Lajos Simicska

Lajos Simicska was regarded as the most powerful oligarch in Hungary from the time Viktor Orbán formed his second government in 2010 until his dramatic public rift with the prime minister in 2015 (see The Fury of an Oligarch Scorned).

Lőrinc Mészáros has supplanted Simicska as the most powerful oligarch in Hungary since the latter year.

Following his rupture with Orbán, Simicska turned against the FideszChristian Democratic People’s Party (KDNP) governing alliance and began to openly support the nationalist party Jobbik.

On July 4, 2018, Simicska sold nearly all the companies under his ownership to his longtime business partner Zsolt Nyerges (source in Hungarian). The opposition newspaper Népszava reported that Simicska had sent his 26-year-old son, Ádám, to the United States to prepare the ground for continuing his business activities there (source in Hungarian).

The term oligarch in its contemporary, Eastern European sense denotes a businessman (and rarely a businesswoman) who acquires significant wealth and political influence through his (or her) connections and allegiance to the government and uses this wealth and influence to provide the government with various means of support.

Background

Simicska was born in the city of Székesfehérvár (central Hungary, pop. 98,000) in 1960.

He attended the same high school in Székesfehérvár as Viktor Orbán, graduating in 1979—two years before the future prime minister of Hungary.

Simicska and Orbán then performed their mandatory service in the Hungarian People’s Army together in the city of Zalaegerszeg (western Hungary, pop. 60,000) in the years 1981–1982 (see Siss-boom-BANG!)

Simicska—as Orbán—subsequently attended the Loránd Eötvös University School of Law and Political Sciences in Budapest in the 1980s, though it is not known if Simicska graduated. While at the university, Simicska and Orbán both lived at the special residence hall for law students called the Bibó College (Bibó Szakkollégium). Simicska participated in the formation and early activities of Fidesz at the Bibó College, though was not among the 37 founding members of the party in 1988.

Political Career

Prime Minister Viktor Orbán and ÁPEH President Lajos Simicska in March 1999 (photo: MTI).

Simicska assumed his first formal political position in 1993, when he became financial director of Fidesz (source in Hungarian). He then served as president of Hungary’s internal revenue service ÁPEH for just over a year at the time of the first Orbán government in 1998 and 1999.

Simicska did not appear in public for a period of 15 years from the time of his resignation as president of ÁPEH in August 1999 until attending the official inauguration of an equestrian center in western Hungary in September 2014. The weekly Magyar Narancs published the first updated photograph of Simicska in over 13 years on the magazine’s cover in December 2012.

Business Activities

Simicska spent the next decade quietly building an opaque business empire centered on the formerly state-owned construction company Közgép (“Public Machine”). Simicska was so secretive about his business activities that although it had long been speculated that he had acquired a majority stake in Közgép, definitive proof that he actually owned the company emerged only in documentation submitted as part of a public tender in 2012 (source in Hungarian).

During this period, Simicska also acquired partial or total ownership over broadcast and print media including the news television station Hír TV, the radio stations Lánchíd Rádió and Class FM, the daily newspaper Magyar Nemzet, the weekly news magazine Heti Válasz and the weekday free sheet Metropol. These media explicitly supported Viktor Orbán and Fidesz.

In addition to construction and media, Simicska focused his business activities on outdoor-advertising, primarily via the companies Mahir Cityposter and Publimont.

Becoming an Oligarch

Simicska attained immense wealth following the return of Viktor Orbán to power as prime minister in 2010, primarily through the large number of state construction contracts awarded to Közgép beginning that year.

Közgép won 179.4 billion forints in public tenders from 2010 through 2013: 1.2 billion forints in 2010; 31.6 billion forints in 2011; 17.6 billion forints in 2012; and 129 billion forints in 2013 (source in Hungarian).

Közgép’s revenue rose almost threefold from 44.8 billion forints in 2010 to 129.8 billion forints in 2014 (source in Hungarian).

