We can only do this work if we have supporters. Become a supporting member now!<\/a><\/h2>\nThis article is based on conversations conducted with sources close to Viktor Orb\u00e1n, Lajos Simicska and other, still influential players in the construction industry. They all asked for anonymity because of the sensitive nature of the story. Simicska declined to comment. Orb\u00e1n and his family members did not respond to the detailed questions Direkt36 sent them.<\/p>\n
Party and family<\/h3>\n
Simicska helped lay the groundwork for the Orb\u00e1n family\u2019s businesses in the early 90s.<\/p>\n
During the privatization process that followed the collapse of the socialist system in Hungary, in 1992 Gy\u0151z\u0151 Orb\u00e1n and his business partners managed to get hands on a company operating the mine in G\u00e1nt. The purchase was helped by companies with ties to the Fidesz party, an article entitled \u201cBoys in the mine\u201d revealed in 1999. According to the article, a company linked to Simicska, previously capitalized from the party\u2019s money, bought a share in the mine company during the privatization, then sold it well below its nominal value to Orb\u00e1n\u2019s father and his business partners.<\/p>\n
Thus, Gy\u0151z\u0151 Orb\u00e1n became the majority owner of the company called Dolomit K\u0151b\u00e1ny\u00e1szati Kft. (Dolomit Rock Mining Ltd.). Gy\u0151z\u0151 Orb\u00e1n later established other companies with his two other sons, Gy\u0151z\u0151 Jr. and \u00c1ron, but based on its revenues and activities, Dolomit is still playing a central role in the family business.<\/p>\n
After this episode in the early 90s, Simicska did not appear to play any role in the Orb\u00e1n family\u2019s business activities. He focused on helping his high-school friend Viktor Orb\u00e1n to transform Fidesz, a small liberal party at the fall of communism, into a major political party. From the outside, there seemed to be a clear division between their responsibilities: Orb\u00e1n was fighting on the political frontline while Simicska was working behind the scenes to provide a solid financial background for Fidesz by acquiring companies that later won state tenders from Fidesz-led municipalities. He apparently used some of that money to build a media empire that supported the party.<\/p>\n
In reality, however, the division was not so stark.<\/p>\n
Orb\u00e1n\u2019s men<\/h3>\n
Simicska, according to sources close to him, frequently talked with Orb\u00e1n, and the businessman\u2019s inner circles also included people who were close to the politician. The most prominent among them was Zsolt Nyerges, a lawyer, who joined Simicska as an associate in the mid 2000s. They worked closely together on further strengthening Fidesz\u2019s economic background, with Simicska taking care of the strategy and Nyerges running the daily operations.<\/p>\n
According to a friend of Simicska, it was not the businessman who chose Nyerges, but accepted him at the request of Orb\u00e1n. \u201cNyerges was a friend of the Orb\u00e1n family,\u201d said the source, adding that Nyerges was sent to Simicska so that Orb\u00e1n had a confidant in the businessman\u2019s circles.<\/p>\n
![\"gant_eng\"](\"\/\/www.direkt36.hu\/wp-content\/uploads\/2017\/08\/gant_eng.png\")
<\/p>\n
The Orb\u00e1n companies’ involvement in state projects in recent years. Source: Direkt36, Figyel\u0151, Magyar Narancs<\/em><\/p>\nLater there were other overlaps between Simicska\u2019s business empire and Orb\u00e1n\u2019s personal circle. In May 2010, a company linked to Simicska became the majority owner of an energy company called ES Holding, whose co-owner and director was the then-24-year-old Istv\u00e1n Tiborcz. At that time, the young man was already dating his future wife, R\u00e1hel Orb\u00e1n, Viktor Orb\u00e1n\u2019s oldest child. Tiborcz kept serving as one of the directors of the energy company, but continued his business activities under the supervision of Simicska and his associates.<\/p>\n
During this period, Simicska\u2019s empire \u2013 including its flagship company, construction giant K\u00f6zg\u00e9p \u2013 produced spectacular growth. The firms kept winning lucrative state tenders, while government positions overseeing major construction projects were also filled with people close to Simicska and Nyerges. This turned Simicska and his companies into a frequent target of opposition politicians and anti-corruption activists, who said that the businessman\u2019s empire symbolizes the rampant corruption of Orb\u00e1n\u2019s government.<\/p>\n
