A group of people have put together a sort of advocacy website for the besieged former Hungarian politician and humanitarian. The purpose of the website aims “to offer access to the documentary evidence.” According to the website, the creators consider the available evidence supportive of Hagyó’s innocence.
Another Hungary post from my Princeton colleague Kim Lane Scheppele, after the jump.
First, Let’s Pick all the Judges
Kim Lane Scheppele March 9, 2012
Europe doesn’t like what is happening to the legal system in Hungary.
These days in Hungary, one person picks all the judges. This judicial “czar” just announced today that she was filling 129 vacant judgeships. Only 23 of the newly assigned judges were already judges before. That means fully 106 of these positions are awarded to judicial newcomers. New judges enter the Hungarian legal system for three-year probationary terms, under the watchful eye of the very government that will decide on their reappointments. These judges, therefore, are independent at their peril, knowing that their jobs depend on how the government evaluates what they do.
The judicial czar also has the power to assign specific cases to specific courts. Hungarian law specifies where cases are normally tried, but in Hungary’s new constitutional order, these usual rules can be overridden by the judicial czar who can transfer specific cases to courts other than the ones that are assigned by law. These transfers of cases do not have to be accompanied by reasons explaining why the judicial czar selected those cases or why they wound up in the courts that they did.
What is to prevent Hungary’s judicial czar from picking the judges and then moving sensitive cases to the judges the government prefers? Not the law, at least not anymore.
To Europe, these practices look like the political control of the judiciary. The rapid acceleration of European actions about the judiciary in recent weeks is a signal that Hungary has hit a European nerve.
On Thursday, March 8, the European Commission sent a “reasoned opinion” to Budapest asking the Hungarian government for more information about Hungary’s radical judicial reform. The Commission has given Hungary only one month to respond, an unusually short turnaround time.
On another front, the European Commission for Democracy through Law (an expert body otherwise known as the Venice Commission) will conclude next week that the changes to the judiciary, particularly the concentrations of powers in the hands of one official, “contradict European standards.” The report will say that the constitution must be amended to ensure an independent judiciary. It is a hard hitting report, as we learned when the Népszabadság, Hungary’s largest daily newspaper, leaked news of the draftthis week.
A few weeks ago, the European Parliament started a process that may culminate in Hungary losing its vote within the European Union. To decide whether to proceed further, the Parliament wanted to hear Venice Commission’s expert view of the judicial reforms, which we have just learned is scathing. More assessments on other aspects of Hungary’s constitutional changes are to come.
Hungary is not waiting for European permission to put its new judicial plan into action. The Fidesz government is moving quickly to consolidate its constitutional revolution. Soon, the new system will be so entrenched that it will be very difficult for Europe (or for that matter, a future Hungarian government) to change it. The first batch of new judgeships appointed under the new system was announced today. The migration of court cases in Hungary started a couple of weeks ago.
On February 17, Tünde Handó, president of the newly created National Judicial Office of Hungary – the new judicial czar – transferred the first set of cases from the crowded Metropolitan Court of Budapest to various less-crowded courts in the countryside. According to the Fidesz government, moving cases around the legal system like this improves the efficiency of the judicial process by giving judges with smaller dockets the opportunity help out their busier colleagues.
In Hungary, as elsewhere, justice often moves too slowly. A reform that speeds up the processing of cases is understandable and even laudable. But in Hungary, unlike elsewhere, these judicial reforms cap the political program that has put the independence of the judiciary in question.
Three of the nine cases that were just moved out of the capital to the countryside are politically sensitive. One happens to be the highest profile corruption case involving the main opposition party, the Socialists. Former Budapest Deputy Mayor Miklós Hagyó and 14 others are charged with embezzling about $70 million from the Budapest Transportation Authority and the Fidesz government is seeking a 20-year prison term for Hagyó. His case was transferred to Kecskemét. The choice of Kecskemét has raised some eyebrows, since the president of the county court there (who will assign the case to a specific judge) was one of the few court leaders in the country who did not sign a petition to the government protesting its judicial reforms.
Another case involves former Fidesz economic advisor Tamás Varga, who has been serving a jail term after being convicted of embezzling about $140 million in government funds. His appeal against his conviction has been transferred to Debrecen.
