NAV director Ildikó Vida admits to being barred from entering the US

November 5, 2014


After weeks of silence, the director of Hungary’s National Tax and Duty Authority (NAV) has explained her views about the US entry ban, admitting both to being banned from the US on allegations of corruption, and the fact that she notified the government about it.  Government officials previously denied receiving any official or unofficial notifications from state employees about the travel ban. In an interview with pro-government Magyar Nemzet Online, a media outlet owned by construction mogul Lajos Simicska, Vida called corruption allegations and US ban measures “a vile attack” against her person and announced her intrntion to lead an investigatio.

The following text is the full translation of an interview she gave to Magyar Nemzet’s Péter Csermely published under the title  “ldikó Vida: I had and still have no part in any corruption scandal.”

Magyar Nemzet: You are one of those who were designated as “unwanted” in the US by the US Embassy in Budapest?

Ildikó Vida: Yes.

MN: Are you the only one or there are other colleagues?

IV: There are others at NAV.

MN: Who are they?

IV: I do not want to name the others. I am the president of NAV and if we are suffering from a vile attack like this it is my duty to defend my employees and myself.

MN: So you know who has been barred from the US other than yourself?

IV: Yes, they all told me.

MN: Were you visibly avoiding the public in the last week because of this case?

IV: Only partially. I organized this vacation long ago.  It was the autumn break and this was the only time of the year that I could spend with my children. I received the US Embassy notification a few days before the vacation, so much later than initial news in the media claimed. On the other hand however, I am also a human being and the whole US procedure has shaken me emotionally. I think that the banning procedure itself is unprecedented. On the other hand I could hardly take all the unfounded slanders that were and are still raining on me.

MN: Don’t you think that each and every day you decided not to speak up increased the credibility of charges articulated against you?

IV: I know that it would have been much more fortunate to go public much earlier. But this vile attack has shocked me to such a level that I did not even realize for days what was happening to me. It took this much time to get to the point where I could speak.

MN: Why do you think that steps made by the US Embassy were vile?

IV: The only difference between the procedure they follow and the show trials of the Stalinist times is that at least show trials were held.

MN: Why do you think they would attack you without any reason?

IV: This is something I do not understand, although I was thinking a lot about it, searching for reasons. My conscience is clear, and I am also sure that my colleagues who work here for decades were doing their job honestly and according to their best knowledge. I really don’t know. We have some controls on certain interest groups who could easily contact the US Embassy. It is also imaginable that external persons unfoundedly referred to us in certain cases, and this is something you cannot do anything against. Still, it cannot be presumed rationally that these kind of issues could have such serious consequences.

MN: Have you been notified via post?

IV: Yes.

MN: What was in the letter you received?

IV: They wrote a few lines about my entrance to the United States being judged undesirable. They were referring to a certain presidential decree that has a passage allowing for the suspension of entry rights of those who are involved in or benefit from corruption.

MN: That was all?

IV: Yes, that was all. They defined neither the specific case nor the subject or anything else, let alone evidence. How can you defend yourself against this? Just consider if somebody points a finger at you, calling you a thief, and this is echoed by everybody days later.  What would you do?

MN: I would say on the very same day that the charges are unfounded and would not care about it any more. But I am not the director of NAV and therefore cannot fully identify with your situation. By the way, the media also raised the possibility that American charges are unfounded. Chargé d’affaires Goodfriend reacted to such claims by saying that the Hungarian government possesses all the necessary evidence.

IV: First of all, the Hungarian government already denied this. Secondly, the Chargé d’affaires said something else each and every time he spoke. First, he stated that government members are involved in the ban.  Later he claimed that only officials close to the government and businessmen are concerned. First, he claimed that he knows nothing about American companies being prosecuted by NAV, but a few days later he admitted to Bunge having notified the NAV about VAT frauds three years ago, and that even though NAV did not do anything about it, they also notified the US Embassy. Right after this statement, Mihály Varga, the minister of national economics, published the fact that NAV has been prosecuting the case mentioned by Bunge since 2011, also resulting in criminal cases and arrests. Then the Chargé d’affaires said that, in fact, Washington does not even want the Hungarians to initiate prosecutions in specific corruption cases, but only wants some NAV officials to be removed as a friendly gesture. The strangest thing was when Mr. Goodfriend said that those under the travel ban could still travel to the US on an official visit. So we are not barred from entering as officials, even though they called us corrupt in our official status, whereas we are banned as private persons, whereas obviously the case is not in connection with our unofficial activities.

MN: When you read the letter did you notify the government about its content?

IV: Yes, I notified someone in charge.

MN: Who?

IV: The name does not matter. The point is that the government was aware of this case.

MN: Well, if the name does not matter, you might as well disclose it now.

IV: I do not want to hijack the case in this direction. I only repeat that the government was aware of what has happened early on.

MN: What did this certain government person in charge say to you?

IV: That I should stand up in public, no matter how oblique and intangible the charges are.  I should tell the truth because corruption and lying goes hand in hand, and if one appears it is obvious that the other one will follow.

MN: The US Embassy made it clear it cannot publish the names of those banned. Media sources to this day only made wild guesses as to the personalities in question. Have you ever considered hiding the fact that you are involved?

