European Anti-Fraud Office’s (OLAF)

Hungarian government: Common border protection must be supported

Gergely Gulyás Minister hungary

At Minister heading the Prime Minister’s Office press conference in Budapest – rendering an account of the proceedings of the Wednesday cabinet meeting – Gergely Gulyás said that common border protection must be supported.

Mr Gulyás said that due to Brexit there will be reduced funds available. He added that, in Hungary’s view, a fair budget is needed, a budget which distributes the emerging losses among Member States in a fair and proportionate manner.

He further pointed out that migration falls within the competence of the Member States, and therefore a budget which takes funds away from European citizens and gives them to migrants is not acceptable. He added that the budget must support the continent’s common border protection efforts, and Hungary maintains that

the EU should reimburse a part of the expenditures it incurred in connection with the protection of its borders.

Money should be saved on Brussels bureaucracy above all, he stated, with reference to the fact that the European Commission itself shared this view earlier.

The Minister said it is also unacceptable that in actual fact the draft consists of two budgets as there are separate development funds allocated to members of the Eurozone. He said it is likewise unacceptable that Member States would only be allowed to retain 10 per cent of their customs revenues instead of 20 per cent.

Mr Gulyás took the view that the proposal clearly demonstrates the legitimacy of the Hungarian government’s criticism to the effect that the European Commission has a flawed view on its role. He added that the Commission must serve as a guardian of the Treaties, and its duties are laid down in the Treaties. The fact that the Commission looks upon itself as a political body has already caused a great deal of harm as it is, he stressed.

In his view, the proposed budget is a political proposal which does not serve the interests of the whole of the European community, and contains a concealed amendment to the Treaties. He believes that the fact that the drawdown of budgetary funds would be rendered dependent on criteria regarding the rule of law constitutes an amendment to the Treaties.

The politician said it is also unacceptable that the European Anti-Fraud Office (OLAF) should be used as a means of political blackmail. Fifty-two per cent of OLAF procedures affect the very Member States which do not wish to join the European Public Prosecutor’s Office, he said.

Mr Gulyás stressed that the Hungarian government is open to a swift agreement on the budget, and believes that a fair compromise hurts everyone equally. He said that from now on the government will hold a meeting focusing on EU issues every month.

Budget of safe growth

He spoke about the budget submitted to Parliament on Wednesday which he described as a budget of safe growth. Among the goals of next year’s budget – in addition to security – he mentioned growth, family support and full employment. He added that the country’s growth prospects are very good as economic expansion has not been this promising in Hungary for some 15 years.

In his view, full employment appears to be an achievable goal, against the background of the current 3.8 per cent unemployment rate. He observed that, according to the science of economics, a 3 per cent unemployment rate practically means full employment, but the government believes that the attainment of a 2.5 per cent unemployment rate is also realistic.

Among the priority plans of the Prime Minister’s Office, Mr Gulyás mentioned the Modern Villages and Modern Cities Programmes – an allocation of HUF 150 billion will be available for the latter –, the development of Budapest and its environs, and the coordination of suburban transport.

In answer to a question regarding the Modern Villages Programme, he said that the concept is expected to be completed by the autumn, and they will then assign the required funds to the programme through the amendment of the Budget Act.

Regarding the amendment of the Fundamental Law, he said that the protection of Hungarian culture – as a Christian culture – is a constitutional duty of the state also today. In answer to another question he added that no one should feel excluded from Christian culture just because they are not a member of a Christian denomination.

In answer to another question asserting that HUF 150 billion would be withdrawn from Hungary due to irregular EU calls for proposals, Mr Gulyás said that today the conditions of an unbiased audit on OLAF’s part do not exist in the case of Hungary. He indicated at the same time that he would investigate each case in dispute.

He said they will have talks with the owner regarding the purchase of the painting Calvary by Mihály Munkácsy. In his view, the Hungarian state’s offer of HUF 3 billion appears to be a reasonable starting point.

He also said that since 1998 Prime Minister Viktor Orbán had attended every World Cup final, and if that is the case on the present occasion as well it is hardly conceivable that he should not meet with the Russian head of state.

He said it is to be hoped that the pay of civil servants will increase by more than 10 to 15 per cent next year.

Regarding the grants provided for the Red Bull air race in Budapest, Government Spokesperson Zoltán Kovács said that a tax revenue of HUF 5 billion – well in excess of the grants provided for the event – is expected to be raised, and if the entire tourism sector is also included in these calculations, the budget may raise a total revenue of some HUF 20 billion.

