Metro 4 fraud

Prosecutor holds talks with OLAF chief

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Budapest (MTI) – Hungary’s public prosecution service is cooperating with the European anti-fraud office (OLAF) to pursue crimes that harm the European Union’s financial interests, Péter Polt, the chief prosecutor, assured OLAF head Giovanni Kessler at a meeting in Budapest on Thursday.

Talks focused on ongoing cases and legal measures aimed at making criminal investigations more effective in cases of fraud that hurt the EU’s financial interests, Polt’s office said in a statement.

At the meeting, Kessler said OLAF maintained good relations with Hungarian prosecutors, working in close cooperation on important matters, the statement said.

Kessler said OLAF would continue to rely on Polt’s support in uncovering and launching legal procedures in corruption cases, ensuring that the culprits are brought to justice.

Polt said Hungarian prosecutors had launched criminal investigations in all cases identified by OLAF. In cases where an investigation was ongoing, it has attached OLAF’s related recommendations, he added. So far, charges were brought in five cases, a penalty was binding in one case. Investigations are under way in 23 cases, Polt said.

During the day, Economy Minister Mihály Varga and Justice Minister László Trócsányi also met the OLAF chief to discuss corruption and irregularities surrounding the construction of Budapest’s fourth metro line, the economy and justice ministries said in a joint statement. OLAF’s report shows the effectiveness of the anti-fraud office’s work, they said, adding that as soon as the Hungarian government received OLAF’s report, it raised criminal charges with the public prosecutor on Jan. 19.

Photo: Daily News Hungary

Weekly government press briefing: Metro fraud, abortions, fostered workers and migration

Budapest, February 9 (MTI) – János Lázár, the government office chief, has called Budapest’s metro 4 construction “the gravest corruption case” in the past few decades. The government will propose legislation for restoring restrictions to the free movement of migrants while their asylum applications are assessed, Lázár said.

Metro 4 project ‘worst corruption case’ in recent decades

Lázár told a weekly news briefing that the European Union’s anti-fraud office (OLAF) had reviewed contracts worth a combined 400 billion forints (EUR 1.3bn) in connection with the metro project and found “problems” concerning 272 billion forints. He insisted that 166 billion forints may have been spent illegitimately and that the city would have to refund 59 billion forints to the European Union unless it contested the findings of the OLAF report within 60 days.

Lázár also suggested that the 166 billion forint total contained 77 billion forints from the central budget, which the government could reclaim.

He said the current city management had nothing to do with these contracts and Mayor István Tarlós had made every effort to increase transparency. At the same time, the contracts signed in the era of the previous mayor Gábor Demszky were most likely affected by fraud, mismanagement, abuse of influence and collusion, he insisted. The public prosecutor’s office has started investigations into some of these cases, he said.

Commenting on criticism surrounding the OLAF report, he said the opposition interprets the OLAF report as “the Bible” when it finds ruling Fidesz at fault. However, when the opposition Socialists-Free Democrats are affected by the report, then they describe it as a botched work, he added.

Meanwhile, Lázár said the cabinet had decided to allocate 33.3 billion forints for raising wages of employees of church-run and other non-state-run social institutions and 7.4 billion forints for raising the wages of graduates working in social services. It was also decided that all employees in social services who hold health-related jobs should be paid in line with the wage scale used in the health-care sector, Lazar said.

Government to scale back fostered jobs programme

Lázár said Hungary’s government has decided to downsize the country’s fostered jobs scheme over the next five years, gradually reducing the number of participants from an average of 216,000 to 100,000. The government is allocating 40 billion forints to support the placement of fostered workers into private-sector jobs, he added. He said there were currently 37,000 unfilled jobs for unskilled workers. Jobseekers will be obliged to take any available job within the administrative district they reside in and can participate in the fostered job scheme only if no other jobs are available, Lázár said.

Government support to new gynaecology clinic where abortions are banned

Also, the government is providing 7.8 billion forints in support for setting up a new gynecology clinic in Budapest that will refuse to perform abortions, he said. Doctors at the new clinic established in cooperation by the Bethesda Children’s Hospital and the Budai Irgalmasrendi Hospital will not be allowed to accept tips, Lázár added.

Lázár announced that Hungary will apply to become the host country for the London-based European Banking Authority and the European Medicines Agency when Britain exits the European Union, he said.

