Are Orbán-linked oligarchs really moving assets abroad as Péter Magyar says?

According to prime minister-elect Péter Magyar, the Orbán regime's wealthy elite (primarily those who have benefited from the so-called "System of National Cooperation" (NER)) have been rushing to move their capital out of Hungary amid the political transition.

According to the politician, preparations to leave the country and move stolen assets abroad are underway behind the scenes. He said that

“Orbán's oligarchs are transferring tens of billions of forints to the United Arab Emirates, Uruguay, the United States, and other faraway countries.”

For the experts, this statement is a clear indication that Péter Magyar either actually has specific information about these transfers or, at the very least, is well-informed about current trends in “asset planning.” When Telex previously looked into how the NER's elite was preparing for a potential Tisza victory, we also heard these countries mentioned as primary destinations for escape, and of course, some other countries also came up (Australia, the United Kingdom, Spain).

Citing internal sources, The Guardian elaborated on this in a bit more detail; according to their report, some funds have been heading to countries in the Middle East (Saudi Arabia, Oman, the United Arab Emirates), while other individuals are eyeing Australia and Singapore. It was also reported that private jets carrying Hungarian passengers are departing en masse from Vienna.

But how realistic is it for members of NER’s economic elite to be moving their wealth out in this manner? And what do we know about these destinations? This is what we explored with the help of our expert sources.

Those who wanted to salvage assets have already done so

According to our sources, there hasn’t been much activity among Hungarian billionaires over the past two weeks, so Péter Magyar’s statement was likely intended as a preemptive message meant to discourage these circles from trying to move their assets out of the country.

Experts also noted that if any assets are indeed being transferred, the financial route certainly does not go through Austria. According to one of our sources, Vienna—mentioned in the Guardian article—appears to be a completely false stopover, as they take the screening of politically exposed persons (PEPs) very seriously there, which means that the Austrian financial sector is definitely not part of the chain. Of course, private jets could still use Vienna as their departure point.

Some have suggested that, at the level of political communication, this might be about preparing an explanation in advance so that if the attempt to recover the funds en masse later fails, there is already a ready-made justification—namely, that the money cannot be recovered because it has already been “moved out.” The same expert noted: anyone who wanted to move funds has already done so in advance; at this point, there is only time for minor damage control.

We have also heard that the heads of a well-known IT company and a financial firm have reassured their employees and partners by saying that they have some kind of agreement in place. According to the reassuring statement, they haven’t reached an agreement with Péter Magyar or Tisza, but they will receive help from well-connected figures in the Hungarian business sector who can offer a way out of the current tight spot. How much of this is true and how much is mere self-delusion remains to be seen.

One thing is certain: the myth of invulnerability crumbled in no time in the world of NER companies, and this circle knows exactly what kind of state assistance and targeted harassment they were able to use against their competitors, which is why they fear the same fate for themselves.

Realistic and less realistic destinations

Csaba Magyar, head of Crystal Worldwide—a firm dealing with international taxation, offshore consulting, and setting up companies abroad—helped Telex by providing a brief characterization of these countries from a professional perspective in terms of their suitability as realistic destinations in this situation.

The United Arab Emirates, Oman, and Saudi Arabia are like most tax havens in the Gulf: they are monarchies, which means that rules can change suddenly, especially during a military conflict. Of the three locations, the United Arab Emirates would be a realistic option, Oman less so, and Saudi Arabia not at all, according to others we spoke with.

Csaba Magyar says that authoritarian monarchies, due to being single-person regimes, find it easier to decide whether a given foreign country counts as a “friend,” just as they later decide who the country will cooperate with in the event of an extradition or an asset freeze request. At the same time, there were those who told us that Saudi Arabia is completely out of the question—it’s too authoritarian a state. In 2017–2018, for example, Crown Prince Mohammed bin Salman rounded up all the ultra-rich and extravagant billionaire members of the royal family into a luxury hotel, and kept them in this luxury prison for months. They were eventually allowed to leave the hotel only after they had come to an understanding about the proper use of their wealth, made donations, and reached an agreement. This is not an environment suited for affluent foreigners.

Uruguay also counts as a potential destination; one famous case for example involved Lionel Messi and his father, who attempted to evade taxes on the Argentine soccer star’s income through offshore companies in Belize and Uruguay. They were caught, but in the end, the soccer player himself was able to avoid trouble—only his father had to face consequences. Incidentally, there’s been more and more talk recently about Hungarians starting businesses in Uruguay, where obtaining residency and citizenship is relatively easy.

According to the expert we spoke with, this was a somewhat surprising choice on the list because it is too exotic and not as stable as, for example, the Gulf countries or, especially, Singapore. Those who choose this option may be counting on the fact that Uruguay isn’t particularly cooperative when it comes to exchanging information and disclosing assets.

In recent years, the United States has benefited from the increased transparency of former classic offshore locations (the Seychelles, the Marshall Islands, the British Virgin Islands) and Switzerland, with many wealthy individuals moving their headquarters to the U.S. One such hub, Reno, Nevada, has even been advertised with the slogan:

“Swiss banking secrecy is over—come to Reno!”

