Today’s been a busy day in Hungarian politics. In the last week or so it was hard to find timely topics, perhaps because Viktor Orbán was on a secret vacation on Croatia’s Mljet Island. He went to the same spot last year, traveling alone and amusing himself by watching football games. But now there is so much news that I don’t know where to start. After some hesitation I decided to write about Ildikó Vida’s departure from the Nemzeti Adó- és Vámhivatal (NAV/National Tax and Customs Office).
Vida was the president of NAV, which turned out to be a hub of government corruption. More than a year ago one of NAV’s employees went public with folders full of documents implicating NAV’s top leadership in tax fraud. I wrote about the case at least twice in November-December 2013: “Tax fraud scandal in Hungary” and “The plight of a Hungarian whistleblower.”
It was not only this brave employee of NAV who noticed that something was amiss in the tax office. Certain American companies also realized that their competitors could undersell them with the effective help of NAV, which “overlooked” their games with value added tax claims. The American businessmen went to the U.S. Embassy to complain. After ascertaining the accuracy of their reports, the U.S. embassy was instructed to call the Hungarian government’s attention to the widespread corruption in NAV as well as in other government and pro-Fidesz institutions. The Hungarian government, despite numerous American complaints, did nothing. It was at that point, in October 2014, that Napi Gazdaság, then owned by Századvég, a political think tank with close ties to Fidesz, revealed that the Americans had informed the Hungarian government that six officials and/or businessmen suspected of corruption had been put on a blacklist of sorts: they were barred from entering the United States. Six of them decided to remain silent, but Ildikó Vida, head of NAV, openly admitted that she was one of them.
U.S.-American relations hit an all-time low when the Hungarian government demonstrated its unwillingness to cooperate with the Americans in ferreting out corruption. The Hungarians claimed that they couldn’t investigate unless the Americans revealed the seven names, which they knew full well the U.S. authorities were forbidden by law from doing. Viktor Orbán himself got involved when he “instructed” Ildikó Vida to sue André Goodfriend, the U.S. chargé d’affaires in Budapest, threatening to fire her if she didn’t.
But it seems that, despite the belligerence of the Hungarian government, behind the scenes the Állami Számvevőszék (State Accounting Office) quietly began an investigation. They found “serious deficiencies.” That happened in March, and with their revelation the guessing game began. Would Ildikó Vida step down? And if so, when? Well, the guessing game is over. We learned today that Vida gave notice on May 20 and that today was her last day on the job.
She is not going out with a whimper, as her farewell letter to the employees of NAV attests. She talks about “five years of constant struggle” against “ideas entertained by the government concerning the organization and the personnel of NAV.” As usual, the government didn’t bother to discuss these plans with the management. In her opinion, these government plans “endanger the budgetary interests and the functioning of the organization. These were the circumstances that resulted–despite the prime minister’s request to the contrary–in my resignation.” Since in the last two months the government didn’t get around to appointing a new NAV chief, Vida asked one of the deputy chairmen, Árpád Varga, to take over her job as of tomorrow.
The secret of her departure was kept pretty well, except that János Lázár, who doesn’t always know when to keep his mouth shut, two weeks ago talked about a reorganization of NAV for which one needs new leadership. More importantly, from Lázár one learned that the government has far-reaching plans for NAV. These plans are still in a preparatory stage: the government doesn’t know in what ways they will change the method of tax collection; they don’t know what kind of organization will adjudicate tax disputes between taxpayers and NAV–the ministry, an independent organization, or an entirely new office. Everything is up in the air.
But this is how things go in the Orbán government on every level. A month ago Lázár, at a forum for architects, admitted that “the state is in dreadful shape. It is too large. It’s immovable and weighed down.” Confusion reigns on every level of the bureaucracy, mostly because for Orbán loyalty is more important than expertise. They got rid of everybody who served in the administration in the eight years prior to 2010. I suspect that by now Viktor Orbán himself realizes that something must be done and that’s why Lázár announced that far-reaching personnel changes are expected to take place sometime in the fall. Many assistant undersecretaries can say goodbye to their cushy jobs.
We most likely will never know whether Viktor Orbán really entreated Vida to stay, but it is unlikely given the administration’s determination to reorganize NAV. Moreover, Ildikó Vida is a close friend of Lajos Simicska. She followed him as chairman of the tax office after Simicska resigned in August 1999. Given the acrimonious relations between Simicska and Orbán, I suspect that Vida’s days were numbered irrespective of her troubles at NAV. The list of recently sacked friends of Simicska is getting longer and longer.