Former state secretary Vilmos Vályi-Nagy has spoken about government meetings held to resolve “problematic cases”, the increase in the purchase price of telecommunications company Antenna Hungária and what he described as massively overpriced state IT procurements in the second part of his interview with Partizán, published on Friday evening.

Vályi-Nagy, who served as a state secretary in the Orbán government between 2010 and 2014, was introduced in the programme as one of the important sources for investigative journalists over the past decade.

He said that meetings were held at Parliament every Monday morning, attended by the then prime minister and state secretaries, where “problematic cases” were dealt with and decisions considered important for the functioning of the economy were made.

According to Vályi-Nagy, the tenders for public lighting in municipalities were among the issues discussed. He said Elios, a company that became closely associated with the business interests of Orbán’s son-in-law, István Tiborcz, regularly won such tenders, while János Lázár was responsible for ensuring that the cases moved forward.

He added that problems arising in connection with the projects were dealt with immediately.

Read more about the interview: How former PM Orbán’s ex-secretary informed media about the shady businesses and was threatened with his kids

‘The proportion of bad projects started to increase’

Vályi-Nagy said that, over time, an increasing number of projects came before the meetings that he considered professionally unsound and financially loss-making for the state.

“More and more cases came up that were totally unprofessional and completely loss-making, and apart from the company implementing the project doing extremely well out of it, they were nothing but a burden and a liability on the back of the Hungarian state,” he said.

He added that the balance had gradually changed, with the proportion of bad projects increasing while the share of good projects declined.

As an example, he cited a government data centre planned for Göd, saying the state had spent HUF 15 billion on the project even though, apart from a concrete structure, nothing was ultimately completed.

Vályi-Nagy described the case as “outright theft”, adding that no one had been held responsible, no investigation had been launched and no criminal complaint had been filed.

Antenna Hungária: ‘I froze’

The former state secretary also recalled negotiations over the state’s repurchase of Antenna Hungária, which had been privatised during the premiership of Ferenc Gyurcsány.

He said that, in the early 2010s, negotiations with the foreign owner had brought the proposed purchase price down from HUF 61–62 billion to HUF 48 billion.

However, when he informed Viktor Orbán about the deal, the prime minister allegedly told him that the lower price was not acceptable and that the purchase price should instead be HUF 53 billion.

“So we had to modify the price backwards,” Vályi-Nagy said. “I froze, because anyone would have frozen in that situation. On the one hand, I did not understand it, but on the other hand, I very much understood what this story might be about,” he added.

State IT procurement became increasingly centralised

Vályi-Nagy also discussed the way the state organised IT procurement, claiming that IT purchases were concentrated among a handful of companies while contract signing was tied to a single ministry. He said the system became so centralised that operational and organisational problems were prevented from reaching the highest levels of government.

According to Vályi-Nagy, a contract for the e-ingatlan system was signed around 2016, but the system has still not worked properly, or has only functioned partially.

He also claimed that the value of active contracts connected to digital citizenship had exceeded HUF 100 billion, despite the system being capable, in his view, of being developed for one-tenth of that amount at a higher professional standard.

The former state secretary said the number of such contracts continued to grow, while in many cases private-sector companies effectively decided what developments the state would carry out.

He described this as “quite incredible”.

From around 2016–2017, he said, there was always someone who effectively took control of the market and decided which companies could enter framework agreements and which could not.

“You can get into this framework agreement, you will be the consortium leader, and you — get out of here,” he recalled the approach as being.

‘Everyone was stealing from everyone’

Vályi-Nagy described the system as a hybrid structure in which even the ultimate owners behind businesses associated with the National Cooperation System (NER) were allegedly sometimes exploited by other NER-linked oligarchs.

He claimed that the oligarchs could also be exploited by their own middle managers.

“So everyone was stealing from everyone,” he said, arguing that this was one reason why the final bill paid by the Hungarian state became so high.

Claims of political interference in investigations

The former state secretary also made allegations concerning investigations by the National Tax and Customs Administration (NAV). According to Vályi-Nagy, the NAV had thoroughly investigated and traced the relevant information, collecting extensive data on those involved and carrying out raids.

He then alleged that, several weeks later, political pressure was brought to bear on the leadership of the tax authority.

“The NAV investigated everything very thoroughly and traced everything. It collected all the information about everyone and carried out raids. Then, a few weeks later, politics raided the leadership of the NAV; those who had been working on the case were sidelined, and the case was moved to a provincial investigative office and put into the hands of four to six people.”

He said that the original 100–120 people working on the case were removed from it and replaced by four to six investigators who had to start again from scratch.

“Accordingly, that was how the case continued,” he said.

Vályi-Nagy claimed that there had been hundreds of cases in which the task of people working at the NAV, police or prosecution service had effectively been to put investigations on the back burner.

Calls for scrutiny of state IT contracts

Turning specifically to state IT procurement, Vályi-Nagy alleged that contracts covering various network services and equipment purchases were significantly overpriced. He also said that licensing agreements deserved particular scrutiny, arguing that the issue “cries out for an investigation”.