Simicska’s pro-Fidesz news media—Hír TV, Lánchíd Rádió, Magyar Nemzet and Heti Válasz— also began to generate significant profit during this period, much of which proceeded from government advertising. The aggregate post-tax profit of these four media nearly doubled from 876 million forints in 2012 to 1.7 billion forints in 2014 (source in Hungarian).

Simicska was ranked the tenth-richest person in Hungary in 2015 with estimated wealth of 73 billion forints (source in Hungarian). He had not previously appeared in the annual Napi Gazdaság ranking of the 100 wealthiest Hungarians due to the lack of transparency surrounding his business operations.

Politics Can Be Different Protest

Police arrest Politics Can Be Different National Assembly representative Benedek Jávor during 2012 demonstration at Közgép headquarters (photo: HVG)

On July 11, 2012, about 40 activists and National Assembly representatives from the liberal-green party Politics Can Be Different (Lehet Más a Politika) chained themselves together at the entry of Közgép headquarters on the outskirts of Budapest to protest the preference the Orbán administration had shown toward the company in awarding state building and construction contracts. Police officers cut the chains and arrested 26 of the protesters, including Politics Can Be Different National Assembly representatives Bernadett Szél and Benedek Jávor, after they refused to comply with an order to leave the premises (source in Hungarian).

Közgép filed charges against the protesters on several accounts, including “disrupting the operations of a production plant of public interest” and slander—the latter accusation in reference to the signs they held bearing inscriptions such as “Orbán’s New Oligarchs!” (Orbán új oligarchái!), “Here Is Where your Money Disappears!” (Itt tűnik el a pénzed!), “Közgép Takes All!” (A Közgép mindent visz!) and “They Run the Country from Here!” (Innen irányítják az országot!) (source in Hungarian).

On March 25, 2014, the Budapest 18th, 19th and 20th District Court exonerated the protesters on all charges (source in Hungarian).

Government Measures to Reduce Advertising Profits

“‘Blow Below the Belt’ for Media Enterprises”: June 2, 2014, on-line issue of Magyar Nemzet.

The third Orbán government formed after the Fidesz-KDNP victory in the 2014 National Assembly election launched a campaign under the direction of new National Development Minister Miklós Seszták aimed at decreasing the revenue of Simicska-owned companies (see sources A and B in Hungarian).

On June 11, 2014, the National Assembly adopted a government-initiated tax on advertising revenue that significantly reduced the profits of Simicska’s television station Hír TV, newspaper Magyar Nemzet, radio stations Lánchíd Rádió and Class FM and advertising companies Mahir Cityposter and Publimont (sources A and B in Hungarian).

Magyar Nemzet criticized the tax on advertising revenue in an article entitled “‘Blow below the Belt’ to Media Enterprises” and, along with Hír TV, joined the protest of mostly opposition media against the tax (source in Hungarian and Black Screen of Protest).

On October 10, 2014, the Orbán government founded an organization called the National Communications Office (Nemzeti Kommunikációs Hivatal) go conduct its advertising operations, thus depriving Simicska-owned Mahir Cityposter and Publimont of a significant source of previous revenue (sources A and B in Hungarian).

Open Conflict with Orbán: G-Day  

“Orbán Is a F.ckhead!” Man reads tabloid Blikk on February 7, 2015 (photo: 444.hu).

The largely veiled and indirect conflict that had developed between Simicska and Orbán following the government’s introduction of the tax on advertising revenue came out into the open after the directors and editors-in-chief of Hír TV, Lánchíd Rádió and Magyar Nemzet abruptly resigned for “reasons of conscience” on February 6, 2015 (source in Hungarian).

Simicska told the opposition newspaper Népszabadság on this same date that he believed that either Prime Minister Orbán or his “entourage” had played a role in the resignations (source in Hungarian). Simicska referred to Orbán as a “fuckhead” (geci) during the interview with Népszabadság as well as in other February 6 interviews with the websites index.hu and 24.hu (sources A and B in Hungarian and Fury of an Oligarch Scorned).

