How Hungarian politicians try to hide their wealth - podcast episode cover

How Hungarian politicians try to hide their wealth

Jul 23, 201627 min
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What's up with Hungary THIS WEEK (July 18 - 24) On this week's podcast Zsuzsanna Wirth of Direkt36, Péter Erdélyi and Ben Novak discuss how some of the most powerful Hungarian politicians have tried to hide the real extent of their wealth before getting caught by investigative journalists.

Transcript

If I were a rich man, yeah, but if it if it if it if it if it if it don't all day long. Ladies and gentlemen, you are listening to The What's Up with Hungary Podcast. I'm your host, Ben Novak. Joining me today is the always very special and lovely Mr. Peter Erday. And we have an interview we'll be talking to both Peter and to Zhuzhi Vier to his a journalist with the investigative journalism NGO Direct 36 and we'll be talking about asset declarations

and some interesting stories that they've published recently. So let's get started. Bill A Big Dollhouse with the rooms by the dozen right in the middle of the door. Joining us today is Zhuzhi Vier. She is a journalist with the investigative journalism NGO Direct 36. Thank you for joining us today, Zhuzhi. Thank you very much.

A few months ago Prime Minister Orbán said that every member of Parliament and the government has to file an asset declaration and that asset declaration has to comply with reality. So it has to have everything listed that they own. And he said for those who don't do that and who don't do this properly, it's a crime. Yeah. And he also emphasized that members of his cabinet, ministers and state secretaries, that's especially true for them. So I guess my question

then is then geared to both of you, both Zhuzhi and Peter. Now you guys have been collaborating on this online platform called Vadion Kerashe, which is like an asset searching program where you essentially take the asset declarations of these parliamentarians or members of the government and then what do you do with them? We build a huge database which transforms the data inside the asset declarations to a usable form. You can analyze the data, you can use it to put pressure

on politicians to comply with the truth when they filed their declaration. You have to understand that in Hungary when the politicians do their asset declarations and financial releases, they are, it's a piece of paper written and it's scanned and it becomes a JPEG, a picture file essentially. So you are unable to search it, you're unable to catalog it. As is, the system is set up in a way that prevents journalists or pretty much anyone else to look at the financial releases

and figure out anything. Well, what I would ask you guys then is that if you say that it's specifically set up this way, do you have any evidence to show that there are cases in which politicians are filing asset declarations in these asset declarations as unsearchable as they are? Do not match up with reality. Yes, yes, there are multiple cases, I think, from the recent years and from before also. We are talking about tens of thousands of asset declarations and it's

basically not, so nobody checks whether they comply with reality at all. Sometimes journalists do, but we don't have the capacity to do that with every asset declarations. Especially before this database. As Ruzha said, there is no authority, there is no state body looking at these declarations. So they file it at the beginning of the year and they file it when they get into

office and they file it when they leave office. The parliament has a immunity and financial declaration to committee, but they don't actually look at the documents and see if they are true or if the information is true or not. They just look at if people filed their declarations in time or not. You guys, Direct 36 has published a number of stories recently about politicians who's asset declarations did not quite match up with reality. Two in particular that I can recall off the top

my head is one considering this guy. He's an MP and an undersecretary in the Ministry of National Development, this guy, Tushul. And there's also a Prime Minister, Orbán. Can you tell me a little bit about what you guys uncovered with Tushul? Yeah, well, Tushul is a minister of state responsible for transportation. He keeps a low profile. I mean, he's not very much on TV,

but he's a very powerful politician in Eastern Hungary, a city called Nila Doin. Well, seemingly, he filed his asset declarations very accurately and it is very detailed, but I managed to find several assets, actually several properties that were entirely left out of his asset declarations for I think eight or ten years. These properties happened to be on a very important location in Nila Doin.

In the center of a future, huge investment. The future industry park in Nila Doin will be at the exact location where Tushul has these rather small lichments, but they might be very valuable to him because of the possibility of future development in the area. And so do you guys have published this story? Have you heard any feedback from, I don't know, maybe the parliament or from law enforcement officials saying, okay, we've we realize that you have presented here evidence that

an asset declaration was turned in, but it wasn't actually accurate. Not at all, but it is very common that this parliament committee does not react at all and that the tax authorities do not care about media coverage concerning politicians assets. Government politicians, I'm sure if Tushul was a opposition MP, the tax authority would take a much more keen interest in what's going on with his asset declaration. And I think one more thing is there that if you file a false

