The rise and fall of Zoltán Spéder

June 16, 2016


Translation of “Zoltán Spéder was inflated, now his bubble is being burst” appearing in on 14 June 2016.


Zoltán Spéder’ power has been broken. His bank and his media empire are in jeopardy, his influence cannot be as great as it has been in recent years.

Nobody from the national elite has yet been subjected to such concerted and intense attacks, sharpened by the fact that in recent years Zoltán Spéder worked closely with the government, which gave him important tasks and opportunities.

It cannot be ruled out that the government, subject to attacks over corruption, is using the present case to demonstrate to the public in an open trial that is prepared to use the tools of criminal law where necessary. Strands of the case could even lead to people working in the Prime Minister’s Office. If this scenario plays out, then besides Zoltán Spéder, János Lázár could also find himself in a difficult situation.

In addition to the concrete legal process, the measures taken against Zoltán Spéder also have a symbolic significance. The harshness of the media campaign sends a message to anyone who does business with the government: no one should imagine that their subjective rights are strengthened by being given an opportunity by the government.

To give a very concise summary, it happened that a long time ago Zoltán Spéder crossed the path of OTP director Sándor Csányi, and more recently stood in the way of the latest endeavours of the central bank chief György Matolcsy and Prime Minister Viktor Orbán. It is also reckoned that the attacks could also have served to give János Lázár a fright.

Csányi and Spéder

Zoltán Spéder has seen Sándor Csányi as his main competitor for ten year now. Csányi has absolutely nothing against the weakening of the FHB [Land Credit and Mortgage Bank], but those close to him say he did not like the style of the media attacks on Spéder.

In light of the decade-long hostility between the two, it is particularly interesting that they met las Thursday in a patisserie in Normafa, a day after investigators raided the offices of FHB. It is not known who arranged the meeting, but what is clear, is that the coffee session would have been far more uncomfortable for Spéder.

Spéder held a directorship position at OTP for 15 years, vacating the position of deputy managing director in 2006, so he was Sándor Csányi’s first deputy. They parted ways acrimoniously, with Spéder considering that he was behind the growth of OTP, while Csányi reaped the rewards. For his part, Csányi considered that Spéder had acted too autonomously and worked behind his back. In 2007, Spéder bought FHB and, as its president, began to grow it. The unspoken issue at stake was whether, after falling out with Csányi, he was capable of creating a new OTP, and this time for himself.

OTP has reported FHB to the European Commission several times in recent years, and OTP is thought to be behind the latest letter from the Hungarian Banking Association to sharply criticise the bank’s activities. Csányi did not look kindly upon the ever greater opportunities being offered to FHB by the government, nor did he hide from Viktor Orbán the fact that he thought Spéder was the wrong horse to back. OTP’s business interests were increasingly harmed by the way FHB, under the supervision of János Lázár, increasingly wreathed a new monster, half supported by the state, that contained the postal service, public utilities and building societies. At a general meeting of savings cooperatives planned for 15 June, but cancelled following the attacks on him, Spéder would have taken a major step towards building his business, and his empire would have become substantially more stable. However, nothing will come of this now.

Spéder and Fidesz

Zoltán Spéder became acquainted with the founders of Fidesz in the late 1980s while studying at the Rajk College [in Budapest], especially at camps organised jointly with the Bibó College. He was among those surrounding Fidesz from the start, and although he did not go directly into politics, he retains links to the party leadership, including Viktor Orbán. When in May the pro-government media was beginning to get its teeth into Spéder, a leading Fidesz politician played down the significance of the attacks, saying “the personal connections are too old and too strong for Spéder to be dropped just like that.”  While this assessment of the situation did not prove accurate, it showed how the banker was considered within the party until just weeks ago.

After the 2010 elections, Spéder asked for help from the Fidesz members who had entered government. There were procedures against FHB under way in Brussels, while at the same time, the banks was not on a stable financial footing. According to some recollections of the time, his requests got a lukewarm reception, although in the end he certainly received diplomatic and legal assistance vis-a- vis the EU, and very likely material help, too.

The government cooperated with FHB until this time in keeping this extraordinary assistance secret, but the MNB [Hungarian National Bank] suddenly took it upon itself to name those who held the securities used to pull the bank out of its mess four years earlier.

In this article, Zsolt Sarkadi summarised how, in 2012, a secret, and as yet officially unknown investor rescued FHB. Many signs suggest that the securities ultimately came from the Hungarian state, and that to this day FHB has paid no interest on them nor exchanged them for an ownership share. We are talking about HUF 30 billion, just the same sum that FHB paid back to the state at the time as a result of the aforementioned unfavourable EU proceedings against the bank. All the signs are that the penalty imposed by the MNB on 7 June was connected to these securities.

The New Monster

Zoltán Spéder prepared for years to build a serious financial institution in collaboration with the Orbán government, and for a long time politics proved a good partner. He received authorisation from Viktor Orbán in 2013 to organise the integration of savings cooperatives. Spéder warned that these small financial institutions could fall one by one, but the then head of the savers’ representative council, Sándor Demján, always rejected this threat.

