Head of Hungarian anti-fraud agency investigated for corruption after conflict with Orbán’s oligarchs  

The Central Investigating Prosecutor’s Office has questioned the president of the Integrity Authority (IH), an anti-corruption authority watching over EU funds. IH’s president, Ferenc Bíró is suspected of abuse of office involving car rentals. This is not the first car-related controversy, however, many suspect that the investigation has political motives, as Bíró recently clashed with the Orbán regime’s oligarch friends.

On the morning of 16 January, a press release was issued by the Central Investigating Prosecutor’s Office, stating that “police actions are currently being carried out in several locations, including the Integrity Authority, in a criminal investigation.” The pro-government journal Magyar Nemzet subsequently reported that, the head of the authority, Ferenc Biró, used the financial resources of the organisation for “private purposes”, and that investigators had also sought information on the case from the authority’s staff.

We contacted the Integrity Authority about the case, but they declined to comment on Thursday morning. Later, the IH’s head of confirmed to HVG that the office is under investigation, but did not provide details, and implied that he still needs to figure out what is going on.

It was confirmed that police officers confiscated several boxes of documents at the IH’s central office.

The family may have used the official car

On the evening of January 16, the prosecutor’s office issued a new statement, which revealed that the president of the Integrity Authority was interrogated as a suspect. They described the reason for the investigation as such:

“Under the relevant legislation, the Integrity Authority is a central budgetary body, whose chairman is entitled to the same benefits as a Minister. Accordingly, he is entitled, inter alia, to the personal use of an official car. The Integrity Authority has rented a top-of-the-range car for the use of the Chairman.

There is reasonable suspicion to believe that the President of the Authority also rented another car from the assets of the Integrity Authority.

The car, also a luxury car, was used mostly for private purposes by the wife of the Chairman, who is not employed by the Authority and is therefore not entitled to use the car. According to the contract concluded, the monthly rental fee for this other rented car was initially HUF 475 285 + VAT, which was subsequently increased.

The President of the Integrity Authority, in breach of the asset management rule, caused a financial loss of almost HUF 14 million to the Integrity Authority.

In addition, the President of the Integrity Authority – abusing his position – in order to exclude the other two members of the Board of Directors (who were also elected by tender and appointed by the President of the Republic) from exercising their legal rights, restricted some of their powers, breaking a law, while at the same time exercising his public authority arbitrarily.”

The spokesperson of the prosecutor’s office also said that Biró’s wife is also a suspect, as an accomplice in the misappropriation of funds.

According to our legal expers, the use of two cars is not illegal in principle. In fact, according to the law, the President of the IH is entitled to ministerial allowances. In fact, a 2020 ammendment to the Annex 1 of Government Decree 275/2015 (21.IX.), removed the text saying that a minister is entitled to use only one car.

In other words, Biró could legally rent multiple cars.

However, the investigating authority claimed that the chairman of the Integrity Authority had breached “the rule of trusteeship”. The IH Code of Ethics, in its chapter on the protection of public property, states that staff members must make „proper and reasonable use of public property in the performance of their duties”.

Whether Ferenc Biró broke this rule is debatable, but an investigation could clear it up. What is certain is that Biró must have needed the car(s), because according to his most recent asset declaration he does not own a car. However, his gross monthly salary is around HUF 5 million, which should be more than enough to regularly rent cars from private businesses.

Bíró suspects a personal conflict

On Thursday evening, Ferenc Biró issued a short statement on the proceedings of the Central Investigating Prosecutor’s Office. It said that the allegations of misappropriation of funds and abuse of office were unfounded and that he had lodged a complaint against him.

“Today they have specifically attacked my person and through this they have sought to make the Integrity Authority impossible. I can assure everyone that the Authority will continue to do its work in the same way: our organisation has always operated and continues to operate to the highest ethical and legal standards. In addition, the law establishing the Integrity Authority provides for cooperation with the Public Prosecutor’s Office, and I will fully comply with this and ensure full transparency,” the IH President stressed.

Not his first car-related controversy

The Integrity Authority has had no luck with car rentals lately. At the beginning of the IH’s operation, the newspaper Magyar Hang noticed that the list of contracts over HUF 5 million published on the authority’s website included Fidesz’s favourite security firm, Valton-Sec Zrt. We therefore asked the public authority to publish the contracts with the company and other companies.

However, the Integrity Authority did not do this, instead we were asked to go to their offices in Roosevelt Square, rented for nearly half a billion dollars, overlooking the Danube. We did so, but the conversation did not last very long. Ferenc Biró told us that he would not show us the contracts, and he did not think he needed to explain why. In his view, these contracts do not belong to a third party.

Despite this, they were released after we published the story.

The documents showed that Valton had provided Bíró with a ‘premium passenger car’ (a 272 horsepower Skoda Superb with L&K equipment), black on the outside and beige on the inside, and that the drivers had ‘above-average precision and determination’. The “security driver service” was paid at a net rate of 1 150 000 HUF/person per month, the car is hired for a net monthly rental of 440 000 HUF and the fuel is paid for by the authority.

The IH’s contracts currently include one car rental: a short-term rental contract with Mercarius Flottakezelő Kft. for the rental of vehicles and fuel for HUF 6 582 440 for the period between 01.08.2024 and 31.12.2024. The contract has been requested in a public data request and will be published as soon as we receive a reply.

Mercatius was a competitor in several suspicious public tenders, regularly losing under interesting circumstances to oligarch Lőrinc Mészáros’ car company. The possible collusion between the two companies is now under investigation by the NNI.

The charges of abuse of office and misappropriation of funds are serious and can carry a prison sentence of up to several years. It should be noted however, that Ferenc Bíró is not the first goverment official who can be reasonably suspected of such violations. PM Viktor Orbán for example was reported to have used one of the Hungarian Defense Forces’ airplanes (thus, public property) to go on a personal vacation. The case was reported to the chief prosecutor’s office, which refused to investigate, stating that quickly that no crime had been committed.

But as far as we know, there were also no legal consequences for the car rental of the Fidesz mayor of Győr, Csaba Dézsi, who used public funds to rent his car, paying almost a million HUF per month, which is many times the market price.

They touched sensitive cases

In the light of these – and many other similar cases of suspected corruption – it is no wonder that many believe that the public crackdown on the Integrity Authority may have an underlying political motive.

Importantly, the IH was not set up by the state of its own volition, but under pressure from the EU. Although the government spends billions of forints every year on its operation, it has not been given any powers. This means that they can only investigate, but cannot prosecute independently.

Nevertheless, they have investigated ad publicized several cases, embarrassing for the ruling party.

Ferenc Biró has also repeatedly called for the expansion of the IH’s powers, complaining that they cannot enforce any of their rulings, and that their cooperation with other government agencies is ineffective. It is also likely that Orbán’s government has practically given up on reclaiming the EU funds that the Union froze due to corruption and other rule-of-law violations. This, from Orbán’s point of view would make the IH superfluous, and even its dissolution could be in the cards.

The IH has also recently clashed with the company of another powerful oligarch, Gyula Balásy, as well as the Public Procurement Jury. Balásy’s companies win practically all government communication contracts, however, IH bucked this „tradition” when their communication tender was not won by a Balásy’s company. Balásy’s men contested the procedure, which has led to an ongoing legal battle with the IH.

The author of this article, Eszter Katus is a member of the Anti-Corruption Working Group of the Integrity Authority as a delegate of Átlátszó. Article translated by Zalán Zubor. Cover photo: Ferenc Biró in the Integrity Authority’s image film. Source: Youtube. The Hungarian version of this story can be read here.