András Bódis, however, is also a founder and sole owner of a construction company that has accumulated – partly as member of several consortia – state contracts worth at least HUF 6.4 billion (EUR 21.3 million) since its creation in 2011.

The firm, called EU-Line, received most of these contracts – nearly HUF 5.5 billion (EUR 18.3 million) – from the municipality of Budapest’s 5th district during the last three years of Antal Rogán’s term as mayor. Rogán is a prominent politician of the governing Fidesz party, now the majority leader in the Hungarian parliament. The total value of the contracts made EU-Line one of the biggest construction business partners of the municipality in the last 17 years, Direkt36’s analysis of procurement data provided by CEU’s Microdata research group, showed.

Bódis has achieved this without running or owning a company before launching EU-Line or without having had serious experience in major construction projects. When asked about his background in the construction industry, he cited only his facility management work in the hotel, which includes tasks like ”repairing, fixing, building and developing”. He kept this job even though EU-Line has billions in contracts and produced profits of HUF 49 million (EUR 163.300) in its second full year of operation.

“I founded EU-Line not with the purpose of making a living but as an investment because I saw an opportunity to be present in a certain area of the construction industry”, Bódis wrote in an email. He claims not to have taken any money out of EU-Line yet. He also says that he does not take part in the firm’s daily operations, which allows him to continue his hotel work.

Direkt36 spent more than two months examining EU-Line’s history and its activities. The investigation showed that there are several indirect links between the company and János Borzován, a businessman with a long history in construction business. Between 2000 and 2010, his firm was one of the most frequently hired companies by the municipality of the 5th district.

Since then, the companies of the 51-year-old Borzován, who is described by those who know him as attractive and always elegantly dressed, have won smaller state tenders. He also got out of several of his companies in the past few years. One of his last big contracts from the 5th district was a project partly funded by the European Union. It was worth several billion HUF and was launched in 2009 with the goal of renovating some of the district’s public spaces. Later, EU institutions raised concerns about the how the winning companies – including Borzován’s firm – had been chosen for the project. Hungarian police are investigating the project, though it is not clear who the target of the investigation is.

Bódis and Borzován confirmed that they know each other but they also claim that their relationship has nothing to do with EU-Line’s activities. „I did not and do not participate in the company’s operations”, wrote Borzován in an email responding to Direkt36’s questions. Bódis made a similar statement.

Juan, the Uruguayan businessman

One of the links between the two men happens to be the Hotel Central Basilica, a three-star hotel with a modest reception hall but located near a popular touristic spot, the St. Stephen’s Basilica, and the workplace of András Bódis. Bódis said he got to know Borzován when he started working there in 2010 because one of Borzován’s companies has been doing the maintenance work in the hotel since its opening.

Borzován’s connection to the hotel was also revealed in the documentation of a government program that aimed to help businesses, including the hotel.

The predecessor of the Hungarian Investment Promotion Agency issued a brochure in 2012, which featured Hotel Central Basilica’s expansion as a project in need of investment. The brochure listed János Borzován as the ”owner of the project” (this was first reported by Vs.hu in an article examining Borzován’s other activities)

The agency says that they were not directly in contact with Borzován but with András Zelei, a contact person who provided all the information about the hotel project. When asked about Borzován’s role, Zelei, who also worked on other projects featured in the brochure, told Direkt36 that he is “not in the position to talk about this”.

Borzován claims that the term, “owner of the project,” referred only to the fact that he was in charge of the hotel’s expansion. “The hotel was developed by my company, which has been doing the maintenance work since then,” he said.

Efforts to reveal the identity of the hotel’s owners also led to links to Borzován. Since its opening, the hotel has been owned by foreign companies whose ownership structure is hidden in registries that cannot be accessed by the public. For years, the hotel was owned – through a Hungarian firm – by a company registered in Liechtenstein, where local rules make it possible for owners to remain in the dark.

