exposes the inner workings of Hungary’s mafia state

November 14, 2016


Daily online published a lengthy exposé Friday morning of the relationship between propaganda minister Antal Rogán and an attorney suspected of being his “bagman”, Balázs Kertész.  In the making for more than a year, the article has it all: data, pictures, videos and attempted cover-ups.

Consisting of ten sections, the lengthy article delves deep into Kertész’s past, recounting his long history with Rogán and their various nefarious dealings, as well as how Kertész may be the key to understanding the skeletons in Rogán’s closet, and why Rogán is acting like Kertész does not even exist.

The article opens with a video recorded in Budapest’s District 5 on Aulich street at around 10 am on November 10, 2015. Three men officially not connected to one another enter a building within a few minutes of each another–first Antal Rogán, a career politician with plenty of scandals tied to his name, then Balázs Kertész, an attorney at Kosik Law Office and the owner/CEO of Monavis Consulting Kft. whose offices are in the Aulich Street building, and finally Árpád Habony, so-called unofficial adviser to the prime minister tasked with building a new pro-government media to replace that of former Fidesz oligarch Lajos Simicska.

Rogán’s ministry, the Cabinet Office of the Prime Minister, told index no such meeting took place.  However, according to the online daily, that wasn’t the first time Rogán had visited the building, having gone there a few days earlier.

So what business does Monavis have with the Hungarian government that would require the involvement of Hungary’s third most powerful government official?

According to the ministry, neither Kertész nor his firm have ever contracted with a government ministry. Nor does Kertész have a badge granting him access to the Hungarian parliament.

Index journalists Szabolcs Panyi, András Dezső and Nikita Hava spent months investigating Kertész and his connection to Rogán. A number of government and opposition figures (only the latter agreed to the use of their names) likened the Rogán-Kertész relationship to that between Prime Minister Viktor Orbán and businessman Lőrinc Mészáros, or the relationship between Orbán and Simicska, the architect of its economic hinterland, before 2014.

According to the story, Kertész got to know Rogán back when they were members of Fidelitas, Fidesz’s youth organization. Later, this relationship expanded to include András Puskás, a man who would go on to become Rogán’s deputy mayor in the capital’s 5th District, eventually joining the state-owned Eximbank which has actively financed the acquisition and operations of pro-government media.

Already an active member of Fidesz in the mid-1990s, Kertész became a Budapest District 3 assemblyman under then district mayor István Tarlós (who currently serves as Budapest mayor). Tarlós reportedly distrusts Kertész so much that he has forbidden the Budapest city public procurement corporation from contracting with Kertész’s Kosik Law Office.

Rogán’s bagman?

Kertész studied law at Péter Pázmány Catholic University and wrote his term paper on money laundering. Graduating in 2000, he joined the law office of László Kelemen, a man believed to have very close ties to then-Smallholders party politician József Torgyán, who, in turn, was a member of the supervisory committee of the National Bank of Hungary (MNB).

It was in 2003, during the K&H brokerage scandal, that the names of Kertész and Rogán first popped up together in a shady way. A parliamentary investigative committee was set up to investigate the scandal. Although it suspected Rogán and Kertész, along with Kertész’s former boss, László Kelemen, of complicity in the scandal, it never issued a definitive conclusion.

According to Index, notes from the official investigation refer to Kertész as Rogán’s bagman.

The K&H scandal implicated a number of politicians on the right and left but no charges were ever filed against Kertész or Rogán. Eventually charges were filed against Kelemen after the main culprit claimed he had helped stall earlier efforts to uncover the scandal.

Self dealing

It was in the mid-2000s that Rogán, Kertész and Puskás took over the 5th District municipal council, with Rogán relying on the assistance of the latter two, according to former District 5 mayor Pál Steiner (Hungarian Socialist Party/MSZP).

By the time Rogán became mayor in 2006, it became obvious that Puskás covered the day-to-day operations of the mayor, while Kertész became known as the man who dealt with district finances. But 2006 would mark a turning point for Kertész, joining and chairing committees responsible for district finances and real estate matters, and joining the board of the municipally-owned asset management corporation. Withdrawn from the public eye, his role in the district’s financial dealings became increasingly important. It was at this time, according to Index, that Kertész perfected the district’s controversial system for selling off municipally-owned real estate.

Leaving the municipal council in 2010, Kertész became the chairman of the board of the Budapest District 5 asset management corporation.

In October 2010, just one month after Kertész founded Monavis Consulting Kft., the district reclassified a five-room, 245-square-meter unit it owned in Aulich Street as a residential apartment. Appraised in 2008 at HUF 52 million (USD 260,000), the apartment was sold for HUF 44 million (USD 200,00) to a dentist in 2011, one year after the reclassification (which, according to a real estate expert, should have doubled the value of the flat),

Three months later, in February 2012, Monavis changed its official place of business to the address of the apartment. Two years later, in February 2014, corporate filings show that the dentist became an owner of Monavis and offered the property as his investment in the company. Prior to the dentist joining, Monavis had registered capital of HUF 500,000 (USD 2,500). The dentist bought a 10 percent stake in the business for the value of the property, thereby increasing the registered capital of the company to HUF 50.5 million (USD 250,000).

In this way, Kertész effectively paid HUF 500,000 to become the 90 percent owner of a five-room, 245-sqm apartment in the heart of Budapest, the value of which at the time of sale may have exceeded HUF 100 million.

This case illustrates how Kertész, while heading the district’s asset management corporation, was able to acquire valuable real estate in the district without directly or formally conducting a transaction with the district.