\u201cThere was a ceiling\u201d<\/h3>\n
While the revenue of Simicska\u2019s companies multiplied in just a few years, the performance of the Orb\u00e1n family\u2019s businesses largely stayed on the level they had been in 2010 and before. This happened despite that Simicska\u2019s companies could have easily given them plenty of work in the state-financed projects they were in charge of.<\/p>\n
Not doing so was the result of a conscious decision, according to construction industry sources familiar with the details. \u201cLajos [Simicska] limited the opportunities of the daddy [of Orb\u00e1n] in several ways,\u201d said one of the sources, the owner of a construction firm that had worked closely with K\u00f6zg\u00e9p. One of Simicska\u2019s close associates also confirmed this to Direkt36. \u201cThere was a ceiling for the Orb\u00e1n family. They could go as high as that, but could not get more,\u201d the associate said.<\/p>\n
The associate said that this was not Simicska\u2019s own decision, he just followed Orb\u00e1n\u2019s directions. The source could not tell whether Orb\u00e1n made this request personally, but he said that it was clear that it originated from him.<\/p>\n
Limiting the family businesses\u2019 involvement in public projects could have been important for Orb\u00e1n so that he can avoid what happened under his first term as prime minister between 1998 and 2002. At that time, he was often criticized because of his father\u2019s businesses. Opposition politicians have brought up that Dolomit Ltd. was a supplier of the then state-owned Dunaferr, and some also alleged that the company supplied materials for state-funded motorway constructions. With regards to Dunaferr, Orb\u00e1n\u2019s family emphasised that Dolomit Ltd. had already become its supplier in 1997, before the first election victory of Fidesz. They denied, however, the involvement of the father\u2019s business in the motorway projects.<\/p>\n
In a TV interview in August 2001, Orb\u00e1n tried to refute the accusations arguing that if he had really wanted to favor his father, he would have not only helped him to get orders worth of some tens of millions of forints, but he would have been able to aid him build the whole motorway. Orb\u00e1n also stated that his father had planned to get involved in certain motorway constructions, but dropped these plans at his son\u2019s request. \u201cThis was a very difficult conversation, by the way. He did not agree with this, but eventually he said that there must be certain correlations that I see better than him, and then he accepted it,\u201d Orb\u00e1n said.<\/p>\n
Unsatisfied relatives<\/h3>\n
Orb\u00e1n\u2019s family did not seem to take the restrictions well after 2010 either. Sources working in state-financed projects and close to Simicska, told Direkt36 that the prime minister\u2019s family expressed their concern to K\u00f6zg\u00e9p\u2019s management over the limited amount of work they got from the company. As Direkt36 showed in a previous story, K\u00f6zg\u00e9p ordered products from Dolomit Kft. in certain sewage constructions, but the family wanted to get more, sources said.<\/p>\n
It was not only Orb\u00e1n\u2019s father and brothers in the prime minister\u2019s family who had conflicts with Simicska. Istv\u00e1n Tiborcz also had a tense relationship with the leaders of the K\u00f6zg\u00e9p group. The management thought that the young businessman was acting too independently in the matters of E-OS, the energy company K\u00f6zg\u00e9p had bought a few years earlier. \u201cThere was a conflict because of the different business approaches,\u201d said one of Simicska\u2019s associates. He added that Tiborcz is an intelligent person, but he did not understand that \u201cfirst he should have learned how things work on a lower level.\u201d<\/p>\n
