The propaganda minister’s land scandal that was too much even for Orbán

The first few days of February saw Hungary’s press erupt with the news that the third wife of Viktor Orbán’s Cabinet and “Propaganda” Minister, Antal Rogán was involved in a hefty land acquisition deal. In November 2020, just before their wedding, Barbara Rogán and two members of her family signed a purchase agreement for an amount of arable land that would cover several districts of Budapest. According to the document, they would put up 1.6 billion HUF (4,4 million EUR) for the land’s purchase. The planned acquisition of the property eventually fell through, but the circumstances surrounding it were rather peculiar: the complicated and permit-ridden nature of land acquisitions provided a legal opportunity to terminate the deal, but according to our sources, what may have truly underlain the withdrawal was that the scandal emerging from the case didn’t sit well with Orbán.

One after the other, cases of suspected corruption have sprung up around the politician in recent years: from property sales in the district that he oversees to the bewildering growth of his residence (and assets) as well as the state funding received by his ex-wife’s start-up company. One memorable incident was his domestic helicopter excursion to a wedding the day before the government’s 2016 migration referendum. Since then, the politician has very rarely held public events in which journalists can ask him questions.

Politicians of the opposition aren’t the only ones to target Rogán. Even the more conservative side of Fidesz often points out that his political style and stance are not reconcilable with the party’s identity and values. Nevertheless, Viktor Orbán insists that Rogán’s assignment is to develop and implement a successful campaign strategy for Fidesz, which has already earned Orbán the election on multiple occasions.

There were several notable details in the planned land transaction:

• It was made public quite by accident: one of the villages involved in the matter uploaded the contract to its website even though municipalities are no longer required to publish land contracts to their communication channels since last year.
• The agreement was concluded shortly before the wedding of Antal and Barbara Rogán (Barbara’s maiden name is Obrusánszki).
• It involves an enormous amount of land: a solid ten square kilometers located in northeastern Hungary.
• Accordingly, the purchase price is also rather hefty at 1.665 billion HUF.
• The money was to be put up by the five buyers, including Rogán’s new wife and two of her close relatives.
• That money, however, would predominantly not have come from their own pockets. According to the contract, only 83 million HUF would have gone into the transaction, whereas the remaining 1.58 billion HUF was to be covered by a loan taken out with Budapest Bank. At the time of the contract, this financial institution was under state control.
• All three of the Obrusánszki’s were registered as farmers at Edelény’s land office not long before the deal, back in August. (This is important to note because in Hungary only registered farmers can buy arable land.)

Some of Telex’s journalists even went to see the parcels of land, and they managed to speak to the mayor of one of the municipalities involved, Csokvaomány. The mayor also used to be the site manager of the estate in question. Zsuzsanna Tóth estimated that roughly half of the thousand-plus hectare territory could be effectively put to commercial use, “It’s also first-rate land for raising livestock and producing animal feed.” She stated that there was a year in which they closed with 15 million HUF in profits from both categories. Added to this are the agricultural subsidies, both area-based and otherwise, which, according to her, can bring in an average of 70-75 thousand HUF per hectare. So even by a conservative estimate, this amounts to 75-80 million HUF in subsidies every year, but it could be even higher.

As to where the Obrusánszki family and its business partners would get the funds from in order to get this deal off the ground, it’s not clear from the company register: although we came across some minor ventures in Hungary and Slovakia, it wasn’t possible to conclude from the revenue data how they would get the money together for the down payment necessary for the deal to take place. The other interesting question is how they wanted to arrange such an amount of credit for such a small down payment. Due to the debt-brake regulation that has been in force in Hungary since 2015, no bank may give a loan if the client cannot put down at least 20% of its value. It is legally possible to circumvent this by including additional collateral in the transaction as security. In terms of the Obrusánszki’s planned land purchase, the value of the assets serving as additional collateral should have been at least 300-400 million HUF.

If the buyers of the large estate had indeed taken out a loan for the purchase of arable land from Budapest Bank, as stated in the contract, it would have been peculiar (not only because the bank’s website doesn’t offer such a kind of loan) also for the fact that BB was under state control at the time of the land acquisition. The bank had been acquired in 2015 by state-owned Corvinus International Investment Ltd. for 700 million USD and was recently rolled into the large “giga-bank” project associated with Hungary’s System of National Cooperation. The project, Magyar Bankholding Zrt., made up of Budapest Bank, TakarékBank, and MKB Bank started operations this past December.