declaration, the first thing you do is you can just amend it. Like there's no consequence out of the out of the gate for lying on these papers, do you just say, oh, I forgot and then you resubmitted and that's pretty much it. That's what that's what plenty of people did. I don't know if Tushul. Yeah, but Tushul is different in this disregard because he doesn't admit that he had that he made any mistakes. So he did? And he says that it is it is all real what he wrote into

his asset declaration. So he hasn't even amended his asset declaration? No. But I'm not at all. I'm sorry, but so you found you went to the land registry and you found land in his name that wasn't in his. Yes, yes, my statements are based on land registry data on property-led registry data and on public databases that that can be looked by anyone. And you can see the land registry data and it is different in some cases. But does he say the land registry is wrong or

does he say that he says that this is all wrong. I am lying and he will file a lawsuit and hand he is he is all this this article is aimed to discredit him. Wow. That's all what he said. He said multiple times that he is going to file a lawsuit. I wasn't I don't know whether he did it so far. I think no, not yet. He still has some time to do that, but I'm not sure about it. Well, another another person who got a little bit of got a little

bit of media attention thanks to your work is the prime minister. So with the prime minister, you guys I'm assuming you went to the land registry near Feltchute somewhere and you guys wrote this pretty lengthy piece about about the lands that are owned by a prime minister or by an in conjunction with some other people, but all around the Feltchute stadium and these weren't listed

on his asset declarations as well. Yes, yes, and I think Patikann he was also in Feltchute. We were together when we were trying to get data out of the the local land registry office and we had some difficulties because after asking for a certain number of land registry documents, the office rejected our claim to see these otherwise public. Can they legally do that? Can the land registry office say that okay, you can't ask any more questions? Well, if you ask me,

they cannot, but they did it anyway. I think yeah, I think it's clear that the law does not, you know, enables them to pick and choose which request to answer, but on the other hand, it's an office, it's bureaucracy. So there's a lady there, you walk in, you ask her question, you submit the number, every piece of land has like a parcel number. They have parcel number. The parcel number,

so you you submit that number and say that you want to see who's the owner. And then if the lady says, no, I'm not going to tell you and there's like a new internal regulation for this, then what can you do? I mean, you know, it's it's her computer. She's sitting behind the desk and that's exactly

what happened. They asked too many questions at the Bicke, the Bicke is the town near Feltchute, the land registry is located at Bicke and they went there, they asked too many questions and after I think a week or two of them constantly being them and submitting these parcel numbers and looking at documents, they suddenly said no, it's this is this is not going to fly anymore. And you are not allowed to ask, I think the end of the day was like, you can't ask more than five. One person on one

day can't ask for more than five pieces of. So the the way around that, I guess is like you just go down with a group of people and that's what we did one time. That's exactly what happened. So we at 444, we organized whatever cars and little caravan. Yeah. So we went down and that was a nice trip to the country. Is the public interested at all in this story? Is it something that they that you see people getting angry about? How you know, I think that the general attitude is that

yes, everyone knows that politicians are corrupt. Everyone knows that they file false declarations. Everyone knows that they keep lying and nothing happens. So I don't think they are really angry. They might be a little bit. I think it's different between stories. So for example, the Tosho kind of thing where he has these lands and those lands are marked for development later on. So he's obviously there to profit from the later sale of the or the letting out of these rents of these lands.

I think that's one story and maybe that's a bit more abstract. Maybe that's not that easy to catch people's attentions with. On the other hand, just before the election, there was the the Rogen thing, how his his flat kept expanding. Like he had to like amend his his declarations. I think multiple occasions and all the time his he had to add more space to the flat he owns. People could relate to that because people live in a whatever 56 square meter flat in Budapest on average. And so they

saw this guy and how he said it was like 96 square meters. I'm just and then he just kept expanding. Every time a news report came out, he would go every time in an investigative piece or whatever came out about how big his apartment is, then he would go in and amend his. Yeah, something like that.

