Police Investigate Public Contract Won Through False Claims

The Budapest Metropolitan Police have launched a criminal inquiry into a major procurement of Budapest’s 8th district, which was won by a consortium that made false statements in order to qualify for the tender. The Metropolitan Police’s press office told Direkt36 that their anti-corruption unit is investigating the case with the suspicion of use of false documents.

The investigation is based on a Direkt36 story, which exposed the controversial procurement concerning the renovation of a local clinic.

The contract, worth nearly 1 billion forints (3.2 million euros), was awarded to a consortium led by construction company EU-Line, which had to prove that they had done similar work in the past. The group of companies claimed that one of its members had renovated a clinic in the distant country of Uruguay. A Direkt36 investigation has revealed that this was not true.

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The renovation indeed took place but documents and interviews show that the reference contained several false claims. For the work in Budapest, bidders were required to show that during their previous clinic renovation they carried out the replacement of at least one elevator. In the Uruguayan clinic, however, there has never been an elevator. This was not the only lie that the company said in the reference. Other pieces of information suggest that the firm had nothing to do with the construction at all.

István Tényi, a citizen known for bombarding the authorities with criminal complaints based on news reports, submitted a complaint based on Direkt36’s story on the day of the publication. The Budapest Metropolitan Police’s press office told Direkt36 that the investigation is being conducted against unknown suspects and nobody has been charged yet. The press office emphasized that at this point the main goal of the inquiry is to check whether all the pieces of information in the complaint are accurate.

Using false documents can be punished with a one-year-long jail sentence, according the criminal code.

The clinic’s renovation was finished at the end of 2015. The municipality of the 8th district, led by mayor Máté Kocsis, a prominent member of the governing Fidesz party, earlier told Direkt36 that they would not look into the procurement. ”It is not the municipalities’ responsibility to check the tender bidders’ ownership structure or the truthfulness of their references,” the municipality said.

The municipality and EU-line did not respond to questions regarding the investigation.

EU-Line, whose unusual ownership structure Direkt36 exposed in a previous story, has been awarded a new contract by the 8th district since the story about the controversial clinic renovation procurement. On October 13, three days after our story had been published, the municipality signed a 35 million forint (113 thousand euros) contract with EU-Line, which was hired to renovate a local kindergarten.

The municipality did not respond to questions on why they hired EU-Line even after it had been revealed that the company won a previous tender through false claims.

  • András Pethő

    András is a co-founder, editor and executive director of Direkt36. Previously, he was a senior editor for leading Hungarian news site Origo before it had been transformed into the government’s propaganda outlet. He also worked for the BBC World Service in London and was a reporter at the investigative unit of The Washington Post. He has contributed to several international reporting projects, including The Panama Papers. He twice won the Soma Prize, the prestigious annual award dedicated to investigative journalism in Hungary. He was a World Press Institute fellow in 2008, a Humphrey fellow at the University of Maryland in 2012/13, and a Nieman fellow at Harvard University in 2019/20. András has taught journalism courses at Hungarian universities.