Language exam

Commenting on a report by ombudsman László Székely stating that the government decision to require an intermediate-level language exam as a pre-condition for entering higher education had been badly prepared, Lázár disagreed with Székely. The six-year preparatory period for the introduction of this requirement should be sufficient and the government should not withdraw the decision because it is an important step in improving the quality of higher education and language training, he added.

 

Government to restore migrant detention

Asylum seekers in Hungary will be required to remain in shelters during the crisis situation linked to mass migration, Lázár told a regular press briefing.

Containers with spaces for 200-300 people altogether will be set up at the border. Asylum applicants will be expected to stay there and wait for their requests to be assessed. The conditions for court procedures will also be made available at these locations via electronic communications, Lázár added.

Migrants without a permit to stay in Hungary will be stopped at any location in the country, not only in the 8 km zone within the border, he said.

If the migration situation deteriorates, a second fence will be built at the border, he said.

Photo: MTI

Government office starts procedure to reveal irregularities in metro 4 construction

Makó (MTI) – The Prime Minister’s Office has launched a procedure to reveal irregularities suspected in the construction of the city’s fourth metro line, the government office chief said on Tuesday.

János Lázár told the press after a public forum in Makó in southern Hungary that it was the most serious corruption case of the past 27 years. Based on a report by Europe’s anti-fraud office OLAF some 166 billion forints (EUR 535m) worth of contracts were affected by fraud in the 430 billion forints investment project. Of the 166 billion forints, the European Union demands that 59 billion forints, which the community had contributed to the project, must be repaid by Hungary, Lázár said

The government must identify how to reclaim the difference in the affected contracts, most of which were financed by Hungary and therefore constituted taxpayers’ money, he added.

OLAF protects the money of EU taxpayers and the government must protect Hungarian taxpayers’ money, Lázár said.

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If the Hungarian investigation reveals similar irregularities as those shown in OLAF’s report, then the government is stipulated by the budget law to reclaim the support granted for the investment, he added.

Photo: Daily News Hungary

Former Budapest mayor Demszky to brief corruption probe committee

Budapest, February 7 (MTI) – The former liberal mayor of Budapest, Gábor Demszky, is expected to appear before a parliamentary committee investigating corruption surrounding the construction of the city’s fourth metro line, Demszky’s lawyer told Tuesday’s edition of Magyar Nemzet, claiming the former mayor had nothing to hide.

György Magyar said that Demszky’s legal responsibility was not at issue in the matter. The contract for building the fourth metro line was not signed by the metropolitan council but by the companies involved. Political responsibility should be distinguished from legal culpability, he said. Anyone who claims, based on the report by Europe’s anti-fraud office OLAF, that Demszky bears criminal liability violates the law, he added.

Socialist lawmaker Csaba Horváth, who was deputy mayor under Demszky, told the paper that he would also be ready to give evidence to the committee if invited to do so. He likewise insisted that the metro 4 project had not fallen within the metropolitan council’s competence.

Erzsébet Gy. Németh, an opposition Democratic Coalition lawmaker who at the time was a Socialist councillor, told the paper that she would not attend any committee hearings because the report had not raised any question of her liability in the case.

The current city leadership is totally unaffected by the findings of the OLAF report, Budapest Mayor Istvan Tarlós told commercial broadcaster Lánchíd Radio on Tuesday. He said that with a single exception, all the findings of the report related to the period before the 2010 general election. The gravest issue concerns the contract for Alstom trains concluded before the 2006 elections, he added.

“I don’t believe there’s anything to discuss,” Tarlós said, adding that the single exception after 2010 related to a change in control engineers.

The mayor expressed surprise over the declaration by Demszky’s lawyer that the former mayor had had nothing to do with the matter when no one had raised any suspicions. Tarlós said he did not wish to make any accusation that Demszky “might bear any substantive or certain liability, but his behaviour can be considered strange.”

DK leader and former Socialist Prime Minister Ferenc Gyurcsány has also decided to stay away from the hearing, the party’s spokesman told a press conference. Zsolt Gréczy argued that OLAF’s report indicated that members of the then incumbent government were not implicated in the case. OLAF has only determined the legal responsibilities of the municipal council leadership and municipal council-owned companies at the time, Gréczy said. Regarding Gy. Németh’s decision not to attend, Gréczy said she had neither been a municipal council leader nor had she led any Budapest-owned company at the time, making her attendance “pointless”.

