Police questioned several suspects in City Hall scandal

Police are pursuing charges regarding three suspects in the case known as City Hall-gate, as revealed by the authorities in response to the Hungarian daily Magyar Nemzet's inquiry. The corruption scandal embroiling left-wing politicians in the capital erupted last autumn after the intention of municipal leaders to secretly sell the Budapest City Hall building came to light. Sound recordings leaked by Anonymus, a masked figure, made clear that property sales in the capital were being managed by a select circle of individuals using a "commission scheme". Police have obtained ten hours of uncut recordings, which will presumably help the investigation move forward.


In recent days, the National Investigation Office (NNI) has questioned several suspects in the City Hall-gate, the police responded to the inquiry of Magyar Nemzet. The daily contacted NNI after ex-PM Gordon Bajnai shared a post on Facebook Sunday, saying that a smear campaign had been launched against him in the City Hall case and alluded to manipulation and edited sound recordings. However, the communications department of the National Police Headquarters (ORFK) disclosed that three persons, who remain at liberty during the probe, were suspected of influence peddling in the case. The newspaper has no information as to the identity of the suspects.

As is known, last autumn, Anonymus, a masked figure, published several sound recordings revealing that

municipal leaders wanted to clandestinely sell the building of the City Hall and the plot it is on, an extremely valuable property.

Not only Russian, but Italian and Israeli investors were also approached with the property deal. The recorded conversations suggested a scenario where a well-defined circle specialising in property sales adopted a “commission scheme” in their practice and certain individuals took bribes.

The City Hall-gate scandal erupted after Index had published an article last November, revealing that the capital intended to sell the City Hall, one of Budapest’s symbolic buildings. In response to the article, Budapest’s Mayor Gergely Karacsony denied that the municipality wanted to find an investor to purchase the entire or the larger portion of the area stretching over almost five hectares in the centre of the capital. It wasn’t long before revealing reports and recordings surfaced in succession. Audio recordings and information disclosed to the public clearly showed that the City Hall was indeed up for sale, what’s more, in exchange for a “commission” of several billions in Hungarian forints.

One of the key figures in the property scandal is Zsolt Berki, who holds no official position whatsoever at the Budapest municipality. He approached several business circles well-known in Hungary regarding the City Hall development project as well as with the sale of other properties in Budapest. As evidenced by his email correspondence under scrutiny in the investigation files, Mr Berki did not care much about the rules of forwarding messages, he would often fail to delete the email history, making the whole chain of recipients clearly identifiable.

In some instances, he simply forwarded an email that was previously sent to a different business circle. The reason why Zsolt Berki can move with such ease in left-wing circles can be explained by the fact that his brother, Jozsef Berki – also mentioned in his testimony – used to work for deceased Socialist Minister Peter Kiss. During the same period, current Deputy Mayor Ambrus Kiss was head of Peter Kiss’s secretariat. Thus, the Berki family’s extremely strong affiliations with the Left cannot be called into question. The Berki brothers closely coordinated their activities, with several email exchanges proving that internal information was directly forwarded to them by a property manager working at the capital’s asset management firm headed by Balazs Barts.

In the audio recordings released by Anonymus, Zsolt Berki can also be heard speaking. In the same recordings, the voice of Balazs Barts, chief asset manager, can also be identified alongside the voices of Gordon Bajnai and Gyula Gansperger, a left-wing businessman and Mr Bajnai’s old “battlefield buddy” from Wallis. One of the recordings indicate that Mr Bajnai had been involved in the negotiations that aimed to sell the City Hall to the Russian-born billionaire Rahimkulov family.

During the negotiations ex-PM Bajnai explained that the investors should expect some “sharks” to move in on the deal in order to charge a commission in exchange for their assistance. “There are at least two problems, from the aspect of management. This is a six-party coalition, which is a given. If anyone sniffs out the possibility of a deal, they immediately want to get in on it as mediators. So that they can then ask for some commission,” the former prime minister described the situation plainly. Mr Bajnai added that “as soon as such news gets around, (…) there are the sharks in a coalition like this”. Sticking to the analogy, he continued by saying that there are a plenty of such sharks cruising in the water and everyone has their own turf in a grand coalition.