February 6, 2015, has become known as G[eci]-Nap (G-Day) in Hungarian.

Halting Construction of the M4 Motorway  

Unfinished M4 Motorway bridge over the Tisza River (photo: MTI).

On March 31, 2015, the Orbán government called an immediate halt to the construction of a 29-kilometer section of the M4 Motorway in central Hungary of which Közgép was building a 2.3-kilometer, 32.5-billion-forint (110-million-euro) segment that included a bridge over the Tisza River (sources A and B in Hungarian).

Deputy State Secretary Nándor Csepreghy said that the government had decided to suspend construction of this section of the motorway in order to examine the European Commission’s concern that the involved companies—Közgép, the French construction company Colas and the Austrian construction companies Swietelsky and Strabag—had formed a cartel when they had submitted their winning public-procurement bids to build the segment of motorway (sources A and B in Hungarian).

However, a European Commission (EC) spokesperson told the opposition website 444.hu that “the tendering procedure was not questioned” when the EC examined the Orbán government’s 2013 European Union funding request for the project, which it did not approve because it was too expensive (sources A and B in Hungarian).

Although the Orbán government never presented any evidence of cartel activity among Közgép and the other companies that had been engaged in construction of the 29-kilometer section of the M4 Motorway, a Fidesz National Assembly representative announced in July 2016 that the government would call a new public tender to finish the project, which was 70-percent finished at the time of its suspension (source in Hungarian).

The Orbán government paid Közgép, Colas, Swietelsky and Strabag 45 billion forints for the work the companies had done on the relevant segment of the M4 Motorway (source in Hungarian).

The section of the M4, including the new Tisza River bridge, that Közgép was building has been standing unfinished since the Orbán government halted construction in March 2015 (source in Hungarian; see also video).

Excluding Közgép from Public Tenders

In July 2015, the Public Tender Arbitration Board (Közbeszerzési Döntőbizottság) prohibited Közgép from participating in public tenders for a period of three years because the company had misstated the size of two ships listed in a 2015 tender to develop the Győr-Gönyű Danube River harbor (sources A and B in Hungarian). In February 2016, the Budapest Court of Justice (Fővárosi Törvényszék) upheld this ruling (source in Hungarian).

However, in June 2016, the Budapest Court of Justice concluded in a second-instance ruling that Közgép had not provided false information in its bid to develop the Győr-Gönyű harbor, thereby permitting the Simicska-owned company to again participate in pubic tenders (source in Hungarian).

In May 2017, the Curia (Hungary’s supreme court) upheld the second-instance ruling of the Budapest Court of Justice in favor of Közgép (source in Hungarian).

The Advertising Column War

Budapest city workers remove a Mahir Cityposter advertising column in January 2016 (photo: MTI).

In September 2015, the Budapest General Assembly (Fővárosi Közgyűlés) voted to unilaterally annul the 25-year contract that the city had concluded with the Simicska-owned outdoor advertising company Mahir Cityposter in 2006, because the company had allegedly not satisfied the stipulations of the contract (source in Hungarian).

On December 22, 2015, the Budapest General Assembly ordered Mahir Cityposter to remove the 761 advertising columns that the company maintained in the city before the beginning of the new year. Budapest city workers began to remove the columns on January 2, 2016, after Mahir Cityposter failed to comply with the order (sources A and B in Hungarian). On January 3, 2016, Mahir Cityposter replaced the 13 advertising columns that had removed the previous day (source in Hungarian).

On January 5, 2016, Mahir Cityposter security guards prevented city workers from removing several of the company’s advertising columns in Budapest (source in Hungarian). However, city workers managed to remove between 100 and 120 Mahir Cityposter advertising columns over the following week (source in Hungarian).

On January 12, 2016, the Budapest Court of Justice ordered the city to stop removing Mahir Cityposter advertising columns on the grounds that it was “causing significant and unwarranted damage” to the company (source in Hungarian).

