Goulash: Chinese affairs in Hungary, Slovakia; new Russia investigations

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. 

WIRETAPPING SCARE IN HUNGARIAN MINISTRY DEALING WITH CHINESE PROJECTS

Xi Jinping’s May 8-10 visit to Hungary is partly about negotiating and announcing new, China-financed railway projects. I reported this – and more on the background of Xi’s Hungary trip – last week. 

Viktor Orbán’s government appears extremely enthusiastic about Chinese rail projects and refuses to acknowledge any potential national security risks. However, behind closed doors, their attitude toward their Chinese counterparts seems markedly different, as illustrated by this amusing anecdote shared by a source familiar with a security incident from last year. According to the source, senior officials from the Hungarian Ministry of Construction and Transport, led by Minister János Lázár, received several model trains as gifts from Chinese partners involved in the Budapest-Belgrade railway reconstruction project. While this is standard practice in Chinese business culture, Hungarian ministry officials were so suspicious that they immediately sent the model trains for technical security examinations to check for any hidden wiretapping devices. My source revealed that the scan found no concealed bugs or cameras in the model trains. (The Ministry of Construction and Transport commented that the Chinese never brought “toys” as gifts, as the ministry is only involved in serious work instead of playing.)

SLOVAKIA’S FICO TRIES TO EMULATE ORBÁN’S CHINA POLICY

“Fico is trying to replicate Orbán’s approach to China by attracting more and more Chinese investments to Slovakia,” a well-connected Central European foreign policy expert told me during our discussion of Xi’s visit to Hungary. Fico and Orbán seem like brothers-in-arms, sharing similar pro-Russian and pro-Chinese foreign policies, but this means they may end up competing for future Chinese investments, particularly in the automotive and electric vehicle sectors. In 2022, Slovakia and Hungary fiercely competed for a Volvo EV factory, with Slovakia ultimately securing the €1.2 billion investment. “Fico wants to stay in power for at least ten years. To achieve this, he is working on stabilizing his popularity through investments in infrastructure, manufacturing, job creation, and tax revenue generation. My contacts say he’s primarily following Orbán’s playbook by relying more on China,” my source explained. Evidence of this emerging strategy is already visible: Last year, a Chinese battery factory was announced for Šurany, a town in Slovakia’s Nitra Region, followed by announcements of major bridge, road, and railway reconstruction projects, including the Bratislava–Komárno railway line, this April.

“PRO-RUSSIAN” HUNGARIAN WEEKLY IN CENTER OF POLISH DEBATES 

Hungary’s pro-Orbán weekly, Mandiner, featured a front-page interview with former Polish Prime Minister Mateusz Morawiecki as he attended the CPAC Hungary event in Budapest. The cover featured Morawiecki and the headline read, “Brussels is a threat to European democracy” displayed on billboards throughout Budapest. Current Polish Prime Minister Donald Tusk criticized his rival, labeling him a “useful idiot” and calling the weekly “pro-Russian.” This reminded me of a story I collected, but ultimately didn’t publish, while working on our feature “How Orbán Angered His Closest Polish Allies,” which explored the deterioration of Polish-Hungarian relations. That article recounted an incident where Magyar Nemzet, another pro-Orbán newspaper, declined to publish a Morawiecki op-ed on the war in Ukraine due to his “different approach” to the conflict.

Additionally, a source connected to the Polish government informed me that in May 2022, Mandiner refused to publish an op-ed by Jakub Kumoch, then-adviser to Polish President Andrzej Duda, in print. The op-ed was pro-Ukrainian and anti-Kremlin. The op-ed eventually appeared online, but Mandiner claimed there was “no space” for it in the print edition. In reality, it was understood that Hungarian Prime Minister Viktor Orbán only reads the weekly in print, and editors didn’t want to upset him with an article opposing his pro-Russian stance. Meanwhile, the Polish government at the time noticed that Mandiner editors allowed virulently anti-Polish comments to appear. Comments under articles by figures like pro-Law and Justice media owner Tomasz Sakiewicz included sentiments such as, “Poland should be divided between the Germans and the Russians. Scumbag warmongers.” Interestingly, now that Law and Justice politicians are out of power, they seem to have forgotten how Orbán’s government-controlled media once treated them. (Again, I really recommend this previous long read on Polish-Hungarian relations.)