European Commission’s official proposal continues to feature a mandatory mechanism without an upper limit

According to the Minister heading the Prime Minister’s Office, Hungary has good chances in the struggle against the mandatory quotas.

Mr Gulyás said at his Thursday press conference held in Budapest that migration will be one of the priority topics of the meeting of the European Council scheduled for 28-29 June, and in this respect there was an important development last week when the proposal of the Bulgarian Presidency was discussed in the Council of home ministers. At this point in time, 16 Member States do not support this draft, while 5 Member States indicated their unconditional support for the proposal, the Minister said.

It is to be hoped that the Bulgarian Presidency’s proposal regarding the mandatory quotas will not be pushed through at the upcoming summit of EU heads of state and government, he said. As far as they can see, the balance has shifted in the direction of the position of the Hungarian government – due to political changes and changes of government, among others – and today we have incomparably more allies on the issue than we had a few years or even a few months ago.

Mr Gulyás said the European Commission’s official proposal continues to feature a mandatory mechanism without an upper limit, but they believe that the chances are good in this struggle, the decision on the quotas can be deferred, or can even be changed.

He indicated that the Venice Commission will decide on the Stop Soros legislative package next week, and according to the usual practice the draft of the Commission’s recommendations will be disclosed a few days earlier.

Parliament will be able to decide in light of those recommendations.

Regarding the amendment of the Fundamental Law on homelessness, he said that also today the situation is that – while there are no precise statistical figures concerning the number of homeless people – according to the majority of experts there are enough beds and other facilities for everyone. This means that the required capacity is available, and the government is also ready to allocate significant extra funds for extending the capacity of these facilities if necessary, he stressed. In the government’s view, no one has the right to use public premises in the way that homelessness involves. Those who do so must be taken to night or daytime shelters.

He told the press that the government is determined to take action, and they support Fidesz’s proposal.

Regarding a recent Fidesz proposal that administrative courts should not come under the supervision of the National Judicial Council, he said that this is a perfectly legitimate proposal. Judicial administration has a number of different forms, and each and every one of these operating in Europe is constitutional and operational.

In answer to a question he said that there is no proposal before the Government that would change the VAT on new housing properties, meaning “the intention that was made clear earlier” to uphold the preferential VAT rate until the end of 2019.

In the context of the instruction regarding a review of motorway projects published in Magyar Közlöny [Hungarian Gazette], he said that the Minister will table a report, and the government will decide in light of the findings of that report. They are examining several motorway sections, including the Miskolc-Kassa (Kosice) section, he indicated.

In response to a journalist’s suggestion that there is a contradiction between the communique of the Ministry of Human Capacities and a statement made by the minister regarding the school year, he said that the World Cup is just beginning, and the school year will not be extended. He said as a child he only ever sympathised with governments in his “childhood political experiences” which did not want to shorten the summer holiday, and in this respect he still has not grown up. In answer to another question, he said that he is rooting for the England team at the World Cup as the Italians did not qualify.

Mr Gulyás said he believes that the ten-week summer holiday is a good thing. According to the government, the idea that everyone should have the opportunity to go to summer camps for two weeks should be fully supported, but there is no need to make this compulsory. Everyone should decide for themselves, and it is good if the state is able to provide favourable conditions for that decision, the Minister highlighted.

Regarding reports that “Lőrinc Mészáros should have a giga-bank as a rival to OTP”, he said he is not aware of such plans, and the government has no intentions of this nature.

They would like minimum 50 per cent of the Hungarian banking system to be in Hungarian ownership. This is an issue of national sovereignty, but the rest of the story is nothing but journalistic indulgence, he said.

He said regarding opposition reactions to next year’s budget that it is nonsense to claim that less money will be spent on education and culture than on the construction of stadiums. There are no excess funds for the latter in general: the construction of the Puskás Stadium must be finished, and there are additional funds allocated specifically for the purpose, he laid down.

Concerning the raising of the security reserves in the budget, he indicated that there are signs which call for caution. He agrees with the Finance Minister that there will probably not be a crisis, and certainly not on the scale of the 2008 crisis, but a number of EU Member States struggle with very high sovereign debt rates, and interest levels are rising throughout the world. At the same time, a trade war is unfolding between the United States of America and Europe, and there is no way of knowing to what extent this will escalate. The government supports the approach that the EU should adopt clear and proportionate counter-measures.