In April 2018, the Budapest Court of Justice ruled that the Budapest General Assembly had unlawfully annulled its contract with Mahir Cityposter, thus reinstating the validity of the 25-year contract (source in Hungarian).

This conflict became known in Hungarian as the [Advertising] Column War (oszlopháború).

Selling Class FM

In May 2016, Simicska and his business partner Zsolt Nyerges sold Class FM, the most popular commercial radio station in Hungary and the only one broadcast throughout the country. Simicska and Nyerges presumably decided to sell Class FM because they believed that the Fidesz-KDNP–controlled National Media and Infocommunications Authority (NMHH) Media Council would refuse to renew the station’s frequency allotment prior to its expiration in November 2016 in order to transfer it to a pro-government station (sources A and B in Hungarian).

In May 2018, the NMHH Media Council awarded the frequency on which Class FM had broadcast—which had been unused for a year and a half following the expiration of the station’s allotment—to a company with close ties to Orbán-government oligarch Andy Vajna (sources A and B in Hungarian).

Ceasing Publication of the Metropol Freesheet

In June 2016, Simicska and his business partner Károly Fonyó decided to cease publication of the free Budapest newspaper Metropol because they believed it would not be able to compete with rival free newspaper Lokál, which began daily publication under the ownership of Prime Minister Viktor Orbán’s chief strategic adviser Árpád Habony and former legal adviser Tibor Győri the previous month (sources A and B in Hungarian).  The Budapest public-transportation company BKV and Hungarian State Railways MÁV announced in May 2016 that they would not renew their contract with the Simicska- and Fonyó-owned Metropol to distribute the freesheet at BKV and MÁV stations in the city and were engaged in negotiations with the owners of Lokál to obtain this right (source in Hungarian).

Post-Rift Company Performance

Közgép generated revenue of 4.9 billion forints in 2017, down from 19.9 billion forints in 2016, 132.8 billion forints in 2015 and 129.8 billion forints in 2014 (sources A and B in Hungarian).

The four main totally or partially Simicska-owned media—the news television station Hír TV, the radio station Lánchíd Rádió, the daily newspaper Magyar Nemzet and the weekly magazine Heti Válasz—posted aggregate revenue of 4.5 billion forints in 2016, down from 7.4 billion forints in 2015 and 11.7 billion forints in 2014 (source in Hungarian).

These four media sustained combined after-tax losses of 1.7 billion forints in 2016, compared to after-tax profit of 200 million forints in 2015 and after-tax profit of 1.6 billion forints in 2014 (source in Hungarian).

According to the annual napi.hu ranking of the 100 richest Hungarians, Simicska had estimated wealth of 77 billion forints (250 million euros) in 2018, compared to 80 billion in 2017, 83 billion in 2016 and 73 billion in 2015 (source in Hungarian).

Over this same four-year period, the estimated wealth of oligarch Lőrinc Mészáros rose to 280 billion forints from 8.4 billion forints.

Jobbik Advertising Campaign

Jobbik sign featuring oligarch Lőrinc Mészáros and Prime Minister Viktor Orbán: “You Work. They Steal” (photo: Orange Files).

On April 1, 2017, the nationalist opposition party Jobbik launched a major outdoor-advertising campaign featuring signs that showed the faces of Prime Minister Viktor Orbán, his chief strategic advisor Árpád Habony, Cabinet Minister Antal Rogán and Fidesz oligarch Lőrinc Mészáros above the text Ti Dolgoztok. Ők lopnak (“You Work. They Steal”) (source in Hungarian).

The following day, Fidesz National Assembly caucus Deputy Chairman Szilárd Németh declared during a press conference that the advertising campaign represented “ultimate evidence that Jobbik is the party of a billionaire. This naturally refers to Lajos Simicska, who manipulates Gábor Vona and all of Jobbik like a marionette” (source from 0:10).