Still another case against SCD Balaton Holding, apparently involving alleged real estate speculation, has generated substantial interest among members of the far-right Jobbik party. It was transferred to Kaposvár.
Why should anyone be concerned about a few cases moving to less crowded courts? Because the judicial czar has close ties to the government and there are few legal constraints on her actions. When one-third of the cases moved in the first round are of serious political interest, then we might well wonder what’s going on.
This reassignment of cases is occurring in a context in which roughly one-tenth of all of the judgeships in the country are suddenly available to be filled with new judges.
In June 2011, a new law suspended all new judicial appointments until the new constitution came into effect on January 1, 2012. During that six-month period, judicial vacancies mounted, waiting for a new system of appointments to begin. Then-Supreme-Court-President András Baka spoke out stronglyagainst the attacks on an independent judiciary, not least because he, as the president of the Supreme Court, was also president of the Judicial Council that had the responsibility for selecting judges.
In the end, President Baka lost his job. When the new constitution took effect on January 1, Baka was singled out for removal in the “transitional provisions” to the new constitution. In Baka’s place, the Fidesz Parliament elected Péter Darák, a little-known Supreme Court justice and academic tax specialist who had become a judge on the Supreme Court in 2000 during the first Fidesz government.
The Supreme Court presidency and six months of frozen judgeships created a number of judicial openings for the Fidesz government to fill. But those were not the only open seats on the bench. The new constitution suddenly lowered the retirement age for judges so that, instead of being able to retire at 70, judges were forced to retire at 62, effective immediately. Through this measure, the government received another windfall of judgeships to name.
In an interview on January 31 in his Budapest office, Róbert Répassy, secretary of state for justice, told me that 236 judges would be immediately affected by forced early retirement measure alone. Of that number, he said, the great majority were judges who were already collecting pensions and working only part time. But he also explained that a number of senior judges holding important posts would also be required to retire. Eight out of the 20 county court presidents, two of the five appeals court presidents, and 20 of the 80 justices on the Supreme Court would have to leave office in 2012 because of the new retirement age, allowing the current government to replace them, too.
And how are several hundred new judges to be selected? Under the old constitutional order, judges themselves ran the process of judicial appointment so that it was hard for the government of the day to control who was named to the bench. Under the new constitutional order, all of the new judges are selected by one person, elected for a term of nine years by Fidesz’s reliable two-thirds majority in the Parliament. That person is Tünde Handó.
Tünde Handó occupies a newly created post in a newly created agency: president of the National Judicial Office (NJO). She has been given the power to fill any judicial vacancy that arises – in both civilian and military courts.
Handó’s selection for this sensitive post raised eyebrows both in Hungary and around the world. Before becoming judicial czar, Handó was a long-serving labor court judge, and also a long-time close friend of Prime Minister Viktor Orbán and his wife. She is married to József Szájer, a Fidesz founder and a current Member of the European Parliament who claims to have written the new Hungarian constitution on his iPad. To avoid conflict of interest, Szájerresigned his Fidesz party posts after Handó’s election as head of the NJO. But he still holds his Fidesz seat in the European Parliament. Handó’s intimate ties with the Fidesz inner circle have not endeared her to the democratic opposition which claims that she cannot be neutral.
Handó has not been in the job long, so it is too early to judge just how she will handle her new responsibilities. Let’s assume that she will exercise these powers with exemplary professionalism.
Even with an angel in this job, however, the powers of the president of the National Judicial Office are unprecedented in European practice for their sweeping range as well as for the inability of the affected actors to appeal or contest her decisions. In this job, Handó can hire and fire judges, evaluate them, reassign them to new jobs, and assign them cases to decide. And for most of these decisions, her word is both first and last in the process.
Take judicial selection. While technically, Handó must pick new judges from among lists of those selected by judicial councils in the various courts, she is the one who controls the timing and terms of the judicial “tenders” through which interested candidates apply for the jobs. If a judicial council does not give her a choice she likes from among the applicants at that court, she can refuse to appoint any of the recommended judges and start the process over by announcing a new tender, until the judicial council for the court in question sends her a candidate she is willing to name as a judge. She doesn’t have an absolutely free hand in this process, but she controls most of the relevant aspects of the search. Among other things, she can attend all of the meetings of the judicial councils that will ultimately make their recommendations to her.