The Minister agreed that

Budapest should have a stadium with a capacity of almost 70,000 which will also host concerts, in addition to sports events,

and will be the region’s largest facility of this type. This will clearly enhance Budapest’s attractiveness, and will generate revenues for the city which will offset the expenditures, he argued.

In answer to another question, he said they support the development of bathing complexes, but the municipalities concerned will make the relevant decisions.

Mr Gulyás said regarding recent talks in Germany that there is a good dialogue between CDU and Fidesz as between two allies, while as far as the dialogue between CSU and Fidesz is concerned, there was never any faltering. They agreed with the Secretary General of CDU that there must be permanent cooperation between the two parties, and in the future they would like regular, annual meetings on the most important content issues Europe faces as at any time in order to lay down what they agree and what they disagree on.

Photo: MTIernm

Chief prosecutor: Hungary ‘exemplary’ in protecting EU’s financial interests

business agreement finances

Hungary’s criminal justice system has been “exemplary” in adopting the necessary European Union provisions concerning the protection of the bloc’s financial interests, Péter Polt, the chief public prosecutor, said on Tuesday at an event marking Prosecutors’ Day that was also attended by Eurojust President Ladislav Hamran.

The most successful form of European cooperation in protecting the EU’s financial interests has been the creation of a joint investigative team, whose efforts have helped bring charges in Hungary in cases concerning the abuse of EU funds, Polt said.

As regards the role of the EU’s anti-fraud office OLAF, Polt said its authority extended only to issuing recommendations to the authorities of member states, and so it does not have the power to handle criminal proceedings.

Citing a report published recently by OLAF, Polt said the Hungarian prosecutor’s office had ordered investigations into all of the suspected fraud cases identified by the office.

Over the past seven years, Hungary raised charges in 47 percent of those cases compared with the EU average of 42 percent, the chief prosecutor said.

On the topic of the European Public Prosecutor’s Office (EPPO) to be established in 2021, Polt said it was “not yet clear” as to what sort of relationship that body would have with the criminal investigative networks already in existence or what exactly it would bring to the table.

Hamran said the growing global threats to security were making the jobs of prosecutors increasingly harder. The lines between countries, the physical and the digital world and criminal groups have become blurred, he said in his Hungarian-language speech, arguing that there has never been a greater need for cooperation among institutions and countries as there is now.

This is where Eurojust can help by supporting and coordinating cross-border proceedings, Hamran said.

Hungary second-most probed country by EU’s anti-fraud office OLAF!

Orbán EU Hungary

Hungary, along with Poland was the second-most investigated country by the EU’s anti-fraud office OLAF in 2017 after Romania, with the office had looked into 10 cases related to the use of EU funds in the former two member states, according to its annual report released on Wednesday. OLAF conducted 11 probes in Romania.

In the cases of Hungary and Poland, OLAF issued recommendations to the local authorities in seven cases each. It issued recommendations in eight cases to Romanian authorities.

The annual report specifically touched on the investigation into public lighting projects in Hungary, in connection with which OLAF recommended the repayment of 43.7 million euros. OLAF said it had looked into a total of 35 bids in connection with the projects and had found “numerous serious irregularities”.

The office recommended the repayment of 28.3 million euros over the suspected abuse of EU research money by a Hungarian-Serbian-Latvian network. The report said two research centres had been set up with the sole purpose of applying for EU funds and that they had artificially increased their project costs.

Hungary was also implicated in a case concerning the attempted import into the EU of 122 tons of illegal or counterfeit pesticides that also involved 15 other member states.

The report did not specify how much money Hungary has been recommended to repay in total.

Of the cases concerning Hungary in which OLAF issued recommendations between 2010 and 2017, the Hungarian authorities closed 17 but made no decisions in 20 others. Charges have been raised in 8 of the 17 cases that were closed by the Hungarian authorities.

Last year OLAF registered 27 reports of suspected fraud cases from Hungary.

Hungary ‘threatened’ with EUR 190-225m fine for metro 4 project – UPDATE

Photo: MTI

Hungarian FM: The upcoming LIBE report is the basic document of a conceptual trial

Foreign Minister press conference

“The special report on Hungary being drawn up by the European Parliament’s Committee on Civil Liberties, Justice and Home Affairs (LIBE) is the basic document of a conceptual trial”, Minister of Foreign Affairs and Trade Péter Szijjártó said in reply to a question from reporters in Brussels on Wednesday.

In a statement to members of the Hungarian press, the Minister said the draft report includes assorted lies and factual errors that call into question the credibility of the whole document.