Meanwhile, Socialist Party MEP has called on the head of OLAF to clarify certain parts of the office’s report on the metro 4 scandal.

“The Orbán government is using the Hungarian media … to abuse the grave shortcomings of the report,” Szanyi said in a statement, calling on OLAF chief Giovanni Kessler to clarify and elaborate on “the many blurry statements” in the report “in order to prevent it from becoming … a propaganda tool of the government”.

Szanyi said the report, while naming officials, business people and lawyers as persons bearing legal culpability in the scandal, had failed to disclose any actual names with the exception of former Socialist Prime Minister Péter Medgyessy. But even Medgyessy’s role is not made clear, Szanyi said. He also criticised the report for failing to establish a timeline for the project, which he said left unclear when the various abuses had taken place. Szanyi also said there were a number of formal errors, contradictions and even hand-written corrections in the report, which he said gave the impression that it had been compiled under pressure in order to meet a strict deadline.

Photo: MTI

Jobbik urges parliamentary investigation into OLAF M4 findings

Daily News Hungary

Budapest, February 4 (MTI) – The opposition Jobbik party has proposed setting up a parliamentary committee to investigate findings by the European Union’s anti-fraud office (OLAF) concerning alleged corruption in the construction of Budapest’s fourth metro line.

Gábor Staudt, Jobbik’s deputy group leader, told a press conference on Saturday that the committee should also find answers to the question “why perpetrators in such corruption cases are never held to account”.

Staudt insisted that ruling Fidesz, when it won power in 2010, had pledged that corrupt politicians would be tried, but it never happened. He also suggested that the prosecutor’s office “has performance problems” when it comes to investigating corruption.

Ruling Fidesz proposes committee to look into OLAF metro project findings

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Budapest, February 4 (MTI) – Ruling Fidesz has proposed that Budapest’s city council should set up an ad hoc committee to look into alleged corruption involved in the construction of the city’s fourth metro line, on the basis of a recent report by the European Union’s anti-fraud office (OLAF).

Speaking at a press conference on Saturday, Balázs Hidvéghi, communication chief of the party, called the construction project the “greatest corruption case” since Hungary’s democratic transition in 1989-1990.

Hidvéghi argued that the proposed body could greatly contribute to shedding lights on shady businesses in the project, through which he said as much as one third of the total budget was “embezzled or stolen”. He insisted that the previous, leftist governments and city management were “clearly responsible” for those cases.

Hidveghi said that Hungary would need to repay 59 billion forints (EUR 190m) to the European Commission, and the total damage amounted to 166 billion forints. “Where has that tremendous total gone?” Hidvéghi asked and urged that politicians involved in the dealings should be identified. “Who are those Socialist politicians, who are those Liberals who are still active within the Socialist Party, the Democratic Coalition, Együtt or in other parties?” he asked.

Photo: Daily News Hungary

Govt publishes OLAF report, blames previous cabinets for corruption scandal

Budapest, February 3 (MTI) – Findings of an investigation by the European Union anti-fraud office (OLAF) “clearly shows” that the previous, Leftist governments and Budapest’s earlier management are to blame for the corruption scandal around the construction of the city’s fourth metro line, state secretary Nándor Csepreghy said on Friday, after the government published the OLAF report on its website.

Csepreghy noted that publication of the English-language document had been delayed by data protection considerations.

The state secretary called the cases of alleged corruption identified in the report the “largest corruption scandal of the past 13 years” due to which the country will probably have to repay a total 59 billion forints (EUR 191m) to the European Union, which the community had contributed to the project.

The M4 project, completed in 2014, cost a total 452 billion forints, of which 272 billion is suspected to have been used illegally, while another 166 billion forints “were stolen”, he said.

Csepreghy insisted that “all but one” of the suspicious contracts involved in the project had been signed before 2010, and concluded that “the most corrupt project of all times” is linked to Leftist governments.

The government is seeking ways to reclaim the amount to cover the possible European fine from “affected politicians and companies,” Csepreghy said.

The opposition Socialists welcomed publication of the report and voiced hope that “the document is authentic”. In a statement, the party called for an “unbiased and impartial” investigation. “Those proven guilty should go to jail and repay the money,” the Socialist statement said.