When she decides to bring a new judge into the system, Handó must recommend the appointment to the President of the Republic who then formally names the judge. (The current President, also elected by the Fidesz parliamentary supermajority, has not refused anything he has been asked to do by the current government.) Judges who are already on the bench can be moved around with Handó’s say-so alone, including promotions, demotions and assignments elsewhere in the country. She may also appoint and relieve from duty all of the court leaders, who assign cases to specific judges and otherwise manage their courts. There is no procedure for judges to contest her decisions unless a judge has been asked to resign.
Handó’s job also extends to the evaluation of judges, since the law requires that they provide annual data directly to her. The law on the judiciary does not specify what information judges must produce for these evaluations; that will come later in rules that she has the power to issue. She, along with the new president of the Supreme Court, may also investigate judges through an only vaguely defined procedure that may lead to a judge’s removal. Among other things, the law does not specify what standards judges would have to violate to put themselves under risk of investigation and potential removal. She may also “suggest” that disciplinary proceedings be initiated against specific judges within their courts.
Handó also has the power to grant exemptions to judges if they would otherwise have to leave their posts, for example when they hit the mandatory retirement age. In response to the infringement procedure that the European Commission has launched against Hungary for age discrimination against judges, the government is now considering a proposal that will enable judges who have reached the new retirement age to petition to be kept on a big longer, as Secretary Répassy told me. And who will decide whether a judge can keep his or her job past the new retirement age? Handó! Secretary Répassy, however, knew of no procedure under consideration for these decisions to be contested if Handó rules against the judges who want to stay on.
As president of the NJO, Handó may also initiate legislation regarding the judiciary, propose to Parliament the budget for the judiciary and determine (it seems, by herself) the number of judgeships that should exist in Hungary in the first place. She is also given the power to speed up for special treatment cases that have social importance. But how she is to determine social importance is not defined by law.
And this brings us back full circle to the cases that Handó moved out of Budapest to regional courts a few weeks ago. Yes, she has the power to do that too – and it is (according to the government) a power that is now enshrined not just in the law, but in the new constitution itself.
Handó’s powers to assign specific cases to any court in the country came into the constitution by a circuitous route. Seeking to control where individual cases were decided, the government inserted parallel provisions into the new law on office of the public prosecutor and the new law on the judiciary, provisions that allowed both the chief public prosecutor and the president of the NJO to choose the courts that would hear particular cases. But the Hungarian Constitutional Court, in a December decision, found that it was unconstitutional for the public prosecutor to have this power because it violated principles of judicial independence. Had the Constitutional Court been able to review the law on the judiciary (and with it, the provision that allowed the president of the NJO to select the courts to hear specific cases), the Court probably would have found that provision unconstitutional too.
Was this a strong Constitutional Court standing up to the government? By surface appearances, yes. By practical consequences, no. In fact, the Constitutional Court’s decision was quickly and easily overridden.
In response to the decision, the government simply slipped this language – language giving both the public prosecutor and the president of the NJO the power to assign specific cases to any court in the country – into the “transitional provisions on the constitution.” This was a giant bill held open for collecting random constitutional changes until the very last minute before the constitution went into effect. The Parliament passed these transitional provisions on December 30. According to the government, the transitional provisions qualify as constitutional amendments, even though many of the provisions are not in fact transitional but make permanent changes to the constitution and even though the transitional provisions were not passed according to the parliamentary procedures for a constitutional amendment.
The status of these provisions as constitutional amendments is presently being challenged by Hungarian constitutional lawyer Gábor Halmai in a petition sent to the Parliamentary Commissioner for Human Rights who has the power, if he chooses, to forward the petition to the Constitutional Court for review. (People used to be able to petition the Constitutional Court directly in cases like this but, under the new constitution, they must now go through the filter of the ombudsman.) Though the Commissioner has had the petition for more than a month, however, he has not yet indicated what he will do. Even if the Commissioner forwards the petition to the Constitutional Court, the Fidesz government has already packed the Court. The government has been able to appoint seven of the current 15 judges of that Court in less than two years, adding to the several judges sympathetic to Fidesz who were on the Court already. Few now expect the Court to challenge the government in any serious way even if it receives this petition.
