{"id":2484,"date":"2016-10-10T12:52:12","date_gmt":"2016-10-10T10:52:12","guid":{"rendered":"https:\/\/www.direkt36.hu\/?p=2484"},"modified":"2022-10-11T23:23:36","modified_gmt":"2022-10-11T21:23:36","slug":"hazugsaggal-nyertek-el-a-milliardos-munkat-kocsis-mate-keruleteben","status":"publish","type":"post","link":"https:\/\/direkt36.exot.hu\/en\/hazugsaggal-nyertek-el-a-milliardos-munkat-kocsis-mate-keruleteben\/","title":{"rendered":"Company Wins Major Public Contract Through False Claims"},"content":{"rendered":"

<\/p>\n

Everything appears to have gone well with the renovation of the Aurora Street Clinic, one of recent years\u2019 biggest construction projects of J\u00f3zsefv\u00e1ros, a district of Budapest. .<\/p>\n

The work was finished in less than a year, remained largely free of political controversies, and the official inauguration last December was attended not only by district mayor M\u00e1t\u00e9 Kocsis, a prominent politician of the governing Fidesz party, but also by Bence R\u00e9tv\u00e1ri, a state minister from the government.<\/p>\n

Deep down, however, there has been a serious problem. The consortium that carried out the construction has won the contract worth nearly a billion forints (3.2 million euros) by submitting false information during the bidding process.<\/p>\n

In order to win, the consortium had to prove that it had done similar work before. The group of companies claimed that one of its members had renovated a clinic in the distant country of Uruguay. A Direkt36 investigation with the help of a local journalist has revealed that this was not true.<\/p>\n

The renovation indeed took place but documents and interviews show that the company that provided the reference made false claims about it. For the work in Budapest, bidders were required to show that during their previous clinic renovation they carried out the replacement of at least one elevator. In the Uruguayan clinic, however, there has never been an elevator. This was not the only lie that the company said in the reference. Other pieces of information suggest that the firm had nothing to do with the construction at all.<\/p>\n

One of the story\u2019s players is J\u00e1nos Borzov\u00e1n, a Hungarian businessman with ties to Uruguay. Local politicians have raised questions about his potential connections to J\u00f3zsefv\u00e1ros\u2019 municipality but did not provide clear evidence to prove that. In a story last year, Direkt36 exposed that Borzov\u00e1n had connections to EU-Line<\/a>, the company that was the leading member of the consortium winning the clinic renovation in J\u00f3zsefv\u00e1ros. Newly gathered information, based on secretly recorded phone calls played during a recent corruption trial, suggests more direct links between him and the municipality.<\/p>\n

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Companies that submit false information in bidding procedures are sanctioned by law. If they are caught they can be banned from procurements for years.<\/p>\n

We asked J\u00f3zsefv\u00e1ros\u2019 municipality whether they made any efforts to verify the reference, given that, somewhat unusually, it was coming from the other side of the world. They said that they don\u2019t think that municipalities should check whether procurement references are truthful. \u201cThe construction was carried out in order,\u201d the municipality said in a written response, adding that \u201dpatients of J\u00f3zsefv\u00e1ros are treated in a modern health centre.\u201d<\/p>\n

Elevator and heating<\/h2>\n

The Aurora Street Clinic was originally opened in March 1978, and it had taken almost four decades before its first major renovation began. The municipality, after securing a major EU grant, launched the procurement process for the construction in the summer of 2014.<\/p>\n

The call for proposals made it clear that only those bidders qualify who can show that they had done similar work in the past 5 years. The call specifically noted that this previous construction had to include the \u201ccomplete replacement\u201d of at least one elevator and of a heating system.<\/p>\n

\"Az

The Aurora Street Clinic – Source: Jozsefvaros.hu<\/p><\/div>\n

Two consortia submitted bids, and the one led by EU-Line failed to file the required reference in the first round. Procurement documents obtained through a freedom of information request show that in October 2014 the municipality wrote a letter to EU-Line, noting the missing information and asking the consortium to submit the reference.<\/p>\n

