How the European Union enriched the Orbán family

Close observers of Hungarian politics are not surprised to learn that Prime Minister Viktor Orbán, a vociferous critic of Brussels at home, uses the European Union as a “cash register.” Any Hungarian entrepreneur would also know that winning major EU-funded contracts is a privilege reserved for a small circle of oligarchs close to the ruling Fidesz party’s inner circle and, it appears, to the Orbán family specifically. As The Guardian notes, Hungary is one of the largest recipients of EU funds, with plans to release €25 billion in new development aid before 2021. Ingeborg Grässle, who chairs the European Parliament’s budget control committee, found that fully 36% of EU-funded public contracts in Hungary had only one bidder. This particular problem exists not only in Hungary, but also in Poland and Croatia.

Far more critical for Hungary, however, is a damning report by the European Anti-Fraud Office. The OLAF report found that a company linked to Prime Minister Viktor Orbán’s son-in-law, István Tiborcz, received €40 million in EU funds to upgrade public lighting in Hungarian towns, despite the fact that the firm, Elios Innovativ, and Mr. Tiborcz had little experience in the field. Additionally, some of the products used by this firm exceeded market rates by 50%. Mr. Tiborcz is no longer a shareholder in Elios, having sold off his shares before the European Anti-Fraud Office commenced its investigations.

The OLAF report found that Mr. Tiborcz’s firm had an unfair advantage when submitting its bid, including obtaining confidential information and a bid process that was tailor-made for his company.

Seven companies, mainly serving as consultants, are implicated in the corruption scandal. For instance, Sistrade Kft assisted municipal governments ahead of the public lighting projects by producing studies and reports. Sistrade’s owner, Endre Hamar, was also linked to Elios, resulting in a conflict of interest.

Mr. Hamar also had an interest in a firm called Eupro Projektmenedzsment Kft., which provided project management services, with Mr. Hamar serving as owner in this firm as well as Elios between 2013 and 2014. His business partner in Eupro, Péter György Kárpáti, is linked to János Lázár, Minister of the Prime Minister’s Office. Mr. Hamar, who is at the centre of the controversy, remains Mr. Tiborcz’s business partner, particularly in luxury real estate ownership and management.

As some of our readers will know, the 31 year old Mr. Tiborcz has a stake in a company called Longoria Holding Zrt., which owns real estate in Visegrád and a building that will be turned into a luxury hotel in Budapest. In 2015, a company linked to Mr. Tiborcz also purchased a castle in the town of Tura, once owned by Baron Zsigmond Schossberger and built in 1883. After the 200 million forint purchase, the castle–previously open for public tours–was closed and a number of trees were cut out from the gardens, despite a decision from the municipality in 2009, declaring the park protected.

Mr. Tiborcz married Mr. Orbán’s eldest daughter, Ráhel, in 2013 and their first child, Aliz, was born in 2016. Today, the 31 year old man is among the wealthiest and most influential people in Hungary.

Mr. Tiborcz pours Mr. Orbán some pálinka.

According to the OLAF report, businessmen and politicians directly connected to Prime Minister Orbán, namely Mr. Tiborcz, Lőrinc Mészáros, Árpád Habony and Lajos Simicska, won a staggering 2,5 billion euros worth of European Union and nationally-funded public projects in Hungary between 2010 and 2016. In some cases, particularly in that connected to Mr. Tiborcz’s firm, it appears that businessmen in Mr. Orbán’s inner circle, as well as Minister János Lázár, knew about upcoming publicly-funded projects and tenders years before they were even published, and ensured that these passed into the hands of Mr. Orbán’s son-in-law.

On Monday morning, Politico’s European edition wrote about how the Orbán family is “splashed with cash.” Politico notes that Mr. Orbán’s brother, Győző Jr., just won its third EU-funded project in the last two years.

Despite the fact that one month ago the OLAF report has noted a series of irregularities and conflicts of interest implicating companies tied to Mr. Orbán’s son-in-law, Hungary’s Chief Prosecutor, Péter Polt–a former Fidesz politician–has thus far failed to launch any kind of investigation. Member of the European Parliament Benedek Jávor has called on Hungarian President János Áder to fire Mr. Polt for repeatedly failing to investigate or lay charges in any suspicious matters linked to Prime Minister Orbán.

The Hungarian Socialist Party – Párbeszéd alliance is calling for a parliamentary committee to be struck to investigate the Elios case and to determine Prime Minister Orbán’s personal culpability. Gergely Karácsony remarked on Monday that there are clear signs the Elios scandal is an example of organized criminal activity, in which the immediate Orbán family is implicated.

“It is clear that the prosecutor’s office did not fight crime, but enabled it,” added Mr. Karácsony.

MSZP-P needs to find forty MPs to establish a parliamentary committee on Mr. Orbán’s culpability in the Elios scandal and the party is presently reaching out to other opposition groups.

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