In the meantime, however, it is through this alleged constitutional amendment that Tünde Handó now has the power to take cases out of the Budapest courts and move them anywhere else in the country she pleases.
Judicial independence requires that judges are free of political influence. But under the new constitutional order, where the power to hire, investigate, promote and remove judges is in the hands of the same person who then also makes specific case assignments to courts, Hungary no longer can guarantee that judges will remain independent. It will take strong judges not to be swayed when the state official who gives them specific cases to decide also holds their careers in her hands.
No wonder Europe is worried about judicial independence in Hungary.
This post was inspired by an Amicus Brief to the Venice Commission, coordinated by Professor Gábor Halmai of the University of Budapest (ELTE), on which I also worked. The Venice Commission will be presenting its report on the laws on the judiciary discussed here for adoption in its plenary session on March 16-17 .
A personal note: I would like to thanks many readers of this blog for supportive personal messages and for the huge turnouts for my lectures when I was in Budapest. You can see my lecture at Central European University in full here.
The Budapest Metro Line 4 (Metro4) has for many years been a major project for the Budapest Transit Authority (BKV). Once finished, it will be the first fully automated metro line in Hungary. Totaling more than 12 kilometers (7.5 miles), it will pass from south Buda under the Danube River and continue deep into Pest. The project has been notorious, however, for its continuity. Critics of the project have considered its progress slow and its management incompetent; tell-tale signs of government corruption. Those in charge of the project say that a lack of resources and manpower are the true hindrances.
Miklós Hagyó is quite familiar with the project. From 2006 to 2010 he served as deputy mayor of Budapest, and in that capacity he was responsible for the political oversight of the city’s assets. In the trial of Hagyó and the other 14 associates of BKV, the prosecution claims that Hagyó “instructed” then chief executive of BKV Attila Antal to strike up a business agreement with the Hungarian consulting firm AAM, who has a strong public sector track record. The alleged purpose of the arrangement was the creation of an assessment report on Metro4. It intended to ascertain the quality and progress of the project’s “management, the administration, as well as quality assurance activities.” The prosecutors assert that Hagyó was required to present the report to the City Council’s Budget Committee.
At this point, everything seems fairly normal. As usual with the Hagyó Case, though, the abnormalities appear when one analyzes the prosecution’s accusations and methodology. Regarding the contract with AAM, the prosecution claims in the indictment on page 17 section 21 the services provided by AAM were “unnecessary,” and they caused BKV financial damages totaling 50,093,400 forints (nearly 230,000.00 USD at the time of writing).
Here arises the first question: By what means has the prosecution determined this contract to be unnecessary? There are most certainly no explanations provided in the original indictment. Neither has the prosecution explained thus far in the trial how this contract and the related work were unnecessary. Besides that simple question, the major refute to this assertion is that the prosecution admittedly neglected to seek consultation from any organization or individual who could be capable of accurately determining the necessity of the AAM contract.
On the other hand, Miklós Hagyó did provide ample evidence for the worthiness of the contract during his first in-court testimony. Perhaps most significantly, though, Hagyó indicated that while he scoured through tens of thousands of pages of collected evidence related to the AAM contract, he failed to find the actual Metro4 assessment report…Let me repeat that: The prosecution did not provide the assessment report of the Metro4 project in the case file. Mind you, this accusation that Hagyó “instructed” his subordinate to create a needless contract with AAM from which he could extort a significant sum of money was one of the most significant reasons Hagyó was forced to endure nine months of hard jail time prior to the trial. The AAM accusation was one of the biggest indicators that Hagyó was an Al Capone-like figure, dictating his less capable minions to do his dirty deeds. Indeed, this questionably “unnecessary” contract which Hagyó allegedly “instructed” his subordinate to create is a major catalyst for the entire trial. And the prosecution did not even include the report, the primary evidence, in the case file.
Other parts of Hagyó’s testimony strongly support the necessity of the AAM contract. For example, he included several quotes from then City Council members who reviewed the report produced by AAM. Here are a few excerpts:
“It is a very fair, well-prepared report. It also shows that we got a lot of information.”