Exactly. And I think that story just because of the relatableness or relatability was caught more attention than Tosho, which is I think a worst offense, like leaving something completely out and leaving a piece of land that you know is going to be an expensive piece of land because of the municipality's development projects. But on the other hand, it's more people are you know,

it's harder to relate to because people don't have these lands marked for development. Yeah, and I think one of the other aspects of it is that within in Rogan's case is that you know, he was a relatively well known governing party politician. So people knew who he was and just watching this cat and mouse game of him running to go amend his asset declaration every time a story came out about

just how big his apartment was. That was pretty funny. My story on Tosho had a follow up. And the second was about some of his local businesses that how his relatives got involved in near-adoint businesses and winning millions of forens of EU money or state money different ways and using them to renovate a local old building. I mentioned to a private hotel or running a bowling pub, making the restoration from EU money and also acquiring a quite well located shop building

in the center of the city. And the people involved in these businesses which were financed by the local municipality of from EU money. The people involved are among them are Tosho's daughter, his nephew, some other close relatives, his wife and other relatives. So we're keeping it and keeping it in the family. You have this one aspect of your story that was really interesting to me. So the municipality of Doña owned a hunting lodge and it used to be some kind of a state like a

little, I don't know, like a villa kind of kind of building. Yes, it is an old mansion and it is called the castle by the locals. It's not really a castle but it's called that way. It is a quite a nice old building. And so this old building that was owned by the municipality, I guess the municipality got EU funds to refurbish or I guess refurbish this old mansion and then they sold it to Tosho. No, what actually happened is that this hunting lodge was given the right of

common, I'm in the right of use to to a hunting society which was headed by Tosho. This local local NGO was the one that applied for EU funds and they got them and with the leading of Tosho as the head of this NGO they managed to restore the old building and they transformed it to a private hotel. And after the restoration was finished using millions of of forens, the municipality, one month later the municipality sold the building of the castle to this NGO.

And you know how much? I don't know an exact number but it was around one million forens which is around 3,200 euros I think. And do you have any information on how much the restoration cost? Yes, it was, Miluki Tabit was around 38 million forens. So there seems to be quite a big difference. That's more than 100,000 euros. Yeah, it's more. It's around 120,000 euros. That was one. This money was one to restore the castle and after the castle was sold to the NGO

for one million forens. Does that signal to you guys that I crime and may have been committed there? Why? I'm sure that this NGO will take great care of the, they are the spiritual owners and they are the driving force behind. They did all the work. The municipality was just there to pay for it. The municipality claims that the best possibility was to give away this castle and as opposed to what were the other possibilities? Yes, they say that they had no other

possible possibilities. No, the possibility is like, you know every so often you find yourself in this situation that you own a castle and there's no other possibility than just to sell it to get for like peanuts to somebody, to government politician. I mean you just, I'm sure that our listeners know the feeling how that works. It's a table of feelings to us all the time. Yeah, and I'm glad that they did it. They went through with it and not pay the attention to all

those naysayers who said there may be another option not selling it. Are you guys now working? This whole tushal story to me is just outrageous. Number one, the whole asset declaration thing to me is really interesting because I've only lived here for a few years and I've never really seen anything happen with asset declarations. When it turned out that somebody turned one

in that was false. The other part of the tushal story that's really interesting to me and that's outrageous is this whole selling off of this lodge for like 3,000 euros after they put 120,000 into it to refurbish it. It doesn't make any sense to me. I don't know whether there'll be any consequences to this, but we do. But even if you know that there's not going to be any consequences to it, why would you then continue with Vadjom Kareša upon two? Because you have to.

Yes. That is our task. There is no S for the municipality. There is no alternative then to sell the lodge. For us, there is no other alternative than to go out and try to expose as many people as possible if they break the law or they file false releases. What are the other options saying? At least that there is a possibility that they would be exposed by the media because of their

wrong doings that might have an effect. I hope. You can't really expect the prosecutor's office to step in or the tax authority or the police and angry to take a really close look at what's going on with the government policy. I was going to ask you one thing. Do you think that like some of the things that show failed to declare were minor things except for I think this is the development plan. I think that was a big piece of land that he failed to declare. Do you

think that this was by accident or was it intentional? I'm not sure. Maybe it wasn't really intentional. Maybe he just didn't think it is important enough to declare. Yes. Because that's the situation. I think when it seems so unreal that these people will lie about the extra 10 square meters. The extra land that they own on top of 50 other pieces of land. What difference would it make to say, yeah, I own this. It's so ridiculous that I think we got

to the stage that there are politicians in Hungary. They are so rich. They own so many assets, properties, everything. That it's just logistically, it's not easy for them to map everything. I would have no idea about that. I would assume that if you're anybody be a politician or a business man or just a regular civilian, whatever, if you have assets and you pay taxes after these assets, then you have records and you probably have an accountant who says, okay, like this is what you own.

Then you make these declarations. I would assume, and if I was just going to go out and assume the absolute worst of why this happens, why they don't include everything. Because at the end of the day,

in a forensic accountant, maybe able to look at this and determine this easily. But if you look at what these people have made, I don't know, over the last 20 years, from holding exclusively, like jobs as public officials, and you match that, those figures up with the amount of assets that they've accumulated over the years, then you would realize, holy cow, there's no way they could have paid for this based on their salary alone or maybe the salary of their spouse or what have you.

