Once he compared Brussels to the Moscow of communism\u2019s darkest period. He often describes the West with pity, saying that it is in a deep and perhaps irreversible social and economic crisis. In a speech last year he listed positive examples only from the Eastern hemisphere, including Russia, China, and Turkey.<\/p>\n
What the prime minister does not talk about is that businesses of some people with close personal ties to him have benefited enormously from the country\u2019s EU membership. Since Orb\u00e1n returned to power in 2010, the performance of these companies has been boosted by their participation in projects funded in full or partly by the EU, from a budget that is contributed mostly by Western countries.<\/p>\n
This is true for Lajos Simicska, who became friends with Mr. Orb\u00e1n in high school, and though at the moment they are engaged in an apparent power struggle with each other, until recently they had been close allies. This is true for L\u0151rinc M\u00e9sz\u00e1ros, who grew up in the same village as Orb\u00e1n and now serves as the chairman of the foundation that runs the prime minister\u2019s pet project, a football academy. And it is also true for a member of the prime minister\u2019s family, Istv\u00e1n Tiborcz, the husband of his oldest daughter.<\/p>\n
It has been well documented that the businesses of these people performed spectacularly well on state procurement tenders in the past five years. Since the majority of state projects in Hungary are funded at least partly by the European Union, it has also been assumed that these businesses have received EU money. But its extent has been hard to determine because the data allowing tracking EU money are hidden in documents of separate government databases.<\/p>\n
Direkt36\u2019s journalists spent weeks analyzing the documents of nearly 300 state contracts won by these companies. This analysis \u2013 based on government databases and data collected by the anti-corruption group K-Monitor<\/a>, and two research groups: Microdata<\/a> and Corruption Research Center Budapest<\/a> \u2013 suggests that each company has benefited hugely from the EU budget.<\/p>\n Records show that projects funded by the EU constitute 88 percent of the value of the state contracts \u2013 totalling billions of euros \u2013 won by companies linked to Lajos Simicska. While this number does not necessarily reflect the actual share of EU money in the companies\u2019 revenues, it shows that EU-funded projects are a major part of their business. The proportion of EU projects is even higher in the case of the companies of Istv\u00e1n Tiborcz and L\u0151rinc M\u00e9sz\u00e1ros, which also won contracts totalling several hundred million euros. In the case of Elios Innovativ, an energy company co-owned by Tiborcz, the share is 94 percent. L\u0151rinc M\u00e9sz\u00e1ros\u2019s construction company, M\u00e9sz\u00e1ros and M\u00e9sz\u00e1ros, has a share of 99 percent.<\/p>\n Source: Direkt36, Gyula N\u00e9meth<\/p><\/div>\n The analysis also shows that nearly one-fourth of these contracts were won by these companies when they were the sole bidders.\u00a0This corresponds with average procurement numbers:\u00a0CRCB\u2019s data show that between 2010 and 2014 the rate of tenders with sole bidders ranged from 26 to 31 percents. Winning without competition was, however, extraordinarily frequent in the case of Elios Innovat\u00edv, which in the past year has received more than half of its contracts for EU-funded projects on tenders where there were no other bidders.<\/p>\n The companies and the prime minister\u2019s office did not respond to questions.<\/p>\n The contracts won by the companies range from gigantic construction projects worth hundreds of millions of euros to small PR events costing a few thousand euros. What is common in these projects is the requirement of onsite displays showing that the funding came from the European Union. The billboards, however, may as well say that the costs were covered by the taxpayers of Western member states.<\/p>\n The reason for this lies in the structure of the EU\u2019s budget. Each member state contributes to it but some get back more than they pay while others receive less than their original contribution. The first category contains poorer countries mostly from Eastern and Central Europe while the latter includes mostly the rich and developed member states in the West and the North, with Germany, Denmark, and Sweden at the top.<\/p>\n The goal of this uneven distribution is to help poorer countries catch up with the rich ones. \u201cThis is one of the objectives of the European Union\u2019s development policies. Solidarity, in addition to economic and other forms of integration, has been an important element of the community ever since the Treaty of Rome\u201d, says Judit K\u00e1lm\u00e1n, an economist focusing on EU development at the Hungarian Science Academy\u2019s Economics Institute, referring to the landmark treaty signed in 1957.