Jobbik said that perpetrators of the alleged graft should be identified. Municipal Jobbik representative Marcell Gergely Tokody said it should be ascertained who signed the contracts with the companies in question, and called it “outrageous” that nobody has been indicted yet.

You can read here the English-language document! 

UPDATE

Green opposition LMP urged immediate public investigations into the case.

“I can honestly say that I want to see heads roll into the dust,” Budapest councillor Antal Csárdi said, calling the case “Europe’s biggest corruption scandal”. He said political players presented in a negative light in the report should draw the necessary conclusions from the scandal and accept political responsibility. Hungary cannot continue to be a country where nothing has consequences, he said. Csárdi said LMP would review the report and file the criminal complaints it deems necessary if the municipal council leadership failed to do so.

The leftist opposition Democratic Coalition (DK) commented on the report saying that “those who steal belong in prison, regardless of their political party.” DK spokesman Zsolt Gréczy said in a statement that the data the party had reviewed thus far indicated that both the pre-2010 leadership and the one in charge since 2010 were implicated in the scandal. The report also names former Socialist Prime Minister Péter Medgyessy as a person concerned in the case, he noted. Gréczy said the current government could also be held accountable for its alleged role in the case.

Medgyessy, who was prime minister between 2002-2004, confirmed on Friday to news portal index.hu that OLAF had contacted him in connection with the metro 4 case.

He told the portal that after having been contacted by OLAF he had responded as stating that he had never been in either direct or indirect contact with Alstom at all.

He called it “incomprehensible and beyond rational thinking” to suggest that he could have had any influence on the Budapest city assembly on the conclusion of a contract with Alstom, arguing that it had been known that he had maintained “rather bad relations” with his successor, Ferenc Gyurcsány and politicians of the allied ruling Free Democrats at the time.

“It is utter nonsense [to suggest] that I could have had any role to play in concluding the contract with Alstom considering that I was not serving as prime minister any more in 2005 when the first tenders for the metro 4 projects were announced, nor in 2006 when the first bids were invited,” he told the portal.

Medgyessy said he had not been either owner or associate of AssistConsult Kft when the company concluded a contract with Alstom.

He said he had bought the company back in 2006 after his parliamentary mandate expired, but had no authority to cancel the existing contract.

Metro 4 report should be published if OLAF consents, says data protection authority

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Budapest, February 3 (MTI) – The findings of an investigation by the European Union’s anti-fraud office (OLAF) should be made public, but it is up to OLAF to decide if the report can be published in full, the head of the data protection authority (NAIH) said.

Daily Magyar Nemzet quoted Attila Péterfalvi as saying that the report is “public information from the first letter to the last” because it concerns public funds from the central budget and from the EU. But he added that providing free access to the document was up to OLAF’s discretion.

Péterfalvi suggested that the head of the government office should seek approval from OLAF to publish the report. Péterfalvi told daily Magyar Hirlap that Hungary’s chief prosecutor could have objections against publication, with regard to the investigation into alleged fraud involved in the metro construction, but added that the prosecutor’s office has not answered his inquiry.

Photo: Daily News Hungary

Budapest mayor urges publication of OLAF report on metro 4

Budapest (MTI) – Budapest Mayor István Tarlós on Tuesday called for the publication of the European Anti-fraud Office OLAF’s report concerning suspected corruption involved in the construction of Budapest’s fourth metro line and told commercial radio Inforadio that he did not understand why there was a dispute and why OLAF was not making the report public.

He said he had received the report from the Prime Minister’s Office. The government and the city management share the same view about it, he added.

He said he did not understand why there was “a slightly artificial dispute about making it public”. The government has received the report with the warning that it was obliged to respect the European Union’s rules on data protection. He added that if OLAF cannot make its report public then why does it pass it on with the “threat” that “you can make it public if you want, but you may have problems if you violate any data protection rules”.

Tarlós said he had received letters from the data protection autority and the Prime Minister’s Office informing him that he might get into extended lawsuits with multinationals if he makes the report public despite the warnings.

He said he would most welcome “this game to come to an end” because it only gives an opportunity for obfuscation by those that make guesses and present theories “out of political motivation or fear”.

Tarlós earlier said that in the document, OLAF listed 78 instances in the metro project in which criminal activities were suspected and all but one had been committed before 2010.