But the prospective financing of Budapest Bank is fascinating not only for its state control but also because the bank’s Deputy CEO, András Puskás, is Antal Rogán’s old confidant and former deputy mayor of the capital’s 5th district. After news of the land deal broke out, it was also discovered that the Obrusánszki’s had received credit from the financial institution once before: a land purchase of a smaller scale that was intended to be covered by a BB loan, as well as a loan for over 300 million HUF for one of their business ventures.

After the land purchase agreement had become public, it was quite some time before Antal Rogán commented on the matter. Following ten days of silence, he finally tried to put the issue to rest by releasing a statement to the pro-government Magyar Nemzet newspaper: no land had been registered in his wife’s name nor had any loan been taken out. He described the news articles that reported on the case as a hate campaign. A day later, the newspaper published an excerpt from an official government document regarding the refusal to approve the contract.

The way an annulment of a signed sales contract can take place stems from the fact that buying land in Hungary is a multi-stage process lasting an average of 4-6 months, which, during that time, can be obstructed at several points by other buyers or authorities with jurisdiction. The official ruling published in the pro-government newspaper does not include its date or justification, but after consulting our legal source with experience in land acquisition matters, we managed to conclude that the agency probably didn’t approve the contract due to formalities. According to our source, there would have been an ample selection of such technicalities because it was possible to find fault with the document in several respects from a legal point of view. However, in practice, such a deal rarely comes to a complete halt on formal grounds: it is possible to challenge the unfavorable ruling in court or conclude a new contract that strictly adheres to the requirements.

And yet, Antal Rogán communicates the official rejection in such a manner as if to deny the very intention to purchase the land. Just the existence of the signed purchase agreement renders this idea absurd. But beyond that, considering the official proceedings involved with land acquisitions, it is also certain that the rejection decision was made well after the case became public – February 10th, according to press reports, which was exactly eight days after the publication of the first news articles. With this in mind, it cannot be ruled out that the rejection was related to the scandal that erupted over the planned land purchase. Multiple details support this theory.

For one thing, it appears as though the narrative had been contrived. Already a day after the case broke out, which was no doubt before the rejection ruling, a news article on the matter referring to anonymous sources associated with Rogán was published under a pseudonym on Index.hu, a news portal influenced by those with close ties to the government. The article states that the land registry doesn’t mention Barbara Rogán’s land acquisition or mortgage-related banking transaction. The article was of no informational value anyway, as the land office would not have registered the property by that date even if the transaction were to have finally taken place. Even after Rogán’s “denial,” the news site later recalled that they were the first to report it: no land acquisition had taken place, and the contract had not been fulfilled. All this could indicate that the basis for the communication, which emphasized the contract’s annulment, had already been laid out days before the ruling was made.

Secondly, Telex has been informed from multiple sources, including one from the administration, that the Prime Minister was not at all pleased with the public exposure of the case. After the release of the first news story, Viktor Orbán allegedly requested rather firmly from Antal Rogán that he halt the acquisition process of the 1,022 hectares of land, by whatever means necessary. The Prime Minister’s strong displeasure in the matter is indicated by the fact that the case wasn’t handled by means of communication but rather the sales proceedings were terminated entirely.

According to our information, Rogán requested help from two of his fellow ministers to halt the land purchase. It was conceived so that the minister’s family would not have to back out of the deal, and for it to be possible to show that the “wise authorities” managed to block the somewhat questionable transaction. In terms of the authorities, the territorially competent Chamber of Agriculture and the government office could bring the process to a halt. It would have been possible to turn to the Minister of Agriculture, István Nagy, and the head of the Prime Minister Office, Gergely Gulyás, to handle the case. According to our government source, it was following Gulyás’s intervention that the government office finally rejected the registration of the sales agreement. At the same time, the government office’s decision – as we noted earlier – would stand on its own merits due to the formal objections contained in the contract.

We reached out to the ministers involved as well as Viktor Orbán’s office regarding the matter. Departing from standard practice (as the ministries generally do not respond to Telex’s questions), several ministries and the Prime Minister were quick to respond, contesting our information in a heated manner. “Everything that you are suggesting is nonsense. It would be easier if you would admit to having proceeded carelessly in this matter and not telling your readers the truth,” the Prime Minister’s Cabinet Office wrote to our paper.