On a Hungarian TV news program in 2008, a businessman promoted a big investment plan: the construction of two bioethanol factories in neighboring Romania that would buy up crops produced by farmers and turn them into fuel.<\/p>\n
\u201cI think it will provide a good livelihood for them,\u201d said Erik B\u00e1nki, identified as the Hungarian manager of HP Investment, a Romanian company proposing to invest \u20ac70 million to build one of the factories.<\/p>\n
B\u00e1nki wasn\u2019t merely a businessman \u2014 he was an influential politician. Since 1998, he has served as a legislator in the Hungarian Parliament, rising to a powerful position with the governing Fidesz Party as head of the Economic Committee.<\/p>\n
A joint investigation by two OCCRP partners, Direkt36 in Hungary and RISE Project in Romania, found that, between 2007 and 2010, B\u00e1nki spent almost \u20ac1 million through several companies to buy more than 110 hectares of land in Romania, including the proposed locations of the two factories.<\/p>\n
He has never declared the details of his business in Romania, and the law governing Hungarian officials does not explicitly require him to do so. However, according to documents examined by OCCRP partners Direkt36 and RISE Project, the details of the deals raise serious questions.<\/p>\n
First, there\u2019s the matter of the acquisition of the land. Some of the purchases B\u00e1nki made required tenders from at least two companies \u2014 and the only other company that submitted a bid was co-owned by his cousin. Given his income declarations, it\u2019s unclear where the money for the land could have come from. And his statements to reporters about possible financing for the bioethanol project are contradicted by a contract examined by reporters.<\/p>\n
Moreover, Romanian court documents show that the promised bioethanol factories were never built and that B\u00e1nki\u2019s companies accumulated more than \u20ac2.3 million of debt to local governments, consisting mostly of unpaid penalties due to the ultimate failure of the enterprise. These debts were eventually settled for just 17 percent of their value when authorities took over land B\u00e1nki had bought for about \u20ac390,000 in lieu of repayment.<\/p>\n
Today, most of B\u00e1nki\u2019s Romanian companies no longer exist, and his remaining land in the country is the subject of bankruptcy proceedings.<\/p>\n
Hungarian law requires parliamentarians to file annual asset statements to give a full picture of their financial situation. Direkt36 checked B\u00e1nki\u2019s declarations from 2000 to 2018, in which he reported that he has bought more than 200 hectares in Hungary since 2015, but he never declared the land bought by his companies in Romania.<\/p>\n
The Hungarian law on asset declaration does not clearly spell out whether parliamentarians must declare only directly owned assets, or also assets owned through companies. While some deputies do declare indirectly owned assets, B\u00e1nki only declared the existence of his Romanian companies, including neither the land he bought through them nor the public debts they incurred.<\/p>\n
B\u00e1nki told Direkt36 there was no reason for him to do so. \u201cThe assets of a company and private ownership are different things,\u201d he said. \u201cIf a\u00a0real estate is owned by a company, it is not owned by a private person.\u201d Records show that B\u00e1nki owned 90 percent of one company that purchased the land and 100 percent of the other.<\/p>\n
Nor do B\u00e1nki\u2019s asset declarations offer any clues about where he got the almost \u20ac1 million he spent on Romanian land between 2007 and 2010.<\/p>\n
A review of his annual declarations and wage records from 2000 shows that B\u00e1nki\u2019s official salary as a politician oscillated between \u20ac20,900 and \u20ac39,000 annually, while his Hungarian and Romanian companies either lost money or posted only smaller profits, not enough to cover the land purchases. The debt of one of his companies grew from about \u20ac291,000 in 2007 to \u20ac688,000 in 2010.<\/p>\n
B\u00e1nki told Direkt36 that the land purchases were financed from loans from foreign and Hungarian companies. He said he did not remember the names of the\u00a0companies, and refused to present documents that would prove the existence and the amount of the loans.<\/p>\n
B\u00e1nki has risen to an influential position in Fidesz, Hungary\u2019s governing party, since his start in politics in the 1990s as a local official and party activist in the southern county of Baranya.<\/p>\n
Except for a two-year detour to Brussels as a member of the European parliament between 2012 and 2014, B\u00e1nki has served in the Hungarian legislature since 1998. Although he has mostly worked in the background, since October 2015 he has headed the Economic Committee, an institution that under parliamentary rules allows Fidesz to prepare and push through legislation without substantial debate.<\/p>\n
B\u00e1nki has also been active in business. Since the 1990s, he has co-owned nine Hungarian companies involved in real estate management, consultancy services, and agricultural production.<\/p>\n
B\u00e1nki began his Romanian operations in 2006, when he founded HP Investment SRL, a real estate development company. According to the Romanian Commerce Registry, he has owned 90 percent of the company since its founding.<\/p>\n