Photo: Daily News Hungary

Prosecutor: Hungary investigates all OLAF reports

Daily News Hungary

Budapest, January 25 (MTI) – The prosecutor’s office said on Wednesday that it had launched investigations into every report it had received from the European Union’s anti-fraud office (OLAF).

The prosecutor’s statement came after Democratic Coalition MEP Csaba Molnár said earlier in the day that Hungary was the only EU country that had never investigated any reports from OLAF. Molnar called it “suspicious” that the Hungarian government had ordered an investigation into irregularities recently uncovered by OLAF in connection with Budapest’s fourth metro construction project.

The prosecutor denied Molnár’s claims, describing them as “falsehood”. The office said it had forwarded OLAF’s findings to authorities that had already been investigating various aspects of the metro construction project. OLAF also took into account the findings of those investigations for its own report, the office added.

The office said it had received a total of 28 reports indicating suspected criminal activities from OLAF between 2012 and 2016, all of which had been or were being investigated.

Budapest mayor urges publication of OLAF report on Metro 4

Budapest, January 24 (MTI) – Budapest Mayor István Tarlós has called it “unfortunate” that a report by the European Union’s anti-fraud office (OLAF) concerning suspected corruption involved in the construction of Budapest’s fourth metro line has not yet been published, daily Magyar Idok reported on Tuesday.

Publication of the document would put an end to the “chaos, double-talk, and attempts to shake off responsibility”, the paper quoted Tarlós as saying.

In the document, OLAF listed 78 instances in the metro project in which criminal activities were suspected, Tarlós said, insisting that all but one had been committed before 2010.

On the subject of Budapest’s 2024 Olympic bid, Tarlós was asked why he had changed his mind from a negative to a positive stance. He noted that the International Olympic Committee had changed bid conditions in 2015, improving the chances of cities like Budapest to successfully host the Games. He added that many people were mistaken to believe that Hungary and Budapest would foot the bill alone, and the IOC would contribute large amounts of funding to help Hungary finance the games. He also noted the potential in sponsorship and private investment. “Budapest can only do well out of it,” Tarlós insisted.

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Budapest mayor: Fine for metro 4 fraud could be lower than first projected

Budapest (MTI) – The fine Hungary is expected to receive from the European Commission for irregularities uncovered by Europe’s anti-fraud office OLAF in connection with Budapest’s fourth metro construction project could be lower than originally projected, Budapest’s mayor said on Friday.

The 76.6 billion forints (EUR 250m) initially projected by the government is “an extreme”, and is unlikely to be the actual fine, István Tarlós told a press conference. The fine will likely end up being “more like 59 billion”, he added.

 

The government has the full support of the capital and is prepared to assist in “any legal action aimed at reducing the sum that will have to be paid back”, Tarlós said. The EC has yet to issue a decision on the matter, Tarlós said.

Budapest public transport company BKV and DBR Metro Project have a case to get the EC to lower the fine, Tarlós said. Hungary “cannot miss out on this opportunity” and should challenge the fine regardless of how big it is, he added.

Commenting on an ongoing initiative to hold a local referendum in connection with Budapest’s bid to host the Olympic Games in 2024, Tarlós urged those “who love the city” not to support the initiative to drop the bid, arguing that the capital would benefit from staging the event.

Photo: MTI

Orbán’s cabinet: Socialist-Liberal city leaders bear responsibility for metro 4 scandal

Budapest, January 20 (MTI) – It is clear that the previous Socialist-Liberal leadership of Budapest’s municipal council bear political responsibility for the corruption scandal surrounding the construction of the city’s fourth metro line, the government spokesman told public radio on Friday.

Zoltán Kovács said it was “absolutely clear” that the city leadership at the time, the then national government and international companies had conspired together in a crime, and all elements of the case must be explored. “But this is not the job of the government,” he insisted.

Due to the half a dozen or so crimes and regulation violations identified by Europe’s anti-fraud office (OLAF), however, the government had no other option than to file a criminal complaint, he added.

Asked about whether the Hungarian justice system should be seen in a critical light given the results of the OLAF report, Kovács said: “Perhaps several issues should be considered in terms of the extent of internal investigations and the rigour of controls.”

