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BKV: End of the line for the teflon party

Written by Alex Kuli and Péter Krekó

Thursday, 11 February 2010

Give credit to the governing Hungarian Socialist Party (MSZP)’s PR people. Twenty years ago, they helped transform Gyula Horn, the former communist who helped the Soviets defeat Hungary in the 1956 Revolution, into the man who the greatest number of Hungarians wanted to be prime minister in 1994.

Mud no matter

Since then, the Socialists have been stung by a string of scandals: from Marta Tocsik, the attorney who was charged in 1996 in relation to an 804 million forint (EUR 2.98 million) state commission, to former prime minister Péter Medgyessy, who was outed as former secret agent D-209 in 2002. Yet none of these problems ever killed their chances at the ballot box. Just as late US leader Ronald Reagan was known as the “teflon” president, the MSZP was the “teflon” party: nothing stuck.
The Socialists won the party-list vote in every election except 1990, nearly quadrupling their share of ballots from 10.9 per cent in 1990 to 43.2 per cent in 2006. This meteoric rise was not merely the result of clever PR – but it certainly helped.

Drip, drip, drip

This time, not even the most skilled spin-doctor can save the Socialists. Shortly after voters voted the party back into power in 2006, then prime minister Ferenc Gyurcsány set about raising taxes, firing state employees and slashing spending to combat a budget-deficit mess that the Socialists had created themselves.

Gyurcsány tried to rebrand himself as a “reformer”, but this time voters weren’t buying it. The Socialists’ credibility was in tatters after the media got hold of a recording on which Gyurcsány admitted that he had lied about the state of the economy in order to win votes.

In 2007 came the news that former Socialist MP János Zuschlag faced charges in connection with the embezzlement of HUF 50-75 million (EUR 182,611-273,910). The teflon had worn out.

The buck stops at BKV

It now appears the Socialists are even losing their non-stick magic in their old stronghold of Budapest. On 28 January, authorities placed former Budapest Transport Company (BKV) chief Attila Antal under house arrest on misuse of funds charges. BKV, the perennially indebted public transport company that has problems paying its drivers, apparently ordered a HUF 9 million (EUR 32,868) study on turning Budapest’s Metro 1 into a luxury subway and paid a contractor HUF 19.2 million (EUR 70,119) to review its stock of photocopy machines during Antal’s tenure. Investigators are also examining the legality of a number of huge severance packages given to BKV employees.

So far, the BKV scandal’s biggest political casualty has been Miklós Hagyó, the Socialist heavyweight who oversaw the BKV as Budapest deputy mayor from 2006 to 2009. While no criminal charges have been filed against Hagyó, party leaders last week forced him to give up his candidacy at the April elections. The unfolding story of the abuses at BKV may drive the Socialists’ support to new depths. And with Antal in custody, police are now likely to find more “people of interest” between now and election day.

In the driver’s seat

Who will profit from Hagyó’s fall? At first sight, it clearly serves Fidesz’s political interests as it reduces the MSZP’s standing.

However, outrage over corruption can raise anger against the political elite in general, playing into the hands of the “new force” that is as yet untouched by political crookery: Jobbik.
Dumping Hagyó will not be enough for either the MSZP or BKV. The transport company has just raised the price of a one-way adult ticket to HUF 320, double what they cost 5 years ago. People may be willing to accept a certain degree of corruption, but not when they can actually see their hard-earned money making other people rich. The BKV is in such bad financial shape that it cannot secure credit from the markets without a sovereign guarantee. Its survival depends on the central budget, and especially on the extremely expensive stabilisation funds that new governments appropriate after every election.

The Hagyó affair has left the MSZP demoralised and embarrassed. The situation will make it even harder to prevent opposition party Fidesz from scoring a two-thirds majority at the April elections. In fact, the MSZP will have to work hard to avoid following Poland’s communist successor party, the Democratic Left Alliance (SLD), into political oblivion.