The United States is not part of the global financial data exchange; it only enters into bilateral agreements, which are generally funnel-shaped: partner countries supply a lot of data, but only a small amount of information trickles back out at the narrow end of the funnel. This system is known as the Foreign Account Tax Compliance Act (FATCA), under which the U.S. is able to collect a great deal of data on Americans’ foreign accounts, but there's very little information flowing the other way. In Nevada and Delaware, the actual owners of so-called LLCs are not even publicly disclosed. However, if someone opens a bank account in the United States, they must be identified, though there is little chance that data will be shared with partner authorities.

Extradition

Choosing more exotic locations can be justified by the fact that there is no automatic extradition from those countries, but according to our sources, the situation is far from being black and white. In other words, just because extradition isn’t available from a particular country doesn’t mean that wanted Hungarian individuals won’t be brought home in a given case; whereas where extradition is available, the process is not always simple.

According to this view, the extradition treaty is no longer as important as it used to be; After all, Marcsi Bróker (who ran a pyramid scheme and fled abroad with the acquire wealth) was brought back from Belize, and András Lakatos (Kisbandi) was returned from Brazil, while if someone flees to a nearby country with a mutual extradition agreement, they may still get away with it. Especially if a competent defense attorney helps them avoid extradition and preserve their assets. The best-known example of this is the Ukrainian oligarch, Dmitro Firtash, who is under house arrest in Vienna: the billionaire criminal is very much wanted by the United States, Russia, and Ukraine, but his Vienna-based lawyers have so far been able to prevent his extradition.

It should, however, be noted that a denial of extradition can quickly be subject to reassessment. This is surely on the minds of North Macedonian politician Nikola Gruevski, as well as Polish politicians Marcin Romanowski and Zbigniew Ziobro, who until now have been able to rely on Viktor Orbán’s hospitality (Romanowski, as Direkt36 revealed, lives in the Buda apartment of a Fidesz faction staff member).

In any case, Péter Magyar has called on the leaders of the National Tax and Customs Administration to immediately freeze the “stolen funds.”

Are they moving?

According to Péter Magyar, several oligarch families have already left the country. Such reports have indeed been circulating, though in our experience, many of the businessmen rumored to have left have in fact remained in the country during the current transition period.

Often, when such reports of people " having left" appear—such as which oligarch’s private jet has taken off for South Africa, or who has become impossible to reach because they are already in Dubai with their entire family— the person in question soon makes a statement from home, or, without trying to stay out of the public eye (at least long enough for people to photograph them), shows up at a restaurant in the capital.

Lőrinc Mészáros, for example, has told several people in his social circle in recent days that he has no plans to leave the country.

In any case, Péter Magyar has called on the chief prosecutor, the national police chief, and the head of the National Tax and Customs Administration to detain “the criminals who have defrauded the Hungarian people of thousands of billions of forints, and to prevent them from fleeing to countries with no extradition agreements before the Tisza government is formed”.

There would naturally be a desire within society to see these assets seized and the perpetrators apprehended and kept here, but surely everyone realizes that from a legal standpoint, it is not that simple. Who is in possession of the exact knowledge and authority needed to determine who is subject to such an order— such as who is permitted to travel and where, how much money they may transfer, and how much cash they may carry with them?

The current warning reminds us of the case of György Schadl, a former bailiff, who was arrested as he was about to leave for Dubai with a large amount of cash; however, he had by then been under surveillance for a very long time, and law enforcement had well-founded suspicions about his plans to flee and move his assets out of the country.

As one of our sources noted, there could have been several reasons for moving assets out of Hungary recently: evading accountability is only one reason, but the prospect of a planned wealth tax (which Péter Magyar has often spoken about) is another. Whatever the case, the Fidesz elite appeared very confident for a long time. Businessmen seemed to genuinely believe in a Fidesz victory, with many even being confident in their expectation of “another Fidesz two-thirds majority,” so it must have come as a shock to many that the Tisza Party won—and with a two-thirds majority at that.

However, we’ve also heard suggestions that, since there were more and more signs and polls indicating Tisza might win, no matter what some people said, the NER aristocracy was actually feverishly readying themselves and finalizing documents behind the scenes. Some of those who had been quietly accumulating wealth for 10–15 years suddenly realised that the authorities might one day decide to take a closer look at their transactions.

Since Tisza's election victory, the NER elite have received several pieces of news that are likely to have reinforced their desire to flee. One such development is that the establishment of the National Asset Recovery and Protection Office remains a key focus in Tisza and Péter Magyar’s communications.

Following Tisza’s victory, the wealth tax—frequently mentioned during the campaign— has also remained on the agenda. Moreover, the fact that Bálint Ruff (strategist and communications specialist who has fiercely criticized the Orbán regime) will be the one heading the incoming Prime Minister's Cabinet suggests that a consistent and resolute anti-NER stance is likely to prevail in the government, which could help coordinate this type of calling to account.