Péter Juhász uses crowdfunding to expose corruption in Budapest District 5

November 26, 2015

Péter Juhász, Photo: Márton Magocsi
Péter Juhász, Photo: Márton Magocsi

Budapest District 5 assemblyman Péter Juhász has really done it this time.  The anti-corruption crusader is determined to prevent the sale of district-owned real estate at substantially below market prices to politically well-connected individuals or companies. The latest scandal involves the pending sale of a district-owned property to the very law office that handles District V’s real estate transactions. According to the opposition Együtt (Together) politician, the sale price is peanuts in comparison to what the property is actually worth.

According to Juhász:

  • those who rent real estate from District V for at least a year may purchase the property for 30 percent less than the appraised value
  • the properties are being systematically appraised for far less than they are actually worth
  • Juhász found out that District V planned on selling a 237-square-meter apartment at Deák Square to a law office which had only been renting the apartment for a few months
  • the law office in question is the one that handles the District’s real estate transactions
  • the unit in question was appraised in 2012 for HUF 154 million
  • that same unit was appraised for the same amount in 2014
  • in 2015, the unit was appraised for just HUF 112.5 million (despite a marked increase in downtown real estate values)
  • the District wants to sell the rental unit to the law office for HUF 78.8 million, and
  • Juhász says he will file a criminal complaint against District V mayor Péter Szentgyörgyvölgyi (Fidesz) for embezzlement if the District signs the papers.

Crowdfunding as anti-corruption tool

Juhász has declared his intention to purchase the property for the appraised price and resell it at a profit. He raised HUF 130 million through crowdfunding over social media by offering to split the profit among the contributors.

Juhász even listed the property for sale for an asking price of HUF 170 million.

“I received 46 phone calls from people interested in buying. There were those who want to buy it for themselves and others who want to buy it for their clients immediately for the price we advertised. It turns out that even double the price [of what it would be sold for to the law office] is still pretty cheap,” Juhász said.

He said that if the District sells the property to the law office, then it is obviously committing embezzlement. He says the District needs to put the real estate up for auction so that it can sell it to the highest bidder.

Deputy mayor defends legalized corruption

In a scramble to defend the District’s questionable dealings, deputy mayor László Böröcz announced that the District is legally required to sell the property to the renter based on the price of the appraisal.

Juhász says this is a “double lie” because (1) there are cases in which the District has sold the property for more than the appraised price, and (2) the law regulating state assets requires the state to liquidate its own assets in a competitive manner. In the case of the flat in question, the District failed to solicit competitive offers.