<\/p>\n As a recipient of the so-called Structural Funds, Hungary has been one of the biggest beneficiaries of this system in the past few years. \u201cIn the previous cycle, which lasted from 2007 to 2013, per capita we were the second biggest beneficiaries of the Structural Funds subsidies\u201d, says K\u00e1lm\u00e1n, adding that in the new cycle the money available is less but Hungary is still among the countries at the top, ranking fourth based on the amount relative to population.<\/p>\n Source: Direkt36, Gyula N\u00e9meth<\/p><\/div>\n The economist, however, mentioned that Western member states benefit from this system, too. On one hand, some of the development policies (such as sustainable growth, security and social cohesion) serve the interest of the whole EU. On the other hand, companies from the Western member states have access to bigger markets thanks to the EU\u2019s enlargement and can also apply for development funds through their subsidiaries – like the Audi car factory in Hungary – in poorer member countries. \u201cThere are channels where some of the money goes back to the West\u201d, says K\u00e1lm\u00e1n.<\/p>\n Though the whole system might only be described with a complicated formula, the equation is very simple in the case of businesses tied to Mr. Orb\u00e1n\u2019s inner circle. Over the past five years, the companies\u2019 performance has been improving enormously while being awarded more and more state contracts financed mostly by EU.<\/p>\n K\u00f6zg\u00e9p, the flagship company of the Simicska empire, had been a major player in the construction business even before 2010, but it has raised its revenue by 50 percent since then, to nearly 200 million euros in both 2012 and 2013. M\u00e9sz\u00e1ros\u2019s construction company, M\u00e9sz\u00e1ros and M\u00e9sz\u00e1ros, had revenues of only 2.8 million euros in 2010 but by 2013 it grew more than tenfold to 31.8 million euros. Elios Innovat\u00edv, co-owned now by Orb\u00e1n\u2019s son-in-law, was founded in 2009 and has had millions of euros in revenues within just a few years.<\/p>\n State contracts appear to have played a significant part in their spectacular growth. Although none of the companies answered Direkt36\u2019s questions, the website of K\u00f6zg\u00e9p and Elios list state projects as references almost exclusively (no website could be found for M\u00e9sz\u00e1ros and M\u00e9sz\u00e1ros). Elios\u2019s list includes a few private projects but it is not clear if those were actually carried out directly by the company as several of those have a comment saying that \u201cthis is the personal reference of our manager in this line of business\u201d.<\/p>\n The prime minister\u2019s office did not respond to questions asking whether Mr. Orb\u00e1n has known that companies of people close to him have been the beneficiaries of EU development projects.<\/p>\n He has had ample time to discuss this with Istv\u00e1n Tiborcz. The 28-year-old man married the prime minister\u2019s oldest daughter, R\u00e1hel, in September 2013. Just before the wedding, Mr. Orb\u00e1n told Blikk, a tabloid newspaper, that \u201cI met Istv\u00e1n for the first time five years ago, but I had known his parents even before that. His father is a doctor, and they have a prosperous farming business\u201d.<\/p>\n There are also photos showing the two men together. During Christmas 2013, pictures were taken of Orb\u00e1n and Tiborcz drinking p\u00e1linka, a strong Hungarian spirit, in the young couple\u2019s home.<\/p>\n Mr. Tiborcz got into business at a young age. He was 23 years old when he participated in the founding of the predecessor of Elios Innovat\u00edv. Later, he got involved in consultancy and real estate companies. Recently, he and his business partners purchased a company operating a harbour at Balaton, Hungary\u2019s largest lake, as was reported by \u00c1tl\u00e1tsz\u00f3<\/a>.<\/p>\n The wedding of Tiborcz and Orb\u00e1n’s daugther – Source: Viktor Orb\u00e1n Facebook<\/p><\/div>\n Mr. Tiborcz does not give interviews but a recent comment by his wife suggested that they live in comfortable circumstances. \u201cWe have our own family with my husband, we stand on our own feet, we succeed thanks to our own efforts, we live our own life\u201d, she wrote on Facebook, as an apparent reaction to some inquiries on how she could afford to study in a Swiss private school where tuition is more than 58,000 Swiss francs (53.800 euros).<\/p>\n L\u0151rinc M\u00e9sz\u00e1ros and Viktor Orb\u00e1n have known each other since childhood. They went to the same elementary school in Felcs\u00fat, a small village about 45 kilometers from Budapest. The prime minister referred to their common roots when he inaugurated a building in Felcs\u00fat a year ago. He recalled that the M\u00e9sz\u00e1ros family was so strongly against communism that their children were the only ones in the school who did not join the pioneer movement. \u201cThey could not even put a pioneer tie on L\u0151rinc\u2019s neck\u201d, said Orb\u00e1n.