István Tiborcz has become one of the wealthiest oligarchs in Hungary since his father-in-law, Viktor Orbán, returned to power as prime minister of the country in 2010.

Marrying Up

The 27-year-old Tiborcz and 24-year-old Rahel Orbán were married in September 2013. The couple first came together in 2008, the year Tiborcz first met his future father-in-law (source in Hungarian).

Tiborcz celebrated the victory of Fidesz in Hungary’s 2010 National Assembly election along with Viktor Orbán and other members of the party élite on Vörösmarty Square in Budapest (sources A and B in Hungarian)

E-OS Innovatív

Tiborcz and a business partner founded the company ES Holding in 2009. Shortly after Prime Minister Viktor Orbán formed his second government in May 2010, an energetics subsidiary of the Lajos Simicska–owned construction company Közgép purchased a majority stake in ES Holding, which changed its name to E-OS Innovatív at this time (source in Hungarian).

E-OS Innovatív dealt primarily with the installation of environmentally friendly and efficient energy technology, generating revenue of 686 million forints in 2010—over 80 times higher than the 8.4 million forints in revenue that the company’s precursor, ES Holding, had posted the previous year (sources A and B in Hungarian).

E-OS Innovatív’s revenue rose to 2.8 billion forints in 2012 and 3.1 billion forints in 2013 (source in Hungarian).

Elios Innovatív

In June 2013, E-OS Innovatív changed its name to Elios Innovatív (source in Hungarian).

The energetics subsidiary of Közgép withdrew from Elios Innovatív (hereafter: Elios) just a few weeks before Tiborcz married Rahel Orbán, allegedly because the company had become involved in a lawsuit with a subcontractor over payment for the European Union–supported construction of solar panels at the University of Szeged in southern Hungary (source in Hungarian).

In 2014, Tiborcz raised his stake in Elios to 50 percent (source in Hungarian).

The Road to Riches: LED Lighting  

In March 2015, the Hungarian investigative-journalism center Direkt36 published a report showing that Elios had won 19 public-procurement tenders to install LED street lighting at various locations in Hungary, including the cities of Zalaegerszeg, Pécs, Szekszárd, Hódmezővásárhely and Vác. According to the Direkt36 report, Elios was the sole bidder in 8 of these 19 tenders.

The Direkt36 report stated that Elios had won 4.1 billion forints in public-procurement tenders to install LED street lighting in Hungary over the previous 15 months, or 72 percent of the 5.7 billion forints awarded to companies to install such lighting in the country over that period.

The report claimed that Elios was in many instances the only company in Hungary that could meet specific tender conditions, notably that requiring previous experience in the installation of LED street lighting. Moreover, in certain instances the owner of the company that formulated the tender stipulations was a co-owner of Elios (see Direkt36 report in English).

Elios posted after-tax profit of 476 million forints on revenue of 3.5 billion forints in 2014 and after-tax profit of 972 million forints on revenue of 7.7 billion forints in 2015 (source in Hungarian).

National Investigative Office Fraud Investigation

In July 2015, the National Investigative Office (Nemzeti Nyomozó Iroda) of the Hungarian National Police (ORFK) launched an inquiry based on criminal complaints received from the opposition parties Dialogue for Hungary and Politics Can Be Different to determine if Elios had overcharged municipalities for LED lighting and had engaged in cartel activity in its public-procurement bids to install such lighting (source in English).

In June 2016, the National Investigative Office halted its inquiry after determining that the criminal complaints that the oppositions had filed against Elios were groundless (source in Hungarian).

Selling Stake in Elios

In April 2015, Tiborcz sold his stake in Elios as the result of charges from opposition media and political officials that the company had won public-procurement tenders due to his family ties to Prime Minister Orbán (source in Hungarian).

Tiborcz reportedly earned three billion forints through the sale of Elios (source in Hungarian).

In 2017, Tiborcz said during an interview (source in Hungarian): “I understood in connection to my participation and withdrawal from Elios that in Hungary, as a member of the prime minister’s family, I cannot deal with just anything. . . . As a member of the prime minister’s family it is necessary to remain distant from state or municipal matters. I had to learn and accept this.”

Shift to Real Estate

Tiborcz changed the focus of his business activity to the real-estate sector after selling his stake in Elios. According to the opposition website valasz.hu, Tiborcz owned an interest in 17 companies, of which 12 dealt with real estate, in January 2018 (source in Hungarian).

These real-estate companies have undertaken the renovation of several manor houses in Hungary, purchased the former headquarters of the Hungarian Shipping Company (MAHART) in Budapest, acquired a half-finished luxury hotel on the Danube Bend and bought a campground along the shore of Lake Balaton (sources A, B, C and D in Hungarian).

OLAF Fraud Allegations

In January 2018, the Wall Street Journal reported that the European Anti-Fraud Office (OLAF) of the European Union had uncovered serious irregularities in connection to EU-financed public-procurement tenders to install LED street lighting that Tiborcz’s company Elios had won (source in Hungarian).

The opposition website 24.hu obtained a copy of the report, which the Orbán government had received though refused to release.

According to 24.hu, the OLAF report recommended that Hungary’s Chief Prosecutor’s Office launch an investigation of Elios on suspicion of fraud in connection with 17 of the 35 European Union–financed public-procurement tenders that the company won in the years 2009–2015. The OLAF report recommended that the European Union withdraw 43.7 million euros in EU funding to Hungary in order to compensate for the fraud (source in Hungarian).

Minister in charge of the Prime Ministry János Lázár claimed that the leaking of the OLAF report was intended to undermine support for the Fidesz-Christian Democratic People’s Party alliance before the April 2018 National Assembly election (sources A and B in Hungarian).

On January 21, 2018, the Pest County Chief Prosecutor’s Office initiated an inquiry into the charges of fraud against Elios contained in the OLAF report (source in Hungarian).

In February 2018, both the Prime Ministry and the Chief Prosecutor’s Office refused an official request from Politics Can Be Different National Assembly representative Ákos Hadházy to publish the OLAF report on the grounds that doing so could influence the investigation of what had become known as the “Elios Affair” (source in Hungarian).

Last updated: June 20, 2018.