Hungary’s chief prosecutor to open investigation into NAV

April 10, 2015

Parlamenti ülésnap 2015 március 30.-án

Péter Polt, Hungary’s chief prosecutor, announced today in parliament that he would open the Hungarian whistleblower András Horváth’s infamous “green dossier”. Investigations into the trillion forint VAT scandal are already under way as it has become clear that a senior tax authority official is under suspicion of having played a role in what is likely the largest tax crime committed in Hungarian history.

Sources tell 168 Óra, a Hungarian weekly, that Hungarian Tax and Customs Administration (NAV) chief Ildikó Vida may be asked to resign. Minister of National Economy Mihály Varga recently said that the tax authority’s problems need to be resolved after a report by the State Audit Office called into question the authority’s internal procedures.

According to 168 Óra, the European Union Court of Auditors and the European Anti-Fraud Office (OLAF) will soon conclude an investigation into whether there is widespread and systemic fraud taking place in Hungary. Should the EU agencies conclude the Hungarian tax fraud scandal to be true, it would prove that Horváth was right all along when he called attention to the huge problems taking place within the tax authority.

The former NAV employee-turned whistleblower says he’s been closely following the events taking place. He says that other tax authority employees have also tried to call attention to abuses within NAV, but because they haven’t received the same kind of media attention he has “the system has dealt with them very harshly.”

Horváth says that aside from not having a job since becoming a whistleblower, he has not been the victim of any atrocity, something he attributes to the amount of publicity and awareness of his activities.

When he first decided to do something about the problems he saw at the tax authority, Horváth turned to leading Fidesz MPs Antal Rogán and János Lázár, but found himself rebuffed. That is when he decided to file an official report with the authorities. The authorities responded by raiding his flat. When asked by 168 Óra whether the authorities ever returned the computer they seized from his flat, Horváth responded that they hadn’t. Apparently, a year and a half wasn’t enough for them to browse the data housed on the computer.

Horváth says Polt’s announcement is flawed with respect to how it ought to be carried out.

“The issue of investigating the affected [tax authority offices] still has not been resolved,” he said. “The [tax authority’s] Special Affairs Directorate was responsible for investigating organized crime within supermarket chains, specifically regarding the fictitious transportation transactions of sugar, cooking oil and meat, all of which result in trillions of forint in tax revenue losses to the country. It was a mistake to dismantle the directorate. It should have been developed further instead of dismantling it and discharging its experienced staff. That was a serious mistake.”

Horváth doesn’t know which tax authority official is being investigated and he can only guess. His initial report to the authorities listed eight officials complicit in the problems which led him to turn whistleblower. Polt mentioned only five of the eight cases and has confirmed investigating only four.

Horváth finds it especially interesting that that the “prosecutor has all of a sudden become incredibly sensitive to respecting the rights of those he is investigating”. He says they are not handcuffing people and parading them in front of the public as was customarily the case. He is convinced this has nothing to do with the rights of those being investigated.

“I don’t think they’re protecting the privacy of those under suspicion. I think they’re trying to prolong the amount of time tax authority chief Ildikó Vida can stay in office. They are trying to patronize the system that her name protects. The trillion forint tax fraud scandal is so huge that it calls into question the accountability of the state’s entire supervisory system, including that of the secret police and the governmental agencies. This is because this scandal is the kind where everyone in the current political establishment may have mud on their feet,” Horváth said.

Before being appointed the equivalent of attorney-general, Péter Polt was an active member of ruling party Fidesz.  A close friend of Prime Minister Viktor Orbán, he has been criticized for the failure of his office to investigate reports of official corruption under the second and third Orbán governments (2010 to present).

Referenced in this article:

Bedőlni látszik a NAV-dominó,; 9 April 2015.