ALLIES DEEPLY SUSPICIOUS OF HUNGARY’S AFRICAN MISSION

Some months ago, along with Direkt36 and Le Monde, we uncovered that Orbán’s son, Gáspár Orbán, is deeply involved in organizing a strange Hungarian military mission to Chad. Later, I also revealed that Orbán Jr. is secretly helping to set up his father’s new national security advisory team. I now have new information about Orbán and Orbán Jr.’s peculiar mission in Africa, which has left Hungary’s NATO and EU allies puzzled. A Central European government official responsible for security matters told me that, according to their information, the alleged “counter-terrorism and migration-control” objectives of the Chad mission are merely a pretext. “What we’ve heard is that the Hungarian government also intends to establish a military intelligence center in Chad, which concerns us. Since Prigozhin’s death and the disintegration of the Wagner group, Russia has lost some influence in Africa. We fear that this Hungarian military intelligence center could potentially serve Russian interests, and I suspect Kremlin officials like Sergey Lavrov, Russia’s main face in Africa, encouraged the Hungarians,” the official explained. “If Russia escalates the conflict in the coming years, we expect it to be multifaceted, and Africa and migration will likely be involved as well,” the official added.

Several NATO and EU representatives with whom I’ve spoken emphasized that the planned Hungarian mission is neither affiliated with NATO/EU nor the UN and wasn’t coordinated within the NATO alliance. When I asked a NATO official knowledgeable about Russian affairs, they said, “It’s definitely an unusual mission that doesn’t serve any Hungarian interests, unless it’s a scheme for some oligarch friend to profit and pay Putin back. Otherwise, it’s a complete waste of resources and needlessly dangerous.” Meanwhile, amidst escalating tensions in recent weeks, the United States has withdrawn its troops from both Niger and Chad, while the two African countries have strengthened their military cooperation with Russia. Despite the deteriorating security situation, a senior EU diplomat stationed in Budapest noted that Hungarian government contacts remain fully committed to deploying 200 soldiers to Chad.

FRESH LEAKS ON HUNGARY’S UPCOMING EU PRESIDENCY

Hungary will assume the EU’s rotating presidency in the latter half of 2024, but no official program or agenda has been publicly disclosed. However, multiple diplomats from EU countries told me that the Orbán government intends to release the official program on June 10, a day after the European Parliament elections end. According to one diplomat, the Hungarian EU presidency seems underfunded, which could have been one of the reasons that preparations are delayed. A trusted journalist colleague, who wished to remain anonymous and uncredited, shared with me a draft schedule for Hungary’s presidency as well as additional information. The present plan seems to be for Viktor Orbán to officially present the Hungarian presidency’s agenda at the European Parliament’s opening session in Strasbourg on July 17. Although everything is still subject to change, what seems to be most interesting is that the draft schedule, as well as information from Hungarian officials, indicates that an informal EU Council meeting is planned in Budapest for November. This summit is expected to focus on the Western Balkans, with heads of state and prime ministers participating. (Again, the Hungarian government did not respond to my request for comment.)

NEW ON VSQUARE

HOW ORBÁN SAVED RUSSIA’S HUNGARIAN NUCLEAR POWER PLANT PROJECT

I’m sure you’ve heard of Rosatom’s increasingly controversial Hungarian nuclear power plant project, Paks 2, but have you heard about Paks 3? In a new investigation, my colleagues at Direkt36, András Szabó and András Pethő, uncover a plot within the Orbán government to quietly let the Rosatom-led Paks 2 project fade away without explicitly informing the Russians while initiating a new project, dubbed Paks 3, involving the French. Although the more pragmatic and pro-Western members of the government supported the plan, it was eventually shut down by none other than Orbán himself. You can read the full story here.

ROBERT FICO: SLOVAKIA’S MAN WHO LIVES FOR VENGEANCE

Many of our Slovak subscribers already know all this too well, but this English-language portrait of Slovakia’s old-new prime minister by ICJK.sk’s Tomáš Madleňák, originally published by Dutch investigative site Follow the Money, is a great summary for any non-Slovak reader. He was once seen as a shady but still pragmatic leader. Then came the murder of journalist Ján Kuciak and his fiancée, Martina Kušnírová, and with it, Fico’s downfall – a political low point from which he climbed back by absorbing COVID-19 conspiracy theories and the most hardcore Kremlin narratives. Though he’s certainly not pragmatic anymore, Robert Fico is now back in power, and “he appears to be going after his perceived enemies: independent media, political opposition, and upright law enforcement.” Read Fico’s portrait here.