L\u0151rinc M\u00e9sz\u00e1ros, a longtime friend Orb\u00e1n and mayor of the prime minister\u2019s hometown, was also frustrated by the volume of orders he received from Simicska\u2019s circles. In the early 2010s, M\u00e9sz\u00e1ros, a former gas repairman who later founded a construction company, complained to other people in the industry about the contracts he could get in state projects. \u201cHe said that Lajos [Simicska] is bleeding him out,\u201d recalled a contractor who had worked with M\u00e9sz\u00e1ros.<\/p>\n
The pushback against M\u00e9sz\u00e1ros was not done at Orb\u00e1n\u2019s request. It happened simply because Simicska\u2019s companies were not happy with the performance of M\u00e9sz\u00e1ros\u2019 firm. A top manager at K\u00f6zg\u00e9p told a contractor that \u201cL\u0151rinc cannot be let close to the constructions because his company doesn\u2019t work well.\u201d A source close to Simicska added that M\u00e9sz\u00e1ros \u201cwanted to work at a very high price,\u201d so the K\u00f6zg\u00e9p group was only willing to give him smaller contracts.<\/p>\n
Signs of change<\/h3>\n
The situation, however, started to change in the favor of those who were frustrated by Simicska\u2019s influence. In 2013, there were signs that the businessman\u2019s position began to weaken. Duna Aszfalt, another construction company, which teamed up with L\u0151rinc M\u00e9sz\u00e1ros, emerged as a rival of K\u00f6zg\u00e9p. A few months before the 2013 September wedding of R\u00e1hel Orb\u00e1n and Istv\u00e1n Tiborcz, K\u00f6zg\u00e9p quit the energy company managed by Tiborcz.<\/p>\n
The personal relationship between Simicska and Orb\u00e1n also started to get cooler. \u201cIn 2013, it was clear that the set-up was changing,\u201d a close friend of Simicska said. According to the source, Simicska learned that Orb\u00e1n was planning to cut back the influence of the Simicska-controlled media companies within the government-leaning media conglomerate.<\/p>\n
After Fidesz\u2019s reelection in April 2014, the conflict became visible for the wider public as well, as figures close to Simicska were purged of government positions. This included L\u00e1szl\u00f3n\u00e9 N\u00e9meth, a longtime confidant of Simicska, who was the minister in charge of major construction projects. In early 2015, the conflict turned into a full-out war when Simicska threw slurs at Orb\u00e1n in response to the prime minister\u2019s alleged interference in his media businesses.<\/p>\n
At the same time, the businesses of those personally close to Orb\u00e1n skyrocketed.<\/p>\n
The companies of Orb\u00e1n\u2019s father and brothers have nearly doubled their revenues since 2013 and their profits have risen even faster. While in 2013 they gained only 15% of profit on their total revenue of 2.7 billion forints (8.6 million euros), their profit increased to 30% on 5.2 billion forints (16.7 million euros) of revenue by 2015. The profit gained during these three years was fully withdrawn from the companies. In 2016, the revenue was significantly lower (11.3 million euros) but this was an industry-wide trend, most probably because of the sudden slowdown in EU-financed construction projects. (The slowdown was only temporary, new projects have been launched since then.)<\/p>\n
Istv\u00e1n Tiborcz\u2019s energy company produced similarly large growth after Simicska and Tiborcz parted ways. In early 2014, Tiborcz regained his ownership in the company then called Elios Innovat\u00edv, which began to win a series of lucrative state tenders for upgrading street lighting systems in several cities. Elios got the majority of these tenders without facing competition. (As Direkt36 revealed it earlier, this happened because the tenders\u2019 conditions were tailored to Tiborcz\u2019s company<\/a>.)<\/p>\nL\u0151rinc M\u00e9sz\u00e1ros\u2019 rise was the most spectacular. In only a few years, the former gas repairman has become one of the country\u2019s wealthiest person, now holding major positions not only in the construction business but also in the media sector, tourism, and the bank industry. As Direkt36 showed in a recent article, a rail construction company linked to M\u00e9sz\u00e1ros even took over a firm that had been part of Simicska\u2019s empire<\/a>.<\/p>\nHidden works<\/h3>\n
