Hungary’s new anti-fraud authority refused to disclose contracts but changed its mind after Atlatszo story

Ferenc Biró, the chairman of the Integrity Authority said to Atlatszo that he would not disclose three of the contracts he had signed. He revealed that no bids were invited for the contracts, he had chosen the partners based on his preferences. They had ‘neither the time nor the manpower’ to do things differently in the first quarter. However, after we published our story, they quickly changed their minds and sent us the contracts we requested.

„The activities of the Integrity Authority, as well as those of its staff, must respect the highest standards of integrity and impartiality. Total integrity is the least we can do to serve our country.” – This is the credo of the Integrity Authority (IH), which was not set up voluntarily by the Hungarian government, they were forced to do so by the EU: this was one of 17 commitments to fight corruption and waste of public money that the European Commission made conditional on Hungary continuing to receive EU funds. But the way the organisation works is not exactly flawless.

Hungary’s new anti-fraud body, the Integrity Authority is funded by public money and has powers “in relation to planned, ongoing or past actions or projects receiving financial support from the EU in whole or in part” and anyone can report to them if they find any of the issues listed above that need investigating. In May, they say they have already investigated more than 30 cases.

Hungarian newspaper Magyar Hang recently looked at the list of contracts exceeding HUF 5 million published on the authority’s website, where it found several interesting items. We were curious about the contracts made with VALTON-SEC Zrt, L’azar Advisory Kft, and Level Nine Vezetési Tanácsadó Kft.

However, we did not receive a written reply from the Integrity Authority but were asked to go in person to their offices in Roosevelt Square, rented for nearly half a billion HUF, overlooking the Danube.

At the meeting, Ferenc Biró, the chairman of the Integrity Authority refused to disclose us the contracts. When we asked him why, as many contracts are publicly available on the Internet and the Authority is funded by public money, he simply repeated the answer:

he does not show the contracts and does not think he needs to explain why.

But we see it differently. According to the Information Act, amended at the end of last year in line with the European Commission’s requests, the Authority would not only be obliged to release contracts that constitute data of public interest but also to provide detailed reasons for refusing to release documents.

We then asked the chairman if more bids had been requested before the contracts were signed, because all publicly-funded organisations have procurement rules which, without exception, require competitive tendering above a certain value and the solicitation of at least three tenders.

It turned out that no other bids were invited, and Ferenc Bíró selected the contracted partners on his own.

As to why they did so, the answer was that “there was no time or manpower” to carry out the procedures in the quarter in which they started their operation. However, according to the chairman, „third parties have nothing to do with the contracts”, so “this part of the discussion can be closed”.

Favourite security firm of Fidesz takes care of the chairman of the anti-corruption authority

The career of security company Valton took off in 2010, when the ruling party, Fidesz came to power. Since then they have received numerous jobs from the government: In 2016, they secured all state celebrations, they worked at demonstrations, events of the Prime Minister’s Office, and even when Viktor Orbán was sworn in before parliament in 2010.

Valton’s success has been unbroken ever since, winning billions in public contracts year after year. For example, they guarded the Water World Cup for over a billion HUF, but they have also been contracted to guard several stadiums. And, of course, at the beginning of the year, they again won the framework contract worth HUF 2.6 billion for guarding the City Park Real Estate Development Ltd.

No wonder the company can also afford to buy a private jet, which is sometimes used by Foreign Minister Péter Szijjártó as well. In November 2021, we reported that the small plane photographed at Geneva airport, from which Szijjártó got out, belongs to Valton-Sec Zrt. Last year, they had HUF 18 billion in turnover and made a profit of HUF 1.8 billion.

The newly founded L’azar Advisory received a total of 300 000 HUF for their services, but they have already been terminated. As Magyar Hang reported, the company’s head, Gábor Lázár, previously worked in a management position at Ernst and Young, and Bíró also spent many years at the same multinational as an anti-corruption specialist. The chairman of the Information Authority told the newspaper that he approached Lázár with the opportunity to work for the organisation because he trusted his expertise.

A sudden change of mind

After our request for data was refused, we decided to submit a FOI request in order to put our request in writing. On Monday morning, we published a story about the case, and suddenly a miracle happened: within a few hours we received the contracts that had been withheld.

The Integrity Authority justified the decision by saying that they had only received a “simple” request from a journalist, not a FOI request, and had therefore not complied with it. In reality, all public authorities have to assess requests on their merits, i.e. a request for public interest data is a FOI request.

Premium car, net 65k per hour

The contract with Valton, for example, shows that Ferenc Biró drives a “premium passenger car” (272 hp Skoda Superb with L&K equipment), black on the outside and beige on the inside, and that the drivers have “above-average precision and decisive looks”. The ‘safety driver service’ costs a net 1 150 000 HUF/person per month, the car is hired for a net 440 000 HUF per month and the fuel is paid for by the authority.

Level Nine Vezetési Tanácsadó Kft. received a net monthly fee of HUF 1.2 million for management consultancy and coaching, and had to do everything in their power to ensure that the “business reputation of the Integrity Authority is not damaged”. This contract will also expire at the end of this month.

However, the contract with L’azar Advisory Kft. raises the most questions, as it does not reveal anything concrete.  The company provided “expert consultancy services requiring specific expertise” for 65,000 HUF per hour + VAT. But what exactly these services were, is not mentioned in the contract – which has already been terminated. The company allegedly received a total of 300 000 HUF for its services.

Translated by Zita Szopkó. The original, Hungarian version of this story was written by Eszter Katus and can be found here and here.  The company data were provided by Opten Kft. Cover photo: President Katalin Novák appoints Ferenc Bíró as chairman of the Integrity Authority in the Hall of Mirrors of the Sándor Palace on 4 November 2022. Source: MTI/Máthé Zoltán.