A day later, EU-Line sent the additional documents. The consortium leader said that their group includes a Uruguayan company that worked on the renovation of a clinic in Pando, a town close to the capital Montevideo in 2011 and 2012. The documents claimed that during this construction the company replaced an elevator, changed the heating system and made the building accessible for disabled people. This reference cleared the way for the consortium led by EU-Line, which eventually won the tender with a 997 million HUF (3.2 million euros) bid. This was 200 million HUF (645 thousand euros) more than the project\u2019s originally estimated costs but it was still lower than the other bidder\u2019s offer. They offered to complete the work for more than 1.2 billion HUF (3.87 million euros).<\/p>\n

Now it\u2019s clear though that EU-Line\u2019s consortium won the contract by breaking the rules. Several elements of their offer were not true.<\/p>\n

The lack of elevator in the Pando clinic provides evidence for that. The Uruguayan journalist working with Direkt36 went to the clinic and found that the building had no elevator. Uruguay\u2019s state health agency, ASSE, also confirmed this, saying in a written response that the clinic had never had an elevator. People associated with the clinic said that there is equipment in the clinic for lifting heavy items but it has been out of use for years, too.<\/p>\n

[iframe src=”\/contents\/uruguay\/index_eng.html” width=”100%” height=”100%” scrolling=”no” ]<\/div>\n

The agency\u2019s response cast doubt over another element of the reference. ASSE said that the heating system was not replaced during the 2011-12 construction. This means that at least two crucial parts of the consortium\u2019s reference were false. Other details suggest that the company that provided the Uruguayan reference had nothing to do with the Pando clinic\u2019s renovation in the first place.<\/p>\n

The Uruguayan connection<\/h2>\n

The firm is called Medicor Latinoamericana and it has Hungarian connections. It used to be part of a big former state company, Medicor Works, which has been dealing with producing and selling medical devices. Medicor Latinoamericana had been operating as a local office during the socialist era, and, according to one of its former managers, Juan Martony, it became an independent company around the fall of socialism. Martony, who is now the honorary consul of Hungary in Uruguay, added that as far as he knows the company is still only involved in medical devices and does not perform construction works.<\/p>\n

Medicor Latinoamericana\u2019s owner and manager, L\u00e1szl\u00f3 H\u00eddv\u00e9gi, also told Direkt36 that \u201cthe firm\u2019s profile has always been dealing with medical equipment,\u201d but he added that the company \u201cdid all kinds of things.\u201d<\/p>\n

H\u00eddv\u00e9gi signed several of the reference documents used for the J\u00f3zsefv\u00e1ros construction and in the phone conversation with Direkt36\u2019s reporter he claimed that Medicor participated in the Pando renovation. He refused to answer the question, however, how he can prove that they indeed did that work. \u201cWho are you? Why would I have to prove this?\u201d he asked angrily.<\/p>\n

When he was told that despite what the reference said, there is no elevator in the Pando clinic, first he went silent for several seconds. Then he said: \u201cLook, what\u2019s important is that the construction is over and [the facility] functions.\u201d When our reporter told him that people closely involved in the renovation have not heard about Medicor\u2019s participation in the project, either, he said that \u201dall I can say what I said before.\u201d Then he told us not to ask more questions and ended the conversation. He did not respond to an e-mail sent after the phone call.<\/p>\n

H\u00eddv\u00e9gi did not give clear answers to the questions raised about their participation but the manager of the main contractor in Pando, a company called Lafory, told Direkt36 that he has not heard of Medicor, either. Lafory has gone bankrupt since then but its former owner and director Guillermo Fraga, told Direkt36 in an email that Medicor did not participate directly in the project. He added that he does not know which companies the subcontractors worked with.<\/p>\n

Medicor claimed that they were contracted to do the Pando renovation by a Uruguayan company called BAU R.S.I. Guillermo Fraga said that he did not hear about this company either, and as far as he knows they did not participate in the project.<\/p>\n

\"A

The clinic in Pando, Uruguay – Source: Jimena Abad<\/p><\/div>\n

It is BAU R.S.I. through which the businessman called J\u00e1nos Borzov\u00e1n is linked to the story. Between 2007 and 2014, J\u00e1nos Borzov\u00e1n was the president of this company, records show. When Direkt36 asked Borzov\u00e1n for a previous story about BAU R.S.I., he said that he became president at the request of a friend and claimed that \u201cto my knowledge, the company performed no activity during my tenure.\u201d<\/p>\n

The part of the Pando clinic\u2019s renovation that was allegedly done by Medicor and BAU R.S.I. took place while he was the president. Borzov\u00e1n told Direkt36 that his previous claim does not mean that the company could not have had any activity. He said that since he is not the president any more he does not think he has the right to speak on behalf of the company, especially about documents that were created after his departure from the firm.<\/p>\n