On Wednesday, the EP’s Budget Control Committee (CONT) adopted its opinion on the issue with a large majority. According to Mr. Szijjártó, the decision can only be interpreted as yet another in a series of politically-based attacks against Hungary by certain Brussels institutions.

The Hungarian Foreign Minister highlighted the fact that Hungary’s economic figures have been improving continuously since 2010, and this would not have been possible if systemic corruption mechanisms were in place as put forward by the CONT Committee. “If systemic corruption is present in a country, it is incapable of producing economic indices such as those produced by the Hungarian economy over the past eight years”, he argued.

“I reject in the strongest possible terms the accusations that appear in the Committee’s opinion” he stated.

The CONT Committee will also be adding its opinion to the upcoming LIBE report. The report, which should be voted on in June, is expected to be put before the plenary session of the European Parliament sometime in the autumn, based on which it could initiate Article 7 proceedings against Hungary, also referred to as a “political atomic bomb”, for violating the principles of the rule of law.

The EP’s constitution, cultural and education, budget auditing and women’s rights committees will also be attaching their official opinions to the LIBE report.

Article 7 enables a multi-step procedure that, if fundamental EU values are grossly and methodically violated, could eventually lead to the suspension of a country’s voting rights, but this also requires the unanimous agreement of all the other member states, which according to analysts is practically impossible.

featured image: MTI

Former Jobbik MEP suspected of cheating with EP expense reimbursement

The Central Chief Prosecutor has questioned Csanád Szegedi, former MEP of Jobbik, on suspicion that he had cheated with his expense reimbursement from the European Parliament and violated rules of employing assistants between 2009 and 2014.

In a statement, the Prosecutor’s Office said that the investigation had been launched at the recommendations of the EU’s anti-fraud office (OLAF). Szegedi is believed to have repeatedly used false documents to show that his delegations had travelled by car, rather than by air at significantly lower cost, in order to receive a higher amount of reimbursement. He has also been suspected of employing assistants in a fictitious way, and of having reclaimed the cost of publications which had not been produced. It is also suspected that Szegedi demanded kick-backs from the salaries of two assistants he had actually employed.

As Wikipedia said:

On 28 July 2012, Szegedi released a statement to the press, which was reproduced on the party’s website[22] that he had with immediate effect resigned from all the various positions still held in Jobbik. Szegedi expressed his wish to remain a Member of the European Parliament. The Jobbik statement confirmed that the news of his mother’s Jewish ancestry “did not pose any threat to his positions in the party.” The statement went on to say that “Last week, in July, media reported that the MEP [Szegedi] had known about his origin for longer than he previously stated.

Allegedly, in 2010, the MEP tried to stop news published about his origin by offering money [bribe], which the MEP categorically denies. This prompted Jobbik vice-president Előd Novák to call for Szegedi’s full resignation, describing the MEP’s actions as a ‘spiral of lies’.” Jobbik says its issue is the suspected bribery, not his Jewish roots.

According to the Prosecutor, Szegedi has caused a total 143 million forints (EUR 458,000) damage to the EP.

Four other people are suspected of having been accomplices in the case.

Szegedi refused to make a testimony and filed a complaint against the accusation.

Election 2018 – PM candidate Karácsony: Graft jeopardises EU funding for Hungary

PM candidate lefitsts Karácsony

Recently discovered cases of severe abuse of power and graft in Hungary jeopardise the country’s access to EU funding, Gergely Karácsony, PM candidate of the Socialist-Párbeszéd alliance, said in Szombathely, western Hungary, on Saturday.

Some of these cases have been exposed by the EU’s anti-fraud office (OLAF), he said.

Hungary currently receives funds of some 1,300 billion forints (EUR 4.1bn) from the EU, he said, some of which might be withdrawn in the next funding cycle due to “pervasive corruption” in the country.

If voted into power, the Karácsony government will freeze and review the spending of the funding already allocated by Fidesz, he said. By allocating 96 percent of the funds available until 2020, the incumbent government is tying the hands of the next one, forcing it to work along its own priorities, he said.

The opposition alliance will spend that money on health care, education, the environment and the infrastructure, he said. “There will be no more castle renovations, stadiums or horse wellness,” he said, referring to projects recently funded by the Fidesz government.

Photo: MTI (illustration)

Opposition sets up unofficial committee to investigate Elios scandal

The opposition Socialist, LMP and Jobbik parties have set up a non-parliamentary “alternative committee” to look into public lighting procurements connected to the company Elios.

