Page 47 - bneMagazine March 2023 oil discount

bne March 2023 Central Europe I 47
indicted or even testify as witnesses as the prosecution closed down the investigation swiftly in circumstances that could have proven their connection to the case.
Accidental discovery of the scheme
The preliminary hearing kicked off on February 17 amid high security and massive media attention. The small Budapest courtroom was full of journalists and observers.
Schadl was escorted to the courtroom in handcuffs by prison guards in ski masks, sporting a sleek jacket, Louis Vutton tennis shoes and wearing a disposable medical mask.
The prosecution has proposed that Volner receive an eight-year prison term and a HUF25mn (€65,000) fine, while it is seeking a 10-year prison sentence and a HUF200mn fine for Schadl.
Hungary’s National Defence Service launched the inquiry and the secret wiretapping of the suspects in 2017 after it learnt about the case as part of a separate investigation into corruption allegations against a senior official of the tax authority NAV.
The public first learned about the case in December 2021 when police arrested Schadl at Budapest Airport allegedly trying to flee to Dubai with his wife. He was travelling with a diplomatic passport granted by the foreign ministry.
For weeks authorities tried to keep the name of the "high-profile" politician involved in the case secret, but after pressure from independent media and opposition MPs, they eventually came out with a statement naming Volner.
The former state secretary resigned from his post in December 2021 and the Fidesz-led parliament lifted his immunity. Nevertheless, he held on to his job as a lawyer until October 2022 and remains at liberty.
Attempts by Hungarian opposition
to have the government remove or even suspend Schadl from his post have failed. Fidesz lawmakers blocked proposals in November to replace
Schadl, who has been in legal custody for more than a year.
The arrests came just five months before the April general election, but the case caused no repercussions in the campaign as Hungarian voters have become inured to corruption.
Leaked wiretapped telephone conversations then began to surface
in Hungarian media in mid-2022 and documents from the investigation earlier this year, unveiling a system of favouritism entrenched in all levels and branches of government
The trial could last years, given
the number of people arraigned
and the likely challenges as the
cases progresses, observers noted. The documentation of the entire investigation is about 1,700 pages long, while the indictment has 72 pages.
Hungary’s justice system, facing an acute labour shortage, is overwhelmed by cases and it is not rare to see legal proceedings drag on for as long as a decade.
Bailiff licence goldmine
Prosecutors allege that Schadl regularly bribed Volner until July 2021 and used his influence to secure the appointment of bailiffs of his choosing in exchange for kickbacks. Volner as state secretary was also in charge of overseeing bailiffs.
According to the indictment, Schadl paid Volner a total of at least HUF83mn (€217,000) in bribes between May 2018 and July 2021. Volner then exercised his influence as state secretary and deputy minister in Schadl's interest.
Holding licenses was a goldmine for bailiffs with hundreds of millions of forints of annual revenue. In six years, Schadl amassed a fortune estimated at HUF1.5bn, including some two dozen properties.
Ironically the licensing of bailiffs was part of a reform in 2015 to improve
the transparency of the sector after many complaints of unjust evictions. The reform required a law degree for holding the position and curbed bailiffs' autonomy. It also imposed tighter supervision by the justice ministry, which is responsible for the appointment of bailiffs based on the recommendation of the head of MBVK, led by Schadl from the start. This reform allegedly enabled the corrupt scheme to work.
At Friday's preliminary hearing at the Budapest Municipal Court, prosecutor Gabor Boros said Volner, in exchange for the bribes, had moved to appoint bailiffs pushed by Schadl and obtain state support for one of Schadl's companies. He said Schadl had obtained more than HUF924mn in kickbacks from the bailiffs he helped get appointed.
On the first day of the trial, four defendants confessed guilty, including
a local government administrator, who helped Schadl get permission for a terrace at his lakeside summer residency in exchange for a HUF500,000 kickback.
Documents in the case show that neither Volner nor Schadl went about their business without any fear of being caught. On one occasion, Schadl allegedly handed over the regular monthly HUF3mn kickback at the entrance of the Ministry of Justice building.
“The trial could last years, given the number of people arraigned and the likely challenges as the cases progresses”
Schadl, 41, allegedly used his power to sell bailiff licenses for kickbacks and threatened people to withdraw their licenses if they had not paid him.
Volner also openly acquired a 300 sqm home in an auction, which he passed on a company owned by his son.
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