– Former Minister of Transport Katona Kálmán
“We can thank both the referring Deputy Mayor [Miklós Hagyó] and László Becker [Metro4 Commissioner] that this material was prepared…”
- Dr. Gábor Dancs
There are more which attested to the necessity and value of the assessment report from AAM. They are available in this section of Hagyó’s testimony. He also systematically explains how he was not directly involved with the Metro4 project or AAM. According to him, the Metro Commissioner László Becker held the reigns for the project’s development. Hagyó claimed that he was merely the political representative of the project for the City Council.
Despite, these shortcomings in the validity of the prosecution’s case against Hagyó, the trial persists. When I inquire to those who follow the case how this is possible – how a trial can subsist when an overwhelming amount of evidence supports innocence of the defendants – the Hungarians just shrug their shoulders. “It’s Hungary. It’s normal,” is a typical response.
Zsolt Balogh: Perhaps Not the Hagyó Case Spark, Certainly the Fire’s Fuel
image source: origo.hu
I have written extensively about the BKV case and the severance payment scandal in addition to the current case against Miklós Hagyó. However, the two cases, though connected to the same company, involve very different alleged crimes and suspects. Since Mrs. Eleonóra Szilágyi Szalai was the original suspect for receiving misappropriated funds, how did Mr. Hagyó become involved? The answer lies within the words of one man.
Balogh entered BKV in April 2007 as an Investment Manager which required of him to oversee the preparations and executions of new projects. A short while later in October 2007, he transferred to the position of Deputy Engineer Manager and Under Secretary to the acting Director Attila Antal. After Attila had fallen seriously ill, Balogh was promoted by the BKV Board of Directors to serve as the Interim Director of the public transportation company in February 2008. According to a source familiar with the public company, there were 15 board directors: nine members from SZDSZ, another four were from MSZP, and the remaining two were appointed by the MSZP government. Mr. Balogh served as the Interim Director until September 2008 when István Kocsis was elected by the Board of Directors to act as full-time Director. At that time, Balogh worked as Kocsis’s right-hand man.
As a result of Balogh’s public accusations that Miklós was involved in bribery and misappropriation of public funds, Miklós was detained by the Budapest Police. Even though no formal investigation had been conducted, the only evidence for the alleged crimes were the public statements made by Zsolt Balogh, Miklós was subjected to pre-trial detention.
While Miklós’s pre-trial detention was maintained without supporting evidence by Judge Mária Szívós, Zsolt Balogh was given full-control over the Public Transport Company in Pécs, a beautiful city of around 160,000 people in southwestern Hungary. This promotion has been noted by many as peculiar considering Balogh’s upper-management roles at BKV during the severance payment scandals. Further speculation has arisen from Balogh’s skeptics since Pécs’s local government is controlled by the Fidesz party.
Before the debut of the trial of the 15 associates of the Budapest Transit Company (BKV), the prosecution team had a simple job. Their only task was to put together a case which clearly demonstrated the guilt of the 15 suspects, an alleged criminal network comprised of BKV’s upper management who were directed by a former deputy mayor of Budapest. BKV was already under public scrutiny for a severance payment scandal. Miklós Hagyó, the former deputy mayor and suspect number one, had already been publicly shamed. Popular opinion considered him a relic from the oppressive Russian past, maybe because many of the non-socialist media outlets portrayed him as such.
Shortly following the smear campaign and while awaiting the trial’s commencement, Hagyó and many other defendants spent a considerable amount of time jail. The prosecution justified this by claiming they held substantial evidence which indicated the suspects intended to flee the country. The prosecution cannot merely will someone into jail, however. A signature was therefore required to approve proposals for pretrial jail. Many suspect a woman by the name of Mária Szívós to be the authorizing judge, at least in the case of Miklós Hagyó, who arguably endured the worst treatment during nine months in pretrial jail.
The prosecution has not been able to provide ample evidence for their cause, however. The court has heard testimony after testimony, all of which revealed that the investigators coerced incriminating statements from the suspects. According to the defendants, the prosecutors and the police worked hand in hand. Many times the defendants stated that the interrogators would fax the investigative statements of the suspects directly to prosecutors during the ongoing interrogations.
For what were the investigators searching? According to the defendants, they sought evidence, authentic or fabricated, which placed Budapest Mayor Gábor Demszky and his deputy Miklós Hagyó at the forefront of an elaborate corruptions scene from which the left-wing parties greatly profited.