Socialist MP Tamás Harangozó said the parties had decided to form the committee because the authorities had been “reluctant” to deal with suspicions of corruption raised by European anti-fraud office OLAF. Harangozó insisted that documents his party had obtained from the cities of Szolnok and Kalocsa supported OLAF findings that “major budget fraud” had been “committed as part of a criminal organisation”.

LMP co-leader Ákos Hadházy insisted that the municipalities for public lighting had been “routinely” manipulated. For example, in Szekszárd, Elios had been tipped off about the planned procurement before the tender was announced, he said.

Jobbik MP György Szilágyi said that

“[Prime Minister] Viktor Orbán and his family have been implicated”.

The committee, he added, will investigate “what fraud the prime minister’s son-in-law has committed through his companies”.

Lázár: Közgép was owner of Elios, and as such bears ultimate responsibility

Daily News Hungary

The date and method of the publication of the OLAF (European Anti-Fraud Office) report on the case of Elios Innovatív Zrt. are part of a political campaign, the Minister heading the Prime Minister’s Office said on Monday in Hódmezővásárhely.

The timing of the OLAF report was politically motivated, and is solely about the election campaign, János Lázár said at a press conference. He added that the case had emerged now, seven to eight years after the completion of the public lighting development, due to the election campaign, and is on the agenda solely in order to drag the Prime Minister into a scandal.

The modernisation of the Hódmezővásárhely public lighting system – the first one implemented in the country – is a development which operates to the highest standards, provides energy savings for the city and results in improved lighting for residents, the politician stressed.

Mr Lázár recalled that in 2008, during his term in office as mayor, there were 6,700 public lighting luminaires in Hódmezővásárhely. The electricity company Démász refused to modernise the system the operation of which cost HUF 100 million annually. A call for proposals of the Bajnai government paved the way for the development, as part of which municipalities were free to choose the technology they wished to employ.

At that time, there was no business in the country that had implemented LED public lighting modernisation projects on public premises before. Three applicants entered the public procurement, including Tungsram-Schréder Zrt. with a bid for HUF 800 million, and the municipality accepted an offer for HUF 577 million made by the company that is now called Elios Innovatív Zrt., the minister told the press.

Tungsram as the supplier of the awarded business manufactured the LED luminaires for HUF 340 million, and as a result, the city benefited from this arrangement, the politician stressed, adding that the tender was also investigated by the public procurement authority. A forensic report on the modernisation of public lighting in Hódmezővásárhely has been prepared which the municipality will publish on its website, the minister said.

Last December OLAF sent the municipality a series of technical comments comprised of eight points which are not featured in the final report. The prosecution service will have to decide on some of the suspected breaches concerning other settlements that were mentioned in the report, while the European Commission will have to decide on others, the politician said.

Mr Lázár stressed that Közgép was the owner of the company during the period under investigation, and therefore, should the European Commission decide on a net adjustment, the ultimate responsibility will also lie with that company.

 

Socialists-Párbeszéd call for parliament probe into Elios case

Daily News Hungary

The allied Socialist and Párbeszéd opposition parties on Monday said they would initiate setting up a parliamentary investigative committee to look into the prime minister’s responsibility in an alleged corruption case surrounding Elios, a company that has been investigated by Europe’s anti-fraud office OLAF.

Speaking at a press conference, Gergely Karácsony, PM candidate of the two parties, called the Elios case “one of the most serious corruption cases of the past 27 years”.

Karácsony insisted that the case showed signs of the use of “organised-crime methods” and that the prime minister’s son-in-law was also implicated in it.

He said OLAF’s report on the case had determined that the Hungarian prosecutor’s office “had been complicit in the crime”. Karácsony said it was clear that Péter Polt, the chief public prosecutor, was unfit to safeguard taxpayer’s money.

He said Párbeszéd would once again submit to parliament a proposal to establish an anti-corruption agency.

Socialist Party group leader Bertalan Tóth told the same press conference that the two parties would on Monday reach out to the other parliamentary parties asking them to support setting up the investigative committee. Under house rules a fifth of lawmakers is required to establish an investigative committee.

Commenting on its handling of cases that have been investigated by OLAF, the Chief Public Prosecutor’s Office said in a statement that it would not respond to “politically-charged attacks lacking any trace of professionalism”.

“Over the past few days, several politicians have made baseless claims about the cases OLAF has forwarded to the prosecutor’s office, severely violating — in a broad sense — the independence of the judiciary,” the office said. The prosecutor’s office has always carried out its duties in line with the constitution and will continue to do so in the future, too, the statement said.

