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Hungary Gov’t publishes OLAF report on Metro 4, eager to blame previous administrations

The European Union's anti-corruption office (OLAF) issued a report which indicated that nearly half of funds spent on building the M4 subway were improperly spent, including some HUF 167 billion (€540 million) OLAF says was "stolen or fraudulently used." Government officials expect that Hungary will have to pay some HUF 60 billion (€194 million) back to the EU, and Hungarian politicians have been scrambling to pin the blame for the corruption case on members of opposing parties.

The Fidesz parliamentary faction requested that the case be examined by the Economics Commission of the Hungarian government, and requested the testimony of former prime ministers Péter Medgyessy, Ferenc Gyurcsány and Gordon Bajnai, former Budapest mayor Gábor Demszky (SZDSZ) and his deputy mayor Csaba Horváth, and former Budapest assemblywoman Erzsébet Gy. Németh, all of whom except for Demszky were members of the Hungarian Socialist Party (MSZP). The commission's investigation would occur in parallel with an investigation by the National Investigations Office already ongoing. If Hungary had a decent prosecutor's office and an independent chief prosecutor, it should undertake a speedy, thorough, unbiased investigation of the case. Unfortunately, this is the last thing we can hope for under the present circumstances.
Economics Commission chairman Erik Bánki (Fidesz) said that there is no way that these politicians were unaware of abuses which led to "the biggest corruption scandal of all time," and that whoever doesn't appear before the commission has something to hide.
"We are curious who participated in the corruption scandal, who directed it and where the money went," Bánki said.
The Socialist politicians, for their part, deny involvement in the case, arguing that their capacities as politicians had no influence on the awarding of contracts that resulted in the theft of EU funds. Demszky and Horváth have both pledged to attend the hearing, while Erzsébet Gy. Németh and Ferenc Gyurcsány have refused.
Demszky's lawyer György Magyar insists that his client can have no legal responsibility because "investments in the M4 were the responsibility of [Budapest transit authority] BKV, the companies signed the contracts, not the city government." The lawyer also said that there is a sharp distinction between political responsibility and civil or criminal responsibility.
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 Greczy 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 Peter Medgyessy as a person concerned in the case, he noted. Greczy 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 to news portal 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 Gyurcsany (chairman of the aforementionned leftist party, DK) 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.
Mr. 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.

According to OLAF, 96% of the "irregularities" occurred in contracts signed by six large firms: Siemens AG, the largest manufacturing and electronics company in Europe; Swietelsky, an Austrian construction company from Linz; Strabag, the largest construction company in Austria, based in Villach; a Hungarian company called Hídépítő Zrt., which as its name indicates builds bridges and roads; the BAMCO consortium (Vinci CGP, Strabag, Hídépítő Zrt); and Alstom, the French multinational company operating worldwide in rail transport, including the manufacture of metro trains.
Siemens, the German company which was in charge of electrical works, received 31.7 billion forints (€102,303,730) for the job. Since OLAF claims that Siemens most likely received inside information during the bidding process, the European Union wants the Hungarian government to pay back the whole amount. The same is true of Alstom's 22.9 billion forint (€73,892,769) tender. BAMCO also won the tender in an irregular manner, and therefore the European Union demands the return of 8 billion forints (€25,817,360). The EU also demands 7.6 billion forints (€24,523,364) from Swietelsky, which was responsible for the interior of the metro stations. Strabag-Hídépítő, in charge of structural work on the station at Baross Square, received 3.7 billion forints for its work but because of procurement irregularities 2.5 billion forints (€8,067,751) should be returned.
Source:; Hungarian Spectrum; Hungary Matters

Last Updated on Wednesday, 08 February 2017 19:45

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