According to the defendants, the trial of Miklós Hagyó and the other 14 associates is a show trial – one in which the verdict is rigged because the suspects are political opponents of those in power.
Hungarian prime minister Viktor Orban has told the EU not to meddle in Hungarian domestic affairs. Photograph: Ferenc Isza/AFP/Getty Images
Imagine a European country where one person can pick the judges. And effectively sack them or transfer them to other courts. And draw up court rules. And initiate legislation on the courts. And hold some 60 other specified legal powers.
Now imagine that this individual has been just given a nine-year term of office. And that, even after that term is up, this hugely powerful figure will simply remain in office unless a successor can command a two-thirds majority in the country's parliament. What would you call a country like that?
The answer, of course, is Hungary. All these powers are in the hands of Tünde Handó, a former judge and president of the newly established national judicial office (NJO). No doubt it's pure coincidence that she is married to József Szájer, a founding member of the ruling Fidesz party and the man credited with drawing up Hungary's constitution on his iPad. Szájer resigned his posts in the domestic party when his wife was appointed in January, but remains a member of the European parliament and a key figure who briefed reporters over breakfast at the Hungarian embassy in London last month.
Little wonder, then, that Hungary was told this week to modify its judicial system. The call came from the Venice commission, the Council of Europe's highly-respected but little-known advisory body on constitutional structures. Its members include senior academics, constitutional lawyers, judges and members of national parliaments. "In no other member state of the Council of Europe are such important powers, including the power to select judges and senior office-holders, vested in one single person," the commission concluded.
Given the "high procedural obstacles in the way of a removal procedure" and the NJO president's "extremely wide competences", the Venice commission insisted that Handó's "accountability must be increased". In particular, "binding decisions should be subject to judicial review".
In contrast to Handó's all-powerful NJO, Hungary also has a national judicial council, elected from among the judges. The Hungarian government told the Venice commission that the judges' council's "main and most important power" was to initiate the removal of the NJO president from office.
But the commission was not impressed. This was no more than a right to put a request to parliament, it concluded. The council's decisions were not binding and its opinions could be ignored. According to the Venice commission, the judges' council "has scarcely any significant powers and its role in the administration of the judiciary can be regarded as negligible".
And that's quite apart from the fact that nearly 10% of the Hungarian judiciary are losing their jobs because the retirement age is being reduced from 70 to 62. "A whole generation of judges, who were doing their jobs without obvious shortcomings and who were entitled - and expected - to continue to work as judges, have to retire," the commission notes. Handó will then be able to promote more than 200 judges to the most senior positions.
Responding to the Venice commission report this week, the Hungarian government promised to introduce legislation that would transfer some of the administrative tasks of the NJC president to the national judicial council and augment the council's existing supervisory powers. In future, the NJC president would only be able to exercise certain powers in accordance with principles prescribed by the judicial council, the ministry of public administration and justice said.
Who asked the Venice commission for their opinion in the first place? The answer is Hungary, whose government invited a delegation to Budapest last month and provided "excellent co-operation". The delegation spoke to Handó, among others. It says, in effect, that she should not take its comments personally.
But it is impossible to ignore the commission's conclusion. Asked to examine Hungarian laws on the independence of the judiciary, the commission says: "the reform, as a whole, threatens the independence of the judiciary."
And the Hungarians can't say they didn't know what to expect. Last June, the Venice commission published a report on Hungary's new constitution, which had been passed two months earlier and came into force at the beginning of this year.
The commission concluded that too many provisions in the constitution had been designated as "cardinal laws", which could not be amended without a two-thirds majority in parliament. Some of these should have been left to ordinary legislation, the commission said. "When not only the fundamental principles but also very specific and detailed rules on certain issues will be enacted in cardinal laws," it added, "the principle of democracy itself is at risk."
WHILE THE European Union has been focused on the debt problems of Greece and Italy, a potentially more profound challenge has been developing in the Central European nation of Hungary, a former part of the Soviet bloc that now belongs to NATO and the European Union. Hungary, which still uses its own currency, the forint, is flirting with insolvency. Its 10-year bonds have been fetching interest rates near 10 percent, far above sustainable levels.