On the topic of illegal migrants, the spokesman said the migrants systematically abuse European laws and it was important to find a legal solution to ensure that in the period during which migrants await a legally binding decision concerning their status, they should not be able to move about freely in Hungary. In between the initial and final court ruling, migrants often illegally move on to western Europe, he added.

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Central prosecution investigating Alstom case

Budapest, January 19 (MTI) – The central investigating chief prosecutor’s office (KNYF) is conducting a full-scale investigation into the case concerning French engineering company Alstom’s contracts for the Budapest metro, based on recommendations by Europe’s anti-fraud office OLAF, the chief prosecutor said on Thursday.

OLAF launched a probe into the case in February 2012, in which a criminal investigation had been started by Hungary’s bureau of investigation in January 2011 on charges of fraud, Imre Keresztes said in a statement.

OLAF submitted its report with recommendations to the Hungarian chief prosecutor in November last year which was then referred to the KNYF, he said.

Keresztes noted that the Hungarian authority had questioned several suspects in connection with the case in October 2016.

The deadline for the KNYF to conclude its investigation is April 3 this year, he said.

Nándor Csepreghy, parliamentary state secretary for the prime minister’s office, announced on Monday that around 167 billion forints worth of damages had been identified by OLAF in connection with Budapest’s fourth metro construction project, and the European Commission could levy a fine on Hungary of 76.6 billion forints (EUR 249m).

He said the metro project had been the most corrupt case in the history of Hungary’s 13-year European Union membership. Irregularities had occurred during the period of former Socialist-liberal governments of the country and the city of Budapest before 2010, he said earlier.

Photo: Daily News Hungary

Budapest Mayor: Metro fraud probe concerns pre-Fidesz period

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Budapest (MTI) – The investigation by Europe’s anti-fraud office OLAF into the construction of Budapest’s fourth metro line almost exclusively concerns the period before Fidesz took over the local council, Budapest Mayor István Tarlós has said.

OLAF identified 80 issues in its probe and only one falls beyond the 2005-2009 period in which the Socialist-Liberal coalition controlled the city, Tarlós told commercial broadcaster ATV late on Tuesday.

 

Tarlós said he hoped the government would publish the OLAF report which he said was not in his possession. He insisted, however, that he had access to authentic information.

Hungary could be fined almost 77 billion forints (EUR 250m) for violations based on the OLAF report, government officials said earlier.

The number four metro line was inaugurated in 2014 after eight years of construction. The 7.3km line with ten stops cost 452.5 billion forints to build and was supported with 180 billion forints in European Union grants.

Europe’s anti-fraud office identifies metro 4 fraud

Budapest, January 16 (MTI) – Around 167 billion forints worth of damages have been identified by Europe’s anti-fraud office OLAF in connection with Budapest’s fourth metro construction project, and the European Commission could levy a fine on Hungary of 76.6 billion forints (EUR 249m), a government official said on Monday.

Nándor Csepreghy, parliamentary state secretary for the prime minister’s office, told a news conference that the metro project had been the most corrupt case in the history of Hungary’s 13-year European Union membership. He said that OLAF had identified almost 167 billion forints had been either “stolen or squirrelled away”, and this money should be recovered for the European and the Hungarian authorities.

The total cost of the project was just over 452.5 billion forints, he said, adding that OLAF had identified irregularities and corruption around contracts worth more than 272.8 billion forints.

Out of this sum, 76.6 billion forints was handed over by the EU in development funds, and Brussels could demand it back, he said.

The Hungarian government received OLAF’s report on its investigation into the project on Dec. 14 last year. The anti-fraud office questioned around 50 people over the course of its investigation, mainly former leading officials of Budapest public transport company BKV and the mayor’s office. It also looked into money trails associated with the private individuals and legal persons tied to the case, Csepreghy said.

The report identifies several private individuals and companies accordingly. The companies include DBR Metro Project Igazgatosag, Euro Metro, Strabag, Siemens, Alstom, Hidepito, the Bilfinger-Porr-Vegyépszer consortium, Swietelsky and the Bamco consortium. Out of the private individuals tied to the case, two are named in connection with the interior design of the metro stations. One of them was a deputy mayor of Budapest before 2010 and the other is the former CEO of BKV, Csepreghy said. The contracts associated with this part of the project were worth 40 billion forints, he added. Individuals named in connection with contracts dealing with the metro’s power supply include the supposed owner of Media Magnet, the former head of Hungarian rail company MAV and a leading staff member of Eurometro. Contracts concerning this part of the project were worth 32 billion forints, Csepreghy said.