Compared to M\u00e9sz\u00e1ros, the Orb\u00e1n family\u2019s enrichment has been more modest. In 2015, Istv\u00e1n Tiborcz even sold his shares in Elios Innovat\u00edv after the controversy surrounding the company\u2019s state tenders grew bigger and drew the attention of Hungarian and European Union authorities. Since then, Tiborcz personally has stayed away from state businesses, but people close to him remained involved in them.<\/p>\n
The companies of Orb\u00e1n\u2019s father and brothers are still working on state-financed projects but it is hard to get information on them as they are hired not directly by state agencies but by contractors or subcontractors. In Hungary, the public procurement database contains information only about the contractors and major subcontractors but there are no records available about those who work on the lower levels.<\/p>\n
Direkt36 managed to unearth details about some of the Orb\u00e1n family\u2019s contracts through a months-long investigation. It is still not known how much money their companies got for these works as the records obtained by Direkt36 did not contain information about the payments and the Orb\u00e1n companies never responded to any of our inquiries.<\/p>\n
Apparently, it does not bother Viktor Orb\u00e1n anymore that his family members are involved in publicly funded projects. At a press conference in June, Orb\u00e1n told Direkt36 that he still considers it important for his father not to participate in public investments. Orban\u2019s answers, at the same time, also suggested that he thinks \u2013 as opposed to his earlier statements \u2013 that if his father does not participate in the project as a main- or subcontractor but as their supplier, it is not problematic. He said this in spite of the fact that suppliers also receive public money, just like higher level participants of state projects.<\/p>\n
<\/p>\nLater there were other overlaps between Simicska\u2019s business empire and Orb\u00e1n\u2019s personal circle. In May 2010, a company linked to Simicska became the majority owner of an energy company called ES Holding, whose co-owner and director was the then-24-year-old Istv\u00e1n Tiborcz. At that time, the young man was already dating his future wife, R\u00e1hel Orb\u00e1n, Viktor Orb\u00e1n\u2019s oldest child. Tiborcz kept serving as one of the directors of the energy company, but continued his business activities under the supervision of Simicska and his associates.<\/p>\n
During this period, Simicska\u2019s empire \u2013 including its flagship company, construction giant K\u00f6zg\u00e9p \u2013 produced spectacular growth. The firms kept winning lucrative state tenders, while government positions overseeing major construction projects were also filled with people close to Simicska and Nyerges. This turned Simicska and his companies into a frequent target of opposition politicians and anti-corruption activists, who said that the businessman\u2019s empire symbolizes the rampant corruption of Orb\u00e1n\u2019s government.<\/p>\n
\u201cThere was a ceiling\u201d<\/h3>\n
While the revenue of Simicska\u2019s companies multiplied in just a few years, the performance of the Orb\u00e1n family\u2019s businesses largely stayed on the level they had been in 2010 and before. This happened despite that Simicska\u2019s companies could have easily given them plenty of work in the state-financed projects they were in charge of.<\/p>\n
Not doing so was the result of a conscious decision, according to construction industry sources familiar with the details. \u201cLajos [Simicska] limited the opportunities of the daddy [of Orb\u00e1n] in several ways,\u201d said one of the sources, the owner of a construction firm that had worked closely with K\u00f6zg\u00e9p. One of Simicska\u2019s close associates also confirmed this to Direkt36. \u201cThere was a ceiling for the Orb\u00e1n family. They could go as high as that, but could not get more,\u201d the associate said.<\/p>\n
The associate said that this was not Simicska\u2019s own decision, he just followed Orb\u00e1n\u2019s directions. The source could not tell whether Orb\u00e1n made this request personally, but he said that it was clear that it originated from him.<\/p>\n
