pierre Divenyi says:

    As Balint Magyar’s book title says: “Mafia state.” Unfortunately, the EU has more important and more pressing problems to deal with, like kicking out non-corrupt Greece from the EU and ignoring corrupt Hungary.

  2. Avatar György Lázár says:

    It is disturbing that no significant politician was convicted for corruption in the last 20 years. Romania, Slovakia, Poland… all handed down prison sentences, not Hungary. I have a a problem with Bálint Magyar’s corruption book (Magyar Polip), he and his co-authors blame corruption on Fidesz, yet corruption is not party dependent, there are plenty of corrupt politicians in the opposition parties. I like János Széky’s book and approach Bárányvakság.. it is more credible description of Hungary’s corruption problem…

  3. @György Lázár

    Haven’t read the Bárányvakság yet, but Bálint Magyar is right:
    The Orban mafia state unleashed an entirely new level of corruption in Hungary:
    – It is an institutionalized, legalized robbery on a grand scale: hundreds of billions of forints, up to 45% kickbacks according to an ELTE study. What is corruption in Europe is only a policy for Fidesz, as Lánczy of Százávág put it. There you have it.

    – The Orban corruption is all pervasive above certain levels (in contrast to the Nigerian or Pakistani kind), although petty corruption has always been around.
    There is no public project in Hungary, highly specialized technical like defense or medical equipment excluded, without at least political corruption involved, i.e. improperly awarding otherwise fair conditions contract to client/friends/relatives. Usually it’s much worse – the awarding process, the pricing, the quality and the execution are all corrupt. See Debreceni’s book “Fidesz rabló gazdasága“.
    – A historian stated that the corruption buck in Hungary always stopped at the PM’s office, at least since PM I.Tisza, which makes Orban easily the most corrupt PM in history. The stunning scale and brazenness also hint to different cultural disposition; a world apart from the right’s traditional profile.

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