Fidesz MEP: EP committee attempting to put pressure on Hungary

eu flag

The European Parliament’s Committee on Budgetary Control (CONT) has recommended further investigations of financial matters in Hungary, which appears to form a part of efforts to put ever greater pressure on the country in connection with the government’s stance on migration, Tamás Deutsch, an MEP representing the ruling Fidesz party, told journalists after a meeting of the committee.

Deutsch said the report by the European fact-finding commission which visited between September 18 and 20 proposes that the European Court of Auditors should launch a country-specific investigation into Hungary.

The Fidesz MEP said that Hungary had nothing to hide and was open to all investigations. But at the same time, in order to avoid any suspicion of bias, all 28 EU member states should be investigated, he added.

The report does not recognise advances in respect of the use of EU funds or the transparency of procedures and related control mechanisms, he insisted.

Ingeborg Graessle, the head of the EP’s fact-finding commission, said the commission’s Hungarian visit had proved useful but Hungary still had a job to do.

Funds between 2013 and 2017 were allocated properly and almost 100 percent of the money was used for the relevant projects, according to the report. However, whereas cohesion and structural funds in this period increased investment rates by 3 percent, they were not implemented in every case in the way the issuer of the tender intended, she added.

Hungarian financial control mechanisms function well, she said, but the Hungarian authorities should take a more proactive attitude in picking up errors which are subsequently spotted by the European Court of Auditors and the European Anti-Fraud Office (OLAF), Graessle said.

Benedek Jávor, the MEP who represents the opposition Párbeszéd party, said at the CONT meeting that the commission’s report accurately reflected the findings of its visit to Hungary,

namely that OLAF sheds light on corruption-related problems in terms of how specific public procurement projects are awarded which are then typically revealed for the large part by the EU’s anti-fraud office later on.

Hungary ‘threatened’ with EUR 190-225m fine for metro 4 project – UPDATE

Hungary faces a fine of 60-70 billion forints (EUR 190-225m) due to financial abuses linked to the Socialist-liberal administration during the metro 4 construction project, the government office chief said on Thursday.

The government has established that the abuses did indeed take place but is endeavouring to get the fine reduced through negotiations, János Lázár told a regular press briefing.

He said Economy Minister Mihály Varga has been asked to set aside the relevant funds in the 2018 budget without depleting funds for health care, the social sector or education.

Of the 452 billion forint total cost of the metro project, corruption by the former Socialist-liberal government allegedly affected 272 billion forints, and 166 billion forints of it was likely stolen, Lázár said. Of the latter sum, 76 billion forints was provided by the European Union and the rest by the Hungarian taxpayer.

He noted the criminal procedures were running along two tracks. One concerned a criminal complaint raised by the PM’s office following a report by the European Union’s anti-fraud office (OLAF) while the other was an international investigation ongoing since 2011. He insisted that the latter related to a probe of “an international left-wing series of crimes” initiated by prosecutors in France, the UK and other EU countries, of which the metro 4 project was a part.

Meanwhile, Lázár noted that Brussels has started to pay out 201 billion forints of European Union funds to Hungary. “This is a serious outcome,” he said, adding that the opposition had been “grasping at straws” in the hope that if they were unable to raise any convincing arguments against ruling party Fidesz, then the European Commission would do so. “The funding will have a positive impact on the public debt,” Lázár said.

Referring to the parliamentary debate on EU funds next Monday, he said last year 8,650 public procurement procedures were conducted by the Public Procurement Authority and the state, totaling about 2,000 billion forints, or 5 percent of GDP.

On the subject of the Paks nuclear power plant upgrade, he noted the opinion of opposition MEP Benedek Jávor that the European Commission’s approval of the Russia-backed investment had been purely a political decision. Lázár said it was “sad” that the Dialogue politician had “given up his political career” and had become a “professional denouncer” who was “battling windmills”. He said the European Commission noted that the project complied with EU law and the expected 7-8 percent rate of return protected the interests of the Hungarian taxpayer. Furthermore, Brussels had declared the project to be transparent, he added. Lazar said technical preparations at the site would take place in the first half of 2018 and the bulk of the construction work would be carried out between 2018 and 2022.

Responding to a question on the conference on the closing of the Norwegian Fund’s 2009-2014 period, the government office chief said the Prime Minister acknowledged all parties involved in the programme, and it would not have been elegant had Veronika Móra, head of the Ökotars Foundation, not received “a decoration”.