Limiting the family businesses\u2019 involvement in public projects could have been important for Orb\u00e1n so that he can avoid what happened under his first term as prime minister between 1998 and 2002. At that time, he was often criticized because of his father\u2019s businesses. Opposition politicians have brought up that Dolomit Ltd. was a supplier of the then state-owned Dunaferr, and some also alleged that the company supplied materials for state-funded motorway constructions. With regards to Dunaferr, Orb\u00e1n\u2019s family emphasised that Dolomit Ltd. had already become its supplier in 1997, before the first election victory of Fidesz. They denied, however, the involvement of the father\u2019s business in the motorway projects.<\/p>\n
In a TV interview in August 2001, Orb\u00e1n tried to refute the accusations arguing that if he had really wanted to favor his father, he would have not only helped him to get orders worth of some tens of millions of forints, but he would have been able to aid him build the whole motorway. Orb\u00e1n also stated that his father had planned to get involved in certain motorway constructions, but dropped these plans at his son\u2019s request. \u201cThis was a very difficult conversation, by the way. He did not agree with this, but eventually he said that there must be certain correlations that I see better than him, and then he accepted it,\u201d Orb\u00e1n said.<\/p>\n
Unsatisfied relatives<\/h3>\n
Orb\u00e1n\u2019s family did not seem to take the restrictions well after 2010 either. Sources working in state-financed projects and close to Simicska, told Direkt36 that the prime minister\u2019s family expressed their concern to K\u00f6zg\u00e9p\u2019s management over the limited amount of work they got from the company. As Direkt36 showed in a previous story, K\u00f6zg\u00e9p ordered products from Dolomit Kft. in certain sewage constructions, but the family wanted to get more, sources said.<\/p>\n
It was not only Orb\u00e1n\u2019s father and brothers in the prime minister\u2019s family who had conflicts with Simicska. Istv\u00e1n Tiborcz also had a tense relationship with the leaders of the K\u00f6zg\u00e9p group. The management thought that the young businessman was acting too independently in the matters of E-OS, the energy company K\u00f6zg\u00e9p had bought a few years earlier. \u201cThere was a conflict because of the different business approaches,\u201d said one of Simicska\u2019s associates. He added that Tiborcz is an intelligent person, but he did not understand that \u201cfirst he should have learned how things work on a lower level.\u201d<\/p>\n
L\u0151rinc M\u00e9sz\u00e1ros, a longtime friend Orb\u00e1n and mayor of the prime minister\u2019s hometown, was also frustrated by the volume of orders he received from Simicska\u2019s circles. In the early 2010s, M\u00e9sz\u00e1ros, a former gas repairman who later founded a construction company, complained to other people in the industry about the contracts he could get in state projects. \u201cHe said that Lajos [Simicska] is bleeding him out,\u201d recalled a contractor who had worked with M\u00e9sz\u00e1ros.<\/p>\n
The pushback against M\u00e9sz\u00e1ros was not done at Orb\u00e1n\u2019s request. It happened simply because Simicska\u2019s companies were not happy with the performance of M\u00e9sz\u00e1ros\u2019 firm. A top manager at K\u00f6zg\u00e9p told a contractor that \u201cL\u0151rinc cannot be let close to the constructions because his company doesn\u2019t work well.\u201d A source close to Simicska added that M\u00e9sz\u00e1ros \u201cwanted to work at a very high price,\u201d so the K\u00f6zg\u00e9p group was only willing to give him smaller contracts.<\/p>\n
Signs of change<\/h3>\n
The situation, however, started to change in the favor of those who were frustrated by Simicska\u2019s influence. In 2013, there were signs that the businessman\u2019s position began to weaken. Duna Aszfalt, another construction company, which teamed up with L\u0151rinc M\u00e9sz\u00e1ros, emerged as a rival of K\u00f6zg\u00e9p. A few months before the 2013 September wedding of R\u00e1hel Orb\u00e1n and Istv\u00e1n Tiborcz, K\u00f6zg\u00e9p quit the energy company managed by Tiborcz.<\/p>\n
The personal relationship between Simicska and Orb\u00e1n also started to get cooler. \u201cIn 2013, it was clear that the set-up was changing,\u201d a close friend of Simicska said. According to the source, Simicska learned that Orb\u00e1n was planning to cut back the influence of the Simicska-controlled media companies within the government-leaning media conglomerate.<\/p>\n
