How to buy a home with Hungarian taxpayers’ money
Mašenjka Bačić
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By financing its minority in Croatia the Hungarian government is expanding its influence through financing the purchase of agricultural land, establishment of companies, support for education and football clubs. But some of the money was also spent by Croatian citizens of Hungarian nationality to purchase agricultural land and family homes.
Viktor Orbán and Andrej Plenković. Photo: Government of Hungary
In the eastern Croatian region of Baranja lies Kotlina, a small village with a population of less than 300, 88 percent of them Hungarian. The village boasts a newly renovated house with yellow bricks and a massive iron gate. On the gate there is a logo with two letters, HM, for everyone to see.
HM stands for the Democratic Community of Hungarians in Croatia, a key body of the national minority that is financed by the Croatian and Hungarian governments. It is led by Róbert Jankovics, a member of parliament who represents the Hungarian minority.
The house renovation in Baranja, an impoverished region where the majority of the 14.000 Croatian Hungarians live, was co-financed by an organisation which received money from the Hungarian government via the Bethlen Gábor Fund (BGA) – the main source of funds for the country’s minority around the world.
The most recent »Hungarian House« in Croatia was established this January in Villa Anna, a house in the port city of Rijeka which will also host a Hungarian honorary consulate.
Hungarian minister of Foreign Affairs and Trade Péter Szijjártó visited the opening and met with Jankovics who later said »that the situation of Hungarians in Croatia plays a key role in Hungarian-Croatian relations, and that we can always count on the support of the Hungarian government«, as reported by Képes Újság, a minority weekly published by DZMH.
DZMH is one of many Hungarian minority organizations which are partly funded by BGA, and occasionally other sources. Among them are three which are connected to DZMH and whose leaders are close to the Hungarian Prime Minister Viktor Orbán.
In a regional investigation called Hungarian money, Orbán’s control a group of journalists analyzed how these funds have been spent in Slovenia, Serbia, Slovakia, Romania and Croatia. In the past decade the fund approved grants for various projects in numerous countries for at least € 1,46 billion. Of this, € 26,6 million was in Croatia, according to BGA's decisions to approve funding.
The data used for this story came from a public database showing decisions for allocation of funds by BGA. Financial reports of BGA as well as data about contract payments are also available from another public site. But these databases are not compatible, comprehensive or reconcilable. Reporters’ analysis also shows great discrepancies in reported amounts.
BGA and other Hungarian state sources fund the construction of playgrounds in kindergartens, financial incentives for parents to enroll children in Hungarian schools, financing purchases of agricultural land and support in setting up new businesses.
On the other side of the interest spectrum are the BGA-backed football academy and stadium in the southeastern town of Osijek and the recent financial backing of a small football club in nearby Vardarac. Millions of euros have been spent in the name of football.
A newly renovated house of the Democratic community of Hungarians in Croatia. Photo: Mašenjka Bačić
DZMH’s solitary reign
The influence of DZMH in the minority community began growing in 2016 when the organization’s candidate Róbert Jankovics was elected to the Croatian parliament. He won by a tight margin but his election was mired by allegations of bribery in exchange for voters.
In fact, in 2019 two people were convicted at a lower court of bribing non-Hungarian Croats to declare themselves Hungarian to be eligible to vote for the list that was led by DMZH candidate Jankovics. The court’s judgement is not yet final.
After Jankovics’ election, the Union of Hungarian Associations which supported the opposing candidate was liquidated. DZMH could thus become the main organization connecting Hungarians in Croatia with their mother state.
In 2020, grants in the amount of € 692 thousand were allocated to Hungarian minority organisations from the Croatian state budget. Of that, DZMH and its local branches were granted at least € 645 thousand.
According to the decisions to allocate funds, the BGA financed DZMH alone with a total of at least € 720 thousand Between 2011 and 2019. Additionally, the organization’s annual income almost tripled in recent years, from € 459 thousand in 2016 to € 1,3 million in 2019.