<\/p>\n Former schoolmates, however, say that Orb\u00e1n and M\u00e9sz\u00e1ros did not have a close relationship when they were children. M\u00e9sz\u00e1ros is three years younger than Orb\u00e1n, which is a big difference at that age. Their status in the school was also very different, said former schoolmates who spoke on the condition of anonymity because they did not want to talk publicly about the two powerful people. Orb\u00e1n was regarded as a leader by his peers even then and he was also popular among girls. M\u00e9sz\u00e1ros, by contrast, was never at the center of attention and his former schoolmates remember him as a hapless little boy.<\/p>\n Viktor Orb\u00e1n in the center, behind him on the right L\u0151rinc M\u00e9sz\u00e1ros – Source: Viktor Orb\u00e1n Facebook<\/p><\/div>\n They were also different in their approach to football. Orb\u00e1n was a devoted player while M\u00e9sz\u00e1ros is remembered as \u201cbeing afraid of the ball\u201d. Still, it was football that brought the two men together as adults. M\u00e9sz\u00e1ros was sponsoring Felcs\u00fat\u2019s team where Orb\u00e1n was a certified player even in the 1990s. Later M\u00e9sz\u00e1ros became chairman of the foundation that Orb\u00e1n established to run a football academy in Felcs\u00fat.<\/p>\n Locally, Mr. M\u00e9sz\u00e1ros was considered a successful businessman even before 2010, but has since become known nationally, thanks to his construction company\u2019s involvement in some big, mostly EU-funded projects. This company, M\u00e9sz\u00e1ros and M\u00e9sz\u00e1ros, also received direct subsidies from the EU in 2011 and 2012 to upgrade its operations. The company got more than 300,000 euros for \u201ctechnological\u201d and \u201cinnovation\u201d developments, records show.<\/p>\n Mr. M\u00e9sz\u00e1ros has also been active in farming, an industry heavily subsidized by the EU. Since 2010, he, his family members and his companies have received more than 1.2 million euros in farm subsidies, records show.<\/p>\n Of the three businessmen it is Mr. Simicska who had the longest and seemingly deepest friendship with Orb\u00e1n. They became friends in high school, later went to the same law school, and spent most of their adult life building up Fidesz, the party now governing the country. Orb\u00e1n was fighting on the frontline of politics while Simicska was working behind the scenes to provide a solid financial background.<\/p>\n Simicska built an empire which depends mostly on state contracts. His flagship company is K\u00f6zg\u00e9p but he is also involved in other industries. His advertising and media companies have also been awarded lucrative state contracts since 2010 and records show that many of those projects were also funded by the EU. Since 2010, agriculture companies co-owned by Simicska also received more than 22 million euros in EU farm subsidies.<\/p>\n Now, however, the friendship that once seemed unbreakable between Orb\u00e1n and Simicska appears to be over. The first signals of the deteriorating relationship came about a year ago when people linked personally to Simicska started to lose their positions in the government. Later, the government proposed changes hurting the interests of Simicska\u2019s companies. Some of these were withdrawn, but others – like a tax on advertising and changes in the distribution of farm subsidies – were not.<\/p>\n For a long time, however, there were only rumours about the souring of their personal relationship. Orban suggested in a December interview that these might be true. When asked about how the alleged power struggle might affect his friendship with Simicska, he said that \u201clife might solve it\u201d.<\/p>\n Simicska recently made it clear that this would not happen any time soon. \u201cOrb\u00e1n is a spunk,\u201d he said at the beginning of February in a series of interviews prompted by his outrage at the abrupt resignation of executives at his media companies, a move reportedly linked to the government\u2019s new media policies. Simicska\u2019s open – and colorful – criticism of Orb\u00e1n stunned many in Hungary, but a person close to him said that he had criticised the prime minister in private conversations months before.<\/p>\n Still, the indirect working relationship between the two has not ended. One of Simicska\u2019s companies, Mahir Exhibition and Event Organizer, was awarded a contract by the prime minister\u2019s office in last December. The company\u2019s job is to assist Mr. Orb\u00e1n\u2019s office in communicating the projects funded by the European Union.<\/p>\n Even the deepest analysis of the public databases did not reveal how much EU money the companies linked to Mr. Orb\u00e1n\u2019s inner circle have already received. Some of the projects have not ended, meaning that the companies have not been paid yet. And if we consider only the value of the contracts won by the companies the number is highly distorted.<\/p>\n This is because the companies have won most of the contracts as part of consortia and public documents do not reveal how the members of the consortia share the money among each other. K\u00f6zg\u00e9p, for example, is carrying out 68 of its 78 projects as part of a consortium so it is likely to receive only a fraction of the 2.1 billion euros it has in contracts tied to EU projects. (Two other Simicska-companies, Dun\u00e1nt\u00fali Telecommunications and Mahir Exhibitions and Events, have additional contracts worth 32 million euros.)