Bodnár: National Bank of Hungary operating “outside of the law”

May 27, 2015

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“They really believe that the central bank’s money is their own small cash desk with which they can do whatever they like.”

The National Bank of Hungary has been operating “outside of the law” for the past year, according to Hungarian Liberal Party (MLP) politician Zoltán Bodnár.  The former deputy governor of the National Bank told ATV that the fact that parliament has yet to appoint a new supervisory board to replace the one whose term expired before last year’s general election means that nobody is holding the central bank accountable for the expenditure of billions of forints worth of public funds.

Bodnár criticized the central bank’s decision to award a HUF 1.8 billion (USD 6.5 million) contract to Fidesz think-tank Százádvég Zrt. despite Tárki offering to perform the same work for HUF 1.1 billion (USD 4 million), that is for HUF 700 million (USD 2.5 million) less.   The purported purpose of the tender was to research public opinion on economic trends over a period of three years.

He says that in theory the central bank’s own formidable staff of in-house analysts should be capable of conducting such research.  Bodnár says there is no “plausible explanation” for why the central bank decided to award the contract to the higher bidder other than the fact that Százádvég must have needed the money (perhaps to help fund its lobbying efforts in the United States.-ed.)

The MLP politician said the result of the public tender “strongly creates the appearance of corruption” and called for the State Auditor’s Office to examine its legality.

Bodnár called “arrogant” and “cynical” the central bank’s official response to criticism appearing in the press, adding that “they really believe that the central bank’s money is their own small cash desk with which they can do whatever they like.”  He warned that “people may get the impression that the National Bank of Hungary is supporting the Fidesz agitation and propaganda department officially known as Százádvég Zrt. that appears to function as its house cash desk.”

“The central bank has an obligation to account to parliament for expenditures of this kind,” says Bodnár, who believes Fidesz caucus leader Antál Rogan should summon central bank governor György Matolcsy to appear before the parliamentary committee on economics.

“This is not a question of monetary policy but one of the central bank spending public money,” observes the former  central bank deputy governor.