\u201cSo, we are done with the big revelation\u201d<\/h2>\n

Borzov\u00e1n\u2019s role could be politically sensitive for the leaders of the municipality. Local opposition politicians have raised questions about the businessman\u2019s potential involvement with the municipality\u2019s businesses but they did not present any hard evidence for that. It was, therefore, easy for the district\u2019s leaders to dismiss the claims.<\/p>\n

For example, during a council meeting last December, Tam\u00e1s Jakabfy, a member from the green party LMP, started his speech with the following question: \u201cLadies and gentleman. I would like to ask you if you know J\u00e1nos Borzov\u00e1n. He is one of Hungary\u2019s most secretive oligarchs.\u201d<\/p>\n

Jakabfy\u2019s theatrical opening remarks were followed by laughter. When he paused for some more seconds to wait for an answer, mayor M\u00e1t\u00e9 Kocsis mocked him by saying, \u201cput some dynamics in your speech.\u201d Jakabfy continued with listing the alleged links between Borzov\u00e1n and the municipality, prompting Kocsis to make another belittling comment: \u201dOkay, now we understand everything. We\u2019re done with the big revelation. We have our conspiracy theory.\u201d<\/p>\n

In fact, Borzov\u00e1n had connections to the municipality. This is known from the corruption trial in which the prosecutors charged the businessman with asking money from other entrepreneurs with the promise that he can influence the decisions of the municipality of Budapest\u2019s central district, a district adjacent to J\u00f3zsefv\u00e1ros. The companies owned by Borzov\u00e1n, who was acquitted by the judge, received contracts worth more than 6 billion forints (19 million euros) from the central district in the past 15 years. During this period he developed close relationships with some senior officials of the municipality, including L\u00e1szl\u00f3 R\u00f3nasz\u00e9ki, the long-time former notary of the district.<\/p>\n

During the court hearings the judge played several phone conversations, secretly recorded by the authorities that contained information suggesting links between Borzov\u00e1n and J\u00f3zsefv\u00e1ros, too. In a call recorded in March 2013, Borzov\u00e1n told R\u00f3nasz\u00e9ki that he was going to have a meeting with M\u00e1t\u00e9 Kocsis but it was cancelled because Kocsis got sick. \u201dI\u2019ve just got a call from the secretary of M\u00e1t\u00e9 Kocsis that M\u00e1t\u00e9, with whom I was going to meet at 12, is under the weather,\u201d Borzov\u00e1n said. Then he and R\u00f3nasz\u00e9ki continued with jokes that members of Fidesz might have had a gathering because another member of the party also got sick recently.<\/p>\n

Borzov\u00e1n did not mention in the call why he was going to meet Kocsis. \u201cAnybody can ask for an appointment with M\u00e1t\u00e9 Kocsis, just like with every other mayor. Then you can either have that appointment or not. I did not succeed in this case,\u201d said Borzov\u00e1n.<\/p>\n

The municipality said that Kocsis knows Borzov\u00e1n but only to the same extent as \u201che knows other investors in the district.\u201d They added that in 2013 Kocsis and Borzov\u00e1n were indeed going to have a meeting in concerning a local sports event but in the end the meeting did not take place. \u201cThere is no close acquaintance or work relationship between the mayor and the entrepreneur,\u201d the municipality said in a written response.<\/p>\n

\"Kocsis

M\u00e1t\u00e9 Kocsis at the ceremony of launching the renovation\u00a0– Source: Jozsefvaros.hu<\/p><\/div>\n

The municipality claimed that they are not able to tell exactly what sports event would have been the topic of the meeting. \u201cNobody can recall this at the secretariat,\u201d they told Direkt36. Borzov\u00e1n said that sometime in the early 2010 he was involved in organizing a bicycle race that would have taken place partly in J\u00f3zsefv\u00e1ros. He said that \u201cmaybe this was the reason\u201d why he wanted to meet the mayor. \u201cUnfortunately, neither the meeting, nor the sports event took place,\u201d he added.<\/p>\n

The municipality referred to Borzov\u00e1n as an investor in the district but did not explain what they know about his investment activities. \u201cThe municipality does not list the private investments in the district,\u201d they said. Borzov\u00e1n told Direkt36 that he and his companies have never had any business activities in the district.<\/p>\n