But it is very easy in the current system to hide your assets. It is enough to give it to your wife, it is enough to give it to your company and then suddenly it doesn't appear at all in your declaration. And it is right to do so because it is not against the rules to give any of your assets to your relatives or give it to your company. So when you guys write about these topics, is one of your goals then to encourage legislation that kind of expands and I guess modifies the

asset declaration rules in a way to where it's much more transparent. Are you taking like this activist role also? Yes, that would be very good because in its current form, this whole system is useless. And it gives you the false sense that politicians are accountable because you see they file declarations every year, but they are actually useless. And I think one other thing that is important that every time you file a story like this, that you get more emails about other people

too. So I guess how this works, regardless of politicians reforming the system or not, you file a story about Tosho, then you will get three emails about his assets and maybe you'll get another emails about some other persons' filings and assets and stuff like that. So it's important to keep the ball rolling in this sense because that ball get you new stories about politicians breaking the law. And this is, I mean, this is part of how you get information. There's like other

ways, sure, but it's important to get tips just to go back for one moment. The very reason they screw it up, the declarations, is because of what you said, they can't legally own as much as they do. So they need to create this facade with the holding companies and with spouses and relatives and stuff like that. The whole system needs to be really complicated. So at the end of the day, should anything happen, they wouldn't be the owner in name of all those things. So they create

this complex web of assets and companies and stuff like that. And then it's really hard to track even for them. And the other thing is, sure, if you are like an everyday person, you need to have a good account and then you need to have like a good record of what you own because of the tax authorities. But these people know that there is no way the tax authority is going to go after them. So for them, the pressure is not. Who do you mean by these people? The government politicians,

mainly? And I think opposition politicians actually do the same. So they use these techniques as well. I am currently working on an article on an opposition politician and the same patterns can be found there. Yeah, and let's not forget about Shimon. Yeah. He was a a MSP politician. He was actually, I think, deputy president of the socialist party right. I think he was, he was, Alain, actually. And just before the 2014 elections, it was right around

the time the whole box deal happened. It was a late January or something like that in 2014. Yeah. Where this story came out, where I guess investigators or somebody found a bank account in Austria with like one hundred or was it like one million euros or something worth of a huge, some kind of the huge amount of money in it that he had not listed on his asset declarations. And then and then this immunity committee, actually, they met to discuss this. And I think didn't they

suspend his immunity? Oh, yeah. But I mean, that was, that was a, you know, the case for that was, he was in opposition. So if I'm sure that if he would have been a government MP, Fidesz, or Caddy MP, they wouldn't have been so quick to revoke his immunity. But because he was MSP and because it was during the campaign for the for the general election, this was a great opportunity them to show how corrupt the socialist are and don't get me wrong. I mean, he did have a secret

bank account undeclared. No one knows how he got that money. Even Las Arianos, you know, with his, he had his son who apparently owns like vineyards in my, do you remember that story? He also has like an apartment. Yeah, he has a really nice apartment. I'm like 10 years old. Yeah. Same about Peter Seattle, who is the foreign secretary, you know, he happens to all know, where he, where he big house. And he said that it was, it's from from family cooperation. Yeah, his family loans him

money. Yeah, you get you get that a lot. And this is what happens when people don't earn enough to own that kind of property. But they do want to have, you know, a comfortable life. They do want to have that nice villa with the swimming pool and whatnot. And so what happens is they need to find ways to either try to hide it. So they will have it. Koshalayosh had a nice piece of yeah, no, yeah, an apartment here in Budapest. I think a house. Yeah, but whatever, an apartment.

Yes, apartment in his, in his wife's name. So no one knew about it before RTR when exposed there. And then yes, Janusz Lazar, this was in his son's name. And Seattle, who said that he, he got money from his dad and mama. Yeah, because it is a huge mistake of the current declaration system that that the declarations of spouses and children are not public. And you can easily hide money and money assets in their declarations because nobody would have

no about it. Well, I guess we we wrapped up this this section. Then, Joujee, thank you for coming by and talking to us about this. And then we look forward to reading more of your work. Thank you very much for inviting me. Thank you. So that was the What's Up with Henry podcaster this week signing out and wishing you a pleasant weekend. It's me Ben Novak and Mr. Peter Erdy. Bye bye. Goodbye.

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