Neither Jobbik nor Simicska denied speculation that the party was conducting its advertising campaign on billboards under the ownership of Mahir Cityposter.

On June 17, 2017, Jobbik announced that the party had spent 54 million forints (approximately 175,000 euros) to display the anti-government signs on 2,468 large billboards and 300 small billboards during its two-month advertising campaign. The opposition newspaper Népszava estimated that Jobbik therefore paid less than one-third of the market cost for the outdoor-advertising space on which the party displayed the signs (source in Hungarian).

Lex Lackey

On June 23, 2017, Fidesz-KDNP National Assembly representatives adopted legislative amendments “on the prevention of covert party financing and the safeguarding of transparent campaign financing” that required political parties to pay the registered list price from the previous calendar year for outdoor advertising (source in Hungarian).

The amendments contained the following official justification (source in Hungarian):

In numerous cases, the suspicion arises that billionaires and financial groups connected to them want to influence democratic electoral competition and want to distort the chances of those that participate in elections. This practice, in addition to posing a threat to the purity of elections, entails the risk of covert party financing and corruption. The objectives of the proposal [proposed legislation] are to prevent the veiled attempts of billionaires to acquire influence, to increase transparency and, furthermore, to ensure that certain parties do not become beholden to business enterprises that finance their election campaigns in a corrupt manner.

The specific purpose of the amendments, one to which Fidesz officials alluded on several occasions, was to prevent Simicska from providing Jobbik with free or discounted advertising space.

On May 3, 2017, the co-sponsors of the legislation, Lajos Kósa and János Halász, held a press conference during which they referred to the proposed legislation as “Lex Lackey” (lex csicska), thus alluding to Prime Minister Viktor Orbán’s statement to Jobbik National Assembly representatives several weeks earlier that “We all know that you do not uphold your own opinions—you are sitting in the pocket of a big businessman. You have transformed Jobbik from a radical-nationalist party into a lackey [csicska] party” (sources A and B in Hungarian).

According to Kósa, “With Lex Lackey we want to prevent parties from becoming simple lackeys in the hands of billionaires . . . billionaire Lajos Simicska has bought Jobbik by the kilo in a clearly visible and by now openly assumed manner” (source in Hungarian from 1:57).

Tax Authority Investigation

On June 8, 2017, the pro-government daily newspaper Magyar Idők reported that Hungary’s National Tax and Customs Authority (NAV) had launched an investigation of Simicska’s outdoor-advertising companies Mahir Cityposter and Publimont to determine if they had underreported the amount of advertising space they had sold to Jobbik (source in Hungarian).

On June 12, armed NAV investigators seized financial documentation pertaining to the first four months of 2017 at the headquarters of Mahir Cityposter (source in Hungarian). On June 15, NAV auditors conducted an investigation of financial records at the offices of Publimont and Mahir Cityposter’s parent company, Mahir Ltd. (source in Hungarian).

On October 27, 2017, Magyar Idők reported—citing National Tax and Customs Authority records—that NAV had uncovered a 75-million-forint (241,670-euro) tax shortfall in Publimont’s sale of outdoor advertising space to Jobbik (source in Hungarian).

NAV has taken no subsequent action against Publimont or Mahir Cityposter with regard to this matter.

Graffiti  

Simicska after spraying graffiti on Orbán-government sign in November 2017 (photo: 444.hu).

Early on the morning of October 3, 2017, Simicska painted Orbán egy geci (“Orbán is a fuckhead”) on an advertising column in his hometown of Veszprém (central Hungary, pop. 57,000). Police checked Simicska’s identity card, though did not charge him with vandalism since he had painted the statement on an advertising column that one of his companies owns in the city (source in Hungarian).

On November 28, 2017, Simicska spray-painted Orbán egy geci on three signs advertising the Orbán government’s “National Consultation on the Soros Plan” located alongside a highway running between Veszprém and Budapest (source in Hungarian).