OLAF identified irregularities and signs of corruption in connection with 57 contracts concerning the project, the state secretary said, adding that 96 percent of the damages identified can be tied to just five of those contracts. Twenty-eight of the contracts in question were financed by EU funds and 29 by loans taken up by the government and the mayor’s office from the European Investment Bank.

The irregularities in question also concern the procurement of the Alstom metro trains, and therefore the capital’s second metro line, as well, which runs the same type of trains, he said. If Brussels were to modify its findings in the future, the value of the damages may rise by tens of billions of forints, he added.

He said the government’s legal advisors were assessing the possibility of releasing OLAF’s report to the public in full, adding that the government was “fully committed” to publishing it.

Csepreghy told today’s news conference that the government would file a criminal report and it expected to hand it to the public prosecutor by the end of this week. The aim is to try to get those who are responsible for the damages to pay them, he said.

From receipt of the Hungarian-language version of the OLAF report, the government has two months to provide a substantive response, he said. The commission will then have a maximum of four months to form its standpoint and decide on any future action.

An MEP of the opposition Dialogue party called for the full disclosure of the OLAF report. Immediate responsibility should be declared, regardless of party affiliation, Benedek Jávor said in a statement. The gravity of the scandal surrounding the fourth metro was such that “there should be no further room allowed for cover-ups”. He said he agreed with Csepreghy that the project “reeked of corruption”, citing massively inflated construction costs mounting throughout and the opacity of the project’s procurement process.

The opposition Democratic Coalition said today that it demanded the government immediately release the OLAF report. The party’s city council representative Erzsébet Gy Németh said she could not understand why it would be in the cabinet’s interest not to release the document. She insisted that the government had already disputed the outcomes of European investigations into “earlier corruption” cases, yet now they would be prepared to pay the fine in order to “make an example of the previous city leadership”.

Were it the case that the report related to the project under the governments prior to 2010 rather than to the ruling Fidesz party, then the document would have formed the basis for “Fidesz propaganda”, she insisted. The corrupt individuals, regardless of whether they happen to be Fidesz politicians or not, should be the ones punished, Gy Nemeth said.

The opposition Együtt party said the case surrounding the metro 4 project highlighted the need for an EU public prosecutor’s office. If the Hungarian authorities are incapable of protecting Hungarian and European taxpayers, there is a need for a new institution, Márton Pataki, head of the party’s Budapest chapter, told a press conference. The news surrounding the fourth metro line indicates that the Hungarian prosecutor’s office led by Péter Polt, along with the country’s justice system, are “near collapse or have already failed”, he said.

Photo: Daily News Hungary

Weekly government press briefing about asylum seekers, local development projects, energy supplies and Metro 4 construction

Budapest, January 12 (MTI) – The government has decided to reintroduce a system for detaining migrants, the government office chief said on Thursday. Government scrutiny of applications by Hungary’s municipalities for extra funding connected with ongoing investment projects will be tightened up, János Lázár, the government office chief said. The government will file a criminal complaint against an unidentified perpetrator in connection with the construction of Budapest’s fourth metro line, he said.

Detention to be reintroduced for asylum seekers

Migrants who have submitted an application for asylum will be banned from moving around freely on Hungarian soil until their case has been ruled on. Also, rejected applicants will be banned from crossing Hungary’s borders until their have received a binding ruling, János Lázár told a weekly press briefing.

The heightened terrorist threat and related security risks are the reason for the decision, he said, adding the view that migration pressure on Hungary was expected to further increase over the course of 2017.

In light of this, the government has tasked the interior minister with preparing the immediate reintroduction of migrant detention, he said.

He said the autumn and December summits of the European Commission and Council on the issue had both failed.

The situation of those staying already within the EU’s boundaries is also problematic, Lázár said, adding that the number of migrants seeking to cross into Hungary from Serbia was on the rise, and this called for tightening up border protections already in effect.

Asked about the issue of a migrant tent camp in Körmend, in western Hungary near the Austrian border, Lázár responded that the reintroduction of detention would resolve the problem since the facility would no longer be needed. He expressed thanks to the town’s leaders and residents for their cooperation so far, which, Lázár said, the government would show appreciation for in the form of development projects.