SANCTIONED PUTIN ALLY ARRANGED CZECH BILLIONAIRE’S MOSCOW MEETING

Czech billionaire Daniel Křetínský maintains a pro-Western image, but his fortune is directly tied to Gazprom and the Kremlin. Křetínský’s wealth, which enables him to invest across Europe, was primarily built on his stake in the Slovak company Eustream, which specializes in transporting Russian gas. In 2016, with the Nord Stream 2 project posing a threat to Eustream’s business, Křetínský traveled to Moscow to meet Gazprom executives. This story by Deník Referendum, in collaboration with ICJK.sk, reveals that this pivotal meeting was arranged by Aleksandr Babakov, a senior Putin regime official who has been on the EU sanctions list since Russia’s invasion of Crimea in 2014. Read the investigation here.

EU PARLIAMENT CONDEMNS RUSSIAN INTERFERENCE, PRAISES INVESTIGATIVE JOURNALISM

Let us allow ourselves a small victory lap. On April 25, 2024, the European Parliament, supported by all five major political groups, adopted a resolution condemning Russian interference in Europe and underscoring the vital role of investigative journalism. The resolution cited our recent VSquare investigation detailing Slovak politician Peter Pellegrini’s request for Kremlin support, facilitated by Viktor Orbán. Read the article on the EP’s resolution here.

KREMLIN LEAKS: FOLLOWING REVELATIONS, RED CROSS FINALLY DECIDES ON RUSSIAN GROUP’S FATE

Sometimes our reporting does have a direct impact — even when it’s slow in coming or isn’t what we might have expected or hoped for. In late April, the governing board of the International Federation of the Red Cross (IFRC) met for a four day board meeting, during which they discussed the Russian national organization’s relationship with the Kremlin, recently uncovered as part of our Kremlin Leaks project. We first revealed that Putin turned the Russian Red Cross into a tool of war and propaganda, and later that the Russian branch worked with groups deporting Ukrainian children. How did the IFRC’s meeting end? Well, they reinforced their cooperation with the Russian Red Cross. ¯\_(ツ)_/¯

MORE FROM OUR PARTNERS

EX-SMER POLITICIAN’S FRENCH REAL ESTATE DEALS. Norwegian daily VG.no and ICJK.sk have uncovered how Viktor Stromček, a former high-ranking member and treasurer of Robert Fico’s Smer party, conducted transactions and money transfers through Dubai, Singapore, and Norway to acquire valuable real estate on the French Riviera. The millions of euros involved are inconsistent with his official income. (Text in Slovak and Norwegian.)

CZECH SMALL INVESTORS LOST THEIR MONEY IN THE CAPE VERDE RESORT. A British property development company lured thousands of people from several European countries into a real estate scheme, and Investigace.cz has been following for years how Czech citizens got involved and lost their money. (Text in Czech.)

PSYCHEDELIC TRUFFLES FROM THE NETHERLANDS ARE SOLD IN THE CZECH REPUBLIC, BUT NOT ENTIRELY LEGALLY. Dutch “magic truffles,” containing psilocybin, a substance that is banned in the Czech Republic, are becoming popular in the country. Their rise is partly thanks to the e-shop behind the product, which advertises extensively on Facebook and Instagram, reaching hundreds of thousands of EU citizens, Investigace.cz reveals. (Text in Czech.)

COURT REVOKES ENVIRONMENTAL PERMIT, BATTERY FACTORY IN GÖD SHOULD SUSPEND ITS OPERATIONS. In the city of Göd, close to Budapest, locals have successfully challenged the environmental permit of Samsung’s much-criticized battery factory in court. However, that doesn’t mean it will actually shut down, Atlatszo shares. (Text in English and Hungarian.)

This was VSquare’s 20th Goulash newsletter. I hope you gobbled it up. Come back soon for another serving. 

Still hungry? Check the previous newsletter issues here! 

SZABOLCS PANYI & THE VSQUARE TEAM