Magyar Nemzet, 12 June 2020
George Soros donates one million euros to Budapest against the Coronavirus. Thank you! – wrote Budapest mayor Gergely Karácsony on his facebook page on 30 March 2020. The mayor added that the speculator’s donation would be reported to the public, as soon as the necessary negotiations and agreements had been carried out and concluded. Since then, we have learned that George Soros’ donation was more generous than initially reported: around one and a half million dollars – not euros – flowed into the city’s accounts, which we will return to at the end of this article. As early as the beginning of April, our newspaper learned from city hall sources that a significant portion of this money might end up in the pockets of some of Budapest’s left-liberal cronies. The information we received was entirely accurate as József Kern, who amassed public health contracts during the socialist era, and whose interests include Diagon and Medisyst health corporations, may make another large killing, along with another company, whose staff partially overlapped with these two companies at one time, and which also won large public procurements when the socialists Gyurcsány and Bajnai were in power: Corden International Kft. In response to our question on 7 April, the Mayor’s Office replied that it had already signed an agreement with Corden Ltd., and that Diagon and Medisys were not contractual partners.
Corden turned out to be the big winner of the money Soros poured into the capital, but the published contracts also reveal that the former health minister under the Gyurcsány and Bajnai governments also received a significant amount of these funds. Moreover, a purchase contract was also given to one company for whom there is no meaningful information, no website, and whose business activities do not include either the sale or distribution of health and medical products. According to the Opten, which runs a company database, some of the companies do not even have employees. The decision regarding the purchasing contracts was made by Gergely Karácsony on his own authority, that is, the local city government, taking advantage of the emergency situation, exercised a legal option which allowed it to issue purchasing contracts without tender on the basis of urgency.
Despite the repeated admonitions of the mayor’s communications staff to “test, test, test”, Karácsony’s contractors began making their purchases quite late. When the first contracts were completed in late March, the emergency situation had already been declared for at least two weeks and first cases in Hungary had already been registered the week previous. By mid-April, when the purchases had picked up, the epidemic had already entered a declining phase.
An ex-minister obtains contracts
In May 2008, Tamás Székely replaced Ágnes Horváth as Health Minister, after Ferenc Gyurcsány’s government lost its parliamentary majority when the Liberal Party withdrew from the governing coalition. Székely was able to retain his position when Gordon Bajnai became Prime Minister. The ex-health minister’s company, Kelen Kórház Kft., signed a contract with Karácsony’s people on 16 April 2020, “to perform ten thousand antibody tests (rapid tests) for the detection of SARS-COV2 virus-related IgG and IgM antibodies from human samples”. The contracting document then added that “confirmation of positive cases must be carried out in an accredited laboratory”. The company was also to carry out sampling. The total amount of the contract was 120 million forints, which included the price of the rapid tests and the examination fee. In signing this contract, Tamás Székely’s company struck pay dirt. The net revenue for Kelen Kórház Kft. in 2018 was 378 million forints, so with just this contract alone it received a third of that in 2020.
Corden cleans up
Currently, nine contracts are accessible on the Budapest municipal government’s website, five of which were concluded between Karácsony’s people and Corden International Ltd. The contracts were not preceded by a public tender process on the basis of exceptional circumstances. The first contract was signed on 3 April 2020 with the aim of screening workers and beneficiaries involved in the provision of social benefits. The contract was for 200 PCR (Polymerase chain reaction) tests with positive cases requiring confirmation at an accredited laboratory. The value of the contract was 3.8 million forints, in other words, the tests cost 19,000 forints each. In the legal document, the contracting parties named József Skultéti, head of the Home for the Aged on Pesti street, as the contact person. On 6 April, Karácsony’s people decided to order another 200 PCR tests under the same conditions, for 3.8 million forints – this time with the health consultant Gábor Havasi as the contact person. A few days later a strange interlude occurred: with the arrival of the first tranche of Soros’ money, Karácsony’s people apparently wanted to carry out testing on a much larger scale than before. According to the G7 news site, Budapest supposed to purchase tests from Corden worth 520 million forints, and they wanted to sign this enormous contract in record time: the Budapest municipal government began the tender process on 8 April, declaring 10 April the deadline for submitting final bids. Karácsony’s people then justified the short time frame because they had only invited one company to submit a bid – Corden International, because Corden was the only business operator under emergency conditions “capable of executing the contract within the timeframe and at the volume expected by the contracting authority”. The deal did not pan out in the end, and Corden did not even submit its bid, even though it was the only one invited. The reasons behind this failure have not been made public.
