The entire Hungarian infrastructure – industry, financial institutions, the media, all natural resources, and most of the agricultural sector – were state owned under Communism. The privatization of these assets started under the last Communist government, in the final years of the 1980's. Most of the assets the government sold (often for a fragment of their market value) in the first wave of privatization went to buyers well connected to the government – to Party apparatchiks, to Party appointed factory directors, to local Party secretaries, and to their relatives and close friends. Most of them were entrepreneurs by that time, had substantial wealth tucked away, and had access to bank credit on the merits of their Party ties. The person in charge of starting up privatization in Hungary was Mr. Peter Medgyessy, the Minister of Finances, later Deputy Prime Minister of the last Communist government.
Under the successive post-Communist governments, a number of top secret police files were stolen from the supposedly closely guarded state archives, either in the chaos of the system change or later. From time to time – especially at election time – some of these compromising documents find their way to the press for the purpose of blackmailing a particular political or business competitor. Just such a stolen file, a secret police recruitment sheet, was published in one of the right-wing newspapers in 2002. It was direct proof that the newly-elected Socialist Prime Minister of the country, Mr. Peter Medgyessy, an economist and an internationally known banker, the so-called “father of Hungarian privatization”, was a secret State Security officer for several years, starting from the 1970s. His code name was D-209. After an awkward period of denial, Mr. Medgyessy confirmed to the Parliament that the accusations were indeed true. While working for the Ministry of Finances as an economist, he was contracted by the State Security Bureau to work for them secretly as a counter-spy in charge of keeping sensitive economic information from foreign intelligence, including the KGB. He has allegedly never spied on his fellow Hungarians and closed his contract with the State Security agency in 1982, when he became the Deputy Minister of Finances, in Hungary's last Communist government. Up until the end of the Communist dictatorship in the country, he was still receiving daily confidential reports from the secret police. Mr. Medgyessy claimed he never read these reports, which often included sensitive information on the system's real or supposed enemies.
Mr. Medgyessy was and still is a smooth, elegant, clean-faced figure. He looks and behaves the part of an international banker. He has a nice smile and wears well-tailored suits. D-209 was the wealthiest Prime Minister the country has ever had up until 2003. He lives in a large, comfortable mansion up in the hills, high above the scenic Hungarian capital. In one PR shot, published in the Socialist press during the 2002 election campaign, he is emerging from his pool in his swimming trunks. He looks trim, muscular, decades younger than his age. He is not a good public speaker, however. He does have a problem with words, just as some male members of the American Bush family do. While he might be verbally fit to handle boardroom dealings, he is visibly terrified and his tongue often stumbles when he must address crowds. A right-wing magazine ran a column with the new Prime Minister's strange sayings, such as “I support poverty,” which he said in his opening speech to the newly-elected Hungarian Parliament in June, 2002. He meant, “I support the poor,” of course, but the damage was done. The nationalist opposition was all over the media in an instant, declaring themselves to have been right all along in warning the voters throughout the election campaign that a secret network of ex-Communist, international bankers who are totally insensitive to the problems of the average Hungarian would take over the country if people elected a Socialist government.
As a direct result of the D-209 scandal, the governing parties proposed new laws that would make the release of the complete list of former State Security employees who were elected as representatives to the Parliament or were in government in the past twelve years of post-Communist Hungary legally possible. They proposed to release the names of secret police agents among the country's public figures, religious leaders, and prominent journalists as well. At one point, there were even Socialist promises to make the agents' lists public in their entirety, so ordinary citizens could learn which relative, friend, or neighbor was reporting on them to the authorities. Nevertheless, if the new laws came into effect, the former agents would still enjoy immunity from prosecution for their past activities. The proposed legislation – a watered-down version of what was originally promised – came up for a vote in the Fall 2002 session of Parliament, but it was sabotaged by the joint effort of all parties. Legal experts were warning the politicians against such laws, even against searching the secret archives. They said that allowing such a search and passing these laws would infringe upon the former agents' constitutional rights to privacy. Furthermore, such laws could be interpreted as retroactive; for they would criminalize people for past deeds which were perfectly legal at the time.
(To be continued)
Tags: László Najmányi