The integration of the savings cooperatives has now grown into a complicated system underpinned by a series of cross-ownerships. This monster combines utility bills, the FHB, the funds of savers and the postal infrastructure. János Lázár led the political supervision of the expansion for the Prime Minister’s Office, although it fell within to the state secretary Mrs Lászlóné Németh. Leading positions in the Takarékbank (which stood above the savings cooperatives) and Magyar Posta (the Hungarian postal service) went to former FHB directors, namely Zoltán Spéder’s confidantes. “Mrs Lászlóné Németh couldn’t even follow what was going on, and if there was a problem she quickly called Zoltán,” said a person with knowledge of the expansion.

Did he push too far without permission?

From this point, the story becomes particularly interesting with respect to the current developments.

The idea is gaining ground around Fidesz that Spéder’s main problem was that he wanted too much for himself. The word is that he was never authorised to build his own empire, but only to build up the system in return for the state rescuing the bank. Instead, numerous steps taken in recent years served to make his position as FHB director indispensable, and this would have been crowned by the 15 June general meeting, where all the signs were that savers would have had to buy into the FHB – that is, the two financial institutions would have grown together entirely, but with FHB people retaining the leadership role. This is what Sándor Demján had in mind when he likened FHB to a parasite in a letter to Viktor Orbán.

According to the explanations made increasingly forcefully by the government, the main reason Spéder has found himself in the firing line is that Viktor Orbán and György Matolcsy have had enough of him using the tools given to him by the state for his own ends. Moreover, also because he has been able to hide from the central bank’s monitoring mechanism. Zoltán Spéder infuriated them when he pressed on regardless, and would have cemented himself into the new conglomerate at the June general meeting, instead of starting to draw back.

Was nobody bothered until now?

It is a big question over whether it is realistic to suppose that the way in which the monster was being created really did not occur to anyone in the government, or whether it is now just a pretext. The process was going on for years, the opposition complained about it, Sándor Demján turned to the Constitutional Court, a series of articles revealed the questionable steps being taken. By contrast, the governing majority recently passed legislation calling for increased protection of business secrets related to dealings between the FHB and postal service. Viktor Orbán has even stood up personally for the aforementioned monster.

It is likely that the collision was hastened by several other important developments, and that it is not primarily about Viktor Orbán suddenly realising that “this wasn’t what we agreed”.

The most important development could be that, allegedly, Viktor Orbán and GyörgyMatolcsy want to place a new bank at the head of the monster. It is widely believed in financial circles that this could be MKB Bank, which the Hungarian state bought from its German owners in the spring, and this year passed on to a consortium whose background remains unknown. The ultimate owners, according to market gossip, could be those whom Orbán and Matolcsy trust as their own. There will be no further need for the FHB in the new system.

Grown too big

Another explanation – which does not dispute the main reason above – holds that Zoltán Spéder was given a clear message months ago: either be a banker or a media owner, but not the two together. According to this idea, Orbán’s circle felt that the financial monster and the media firms among his interests represented too much power. In no way did they want to see another Lajos Simicska appear on the scene, especially not one who simultaneously collects on utility bills and influences public opinion.

Spéder directs the media firm CEMP, whose publications include Index, among others. Moreover, his confidantes hold key positions in Mediaworks, which publishes Népszabadság and Nemzeti Sport and is counted among Spéder’s interests in the media world despite being owned by the Austrian businessman Heinrich Pecina.

All this together was too much for Orbán’s circle, and reinforces stories according to which Árpád Habony had earlier wanted to acquire Mediaworks from Pecina, and is now showing interest in CEMP.

(The interest in CEMP in circle close to the government is in no way new: a couple of years ago, Simicska would happily have taken it.)

Rival Clans

The leaders of the Prime Minister’s Office were taken by surprise at the start of June by the intensity of the fire aimed at Spéder. They shouldered the attacks and held back from open warfare with the Fidesz group at odds with János Lázár. However, some days later they tried to plant the idea that there was no question of having to defend themselves, and moreover sent the message that the entire campaign was about Spéder alone.

The overgrowth of Spéder’s empire also meant a strengthening of János Lázár’s position, and this was certainly not taken kindly by that group in the government whose economic line is represented by development minister Miklós Seszták and whose political line is represented the the minister who heads the prime minister’s cabinet office, Antal Rogán.

The Seszták group (which enjoys the resources of MOL, and that of the influential Sándor Csányi, too) would kick the energy legs from the growing monster, while the informal director of the cabinet office, Árpád Habony, would take away Spéder’s media empire. In these circumstances, steps taken against Spéder and the monster would simultaneously weaken Lázár.

Lázár did all he could last year to prevent Rogán from being appointed a minister; now Lázár could be forced to come to his defence. Whatever comes of the investigation into Zoltán Spéder and his circle of interests, the political responsibility will rest above all with him.