Tapped phone calls reveal new details of the corruption case in Central Budapest

Tapped phone calls played in court have provided further insight into the extraordinarily close relationship between the former notary of Budapest’s District 5 and a local businessman, both defendants of an ongoing corruption trial.

According to the phone calls, the notary, László Rónaszéki, and the businessman, János Borzován spoke regularly and shared information on their private life just as about business. Borzován called the notary “Laci” or “Lacika”, both informal versions of his first name.

János Borzován  was active in Budapest’s central district through his construction company, getting several valuable contracts from the municipality while László Rónaszéki was serving as the district’s notary.

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Borzován is charged of asking money for influencing official procedures of the municipality. According to the prosecutors, he was cooperating in this with Rónaszéki. The third defendant, a restaurant owner, is charged of giving money to Borzován so that he help him obtaining a licence from the municipality.

All three men are denying the charges.

Zizi Bar’s licence

The prosecutor’s office claims that Borzován and Rónaszéki committed crimes regarding two separate legal procedures. Direkt36 covered extensively the one that was revolving around obtaining a restaurant licence. According to the prosecutors, Borzován asked 1.5 million HUF (4800 euros) from a then co-owner of a place called Zizi Bar in return for arranging a license needed for longer opening hours.

According to the charges, a few days after the phone conversation with the restaurant owner, Borzován indeed spoke with Rónaszéki about the license application. Another couple of days later, a colleague of the restaurant owner took the money to the place previously agreed upon, a downtown hotel that, according to the prosecutors, belongs to Borzován’s business interests. The next day, the local government acknowledged the license application and registered the restaurant’s late-night opening hours.

The prosecutor’s case is based partly on secretly tapped phone conversations. Borzován claims, however, that the prosecutors misinterpreted what happened. He acknowledged that he got 1.5 million forints from the restaurant owner but he claims that this money was in return for a construction work he arranged for Zizi Bar. He added that no invoice was issued because they had an informal agreement with the restaurant owner and that is why the work is not included in neither company’s books.

Borzován acknowledged that he had known about the pending licence of Zizi Bar. He also admitted that he talked about it with Rónaszéki but he claimed that the money from the restaurant owner had nothing to do with it.

The importance of Borzován’s image

The rest of the charges involve a real estate deal. Prosecutor Zoltán Andréka said that a company sold a property in District 5 in July 2012 but the new owner could not be registered in the land records as long as the municipality did not waive its right to buy the property. Due to the summer break, the municipality made this decision only in September but those involved in the real estate deal had to wait even longer. They needed an official copy of the resolution in order to proceed with the land records registration.

It was then that one of the intermediaries involved in the real estate deal contacted Borzován and, according to the charges, asked him to help them get the resolution. The prosecutor said that Borzován agreed to do this and turned to Rónaszéki. According to the charges, Borzován wanted to make sure that it would be clear for the intermediary that it was he who arranged the resolution’s issuance. The prosecutor said that this was important for Borzován because he wanted to cultivate the image that he is a person who can arrange official matters at the municipality.

According to the charges, Borzován asked 500 thousand HUF (1.600 euros) from the intermediary but he refused to pay. The resolution was eventually issued in the middle of October, a month after the decision was made.

At the hearing, Borzován claimed that he prosecutors’ charges are baseless in this case, too. He said that he was in contact with the intermediary, a real estate dealer, because he wanted to sell one of his properties. He acknowledged that he became familiar with the matter of the resolution. He also said that he discussed it with Rónaszéki but he did it only to selflessly help the real estate dealer.

“We spoke often and on various topics. I may have asked him about this too,” said Borzován, who was described by the prosecutor as someone with a wide network of contacts in District 5.

“Don’t chill out too much”

For years, Borzován was a major player in the district’s construction business. Between 2000 and 2010, Borzován’s company, BAU Holding 2000 Ltd., received contracts from the 5th district – often as member of consortia – totalling 6.5 billion HUF (20.6 million euros), procurement records show. Data analysis provided by the CEU Microdata research group shows that no other company won more from the local government in this period.

After 2011, the total revenues of János Borzován’s companies started to fall, and they also received less work from the 5th District. At the same time, a new company, EU-Line, came to be a close partner of the municipality in construction works. Direkt36 showed in a previous article that there are several indirect links between EU-Line and János Borzován but he claims that he had nothing to do with the company’s operations.

The corruption trial made it clear that Borzován’s business activity might have faded in District 5 but his connection with the notary remained strong. Apart from talking on a daily basis, Borzován also did favors for Rónaszéki. He arranged, for example, that the apartment of Rónaszéki’s daughter got renovated at a discount price. Rónaszéki did not remember clearly when this happened but he said that it must have been sometime in 2013.

Borzován also helped Rónaszéki when the notary needed new suits. He connected Rónaszéki with one of his friends, who was selling suits imported from abroad. Borzován said that Rónaszéki paid for what he bought he only helped with connecting the two people.

The tapped phone conversations suggest that Borzován and Rónaszéki had a very informal relationship. In a call cited at the trial, Borzován told Rónaszéki that “he shouldn’t chill out too much.” Borzován later told the investigators that he does not remember why he said this but added that he had a very good relationship with the notary so “we could afford to say things like this.”

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  • 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.