As we wrote last week, the Budapest metropolitan council’s working group on corruption has sent its report in connection with the metro 4 investment to the European Parliament’s Committee on Budgetary Control.

Fidesz MEP: OLAF does not back opposition suspicions

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Fidesz MEP Tamás Deutsch has said that the head of the European Union’s anti-fraud office (OLAF) has given evidence to the European Parliament’s Committee on Budgetary Control (CONT) concerning the office’s activities related to Hungary and nothing he said supported suspicions or allegations raised by Hungary’s opposition parties.

Deutsch told MTI late on Monday that concerning the 14 ongoing investigations related to Hungary, OLAF acting director-general Nicolas Ilett said that, relative to other EU member states,

cases concerning Hungary were few in terms of the proportion of allegations to actual OLAF investigations.

Further, Ilett said relations between OLAF and the Hungarian authorities were “proper and satisfactory”.

According to Deutsch, Ilett also said that, with the exception of the case related to graft around the metro 4 investment, the amount Hungary was likely to repay to the EU would be below the reimbursement rate expected of other EU member states.

Budapest’s corruption working group sends report to EP on metro 4

The Budapest metropolitan council’s working group on corruption has sent its report in connection with the metro 4 investment to the European Parliament’s Committee on Budgetary Control.

Máté Kocsis, the ruling Fidesz party’s Budapest leader, said at a press conference on Friday that given the EP committee will discuss related investigations carried out by the European Anti-Fraud Office (OLAF) next week, Fidesz’s Budapest branch has asked the head of the working group to send the report in English approved by the Budapest Assembly to the panel.

Thanks to former Socialist prime minister Ferenc Gyurcsány and Gábor Demszky, Budapest’s mayor at the time, and his deputies,

the metro 4 investment became the biggest corruption case in the country, Kocsis said.

He noted that the city assembly on Feb. 22 decided to set up a working group on corruption in connection with the OLAF report.

The working group’s head, Lénárd Borbély (Fidesz), said the investment had been one of the most expensive projects in the European Union during the 2007-2013 funding period. The investment’s costs ballooned by more than two hundred billion forints, he added.

According to the OLAF report, the city’s administration after 2010 was not involved in any corruption, Borbély said.

Featured image: Daily News Hungary

Budapest assembly approves report blaming Socialist-liberal city leadership in metro corruption case

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The Budapest assembly has approved a report blaming the former Socialist-liberal city leadership for irregularities highlighted by OLAF, the European anti-fraud office, in connection with construction of the capital’s fourth metro line.

City lawmakers asked the mayor to send the findings of the report by a special working group examining graft related to the investment to the public prosecutor’s office.

Wednesday’s motion received 22 votes in favour and 6 abstentions.

According to the working group, the hearings of the former executives and supervisory board members of Budapest transport company BKV revealed that the company’s decision-making had been formal and brought about by former Budapest mayor Gábor Demszky, his former deputies and his cabinet.

“The investment up to 2010 was directly enabled due to Socialist-liberal influence and control,” the report states.

These parties are faced with full financial, legal and moral responsibility for the corruption-tainted public procurement contracts, it added.

Photo: Daily News Hungary

Fidesz MEP to turn to OLAF over left lawyer’s loan 

Daily News Hungary

Fidesz MEP Tamás Deutsch said on Thursday that he will submit a complaint to the EU’s anti-fraud office (OLAF) concerning an alleged loan to a left-wing lawyer by a holding company run by opposition Democratic Coalition Party (DK) leader Ferenc Gyurcsány. 

Deutsch told a press conference that

Altus, the company in question, had provided 80 million forints in the form of a loan to the lawyer

and politician Zsolt Czeglédy out of a 1.5 billion forint (EUR 4.8m) contract Altus had concluded with the European Commission.

Czeglédy, who was local government representative of Szombathely, in western Hungary, representing Éljen Szombathely-Socialists-DK-Együtt, also worked as a lawyer for DK, the Socialist Party and Altus.

Czeglédy is currently in pre-trial detention, suspected of defrauding the budget of 3 billion forints. 

The ruling party MEP said he hoped OLAF would immediately launch a probe into the transaction on charges of a misuse of EU funds and other serious law violations.

The MEP noted that he had already raised objections against the deal between Altus and the European Commission a year and half ago.

He called it “unprecedented in Europe” that a company owned by a former prime minister who is still an active politician would conclude a contract “using 1.5 billion forints paid out of European taxpayers’ contributions”.

Deutsch also accused Gyurcsány of using proceeds from Altus’s revenues to finance his DK party.