An additional € 9,5 million was alloted from BGA to organisations connected to DZMH, such as Europa AP, the Forum of Hungarian Teachers and the Hungarian Educational and Cultural Center.
Between 2011 and 2019 almost a half of DZMH’s grant awards approved by the BGA (about € 340 thousand), was spent on investments in real estate, renovations of old country houses, such as the one in the village of Kotlina, and the construction of new ones.
Since 2011, the DZMH »has financed or lobbied for financing to renovate different secular and religious buildings important to the Hungarian minority in Croatia« in 23 towns, mostly in Baranja but also in Rijeka and Zagreb, Jankovics told Oštro.
In the current school year, the DZMH began to offer 20.000 kuna (€ 2.600) to parents who enroll their children in bilingual elementary and high-schools.
As a result, the number of children attending bilingual elementary schools grew from 112 in the previous school year to 139 in the current one. And the number of those in high-schools rose from 12 to 27, according to data of Croatia’s Ministry of science and education.
Another organisation which was substantially supported by the BGA was the Forum of Hungarian teachers. From 2011 to 2020 around € 1,7 million of project proposals were approved to this Forum, of that 840 thousand were intended for the construction of five kindergartens and five playgrounds across southeastern Croatia.
A further € 400 thousand was approved for the establishment of a center for youth and agriculture in Kopačevo, near a local nature park in Baranja. The FMPH renovated a building there and built 10 bungalows to serve its various activities, such as workshops for professional development of teachers.
The vice president of FMPH Ana Kovačević is also vice president of DZMH’s branch in Beli Manastir, the most populous town in the Baranja region. In 2019, as a DZMH candidate from this town, she was elected to the Hungarian national minority council.
FMPH did not reply to Oštro’s request for comment.
Buying agricultural land
In addition, Kovačević is a member of the board of Economica Hungarica (Economica Hungarica Alapítvány), a foundation established in 2017 by the Hungarian state-owned company MNKH which was merged with another company in 2018 due to losses.
Economica Hungarica operates in accordance with DZMH’s strategy for economic and rural development and offers funding to Croatian citizens of Hungarian origin for purchasing of buildings and land or establishing businesses.
In three years it has granted funding to 783 subjects of which six persons purchased a family home with the money. Thirty companies bought a total of 82 hectares of agricultural land, Economica Hungarica director Zorica Paliž Toth told Oštro.
Another BGA beneficiary with connections to DZMH was the Osijek-based Hungarian Educational and Cultural Center (Horvátországi Magyar Oktatási és Művelődési Központ, PKCMH). Its director Janoš Andoči is also the vice president of DZMH’s branch in the village of Kneževi Vinogradi and a member of the Council of the Hungarian National Minority of the Osijek - Baranja County where he represents DZMH.
The center was opened in 1999 and includes a kindergarten, elementary school, high schools and a dormitory for up to 48 students that currently houses 46, Andoči told Oštro. According to BGA grant decisions, it was awarded projects for a total of at least 177 thousand euros since 2011.
Pampas 2020. Photo: FC Osijek.
Buying agricultural land
Kovačević is also a member of the board of Economica Hungarica, a foundation established by the Hungarian state-owned company MNKH in 2017 which was merged with another company in 2018 due to losses.
Economica Hungarica operates in accordance with DZMH’s strategy for economic and rural development and gives grants to Croatian citizens of Hungarian origin for the purchase of buildings and land or the establishment of businesses.
In three years it granted funding to 783 subjects of which six persons purchased a family home with the money and 30 companies bought a total of 82 hectares of agricultural land, Economica Hungarica director Zorica Paliž Toth told Oštro.
Another BGA beneficiary with connections to DZMH was the Osijek-based Hungarian Educational and Cultural Center. Its director Janoš Andoči is also the vice president of DZMH’s branch in the village of Kneževi Vinogradi, and a member of the Council of the Hungarian National Minority of the Osijek - Baranja County where he represents DZMH.