Nevertheless, on 16 April Karácsony’s people ordered a further 400 PCR tests from Corden International under the same conditions, when two different contracts, each for 200 tests and with identical terms and conditions were signed. A gigantic uptick in business, however, did not have long to wait: a contract dated 23 April provided for the purchase of ten thousand PCR tests at a total value of 190 million forints.
A promotions company delivers 1.5 million masks
Business Rally Hungary Kft. also got big money in municipal contracts, when Gergely Karácsony decided they would deliver 1.5 million surgical masks worth 247.5 million forints plus VAT. The contract was signed on 30 March 2020. With this, the company could be expected to almost double its revenue compared to 2018, if it enjoys similar success this year. The decision made by the Mayor’s Office is interesting, because Business Rally deals with image design, marketing, software development and consulting. The company’s managing director is Endre Kodolányi, who is also the managing director of Webgarden Kft., which deals with computer programming and website creation, and is also the founder of the Special Animal Rescue Unit. On the Business Rally Hungary website, in their news section, they explain that “they take part in the defense against COVID-19 importing disposable surgical masks and KN95 masks for hospitals, local governments, and utility companies”. It is worth adding that according to the Opten company information database, Business Rally’s business does not include trade in medical products.
Family businesses and no employees
Some 250 thousand FFP2 protective masks were delivered to the Budapest municipality by Rotatech Holding Kft. for 211.75 million forints. The company’s main activity involves “other ancillary business services”, but on 22 April 2020, several new activities were registered, including the sale of medical products. The municipal government, however, signed the contract with the company prior to this – on 30 March 2020. Rotatech has neither employees nor a website. The company, based in Érd, is owned by Zsolt Török, who has an interest in Camelot Holdings Kft. in Pápa, and is also a representative for For&Go Kft., which deals in cars. Zsolt Török’s business partner is Zhou Weihui, a Chinese national, who trades in perfumes through another company. It is through him that Török was likely able to obtain protective masks imported from China. The “Social Cohesion” fundraising campaign in Pápa, which in three days collected enough donations for the purchase of ten thousand face masks, was also initiated by these two entrepreneurs. The donations were deposited in the Rotatech account with CIB Bank.
– When the face masks were being handed over, Róbert Kiss stated that Zsolt Török, having an entrepreneur friend with Chinese business contacts, found out he could purchase 10,000 face masks, for which he went about creating a group on social media and raising the necessary funds – from Pápa Ma [Pápa Today] news site. Rotatech had no net revenue for 2016, 2017, and 2018, so the fact the company was able to strike it big in 2020 is thanks to Karácsony.
The mayor also signed a contract with EU Buses.eu Kft. for 35 thousand surgical masks worth more than 11 million forints. The family-owned business was given the contract without any public tender – given the extraordinary conditions cause by the Coronavirus. The company’s main business is land-based passenger transport, as well as the manufacture of metal and plastic products. The managing director, Miklós Gábor Illés, was previously an insurance agent. The company included the retail sale of medical products within the scope of its business activities, but this change was made on 31 March, whereas the contract for the supply of surgical masks had already been signed on 23 March. The company previously operated as a family business under the name Illés Família Műanyag-, Fémfeldolgozó és Értékesítő Kft [Illés Family Plastic and Metal Processing and Sales Ltd].