Erzsébet-gate sweeps over the city

Liberal SzDSz officials behind bars over property corruption scandal in Pest’s district VII.


Péter Kardos was the second SZDSZ politician to be taken in detention, following the arrest of György Gál on November 25, as a result of a plea bargain in Pest’s district VII, known as Erzsébetváros.
Kardos first attained a mandate in the VII. district local government assembly in 1990, and was chairman of the municipality’s Economic Committee between 1990 and 1994.
Kardos attained his mandate in 2002 as a party-list representative of SZDSZ and is a member of the Public Order and Environment Protection Committee, the Financial Committee and the IT Committee of the municipality.
Kardos was now taken into arrest on suspicion of a major financial fraud.
Police investigation in the case of scandalous real-estate businesses in Budapest’s 7th district of Elizabethtown (Erzsébetváros) has been going on since 2006. According to the suspicions, the municipality’s SZDSZ caucus-leader, and chairman of the municipality’s Economic Committee, György Gál (SZDSZ), has been cooperating with an entrepreneur, György Nagy, in dubious transactions since 2002.
Nagy had aimed to purchase a number of residential real estates significantly below their market values from the municipality in order to sell them to foreign investors with a high profit margin, involving offshore companies.
Some eight (possibly nine) residential real estates, all of which used to be the possession of the 7th district municipality, are believed to have been sold this way in 2003 and 2004.
Prosecutors claim that the former chairman of the Economic Committee, György Gál, has received Ft195m (Eur736,000) slush fund upon his request from the entrepreneur for his support.
The transactions have supposedly caused a Ft700m (Eur2,65m) damage to the municipality, claim the prosecutors.
Nagy, who is believed to have had contacts not only with influential members of SZDSZ, but also with key Fidesz politicians, was the first person to be arrested in the case.
Right-leaning daily Magyar Nemzet reported that Nagy made a statement incriminating even the Socialist district mayor György Hunvald, who (similarly to Kardos) rebuffs all accusations. Hunvald claims that, since the municipality annulled five buildings’ sales contracts in January, there could not have been any damage caused.
It is likely that Nagy made a plea bargain with the prosecution and was paroled a few days after Gál had been arrested.
The liberal party has called upon Gál on Tuesday, December 2 to suspend his party membership and all offices he fulfills in the name of the party. “The presumption of innocence is a fundamental right that all accused have, yet accusations should not be allowed to cast a shadow over the party,” SZDSZ announced.
MDF representative Péter Simon told MTI on Monday, December 8, that he was to initiate the dissolution of the municipal parliament in order to regain voters’ trust.
Dissolution of the municipal parliament can be initiated by one quarter of the municipal parliament’s members -7 politicians, in the case of the 7th district- and needs the majority of votes for the implementation. Simon hoped to attain the support of six more municipal members for the dissolution by Monday evening, based on which the major, György Hunvald (MSZP) would have to summon the municipal parliament within 3-21 in order to decide on the dissolution.

Orsolya Tokaji-Nagy

12.12.2008