Prosecutor’s Office dedicated to investigating warnings concerning EU support

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Public Prosecutor Péter Polt has met a delegation of the European Parliament’s Committee on Budgetary Control (CONT) and told them that “the Hungarian prosecutor’s office is dedicated to investigating recommendations and warnings concerning European Union funding,” the prosecutor’s office said on Tuesday. 

At the meeting on Monday, Polt and the delegation headed by CONT chairperson Ingeborg Graessle reviewed the prosecutor’s tasks in connection with EU funding. They discussed certain concrete cases and ties between the Hungarian prosecutor’s office, the European Anti-Fraud Office OLAF and the EU’s Judicial Cooperation Unit (Eurojust). They also discussed the issue of the planned European Public Prosecutor’s Office, the statement said.

The public prosecutor’s office maintains excellent and regular working relations with OLAF, which has also been confirmed by OLAF Director-General Giovanni Kesler, the statement added.

Contrary to statements by various politicians, the prosecutor’s office has ordered investigations in every case whenever OLAF contacted the office with recommendations or warnings. Whenever an investigation was under way, OLAF’s recommendations were added to the case and evaluated, it added.

As a result of 33 recommendations and four warnings by OLAF so far, the public prosecutor’s office has raised charges in seven cases.

Additionally, charges were raised as a result of an investigation launched in reaction to a 2011 report by OLAF. Two convictions resulted from these cases, an additional six rulings are still to be made and seven cases have been dropped. Investigations are under way in all other cases.

Polt told the delegation that Hungary is an active participant in Eurojust’s work and the international investigating team coordinated and financed by Eurojust.

Commenting on plans about the European Public Prosecutor’s Office, he said strengthening Eurojust and expanding the use of the Eurojust team could offer an effective alternative, the statement said.

Jobbik: OLAF fails to ensure transparency of investigated affairs

Daily News Hungary

The opposition Jobbik party accuses the European Anti-Fraud Office (OLAF) of not ensuring public insight into the affairs it investigates, the party’s deputy group leader said on Monday.

Speaking at a Budapest press conference, Gábor Staudt said he had requested the release of six reports of unknown contents, all pertaining to concluded investigations and different Hungarian governments. All requests were rejected with “transparent excuses”, Staudt said.

The reasoning of the rejections was identical in all six cases, Staudt said, citing the protection of business interests and the interests of investigation. The latter, he said, is “complete nonsense” in the context of the requests, he said.

Jobbik is to turn to the European ombudsman, the ombudsman investigating complaints about European bodies, and possibly proceed to file a lawsuit with the European Court of Justice, Staudt said.

Jobbik obtained information from Hungary’s chief prosecutor earlier this year that the anti-fraud office has concluded probes into six investigations already closed by Hungarian authorities. Jobbik said in March that under EU law, OLAF had a duty to release the reports, given that no criminal proceedings had been launched in any of the cases.

Jobbik said in March they intended to release the reports to the public.

Metro 4 fraud: Former Budapest Mayor Demszky ‘knew about metro 4 irregularities’?

Budapest’s municipal council leadership under former liberal mayor Gábor Demszky “knew everything” about the irregularities surrounding the capital’s metro 4 construction project, the former head of Budapest transport authority BKK said on Wednesday.

Europe’s anti-fraud office OLAF announced in January that it had identified around 167 billion forints (EUR 539.2m) worth of damages in connection with the project.

David Vitézy, who headed BKK between 2010 and 2014, told reporters after a meeting of the working group investigating the case that it had been known as early as 2008 that the project involved a conflict of interest over “collusion” between Eurometro, the company in charge of managing the contractors and preparing the public procurements, and the contractors.

It was also known that Demszky, Socialist deputy mayor Miklós Hagyó and the management of Budapest transport company BKV had known about this, he said. Vitézy said the municipal council leadership had known of the abuse of funds that had been going on in connection with the project and had done everything it could to “sweep it under the rug”.

The working group heard five people who were on BKV’s supervisory board between 2007 and 2010 at its Wednesday meeting.

Vitézy said a number of issues that were “closely related” to the content of OLAF’s report on the metro construction project had been discussed at the company’s supervisory board meetings during that time period. He argued that this meant that the municipal council leadership had been in possession of information in 2007 and 2008 which OLAF had recently uncovered.

Vitézy said that back then “all meaningful” decisions concerning the metro 4 project had been made at the mayor’s cabinet meetings at City Hall and meetings of the committee overseeing the project.

Photo: Daily News Hungary