The Budapest investigation committee suspects corruption in the real estate transactions of the former leader of Fidesz
More than 1,200 city-owned apartments were privatized at a significantly reduced price in downtown Budapest between 2014 and 2018 under the leadership of the ruling Fidesz, as concluded in the final report of the commission of the Budapest Assembly investigating potential corruption in property sales in the capital. The group examined the actions of György Schadl, the key figure in the corruption case of former Deputy Justice Minister Pál Völner (Fidesz) as case studies, and found that he may have -be used money to pay bribes.
Corruption charges against Pál Völner hit the headlines in early December. According to the prosecution, Völner had regularly received 2 to 5 million forints (5,400 to 13,500 euros) from György Schadl, the president of the Hungarian Chamber of Bailiffs, arrested in early November. In total, the former deputy minister and secretary of state would have received among other things 83 million HUF to appoint certain people as bailiffs, all supported by Schadl.
This commission of inquiry was set up by the Budapest Assembly, led by the opposition, in order to examine the sales of “suspicious” properties of the various directorates supported by Fidesz in downtown Budapest. In particular, they paid close attention to the local real estate transactions of Schadl, who is known to have purchased several properties in Budapest. Fidesz boycotted the commission, while in the 5th arrondissement, still led by Fidesz, representatives of the ruling forces voted against a commission of inquiry.
Corruption in real estate sales in Budapest under the leadership of Fidesz?
According to the panel, an impressive number of apartments in the 5th, 6th, 7th, 8th and 9th arrondissements, all led by Fidesz in the previous cycle, have been resold at market price, only a few months after being bought at a price decreasing price with the municipality. Due to discounted rental house sales, suspected straw men may have purchased the apartments instead of the tenants.
In the 7th district (Erzsébetváros), for example, between 2015 and 2019, almost half of the apartments purchased from the municipality were sold in one year, and in 2017 and 2018, 27 to 30% of the properties were sold in 30 days, while it fell to 0 in 2020 (the year after the opposition took power), according to the report of the commission chaired by Péter Niedermüller, mayor of the district of the Democratic Coalition (DK) .
In addition, there was no overall property management concept in either the 5th district or the 7th district (before 2019), and it is not known on what basis the properties for sale were chosen.
The committee therefore concluded that real estate sales were not determined by neighborhood needs, but rather by the buying intentions of individual buyers close to the ruling party and its holdings. On top of that, information about the tenders was mostly only available through logins, as the tenders were published in local newspapers and pro-government media only for a few days, with little information.
Schadl case: Eight suspicious purchases with corrupt money?
The committee also looked at Schadl’s real estate transactions as a case study.
According to their findings, Schadl bought eight apartments in Erzsébetváros from the municipality for a total of HUF 225 million (EUR 606,000), despite being the sole bidder for seven of them, and even paid before the municipality has actually taken the decision on the Sales. He then quickly sold two of the eight apartments and the others were being renovated. The group also suspects that Schadl may have paid this amount out of his bribe, amounting to a total of 800-900 million HUF, in the current state of the criminal investigation.
The panel is now recommending Mayor Gergely Karácsony to involve the State Audit Office in the investigation, and they are calling for a general citywide investigation covering all district councils.
The report should be on the agenda of the Municipal Assembly at the end of April.
featured image illustration via Tibor Oláh/MTVA