After Fidesz\u2019s reelection in April 2014, the conflict became visible for the wider public as well, as figures close to Simicska were purged of government positions. This included L\u00e1szl\u00f3n\u00e9 N\u00e9meth, a longtime confidant of Simicska, who was the minister in charge of major construction projects. In early 2015, the conflict turned into a full-out war when Simicska threw slurs at Orb\u00e1n in response to the prime minister\u2019s alleged interference in his media businesses.<\/p>\n
At the same time, the businesses of those personally close to Orb\u00e1n skyrocketed.<\/p>\n
The companies of Orb\u00e1n\u2019s father and brothers have nearly doubled their revenues since 2013 and their profits have risen even faster. While in 2013 they gained only 15% of profit on their total revenue of 2.7 billion forints (8.6 million euros), their profit increased to 30% on 5.2 billion forints (16.7 million euros) of revenue by 2015. The profit gained during these three years was fully withdrawn from the companies. In 2016, the revenue was significantly lower (11.3 million euros) but this was an industry-wide trend, most probably because of the sudden slowdown in EU-financed construction projects. (The slowdown was only temporary, new projects have been launched since then.)<\/p>\n
Istv\u00e1n Tiborcz\u2019s energy company produced similarly large growth after Simicska and Tiborcz parted ways. In early 2014, Tiborcz regained his ownership in the company then called Elios Innovat\u00edv, which began to win a series of lucrative state tenders for upgrading street lighting systems in several cities. Elios got the majority of these tenders without facing competition. (As Direkt36 revealed it earlier, this happened because the tenders\u2019 conditions were tailored to Tiborcz\u2019s company<\/a>.)<\/p>\n L\u0151rinc M\u00e9sz\u00e1ros\u2019 rise was the most spectacular. In only a few years, the former gas repairman has become one of the country\u2019s wealthiest person, now holding major positions not only in the construction business but also in the media sector, tourism, and the bank industry. As Direkt36 showed in a recent article, a rail construction company linked to M\u00e9sz\u00e1ros even took over a firm that had been part of Simicska\u2019s empire<\/a>.<\/p>\n Compared to M\u00e9sz\u00e1ros, the Orb\u00e1n family\u2019s enrichment has been more modest. In 2015, Istv\u00e1n Tiborcz even sold his shares in Elios Innovat\u00edv after the controversy surrounding the company\u2019s state tenders grew bigger and drew the attention of Hungarian and European Union authorities. Since then, Tiborcz personally has stayed away from state businesses, but people close to him remained involved in them.<\/p>\n The companies of Orb\u00e1n\u2019s father and brothers are still working on state-financed projects but it is hard to get information on them as they are hired not directly by state agencies but by contractors or subcontractors. In Hungary, the public procurement database contains information only about the contractors and major subcontractors but there are no records available about those who work on the lower levels.<\/p>\n Direkt36 managed to unearth details about some of the Orb\u00e1n family\u2019s contracts through a months-long investigation. It is still not known how much money their companies got for these works as the records obtained by Direkt36 did not contain information about the payments and the Orb\u00e1n companies never responded to any of our inquiries.<\/p>\n Apparently, it does not bother Viktor Orb\u00e1n anymore that his family members are involved in publicly funded projects. At a press conference in June, Orb\u00e1n told Direkt36 that he still considers it important for his father not to participate in public investments. Orban\u2019s answers, at the same time, also suggested that he thinks \u2013 as opposed to his earlier statements \u2013 that if his father does not participate in the project as a main- or subcontractor but as their supplier, it is not problematic. He said this in spite of the fact that suppliers also receive public money, just like higher level participants of state projects.<\/p>\nHidden works<\/h3>\n