District mayor faces disciplinary procedures for not signing contracts he suspected of corruption

July 4, 2017

Photo: Origo- Bielik István

Mayor of the 15th district of Budapest László Hajdu could face disciplinary procedures that might temporarily suspend his power after he blocked council investments he highly suspected of being corrupt, reports Hungarian news site hvg.hu. The emerging story is a picturesque example of the mechanics behind misappropriated public funds in Hungary.

The 15th district council will decide Tuesday whether to initiate disciplinary procedures against Mayor Hajdu (a member of the Democratic Coalition, or DK party). Disciplinary procedures, proposed by Fidesz members of the district council but also backed by a Socialist (MSZP) and a Jobbik council member, were officially justified by the fact that Mayor Hajdu had not executed two resolutions formally adopted by the council.

However, according to hvg.hu’s district council sources, the real motivation behind the disciplinary procedures is to remove Hajdu – originally backed by DK and local NGOs – from power in order to force through three contracts prepared by the district’s economic operation center (GMK), led by the recently appointed Fidesz-tied Gizella Aradi.

Aradi was responsible for preparing tenders for the renovation of two district kindergartens and a nursery. The district council approved the tenders prepared by the GMK, worth HUF 245 million (USD 901,600), in February.

However, strange modifications to the tenders began to surface around May. After an elaborate internal mailing between Hajdu and the GMK, Hajdu assembled a meeting to discuss the issue. According to an anonymous district council source, the following information was revealed at the meeting:

  • The GMK which is only entitled to execute the council’s decisions arbitrarily modified the tenders both technically and formally without the knowledge of the council.
  • The tenders that were approved by the council were originally open public procurements. However, by May the GMK modified the tenders to be restricted.
  • The commissioned public procurement expert Péter Barkócz remarkably concurred with the Fidesz-KDNP council members, the leader of the GMK and the deputy mayor, who was also appointed by Fidesz. The expert argued that too many companies applied for the tenders, hence the restriction on the tenders was completely justifiable.
  • The estimated costs of the renovations increased by 40 percent in all three tenders.

According to hvg.hu’s anonymous source, Hajdu openly confronted the expert, the deputy-mayor and Aradi at the meeting, saying: “I have a feeling that you represent the interests of the invited contractors, instead of the council’s.”

Hajdu added that he couldn’t understand why he didn’t hear a single word about possible ways to cut costs in order to save council funds, and only heard justifications for the tens of millions of forints in extra costs.

In addition to the sudden escalation of costs, all three contracts contained elements that raised suspicion of the involvement of a cartel. The cost calculations proposed by the contractors contained strange similarities and, in some cases, the same mistake repeated in all three contracts.

Mayor Hajdu had to choose between turning a blind eye to the suspicious circumstances and giving a green light to the renovations, or refusing to sign the contracts, hence postponing the needed investments. He chose the latter, and a full-scale attack on him commenced.

Fidesz-KDNP council member János Agárdi – who initiated the disciplinary procedures against the mayor – told hvg.hu that the opposition parties in the district consciously obstructed the implementation of the project through the mayor in order to create an unpleasant topic for next year’s general elections.

“The body decided to allocate these funds to the renovation and reconstruction of these facilities. Even though the decision obliges the mayor, he refused to execute it, moreover he did not even provide an explanation,” said Agárdi, adding his assertion that the council notary, former MSZP MP Mónika Lamperth, is behind Hadju’s actions.

As the council notary, Lamperth is not allowed to voice her political opinion, but the former minister of interior is responsible for the council’s legal operation. Because of the suspicious contracts, Lamperth appealed to the Economic Competition Authority (GVH) and the president of the Public Procurement Authority. According to Agárdi, Lamperth should have waited to act at least until the end of the Hajdu disciplinary procedures, and he argues she acted based on party interests.

When asked about the astonishing 40 percent increase in costs, Agárdi told hvg.hu that the original estimates calculated before the appointment of GMK director Aradi were “abnormally low” and current prices reflect the market prices. However, contrary to this, Mayor Hajdu insisted that the initial estimates were already presented under the new leadership of the GMK.

Agárdi also dismissed concerns regarding the restricted nature of the tenders, as “the number of companies selected for the tenders were sufficiently high,” and refuted claims that the suspicion of a cartel ever surfaced.

“If according to the mayor a [cartel] is in the background, he should voice his opinion, he should react,” Agárdi said.

Agárdi’s statements coincidentally match completely with how Fidesz’s district newspaper presented the story. The article published on July 2 states that mayor Hajdu “calls his followers to arms” inspired by the “former minister of interior Lamperth” to fight the “MSZP-DK civil war.” Regarding the 40 percent increase in costs, the modification of the tenders from open to restricted and the strange similarities in the contracts, the newspaper only wrote two words: “alleged corruption.”