The center was opened in 1999 and includes a kindergarten, elementary school, high schools and a dormitory for up to 48 students that currently houses 46, Andoči said. According to BGA grant decisions, the center successfully bid for projects in the amount of at least € 177 thousand since 2011.
Football, the sport of choice
In 2020, the BGA approved around € 18 million of project money to Croatian organisations but DZMH was no longer a beneficiary. A new organisation called Europa AP appeared on the list. Its president Oliver Matijević is also the executive president of DZMH, while Europa AP’s vice president is the minority Croatian parliamentarian Róbert Jankovics.
Also last year the BGA approved around € 962 thousand to Europa AP for support and development of FC Vardarac (Várdaróc FC), a small football club that won the country’s 2nd league in season 2019/2020.
The president of FC Vardarac told Oštro Europa AP was their »sponsor«. The funds were used to buy equipment, install spotlights, renovate the stadium building, pay the bills, maintain the playing fields, and for similar costs.
»Support came spontaneously, we did not ask them«, said Atila Kiš, the president of FC Vardarac when asked why the club’s financing came from Europa AP. He said that Jankovics had helped them to get in touch with Europa AP, which in turn helped because the organization didn’t receive any money from the Croatian budget in 2020.
Photo: Facebook
Oliver Matijević, the president of Europa AP, said in an email to Oštro that »Europa AP and FC Vardarac are long-standing partners with a goal of strengthening and promoting sport among youth, especially Hungarians in Croatia«. He added that they have significant administrative potential which is why they approached BGA and other organisations.
It is not clear what kind of administrative potential Europa AP had. Before BGA began to finance it had no income in 2018 and just € 135 in 2019.
In addition to the money for the football club, the BGA approved Europa AP around € 6,6 million for operating costs and other programs, such as the development of local TV Studio Drávatáj, renovation of churches and tourist centers.
The money was awarded to FC Vardarac after BGA had already approved € 3,1 million in 2018 and around € 3 million in 2019 for the construction of 8 football fields and a stadium for 12 thousand viewers to FC Osijek Football School (Škola nogometa NK Osijek). According to the fund’s grant decisions, BGA granted the school about € 10 million in 2020.
FC Osijek was a flailing club when it was purchased in 2016 by Osijek-born businessman Ivan Meštrović and Lörinc Mészáros, an ally of prime minister Viktor Orbán. Both left the club last year but it appears that Mészáros has not cut all ties to the club.
Two Hungarian private equity funds (whose beneficial ownership is not publicly disclosed acquired stakes in the club BETA Private Equity Fund and Open Innovation Capital Fund). Until 2019 both funds were managed by MKB bank where Mészáros holds a 48,6 percent shareholding. Today the two funds are managed by two former MKB bankers.
László Szíjj, the third co-owner of the club in Osijek, acquired his stake in 2019. He is Mészáros’s business partner. It is on his yacht that the Hungarian foreign minister Péter Szijjártó spent his holiday in Croatia last summer, as revealed by Hungarian non-profit media Atlatszo.
In June this year, Meštrović resigned from his position of president of FC Osijek. But the club then announced in a press release that he will maintain his role as president of the FC Osijek Football School and will dedicate his time to the completion of the new football stadium and camp located in the city’s Pampas neighborhood.
As Oštro reported in 2018, the land for the stadium was purchased from the City of Osijek by the football school in 2017 for around € 268.000. The purchase was later investigated by the state prosecutor who did not find any irregularities, the Croatian State Prosecutor's Office for the Suppression of Corruption and Organized Crime confirmed to Oštro.
The stadium is still under construction but according to the investor and the City of Osijek’s latest plans it should end in 2022.
The production of this investigation was supported by a grant from the Investigative Journalism for Europe (IJ4EU) fund.