But Hungary has another problem too: Its right-wing nationalist government has launched an assault on its democratic system of government. Using a two-thirds majority in parliament, it has pushed through a new constitution as well as a series of fundamental laws that give the ruling party sweeping powers over the judiciary, the media, churches and the central bank. With the new charter and laws taking effect Jan. 1, the government of Prime Minister Viktor Orban now more resembles the autocratic regimes of Russia and Belarus than fellow E.U. democracies.
Some 270 judges are being forced to retire, and sole authority to name their replacements has been given to a close associate of Mr. Orban — who also may choose the courts where cases are assigned. All but 14 religious denominations have been denied official recognition; those losing tax-exempt status and state school payments include the Episcopal and Methodist churches, several Jewish congregations, and all Muslim sects. A leading opposition radio station was denied a license by a new media board controlled by Mr. Orban’s followers. Electoral districts have been redrawn in such a way that the ruling Fidesz party — which lost two of the last three elections — would have won all three.
Mr. Orban has ignored mounting criticism of these initiatives by European and Western governments, including the Obama administration. Instead, he pushed through many more laws during the last weeks of December, including one that strips the central bank of independence and another that fixes flat tax rates in a way that will make it hard for future governments to alter them. This has given leverage to the European commission, because E.U. treaties require central bank independence. With the Hungarian government in desperate need of financing, Brussels and the International Monetary Fund have made clear no help will be forthcoming unless the laws are changed.
At first defiant, Mr. Orban has now dispatched a negotiator to meet with the IMF in Washington; over the weekend he hinted that he might retreat on the central bank. But the European Union, which is due to consider Hungary’s case this week, should not limit itself to the financial sphere in pushing back against Mr. Orban’s concentration of power. The new laws governing the judiciary, religious bodies and the media are incompatible with basic human rights and democratic checks and balances. For the European Union to tolerate them in a member state would be a breach of the community’s essential character.
Miklós Hagyó is ducking and dodging what appears to be an all-out militaristic assault. The title of the image is “Budapest Ostroma” which is translated into “The Siege of Budapest.” The grey figure waving I have no idea what type of flag says, “Look out! They are not just shooting at Hagyó!”
This of course is in reference to the Fidesz (Fee-dess) party, which has a majority rule over the Hungarian government. As I have written before, a popular theory behind the Hagyó case is that the Fidesz used Miklós Hagyó, who was a popular politician of Fidesz’s rival party, as a scapegoat of government corruption to win the previous national elections. That theory has not yet been proven, but Fidesz certainly took control of parliament. Since then, the party wrote and implemented a new constitution which nationally centralized many societal tools: the judicial system, the banking system, and the media. If that wasn’t enough of a power grab, Fidesz’s leader, Prime Minister Viktor Orbán, has faced international allegations of putting his friends in very powerful positions within these three sectors, presumably in an effort to ensure his remains the prime minister. Ah, Hungary…
A Recap on the History of the Hagyó Case: What Happened and Who Was Involved?
Zsolt Balogh, left, and Miklós Hagyó in Kecskemét Court in Kecskemét, Hungary
On Wednesday, I said that I was going to make a summary post about my blog, The Hagyó Case. I want to do this for a couple of reasons. Firstly, the blog’s readership has increased about 30% over the past week, which is great! Appropriately, I’d like to recap the evolution of the story for those who have recently started following. Secondly, the story is full of confusing details about the legality of contracts and whether or not those contracts contributed to the financial gain of an alleged criminal organization. I have described the intricacies of the contracts in previous posts, and I will continue to relay the information from subsequent court hearings. For now, I only want to provide the back story.
In 1998, a successful and wealthy businessman by the name of Miklós Hagyó (Me-klosh Ha-djo) joined one of Hungary’s dominant political powers, MSZP (Magyar Szocialista Párt – Hungarian Socialist Party). Over the next twelve years, he would climb the political ladder to become a deputy mayor of Hungary’s capital city, Budapest, and a member of parliament. Within his deputy mayoral capacities, Hagyó supervised the public transportation system of Budapest which is aptly translated as Budapest Transit Company (BKV). Although Budapest’s public transport system is well-used, the company was annually taking a financial beating. For example, in 2007 and 2008 the company was publicly indebted over 100 billion forints. As I type, that is almost 470 million US dollars. How did the company stay afloat? As I said, they were indebted to the public which translates into the government repeatedly bailed out the company. As a government subsidy, BKV’s business practices were under the watchful eyes of state institutions like the State Audit Office of Hungary, who noticed an employee severance payment scandal which I wrote about here.