The palace<\/h2>\n

Another phone call played in court revealed new details about a controversial real estate deal of the J\u00f3zsefv\u00e1ros municipality. In 2006, years before Kocsis became mayor, the municipality decided to sell one of its properties, a 19th century building known as Hunyady Palace. They signed a contract with a company called Georosco, which agreed to carry out certain real estate developments in the district in return for getting Hunyady Palace, located in Trefort Street, a short and quiet street at the heart of Budapest.<\/p>\n

Georosco occupied the building but the real estate developments did not go according to the plans, so, for years, the company could use the property only as a tenant. In the meantime, several local politicians criticized the deal, arguing that it was disadvantageous for the municipality. Another major concern was that Georosco had a murky ownership structure. Over the years, firms from Liechtenstein, Cyprus, and Uruguay owned the company, jurisdictions where public company records do not contain ownership information.<\/p>\n

Press reports showed indirect links between these foreign companies and Borzov\u00e1n but no hard evidence emerged showing his role in the real estate deal. In one phone call played in court, however, Borzov\u00e1n suggested that he was personally involved the matter.<\/p>\n

The conversation, which also took place in the 2013 between R\u00f3nasz\u00e9ki and Borzov\u00e1n, started with the former notary complaining about a newspaper that wrote a critical article about his municipality. Borzov\u00e1n then shared with him his own bad experience with the press. He told R\u00f3nasz\u00e9ki how one online news site (as he put it, \u201dI have no fucking idea which one, but it is a known site\u201d) once reported that the \u201dTrefort Street was bought by a Jewish investor, who paid the price and then disappeared, leaving the municipality in a situation where they did not know what to do.\u201d<\/p>\n

In explaining why this report was false, Borzov\u00e1n hinted at his involvement in the real estate deal. \u201cI don\u2019t consider myself Jewish, maybe there is something in me but I don\u2019t think I am [a Jew],\u201d he said. He added that it was also not true that the investor had disappeared. \u201dWe have not disappeared, we are here, alive and kicking\u201d Borzov\u00e1n said.<\/p>\n

Although he did not go into the details it was quite clear that he was talking about the Hunyady Palace. No other building in Trefort Street was owned by the municipality in recent years. Furthermore \u00c9p\u00edt\u00e9szf\u00f3rum, a news site covering architecture, indeed published a rather confusing story in 2007 saying that an Israeli investor bought the building at the address of Trefort Street 3-5 (the address of Hunyady Palace), and then \u201cfled.\u201d<\/p>\n

Borzov\u00e1n claims that his only connection the the Hunyady palace is that the company that moved into the property asked his firm to do renovation work on the building.<\/p>\n

The municipality said that they are not aware of Borzov\u00e1n\u2019s involvement in the property deals. They said that during the process the municipality was in touch with Tam\u00e1s Dulin, the manager of Georosco, who reassured them that the company\u2019s ownership structure is transparent. \u201cBeyond this, we have no knowledge on who was involved and what role he or she played in this\u201d the municipality said.<\/p>\n

Georosco finally purchased Hunyady Palace at the beginning of 2016, land records show. Currently, the company is owned by two companies that both were involved in the Aurora Street Clinic\u2019s renovation. The majority owner is BAU R.S.I., the Uruguayan company which had a role in providing the false reference. The other owner is EU-Line, the consortium leader, which has become a close partner of the municipality since the clinic construction.<\/p>\n

After getting the Aurora Street contract, EU-Line has won three other bids from J\u00f3zsefv\u00e1ros, worth 220 million forints (710 thousand euros) in total. \u201dIt is not the municipalities\u2019 responsibility to check the tender bidders\u2019 ownership structure or the truthfulness of their references\u201d the municipality said.<\/p>\n

We can do this work only if we have supporters.<\/a>\u00a0Become a supporting member now!<\/a><\/h3>\n

For data on the Hungarian companies we used the services of\u00a0Opten<\/a>\u00a0and\u00a0C\u00e9ginfo<\/a>.<\/em><\/p>\n

<\/p>","protected":false},"excerpt":{"rendered":"