Government tightens up scrutiny of extra costs related to local development projects

Applications for extra funding of up to 15 percent will be directed to the relevant ministry. In the case of extra funding worth an extra 15-30 percent, the economy minister together with justice professionals will have the right to veto the allocation, János Lázár told.

Applications for over 30 percent of extra funding will be rejected outright, he said.

Meanwhile, Lázár said the government aims to pay out the total amount of 9,000 billion forints (EUR 29.3bn) available to Hungary in EU development funding by the end of March 2018.

Further, the government plans to invite, by the end of March this year, applications for EU funds available until 2020, with decisions expected to be made no later than the end of this year, he said.

This year’s plan is to transfer EU funds of at least 2,200 billion forints (EUR 7.1bn) or possibly up to 2,700 billion forints, contributing significantly to projected economic growth of at least 4 percent, he added.

Lázár said the government had authorised the Prime Minister’s Office to continue a review of background institutions and also review state-run companies. The transformation and rationalisation of state-run companies could take place this year, he added.

He said Economy Minister Mihály Varga had briefed the cabinet by about a new strategy for the market of government securities. The target remains the reduction of the public debt to 65 percent of GDP by 2020 but Hungary’s current economic performance means that financing can be cheaper, he said. Hungarians finance 40 percent of the public debt and foreign creditors finance another 40 percent, which means the country is less dependent on them than before, Lázár said. A total 270 billion forints projected to be collected from land auctions in 2016 and 2017 will also be used to reduce the public debt, he added.

Lázár also said that Prime Minister Viktor Orbán will visit Szeged, in southern Hungary, on Jan. 30 and meet Mayor László Botka of the opposition Socialists. The government has promised to provide support for an industrial park to be built on 200 hectares in Szeged, and the city has also received special government support for the implementation of the Extreme Light Infrastructure (ELI) project.

In response to a question about the further development of the M0 motorway around Budapest, he said the route is planned to be finalised this year and a public procurement tender will be invited in the second half of the year, so construction could start in 2018 and be competed in 2022.

Hungary has sufficient energy supplies

Hungary has sufficient energy supplies and will meet demand even in “the most extreme” weather conditions, Lázár told.

At the beginning of the winter season, the government made arrangements to increase gas reserves by 13 percent, he said. The country has sufficient supply of electricity too, Lázár added.

The government has extended help to all municipalities to ensure services are provided for the homeless and needy, the minister said. He also urged homeless people to seek accommodation at the nearest shelter.

Government to file criminal complaint over Metro 4 construction

Lázár noted that the European Union’s anti-fraud organisation (OLAF) had concluded an investigation into the metro project. He also insisted that “an international leftist crime” had been committed.

Lázár said the alleged criminal activities including fraud, corruption, cartelling and abuse of authority could have been committed by Budapest’s former Socialist and Free Democrat managers.

The minister said Hungary faces fines totalling 76.6 billion forints (EUR 249m) imposed by the European Commission due to the irregularities identified. He said he shared Budapest mayor István Tarlós’s position that any fine should be borne by the perpetrators.

Photo: MTI

Fidesz wants EU anti-fraud office to investigate Altus contract

Daily News Hungary

Budapest, December 8 (MTI) – Hungary’s ruling Fidesz party wants the European Union’s anti-fraud office (OLAF) to examine a contract the European Commission awarded to Altus, a company owned by Ferenc Gyurcsány, a former prime minister who now heads the opposition Democratic Coalition (DK).

Commenting on the 383,000 euro contract to produce a study on the results of Poland’s cohesion policy, Fidesz MEP Tamás Deutsch said on Tuesday that Fidesz would do its utmost to put a line under a series of “corrupt deals” involving the opposition.

OLAF is holding a conference in Budapest on Friday and a Hungarian government representative will raise the issue then, he added.

DK said in response that Fidesz’s “threats” against Altus were “pathetic”. Hungary can be proud that one of its companies boasts internationally acclaimed experts and leads an international consortium which won the contract in an open and fully transparent competition called by the European Commission, the party said.

Nándor Csepreghy, parliamentary state secretary at the prime minister’s office, said the commission does not seem to have given up on “actively intervening” in the internal party financing affairs of an EU member state. The commission has been financially supporting a company with a single member, an active politician who spends the money to finance his own opposition party, Csepreghy added.