Goulash: Megayacht for Orbán’s friends; 100 Russian spies in Austria; EU’s Trump panic

Szabolcs Panyi 2024-03-21

Goulash Newsletter

Ahoj from Prague, where the Visegrád Group’s foreign ministers met today – and where I’m picking up tidbits of information about what’s going on in Central Europe. For example, there’s Slovakia, where they’re getting ready for this weekend’s presidential election – and where our recent story on Peter Pellegrini’s 2020 collusion with Russia and Hungary made the news. I think this newsletter’s scoops – including on Russian espionage in Austria and the Hungarian elite’s $100 million yacht – may have some impact, too. 

So enjoy your latest serving of Goulash, which you can also read online. Please share our newsletter on social media and with your friends and colleagues. This is the link where they can subscribe themselves.

–  Szabolcs Panyi, VSquare’s Central Europe investigative editor

Back in 2016, when the soon-to-be founders of VSquare gathered in Warsaw to discuss our cross-border initiative, we worked to come up with a name. Although we eventually settled for VSquare (standing for V4, the Visegrád Four countries), the runner-up name for our site—proposed by Investigace’s  editor-in-chief Pavla Holcová—was goulash. But no brainstorming session is ever really wasted, and the name will be served as our new newsletter.

SPICY SCOOPS

There is always a lot of information that we hear and find interesting and newsworthy but don’t publish as part of our investigative reporting — and share instead in this newsletter. In this issue, we cover the latest in US-EU and US-Hungarian relations – plus some spying from Austria and the lavish lifestyle of Viktor Orbán’s friends.

SCARED EU MEMBERS HOLD “TRUMP SCENARIOS” MEETING IN BRUSSELS

Recent US electoral polls scared EU governments, and now there is an initiative to sit down, brainstorm and come up with a plan. According to one European country’s government official with knowledge of the initiative, on Wednesday, EU member states’ foreign policy planners already sat down in Brussels to discuss possible “Trump scenarios” and how to react to them. This meeting was organized by the EU’s diplomatic arm, the European External Action Service (EEAS). “There is sort of a panic, the French and the Germans are especially scared,” the official told me, adding that “the current German government developed a close relationship with the Biden administration, and they are now afraid there will be a huge backlash if Trump wins.” And what happens if a Trump administration winds down support for Ukraine, or even cancels US security guarantees to Europe? These are the most important questions. “My suggestion is actually quite simple. Let’s buy tons of US ammunition and weapons to please Trump, because he is a transactionalist,” the source countered. However, the source highlighted that Hungarian participation in such EU meetings is not necessarily helpful. After all, Viktor Orbán’s government is openly rooting for a Trump victory and Joe Biden’s defeat.

ORBÁN’S PROPAGANDA MINISTER MESSES WITH US SOLDIERS’ LICENSE PLATES

In fact, US-Hungarian relations are currently so bitter that, according to US Ambassador to Hungary David Pressman, Hungary is intentionally trying to make everyday life harder for US troops stationed in Hungary. A week ago, the US ambassador said in a speech that “For more than three years, in violation of our Defense Cooperation Agreement, the Hungarian government has not allowed these young soldiers to get license plates for their family cars … Not because of bureaucracy or red tape. Because the Hungarian government has made the political decision to do so.” The rhetoric was unusually tough — but the substance of the speech checked out. “It’s true, this is a political decision to mess with American soldiers and try to get the US to ask us to resolve the issue, so we can also ask for something in return,” a former Orbán government official with knowledge of the issue confirmed to me.

According to the source, every Hungarian ministry involved in permitting US soldiers’ American-made cars – which don’t comply with EU traffic standards – was in favor of giving them proper local license plates, but the procedure was stopped by the Hungarian Prime Minister’s Cabinet Office, led by Antal Rogán. He is not only Orbán’s most powerful minister, but is also in charge of the increasingly anti-US, pro-Russian Hungarian government propaganda machine, as well as the intelligence services. It was Rogán who, in mid-late 2021, when the license plate issue was discussed, issued an order to all ministries to refuse the license plate requests. According to the former Orbán government official, when conveying the message, Rogán’s state secretary Krisztina Rédey explained to other ministries that it’s a firm political decision and no one should dare to go against it. And they didn’t, meaning US soldiers are now forced to request temporary registrations again and again for their cars, as they have been for more than three years.