Simicska said during an interview with the television station ATV that he had painted the graffiti on the signs because “it makes me feel better” (ettől jobban érzem magam). Simicska added that “I am fundamentally a happy person, but this is how I can vent my frustration” (source in Hungarian).

Open Support for Jobbik

On November 30, 2017, Simicska said in an interview with the television station RTL that “I will vote for Jobbik [in the 2018 National Assembly election]” (source in Hungarian). Simicska stated during the interview that he did not provide Jobbik with monetary support, though did maintain “contractual relations” with the party (referring to Jobbik political advertising appearing on signs under the ownership of his outdoor-advertising companies).

Shutting Down Magyar Nemzet, Heti Válasz and Lánchíd Rádió

Following the landslide victory of the Fidesz-KDNP governing alliance in the National Assembly election held in Hungary on April 8, 2018, Simicska immediately discontinued publication of the daily newspaper Magyar Nemzet and broadcasts of Lánchíd Rádió (source in Hungarian).

In June 2018, Simicska halted publication of the printed version of the weekly magazine Heti Válasz (source in Hungarian).

Simicska thus essentially reduced his once substantial media portfolio to only the news television station Hír TV.

Sale of Remaining Companies

On July 4, 2018, Simicska sold almost all his remaining business interests, including Közgép, Hír TV, Mahir Cityposter and Publimont, to his longtime business partner Zsolt Nyerges (source in Hungarian). On August 1, 2018, Nyerges fired Hír TV’s main program hosts and restored the station’s pre–G Day pro–Orbán government political orientation (source A and B in Hungarian).

Notable Quotes

“Orbán is a fuckhead [geci].” February 6, 2015, during interview with opposition website index.hu (source in Hungarian).

“Naturally an independent media always deals with current issues, though the Orbán government has ambitions to essentially abolish the independent media; but naturally this media―our media―will resist this and will not give a fucking shit about what Orbán wants.” February 6, 2015, during interview with opposition website atlatszo.hu (source in Hungarian).

“Believe it or not, my alliance with Orbán was based on the fact that we wanted to bring down the dictatorship and the post-communist system. This proved not to be an easy thing–it required a lot of work. But building another dictatorship in its place was certainly not a fucking part of this alliance. I am not a partner in this.” February 6, 2015, during interview with the website of the opposition weekly Magyar Narancs (source in Hungarian).

“I imagined him [Orbán] to be a statesman who could do good for this country, but I had to realize that he’s not.” February 6, 2015, during interview with the website of the opposition weekly Magyar Narancs (source in Hungarian).

“The sentence came out of his [Orbán’s] mouth that I will never be able to forgive, which for me is tantamount to treason, that ‘Rosatom [Russian state nuclear-energy company] will by this [the television station RTL] for me.’ However, I don’t take part in treason. This was the point when I said, wait a minute Lajos. When [the word] Rosatom came out of his mouth, I looked at him and he realized that he had made a mistake when he said that sentence to me. Then we looked at each other for a while.” November 28, 2017, during interview with RTL (source in Hungarian).

“This country has survived the Mongols, the Turks, the Habsburgs and the Russians. It will survive Viktor Orbán as well. This is a strong nation.” November 28, 2017, during interview with television station RTL (source in Hungarian).

“That the country has come to this point, and a mafia state has been built, I had a role in this and I have some responsibility for this and I am not going to run from this responsibility. . . . What is my responsibility? That I participated in it [building the mafia state]. That I supported it and helped it and didn’t recognize it in time.” November 28, 2017, during interview with television station RTL (source in Hungarian).

“I don’t deal with buying up parties. In the course of my life, I have had a close connection to only one political formation, one called Fidesz. However, I severed all my connections with them [Fidesz] four years ago when it became clear to me that I was dealing with simple traitors and thieves.” January 23, 2018, in communiqué published in response to reports in pro-government media that he had “bought” the opposition parties Jobbik and Politics Can Be Different (sources A and B in Hungarian).

Last updated: June 8, 2018.

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