On April 28th 2011. the prosecutor general initiated the suspension of the immunity of Ferenc Gyurcsány, on charges of abuse of office.
The move is related to the issue of the “Sukoró land swap”, as it has been publicly known in Hungary, and examined by the Central Investigation Office of the Prosecution (Központi Nyomozó Főügyészség).
The official statement of the Prosecution says that the related investigation was launched because, according to their reasoning, the Hungarian State had sustained financial damages worth HUF 1.3 bn (€ 5 million) as a result of the land swap.
In May 2008, several representatives of the Hungarian Government met with a group of investors who intended to create, through an investment of € 1 bn, a new entertainment centre in Hungary involving the creation of close to 3,000 new jobs.
The way the Sukoró investment was treated was in no way different from any other major foreign direct investment projects in Hungary. Government institutions were approached by an investor with a concrete intention to invest. The ministries responsible for economic and financial issues considered the proposal to be worthy of attention, therefore an official, rather protocolar meeting was organised between the investors and the Government. The government nominates a contact point, and asks the state institutions concerned to facilitate the implementation of the investment. The same happened with the investments by Mercedes-Benz in Kecskemét, and Audi in Győr, in which cases nobody voiced suspicions of any criminal activities.
At the aforementioned – very short – meeting with the investors, Ferenc Gyurcsány welcomed the investment proposal, appointed the minister of economy as contact point, and asked the relevant state institutions to provide – within the relevant legal framework – assistance for the implementation of the development. Viktor Orbán, current prime minister, then opposition leader, also met the investors himself. The investors requested to swap the land lots in their possession on market terms, including full financial settlement of any value difference between the lots exchanged. In the case of both Audi and Mercedes, the investor selected state-owned lands, which it was then allowed to purchase.
While in the Sukoró case Ferenc Gyurcsány gave oral instructions to the State Asset Management Agency to implement the eventual swap within the framework of applicable legal regulations, this summer the Government gave written orders to the National Asset Management Agency to hand over the lots selected to Audi, also specifying the price to be applied.
In the Sukoró case, the representative of the investors wished to swap several land lots to be used for a later motorway construction project for one land lot next to Lake Velence.
During the implementation of the swap the State Asset Management Agency had to examine whether the swap was executed at appropriate market values, and whether the land lots offered by the investor were indeed appropriate for the purposes of the state.
The State Asset Management Agency commissioned three different studies by independent experts concerning the value of the state property to be exchanged. However, following the swap, the Prosecution tabled a radically different value assessment. Therefore, the State Asset Management Agency commissioned a control study, the author of which – an official legal expert – confirmed the contracted swap value.
The Prosecution also refers to a report by the State Court of Auditors. However, all statements of that report were commented upon by the State Asset Management Agency already during the preparation of the study, as it is allowed to do so under applicable legal regulations.
Acting as the responsible asset manager, the minister of finance of the former Socialist government launched a civil lawsuit in order to have the real value of the state property established by the court, being the only competent national institution for this purpose. During those proceedings, the state contested the contract with the investors, claiming that the contract value was disproportionate. The lawsuit is still in progress, the court has not taken a decision yet. If the court establishes that the contract values were correct, there is obviously no financial damage. If the court decides that the contract values were incorrect, the swap contract is void, the original situation is restored, and the state cannot claim financial damages for this reason.
Following the change of government, the representative of the state modified its position in the lawsuit, and – rather than establishing that the contract value was disproportionate – wants the court now to declare the contract illegal under a different legal regulation.
However, the Prosecution decided that the only expert study that was correct was the one commissioned by them, with the other four being surely wrong. This leads to the strange situation that – although the court has not even established the value of the land lots even at the first instance – the Prosecution is not only sure that the contract value was wrong, but also that a crime was committed.
Currently, investigations are going on in several directions. Former prime minister Ferenc Gyurcsány is to be sued for an alleged malfeasance in office.
In August 2010, three months after the change of government, the Prosecution initiated the arrest of the CEO of the State Asset Management Agency, and the Agency’s Sales Director. The Metropolitan Court of Budapest ended their detention and decided that their arrests had been unwarranted. The Prosecution tried to justify the detentions with the need to ensure that the accused could not influence the investigation, the witnesses, or destroy documents – notwithstanding the fact that by then the investigation had been going on for 18 months, and was based almost exclusively on documents that had been provided to the prosecutors by the accused themselves. Furthermore, the accused would have been incapable of destroying documents for the simple reason that they were no longer working at the State Asset Management Agency by that time. One of the two arrested managers claimed that his arrest was carried out under a violation of his personal rights, and has therefore turned to the court in Strasbourg.
During the investigation, documents – including testimonies – were repeatedly leaked from the Prosecution. From these documents and the statements of the accused it is evident that the only concern of the prosecutors was whether or not Ferenc Gyurcsány had instructed any state agencies to make decisions favouring the investors. According to the leaked testimonies and the statements of those concerned, the prime minister did not, in any way, instruct the responsible authorities.
Notwithstanding the above, the Prosecution has requested to suspend the immunity of former prime minister – and current opposition MP – Ferenc Gyurcsány, on the basis of alleged abuse of office.
The suspension of immunity is decided upon by Parliament by a two-thirds majority. The outcome of the vote is evident taking into account that the governing party coalition in itself has the required majority.

Last Updated on Friday, 30 August 2013 09:11