Kertész pretty much dropped off the map after 2010. He rarely attends public events and holds no political office. Several independent sources told Index that he has even taken to utilizing a decision by the European Union Court which allows citizens to petition search engines to remove links related to their own personal lives from their listings.

According to Index, everyone at the district who had any ties to Kertész is running interference for him. The district refused to provide the resumé or official photographs of the elusive figure to Index.

In August it was reported that Rogán’s patented IT invention belongs to a company called MobilSign Kft., which just happens to be owned  by Kertész’s wife, Petra Pozsgai.

Hungary’s residency bond program

Furthermore, Kertész’s former law school classmates form the network of lawyers involved in Hungary’s controversial residency bond program, reportedly masterminded by Antal Rogán himself, and also in Árpád Habony’s media companies. Off-shore companies licensed to broker the sale of residency bonds have reportedly made hundreds of millions of dollars, primarily at the expense of the Hungarian treasury.

According to Index, an individual contracted by Fidesz to act as its lobbyist in Russia helped secure business for Kertész by organizing wellness retreats to Hungary for executives from Russia’s atomic energy sector. In February 2013, a few weeks after the successful meeting with the Russians, Kertész co-founded a company for this purpose. A few days after that, a man by the name of Zsolt Bauer also joined the company as a shareholder.

Prior to that, Bauer had owned numerous businesses with Fidesz MP Erik Bánki, who, earlier this year, submitted a bill to conceal how almost USD 1 billion used by the Central Bank (MNB) to endow various private foundations was being used. Bánki now chairs the parliament’s economics committee which – under Rogán’s chairmanship a few years ago – was responsible for creating the controversial residency bond program.

The company was unexpectedly wound up in 2016. Index suspects this may have been directly tied to the investigation Index was conducting at the time.

The Eximbank connection

Remember András Puskás from the beginning of this story? In 2014, he went from being Antal Rogán’s deputy mayor in the 5th District to becoming the deputy CEO of Eximbank, Hungary’s state-owned import-export bank — all this despite having absolutely no background in banking.

One Fidesz source reportedly told Index that the move was intended to remove Puskás, Rogán’s neighbor and heir-apparent, from the spotlight only months before the 2014 general election and less than a year before local elections were scheduled.  The reason for this, according to Index, was that Rogán’s dirty laundry was starting to be aired. It was during this time the public learned that Rogán had under-reported certain figures on his parliamentary declaration of assets. When that story broke, the public learned that he and Puskás are actually neighbors in the same luxury gated community in Buda, along with Csaba Csetényi, whose companies have been the main beneficiaries of copious government advertising over the past two years, including 2015’s “national consultation” campaign as well as this year’s anti-EU refugee settlement campaign.

Appointed to the executive posting at Eximbank by then-foreign minister Tibor Navracsics, Puskás wasn’t the only person from the Rogán clique to go to work for Eximbank.  Wine expert and adviser to the prime minister on national security issues András Tombor’s brother, Bálint, also found work at the bank overseeing its emergency loan program after leaving his post as the chief-of-staff for undersecretary István Mikola this summer.

Eximbank helped finance government film commissioner Andy Vajna’s acquisition last year of TV2, Hungary’s second-largest commercial channel. More recently it reportedly funded István Garancsi’s acquisition of a 140-acre waterfront real estate in Budapest’s District 11.

The Georgian connection

According to a video obtained by Index, the Rogán-Puskás-Kertész trio was again recently seen together at Kertész’s office.

On July 27th, 2016, three men came out of the building that houses Kertész’s office: Shabtai Michaeli, a Georgian-Israeli man behind one of the companies contracted to sell Hungary’s controversial residency bonds; Nika Gilauri, a former prime minister of Georgia, who had also served as the country’s minister of finance and energy; and Georgian banker Irakli Rekhviashvili.

Index asks why this delegation of influential Georgian officials wasn’t received by the foreign ministry in Buda’s Bem Square.

In the video, the three men could be heard talking about some kind of meeting they just had in the building. They were deliberating whether or not to sign a contract with someone in the building, something about a power plant, and an exchange of money and percentages.

According to Index, one of the men is heard referring to someone in the building and saying, “Let them start working! They have to pay their own.”

It turns out that the men were discussing the construction of a 60-megawatt power plant in Georgia. This meeting outside Kertész’s office took place just months after foreign minister Péter Szijjártó announced that Hungary would extend a USD 68 million line of credit to Georgia in the interest of strengthening business ties between the two countries.

While there is no information about a loan from Eximbank to Georgian interests for the construction of a power plant, Index found a company incorporated in Georgia called Hungarian Georgian Investments Co LLC. The company appears to be connected to both Michaeli and Rekhviashvili.

Index tried contacting Nika Gilauri regarding the meeting at Kertész’s office. The news site would have liked information about precisely who Kertész represented at the meeting, but received no response.

A vanishing chain of circumstantial evidence

According to Index, some of the pictures used in this article (for example, connecting Rogán and Kertész) have disappeared from social media. The journalists saved the pictures, but it is likely that those implicated in the Index article are worried about the obvious connection between Rogán and Kertész.

While Rogán’s propaganda ministry initially denied the meeting recounted at the beginning of this article ever took place, a statement subsequently released by the ministry after the article was published indicated that

“[The ministry] sees nothing wrong with a government minister occasionally visiting an old friend for a coffee. It is interesting that the Index videographer was present for almost all these visits, which raises the suspicion of unlawful surveillance.”