“This is reality, that’s how it works,” the ex-PM says on the recording, referring to the Left in the capital. It is also clear from the recordings that Mr Bajnai was reassured at a “much higher level” than Balazs Barts that there was an intention to sell the City Hall. However, he hinted that the project was sensitive and that it would not be good if details were to emerge before the elections.

Later it came to light that, in addition to the Russians, the City Hall had also been offered to Israeli, American, Arab and Italian businessmen through Mr Berki. The latter investors were represented by Riccardo Salvatore, who, according to a testimony, had mentioned a “commission” of several billions of forints in connection with the sale of the City Hall. It is worth noting that the Italian businessman had presented the parameters, characteristics and future potential uses of the City Hall to several people. A significant point here is that Mr Salvatore insisted that the parties to the transaction sign a statement of confidentiality.

A vállalkozó a botrány kirobbanása után azt kérte a vele kapcsolatban lévőktől, hogy minden, a Városházával összefüggésben lévő üzenetet, dokumentumot töröljenek. A nyomok eltüntetésére vélhetően azért volt szükség, hogy ne tudják beazonosítani a fővárosi korrupciós gépezetet működtető személyeket, akik a Városházán kívül több ingatlant is értékesíteni akartak a „jutalékos” rendszer szerint. Ezek közé tartozott egy Tétényi úti, egy Bécsi úti, valamint a Rimaszombati út 2–4. címen található telek is. Utóbbi esetben a „jutalék”, azaz a kenőpénz kétmilliárd forint lett volna.

After the scandal erupted, Mr Salvatore asked all of his contacts to delete all messages and documents related to the City Hall deal. It is believed that removing the traces was necessary to prevent the identification of those running the corruption machine in the capital, who wanted to sell several properties besides the City Hall under the “commission” system. These included a plot on Tetenyi Road, a plot on Becsi Road and a plot on Rimaszombati Road, all in Budapest. In the case of the latter, the “commission”, that is, the bribe, would have been two billion forints (about 4.8 million euros).

After the City Hall scandal broke out, ruling party MP Gyula Budai filed several complaints, and Istvan Tenyi, known for filing numerous public interest complaints, also turned to the investigating authority based on information published in the press.

At the same time, National Bureau of Investigation (NNI) has ordered an investigation on suspicions of influence peddling, fraud, bribery, accepting bribes, abuse of office, and misappropriation of funds. The police also carried out searches as part of the investigation, including a visit to the headquarters of the Budapest Asset Management Centre Zrt. on Attila Road. It was later revealed that searches were conducted at the City Hall in the offices of the chief notary and deputy mayor Ambrus Kiss. Computer data were also examined during the investigation.

It is not known who the NNI “addressed”, but the fact is that Gordon Bajnai – at a time very close to the allegations – published on his Facebook page the above-mentioned post which stated that the police had suspended the investigation into illegal data collection for which he had filed a complaint after the audio recordings of him were leaked. Mr Bajnai claimed that the police had also written in their decision that the footage of him had been edited. Later Gergely Karacsony also posted and called the City Hall case fake news. Mr Bajnai and the Budapest mayor, however, forgot to mention that the suspicion was not based on the audio material that was leaked to the press, but on the complete, unedited, ten-hour-long recordings that Anonymus had provided to investigators before Christmas last year.

In the case, the police also interrogated a very important key witness, through whom Zsolt Berki offered the City Hall to American investors.

Witness 1 stated that he had consulted about the sale on three occasions with Mr Berki, who he had known for three years and who regularly sent him emails about properties for sale in the capital. In one of the in person meetings it was mentioned that the price of the City Hall would be forty billion forints (almost 97 million euros), and the “commission” would be 10 per cent, which the witness considered too high, he told the investigators. Zsolt Berki told him that if he was seriously interested in the deal, he would have to talk to Deputy Mayor Kata Tutto, the witness said, adding that later, Mr Berki sent him a draft contract including the purchase price and the “commission”. The former amount had been reduced to “thirty something”, while the latter, that is, the “commission”, remained at 10 per cent.




city hall gate, Hungary, scandal