NEW $100M MEGAYACHT ORDER FOR ORBÁN’S FRIENDS

Speaking of unusual vehicles: Superyacht collection has become a symbol of the rapid enrichment of Hungarian Prime Minister Viktor Orbán’s entourage, members of which accumulated their wealth through lucrative public contracts. The lavish lifestyle of the Orbánist elite was uncovered mostly thanks to the work of Atlatszo.hu and specifically photojournalist Dániel Németh (who, in return, was surveilled with Pegasus spyware, as revealed by Direkt36). These yachts, which contentedly criss-cross the Mediterranean, don’t actually belong to a single person, and instead essentially function as an “obshchak” – a term used to describe communal funds in the Russian underworld and in Putin’s Russia – for those who belong to the highest echelons of power. It all started in the mid-2010s with Artemy, a 35-meter long yacht, followed by Lady MRD, a 42-meter long Benetti luxury yacht that was, at the time, worth approximately $20 million. That boat was officially owned by Hungarian public contract king László Szijj, lieutenant to Lőrinc Mészáros, who is dubbed by the Hungarian opposition as Orbán’s wallet. Besides Mészáros himself, many in Orbánworld, including foreign minister Péter Szijjártó and his family, were documented enjoying the high life on its deck. Lady MRD was replaced first by the Benetti-made Seagull MRD (50 meters, $35 million), then by Rose d’Or, Italian luxury boatmaker Sanlorenzo’s 62-meter long, $75 million superyacht. In his investigative documentary shorts, Dániel Németh captured Mészáros and other top managers of Orbánworld enjoying these obshchaks in 2021, and again, more recently, in 2023.

But now comes another upgrade! A few months ago, a mysterious Hungarian client placed an order for a 73-meter long Sanlorenzo megayacht with a price tag of roughly $100 million, to be delivered in 2028, a well-connected business source told me. I instantly reached out to Sanlorenzo for confirmation but received no reply. While we don’t know who the client is, the previous Sanlorenzo boat was bought with the help of lease financing from the Mészáros-linked MBH Bank Group. MBH replied to my request for comment, but said only that they can’t comment on any question related to clients due to bank secrecy. My Direkt36 colleague Ágnes Gólya, who used to compile Forbes Hungary’s annual billionaires list, told me that only the top seven of Hungary’s richest could afford such a superyacht. However, there are only a few of them – including Mészáros and Szijj – who are known to actually embrace such luxury assets. This is partly because superyachts are really terrible investments due to their enormous maintenance costs and quickly deteriorating value, Ágnes added. All in all, Hungarian taxpayers should not approve such a poor method of investment of their money – but they should look at the amazing specifications of 73Steel, Sanlorenzo’s newest and largest model!

AT LEAST 100 RUSSIAN “ESPIOMATS” ROAM FREELY IN AUSTRIA

In early March, the intelligence chief of a Central European country informed government officials in a closed door meeting that approximately 100 out of the 250-300 Russian diplomatic personnel posted in Austria are suspected of being undercover agents working for Russia’s intelligence services, the SVR, the FSB and the GRU. This information was confirmed to me by multiple government officials and security experts, some of whom have ties to their respective countries’ intelligence apparatuses. “They are obviously not operating only in Austria,” one of the sources told. An Austrian government official told me that, according to their tally, there are currently at least 252 Russian diplomatic workers – diplomats plus technical and administrative staff – at the Russian Embassy in Vienna and in the Russian permanent missions to the OSCE and the UN and its disarmament office. However, this number doesn’t include teachers at Russian schools in Austria who also enjoy a certain level of diplomatic immunity, the Austrian official added. Then there are the diplomats’ spouses (who, again, enjoy immunity). According to the government official from one Central European country, since the mass expulsion of Russian diplomats in recent years, Russian intelligence increasingly tasks these Russian teachers, as well as the family members of the remaining diplomats, with intelligence gathering activities. (For more on Russian spies, including an in-depth interview with a former counterintelligence officer, read our previous stories.)

RUSSIAN DIPLOMATS EXPELLED FROM AUSTRIA ALSO SPIED AGAINST OTHER COUNTRIES

The real issue with the large number of Russian intelligence officers under diplomatic cover in Vienna is that a bunch of them are posted there officially – but actually spy against neighboring countries. As I previously reported, for example, Slovakia is aware that some of the Russian diplomats in Austria commute to their country to spy. This is also the reason that Czech diplomats have been consistent in trying to push their initiative to restrict the free movement of Russians within the Schengen zone, also per my earlier reporting. The main opponents of the Czech initiative are still Austria, Germany, and Italy. However, pressure has been mounting on Austria to do something about the Russian spy nest that they are still hosting. Last week, the Austrian government expelled two Russian diplomats for actions “incompatible with their diplomatic status.” No details were officially disclosed regarding the type and target of their spying activity, but an Austrian government official acknowledged to me that “the espionage concerned Austria and other countries from Austria.” This means that allegations that Russia targets other European countries out of their Viennese outposts are confirmed. However, the Austrian official couldn’t say in which other countries the expelled Russians were spying.

Szabolcs Panyi

VSquare’s Budapest-based lead investigative editor in charge of Central European investigations, Szabolcs Panyi is also a Hungarian investigative journalist at Direkt36. He covers national security, foreign policy, and Russian and Chinese influence. He was a European Press Prize finalist in 2018 and 2021.