IV: No, never. But I got hit so hard by the charges that I needed time to cope with the situation.

MN: NAV has been gravely accused through your person. Have you considered resigning from your position?

IV: Why would I have considered such a step?

MN: To relieve the Tax Authority of the burden.

IV: If I resigned I would tacitly admit that the charges against me are founded. But this is exactly the point we are trying to avoid here, that I have committed none–do you understand?–none of these crimes. I have not been benefiting from corruption and I am willing to stand against whatever prosecution it takes to prove this.

MN: At this point you could be easily removed from your position as obviously it is not in the government’s interest to preserve tensions in US-Hungarian diplomatic relations.

IV: I would still have no choice but to stand up and defend NAV, my colleagues and myself.  I am quite the “mother-tiger” type and I have two families: my actual one and the Tax Authority. I will fight until the end for our truth and I will never give up. There is simply nothing else I can do.  Somebody, somewhere for some reason has falsely accused me of being a corrupt villain. But I refuse to live with this for the rest of my life, tolerating slurs and filth coming down on me and letting them rip my honor apart. No, I will not let this happen.

MN: Do you think that you have made mistakes? For example, there is András Horváth’s “green dossier” case. At the time when it went public NAV concluded its inner probe in a single day. Don’t you think that you should have dedicated more time to it?

IV: We dedicated all the time to the probe that was necessary. We only looked through the list of primary taxpayers and this is much more narrow than all the taxpayers. Every single case is stored in our computer database and these showed that every examination was in order. Our system has several control and check-up points. We have a legal, a security and a planning department as well as external control points, as well as a special department at National Defense Services dealing specifically with this. This renders any abuse in our system quite unlikely. And otherwise we dealt with the case in its details after the quick review. Our legal and security departments uncovered only a single case, where they established that our official in charge did not do his job professionally. But his actions did not trigger any loss in the budget.

MN: It seems like you did not convince the US Embassy however.

IV: This was clear even then as a real political hysteria has erupted in the case. A superficial and unfounded claim has been articulated, and afterwards the entire opposition jumped at NAV’s throat claiming that we are corrupt. But we aren’t.

MN: There were some general charges against you, claiming that the level of VAT frauds in Hungary is intolerable and…

IV: Yes, and they also claimed that we are assisting these frauds. This is a charge without any evidence as well. A few days ago the European Commission published a study on the issue of the VAT gap in Europe. The VAT gap is the difference between collectable amount and the actual collected amount. In the case of Hungary in 2011 this gap was exactly a thousand billion forints, and now the EC published that by 2013 the difference has been reduced to 900 billion forints. The claim, that this is a specific Hungarian phenomenon, is also ridiculous. This is a problem affecting the whole EU and according to the Commission’s data in the whole Union the difference is 177 billion euros. Out of this the Hungarian difference is 3 million euros. In Hungary the VAT gap is 25%, and this is the EU average as well. In Romania the gap is 44%, in Slovakia it is 39%. So where is this huge Hungarian VAT scandal, I ask, where? Of course, 900 billion forints is a lot, we have to reduce this. We are applying legislation but we are not forming the legislative framework itself. Of course we make suggestions and also received new legal means in the last few years like the reversed VAT, pre-registration procedures, enhanced tax authority control, the extension of wire transfer deadlines. In the next year we will also introduce a digital system tracking merchandise.

MN: The other case that media connected to the motion of the US Embassy is the case of an American company, Bunge. As revealed by this is about Bunge suffering market disadvantages in Hungary because all other companies were cheating with VAT. Bunge filed a report about this to NAV but no action followed on their behalf.

IV: But there were actions. There are several thousand ongoing prosecutions in that certain sector and we have also taken notifications by Bunge very seriously, as we take all other reports seriously. There were investigations, criminal cases have been initiated and there were arrests as well. But Mihály Varga, minister of national economy, has already given account of these measures before the public, when the name of Bunge has surfaced.

MN: Yes. But we still see that this was not enough. What else could you  do?

IV: We are in a very difficult situation, we already successfully refuted all the concrete claims that have surfaced but it is impossible to defend ourselves against general accusations. Still, I am aware of how serious this case is and that we need to produce results as fast as possible. What I am able to do is to set up a special group within NAV that would go through all the cases in connection with each considerable company operating in Hungary virtually using microscope lenses. On the other hand I will initiate civil and criminal court cases on behalf of NAV in connection with all the slanders that we have got.

MN: Concerning the examination group, does this mean that Ildikó Vida returns fire to Washington?

IV: I have no intention to return fire to anywhere. But me and my colleagues at NAV have been accused of corruption, using a drastic diplomatic tool. This makes clear that we have to take charges very seriously. I promise that we will do so. I will personally oversee the work of this special group, and naturally they will do their job strictly in line with all the laws and regulations. We have to uncover what the real problem of the Americans is, as so far even despite our and the government’s requests they are reluctant to disclose solid evidence.

MN: Did you seek out André Goodfriend after receiving the letter?

IV: No. He also wrote that I can make observations during a possible visa request concerning their decision. Well, my observation is that I am not corrupt and neither are my colleagues.

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