<\/p>\n Many EU-subsidized projects are partly financed by the national government, which also makes tracking the money difficult. The share between the EU and the national government varies. There are projects that get all of their funding from the EU, while others get less than half.<\/p>\n Similar variations can be found among the contracts of Simicska\u2019s, M\u00e9sz\u00e1ros\u2019s and Tiborcz\u2019s companies, though Direkt36\u2019s analysis shows that the vast majority of their projects received significant EU subsidies. At least one-third of the projects are completely financed by the EU and another one-third received at least 75 percent of its funding from the EU. The share of similarly funded projects may be even higher but not all contracts could be analysed for this purpose due to the lack of data.<\/p>\n Of the three business groups, it is Elios Innovat\u00edv, the energy company co-owned by the prime minister\u2019s son-in-law, where the flow of EU money is the easiest to trace. Since 2010, the company has amassed contracts,<\/span> related to EU-funded projects,<\/span> worth more than 20 million euros.<\/p>\n Mr. Tiborcz served as board member from 2009 to January 2014 and became co-owner through one of his companies in April 2014. His ownership stake coincided with the start of Elios\u2019s recent successes in state tenders.<\/p>\n In the previous two years Elios won only four state projects. Since the beginning of 2014, it has been awarded 21 – mostly EU-funded – contracts. The company won these alone – not as part of a consortium – and nearly half of them have 100 percent funding from the European Union. The rest also receives a high share – 85 percent – of EU funding.<\/p>\n These successes since the beginning of 2014 are also remarkable because Elios won more than half of the EU-funded contracts as the sole bidder. The total value of these contracts is more than 10.8 million euros.<\/p>\n In January 2015, the company was awarded a contract worth 2.7 million euros to improve the street lighting system in the rural city of Zalaegerszeg. Elios was the sole bidder in the tender. A spokesperson for the mayor\u2019s office said that they had no choice but to declare Elios the winner: \u201cSince the bid was valid, the procedure had to be concluded by announcing a winner according to the law.\u201d<\/p>\n For information on companies, we used the databases of Opten<\/a> and Ceginfo<\/a>.<\/em><\/p>","protected":false},"excerpt":{"rendered":" The prime minister has been saying harsh things about the EU and the West. What he does not talk about is that companies of his friends and his son-in-law are receiving a lot of money from there.<\/p>\n","protected":false},"author":4,"featured_media":1393,"comment_status":"open","ping_status":"closed","sticky":false,"template":"single-444.php","format":"standard","meta":{"footnotes":""},"categories":[6,10],"tags":[],"ppma_author":[522,523],"class_list":["post-9550","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-az-orban-csalad-uzletei","category-elnyelt-eu-penzek","author-cap-andraspetho","author-cap-anita"],"authors":[{"term_id":522,"user_id":0,"is_guest":1,"slug":"cap-andraspetho","display_name":"AndrasPetho","avatar_url":"https:\/\/secure.gravatar.com\/avatar\/?s=96&d=mm&r=g","description":"","first_name":"","last_name":"","user_url":""},{"term_id":523,"user_id":0,"is_guest":1,"slug":"cap-anita","display_name":"Anita","avatar_url":"https:\/\/secure.gravatar.com\/avatar\/?s=96&d=mm&r=g","description":"","first_name":"","last_name":"","user_url":""}],"_links":{"self":[{"href":"https:\/\/direkt36.exot.hu\/en\/wp-json\/wp\/v2\/posts\/9550","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=9550"}],"version-history":[{"count":0,"href":"https:\/\/direkt36.exot.hu\/en\/wp-json\/wp\/v2\/posts\/9550\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/direkt36.exot.hu\/en\/wp-json\/wp\/v2\/media\/1393"}],"wp:attachment":[{"href":"https:\/\/direkt36.exot.hu\/en\/wp-json\/wp\/v2\/media?parent=9550"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/direkt36.exot.hu\/en\/wp-json\/wp\/v2\/categories?post=9550"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/direkt36.exot.hu\/en\/wp-json\/wp\/v2\/tags?post=9550"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/direkt36.exot.hu\/en\/wp-json\/wp\/v2\/ppma_author?post=9550"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}![\"Source:](\"\/\/www.direkt36.hu\/wp-content\/uploads\/2015\/02\/d2.png\" "\\"Source:")
<\/a>Whose money?<\/strong><\/h3>\n
![\"english_chart\"](\"\/\/www.direkt36.hu\/wp-content\/uploads\/2015\/02\/english_chart.png\" "\\"Source:")
A new family member<\/h3>\n
![\"Forr\u00e1s:](\"\/\/www.direkt36.hu\/wp-content\/uploads\/2015\/02\/1185466_10151866841316093_1542589381_n.jpg\" "\\"Source:")
<\/a>A friend from the village<\/h3>\n
![\"Forr\u00e1s:](\"\/\/www.direkt36.hu\/wp-content\/uploads\/2015\/02\/934875_10152835453626093_6894708265151335661_n.jpg\" "\\"Source:")
A broken friendship<\/h3>\n
The way of the EU funds<\/h3>\n
When the EU pays the bills<\/h3>\n