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Six things Direkt36 revealed about the company of Orbán’s son-in-law, and later were also found suspicious by the EU’s Anti-fraud Office

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After we launched Direkt36 in the beginning of 2015, we have covered the businesses of Orbán Viktor’s son-in-law, Tiborcz István in several articles. We even investigated the success of his formerly co-owned company, Elios Zrt, which was extremely successful on EU-funded tenders for street lighting replacement. In our articles we revealed that the tenders included specific requirements that could only be met by Elios; that the key to the success of Elios was their first contract from Hódmezővásárhely, a city where at that time János Lázár, now the head of the Prime Minister’s Office, was the major. We published a secret voice recording which proved that Elios had got involved in the preparations of a major public project nearly two years before they won the tender for it.

The European Anti-Fraud Office, OLAF investigated the street lighting project carried out by Elios for two years. In January, they announced that they had closed the investigation, and they had found serious irregularities in the 35 investigated projects, but neither OLAF nor the Hungarian government published the full report. Hungarian online daily obtained the report and wrote a series of articles about it. Although Direkt36 isn’t mentioned in the over 100-page-long final report by OLAF, there are several common conclusions in the report and in our previous articles.

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1. The OLAF investigation found that the public procurement tenders published in 2012 included specific requirements that could only be met by Elios. In our first article about Elios published in March 2015, we gave a very detailed description about this method.

2. In our first article, we also revealed that the key to the success of Elios was their first contract from Hódmezővásárhely – and OLAF also came to the same conclusion. Hódmezővásárhely was the very first city in Hungary – and one of the first ones in Europe – where the old street lights were replaced by LED lamps in 2010. At that time János Lázár, now the head of the Prime Minister’s Office, was the mayor of Hódmezővásárhely. Elios was founded just a few months earlier, which means they won the contract without history in street lighting, while other applicants had more experience in such projects. One of their competitors was a company called Tungsram-Schréder, which became the subcontractor of Elios in Hódmezővásárhely and in most of their later projects. In our articles we showed how Elios used this very first project to fit the reference requirements in the next tenders. Since Elios was the only company in Hungary with this reference, they won the big tenders without competition.

3. It was not only the total value of the required references that was favourable for Elios, but also that the required experience was specified to LED lighting systems. As professionals stated to Direkt36, these requirements were not necessary at all, since the installation of these lamps does not require special knowledge. The public procurement tenders won by Elios also included unusually detailed technical requirements. Most of the time the requirements were tailored for the lamps of Tungsram-Schréder, the supplier of Elios. The OLAF report added that in most cases even the manufacturer of the lamps were named in the public procurement tenders. This, however, is against the law since it unnecessarily restricts competition.

4. First, an investigative portal wrote about the street lights projects of Elios, and they revealed that some street lights projects were prepared by a company called Sistrade. The owner of Sistrade is an old friend and business partner of István Tiborcz, and he was even the co-owner of Elios for a while. When we started to investigate the projects won by Elios, we found out that Sistrade was present in other projects too, and we showed the consequences that this scheme had on the price paid by local governments, and on the profit made by Elios. The investigation by OLAF concluded the connection between Elios and Sistrade represents a conflict of interest.

5. The final report of OLAF related the conflict of interest to the owner of Sistrade, Endre Hamar, and named him with other companies and persons as possibly responsible for the cited irregularities. In our articles, we also described the role of Hamar’s company and other businesses. The municipalities ordered preliminary studies from Sistrade and their partner company, Tender-Network. These studies written for the European Union tender applications were of key importance, as they set every detail of the project. The studies determined how many lamps had to be changed, the amount of EU funds that the local governments would apply for, the estimated price of the project, and the amount of money to be allocated for the different parts of the projects. In all the cases that we looked into, the technical expert, either working for Sistrade or Tender-Network, was the same person: András Imrovicz. The OLAF report repeated his name, and their investigation found further evidence – emails – that Sistrade, Imrovicz and Elios worked together on the preliminary studies.

6. In the beginning of last year, Direkt36 published a secretly made audio recording from 2012, which shows that Elios had got involved in the preparations of a street lighting project in Szekszárd nearly two years before it won the tender for it. The report of OLAF treats it as a fact that the mayor of Szekszárd and a leader of Elios talked about the project months earlier than the government published the EU-tender for it. The tape was earlier investigated even by the Hungarian police, but they said that it was not an evidence of any illegal act.

OLAF sent the final report about the Elios-investigation to the Hungarian government. The government claims that it cannot publish the report due to the fact that the Hungarian prosecutors – on OLAF’s suggestion – launched an investigation. Last year, in a similar case the government did publish an other OLAF report, despite the fact that the Hungarian prosecutors investigated the case. But that case was connected to the previous governments, while this case is connected to Orbán’s son-in-law. Now the Prosecutor General’s office announced that the investigation in this case could take years.