Miklós Hagyó was not connected to the severance payment scandal, but it was the spark which lit the fire that was to become the political downfall and eventual imprisonment of the former prominent politician and humanitarian.
In March 2010, a former CEO of BKV by the name of Zsolt Balogh gave two interviews, one to Magyar Nemzet (Hungarian Nation) and another for HírTV. During these interviews, Balogh stated that shortly after his promotion to CEO Hagyó invited the new executive to his office for what presumably would be a quick professional introduction. However, according to Balogh, upon entering the office Hagyó was using both of his hands to stuff himself with 40 ounces of cold meat. Then, he allegedly proceeded to tell Balogh “things must be done around here, and those who do not do it will receive no mercy. Their throat will be cut.” After that, Balogh claims Hagyó demanded an upfront payment of 15 million forint (more than $70,000.00 at the time of writing [ATW]). Furthermore, he would annually need to pay that amount to Hagyó. According to Balogh, the next day he obliged by giving Hagyó the 15 million forints which were hidden inside of a Nokia phone box designed for packaging. The former CEO also claimed that he passed around 70 million forint (more than $328,000.00 ATW) to Hagyó over the course of a year.
Quite naturally, one should wonder from what financial source did Balogh pay Hagyó. Well, this is where the tricky contracts come into play.
The prosecution claims that Hagyó sat atop a criminal organization with BKV’s senior management serving as his loyal henchmen. The upper management’s purpose was to organize BKV’s business with other companies that were privately or professionally connected to the deputy mayor. Once the contracts were created and the money was paid out Hagyó allegedly extorted the contract revenues from the managers.
After Balogh made the public statements, Hagyó became the disgraceful symbol of political corruption in Hungary. As a result, the former deputy mayor and member of parliament stepped down from his respected positions. A few months later in May 2010, the general elections occurred, and due to his prior resignation he had lost his penal immunity. The police arrested him immediately following the governmental change. On May 14, 2010, after a few days of police interrogation, the court sentenced him to pretrial detention. The prosecutors claimed they possessed evidence which strongly suggested Hagyó intended to flee the country in an effort to avoid legal troubles.
Miklós Hagyó passed nine months in pretrial jail, but due to deteriorating health he spent many months in the prison hospital.
The prosecution spent nearly three years in an attempt to gather enough evidence to put Miklós and 14 other people in jail. Some presume that the investigators were trying to find evidence which would have connected the allegedly embezzled money to the Hungarian Socialist Party, who just happens to be the political rival of the currently governing Fidesz party.
Regarding the pretrial detention, Miklós’ lawyer requested access to the evidence which was “substantial” enough to keep him in jail for nine months. Neither the prosecution nor the judge ever provided the evidence, citing that it would jeopardize the “integrity” of the investigation.
The trial is currently on hold for about a month. So far, the biggest twist has been Zsolt Balogh’s in-court testimony. He retracted his accusations, saying that the investigators coerced him into accusing Miklós of these crimes. If he did not oblige to their demands, he would have had significant problems.
Many people might wonder why I chose to create a blog about this case. I find the story to be morally and socially stimulating, but apart from that I felt that Miklós’ story should be told to the world outside of Hungary. According to BKV’s financial records, much of the work from the controversial contracts benefited the company. Financially the company was spending less money, yet it was developing the transportation system. The prosecution has also admitted this to be true.
Why, then, is Hagyó accused of running BKV as a criminal organization from which he extorted billions of Hungarian forints? There are a few different theories to that question. A particularly strong one suggests that the socialists’ opposition, the Fidesz party, used him as a political pawn to turn the Hungarian populace against the socialist party. In doing so, they could regain control of the Hungarian government. Well, they did in May 2010.
Amongst all of the confusing uncertainties of the Hagyó case, one thing is profoundly true. If the current government of Hungary is willing to manipulate a person’s life, especially the life of a regionally powerful person, then they can do that with anybody. That is why I have chosen to write about Miklós Hagyó.