The company needed to show that they had done similar construction in the past so they brought a reference from Uruguay. But it was a lie.<\/p>\n","protected":false},"author":4,"featured_media":2488,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"ppma_author":[440],"class_list":["post-2484","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-belvarosi-milliardok","author-petho-andras"],"authors":[{"term_id":440,"user_id":4,"is_guest":0,"slug":"petho-andras","display_name":"Andr\u00e1s Peth\u0151","avatar_url":{"url":"https:\/\/direkt36.exot.hu\/wp-content\/uploads\/2023\/07\/av_Peto_Andras.png","url2x":"https:\/\/direkt36.exot.hu\/wp-content\/uploads\/2023\/07\/av_Peto_Andras.png"},"description":"[:hu]Andr\u00e1s a Direkt36 egyik alap\u00edt\u00f3ja, szerkeszt\u0151je \u00e9s \u00fcgyvezet\u0151 igazgat\u00f3ja. Kor\u00e1bban az Origo vezet\u0151 szerkeszt\u0151je volt, miel\u0151tt a port\u00e1l r\u00e9sze lett a korm\u00e1ny propagandag\u00e9pezet\u00e9nek. Andr\u00e1s dolgozott a BBC World Service-n\u00e9l Londonban \u00e9s a Washington Post t\u00e9nyfelt\u00e1r\u00f3 rovat\u00e1n\u00e1l is. R\u00e9szt vett sz\u00e1mos nagy nemzetk\u00f6zi nyomoz\u00f3 projektben, k\u00f6zt\u00fck a Panama-iratok feldolgoz\u00e1s\u00e1ban. K\u00e9tszer is elnyerte a legjobbnak \u00edt\u00e9lt t\u00e9nyfelt\u00e1r\u00f3 cikkek szerz\u0151inek j\u00e1r\u00f3 Soma-d\u00edjat. T\u00f6bbsz\u00f6r tanult \u00f6szt\u00f6nd\u00edjjal az Egyes\u00fclt \u00c1llamokban: 2008-ban a World Press Institute programj\u00e1ban, 2012-13-ban Humphrey-\u00f6szt\u00f6nd\u00edjask\u00e9nt a Marylandi Egyetemen, 2019-20-ban pedig Nieman-\u00f6szt\u00f6nd\u00edjask\u00e9nt a Harvard Egyetemen. Andr\u00e1s t\u00f6bb magyar egyetemen is tan\u00edtott \u00fajs\u00e1g\u00edr\u00f3 kurzusokat.\r\n[:en]Andr\u00e1s is a co-founder, editor and executive director of Direkt36. Previously, he was a senior editor for leading Hungarian news site Origo before it had been transformed into the government\u2019s propaganda outlet. He also worked for the BBC World Service in London and was a reporter at the investigative unit of The Washington Post. He has contributed to several international reporting projects, including The Panama Papers. He twice won the Soma Prize, the prestigious annual award dedicated to investigative journalism in Hungary. He was a World Press Institute fellow in 2008, a Humphrey fellow at the University of Maryland in 2012\/13, and a Nieman fellow at Harvard University in 2019\/20. Andr\u00e1s has taught journalism courses at Hungarian universities.[:]","first_name":"Andr\u00e1s","last_name":"Peth\u0151","user_url":""}],"_links":{"self":[{"href":"https:\/\/direkt36.exot.hu\/en\/wp-json\/wp\/v2\/posts\/2484","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/direkt36.exot.hu\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/direkt36.exot.hu\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/direkt36.exot.hu\/en\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/direkt36.exot.hu\/en\/wp-json\/wp\/v2\/comments?post=2484"}],"version-history":[{"count":2,"href":"https:\/\/direkt36.exot.hu\/en\/wp-json\/wp\/v2\/posts\/2484\/revisions"}],"predecessor-version":[{"id":9199,"href":"https:\/\/direkt36.exot.hu\/en\/wp-json\/wp\/v2\/posts\/2484\/revisions\/9199"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/direkt36.exot.hu\/en\/wp-json\/wp\/v2\/media\/2488"}],"wp:attachment":[{"href":"https:\/\/direkt36.exot.hu\/en\/wp-json\/wp\/v2\/media?parent=2484"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/direkt36.exot.hu\/en\/wp-json\/wp\/v2\/categories?post=2484"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/direkt36.exot.hu\/en\/wp-json\/wp\/v2\/tags?post=2484"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/direkt36.exot.hu\/en\/wp-json\/wp\/v2\/ppma_author?post=2484"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}