What we know so far about the Katalin Cseh scandal

All we found out was that a left-wing politician received about a billion forints-worth of EU funds.

On Sunday July 18 and Monday July 19 videos appeared on the Bennfentes.net portal, promising the results of a big expose; at the time, all we found out was that a left-wing politician received about a billion forints-worth of EU funds. On Tuesday, the Bennfentes.net article was published revealing that the politician in question was none other than Katalin Cseh, a Member of European Parliament from the Momentum Movement party.

Cseh was the managing director of a printing company, Pannónia Nyomda Kft. from 2013 to 2018. The company was founded in 2010 by the politician’s father, Tibor Cseh. During these years, Pannónia Nyomda managed to receive European Union grants for more than HUF 68 million, awarded for the development of hologram technology. Later, the company won HUF 217 million for the development of so-called holographic GIS language and a digital holographic printer.

The article revealed Pannónia Nyomda’s corporate relations. At the time, NOVA-INN Kft., Mondat Kft., and Holotech Hungary Kft. were all registered at the same address as Pannónia when they won their 68 million grants. Incidentally, these companies reaped quite a profit off the EU grants as well: NOVA-INN won HUF 200 million, Monday since 2004 has won almost HUF 500 million, and Holotech got about HUF 1.75 billion. If we also take into account the companies’ predecessors, then we will find HUF 3.73 billion in EU grant money. Adding in Uniotech Kft.’s HUF 63 million, the printing-company network received almost HUF 4.8 billion in EU support.

PestiSrácok.hu wrote a comprehensive summary of all the connections on Wednesday. The article reveals a complicated network of companies whose headquarters are in Vác and Szirák; the headquarters and offices of all the companies involved were registered at the same address in these towns. The companies moved together, changed locations together, and applied for grants together. The PestiSrácok also found personal connections.

Origo.hu reported on the newest details of the case on Thursday: Pannónia Nyomda Kft. has won HUF 168 million worth of public procurement here in Hungary. So, alongside the EU grants they were also quite lucky with Hungarian ones. The most frequent, 3-times commissioner was Budapest’s IX. district government which hired them to print the local Ferencváros newspaper for residents. According to Origó, another player in the company network, Mondat Kft. also took part in one of the tenders and actually competed against Pannónia Nyomda Kft. Just that there was a slight problem: the company simultaneously declared that it does not hire subcontractors and that it does. On another occasion, in 2013, Pannónia Nyomda submitted a tender together with Archidesign Kkt.; meanwhile, the other two competing bidders could be linked to Archidesign (Visualia Kkt.) and the other to Pannónia Nyomda (Bunt 24 Ltd.). “This all means that the aforementioned companies could easily collude during the bidding process so that the most favorable conditions could be provided for the Pannónia-Archidesign partnership” summarized Origo.

In connection with these cases, Origó has filed a report with the Hungarian Competition Authority, and they have in turn launched an investigation. Meanwhile, István Tényi made a statement: he has turned to the Central Prosecution Service of Hungary on suspicion of budget fraud causing significant financial loss due to the multi-billion forint subsidies of companies affiliated with Katalin Cseh.

Katalin Cseh has reacted to the scandal multiple times throughout the past few days. On one occasion she even claimed that her political career and managing director position did not overlap – which is untrue. The company documents refuted her claim: in 2015 Katalin Cseh was one of the founders of Momentum Movement and in 2017 she was elected as a member of the governing board. Her position as managing director of the printing company only concluded in January 2018.

The interesting thing is that while these companies have pocketed billions in EU subsidies, Katalin Cseh and her party have been lobbying for years for the EU to suspend the payment of EU subsidies to Hungary; in fact, they even campaigned on “giving EU grants to the poor”.