Last August, the hotel was taken over by BAU R.S.I, a company registered in Uruguay, another country which does not give access to information on company owners. In the case of this company, however, links could be established to Hungary, and personally to János Borzován.

This company has the same Montevideo address as a man named Juan Borzovan Nagy, records show. The Hispanic sounding name belongs to János Borzován, the 51-year-old Hungarian businessman. Borzován’s mother’s name is Nagy, but it is not only the similarity of the names that suggests that the two versions belong to the same person. The place and date of birth of Juan Borzovan Nagy and János Borzován are the same, records show.

The Montevideo address belonging to both BAU R.S.I and Juan Borzovan Nagy is listed in the Uruguay’s phone directory under the name of Borzovan. A call to the number shown in the directory was answered by a man sounding old and speaking Hungarian with a slight accent. He said that Borzován is his friend, who has visited Uruguay several times and uses his address to make residence in the country easier for him.

Borzován confirmed that he stays at this address when he visits Uruguay. He added that he knows BAU R.S.I., the company registered at the same place, but he claims that he has no other connection with it. Direkt36, however, obtained the company’s official registration document showing that Juan Borzovan Nagy was the president of BAU R.S.I. from July 2007 to February 2014, BAU R.S.I., not long before it became owner of the hotel in Budapest.

„I was asked to be the president of the company by a Uruguayan lawyer whom I know”, wrote Borzován. He declined to answer questions about the company’s ownership. „To my knowledge, the company had no activities during my tenure as president. Because I am not an official of the company any more I am not entitled to give statements about it,” he added.

BAU R.S.I.’s current president is a man who shares the same Montevideo address registered to Borzován, records show. The man reached on the phone number belonging to the address asked for the questions about BAU R.S.I. in writing. He said that he would later provide an email address later but this did not happen. He ended the next call abruptly and could not been reached at a later attempt.

The man has the same family name as that of BAU R.S.I.’s current president. It could not be confirmed during the calls, however, that he is in fact the same person.

This info graphic shows the connections between Bódis and Borzován. The +/- signs next to names highlight the interests:

Another link between EU-Line and Borzován’s business interests is the location where EU-Line is operating. Although the company is registered at a house in the suburbs of Budapest, its phone numbers are listed at an address in a building on a quiet street in the downtown area where a big sign also shows EU-Line’s presence.

The property belongs to the municipality of 8th district and is being rented by a company which has been owned since March 2015 by EU-Line and BAU R.S.I., the Uruguayan company registered at the address of Juan Borzovan Nagy. In the previous five years, the company was owned by a firm registered in Cyprus, whose documents also listed Juan Borzovan Nagy as one of its representatives.

The mailbox at the gate of the property lists five companies, three of which have direct links to Borzován. He owns one of them and holds an office in the two others. The remaining two companies are owned by foreign firms, which also have indirect links to Borzován.

Borzován said that he recommended the property to EU-Line, whose owner he had known by then. “They were looking for an office and I suggested them this place where I also had my office,” he wrote, noting that ”if anybody had anything to hide regarding this they wouldn’t have put their sign on the property.”

A lawyer is another connection between EU-Line and Borzován. EU-Line has been represented in the company court by Mihály Mátrai, a lawyer who has also worked for several of Borzován’s firms, records show. Mátrai declined to answer questions about his clients, citing attorney-client privilege. ”I cannot add anything to the information that is already available in the company registry,” he said.

Bódis and Borzován did not dispute these links between them. Bódis even emphasized that he has a strong relationship with Borzován.”I know János, I speak with him several times a week, we have a good business relation and also mutual acquaintances, colleagues, business partners, and yes, lawyers too, but this is completely normal,” wrote Bódis.

Borzován said that he got to know Bódis in the ”company of mutual friends” and though he claims that he had nothing to do with EU-Line’s foundation he noted that he and Bódis discussed the company’s launch. “Given that I have known the company’s owner, whom I consider as a friend, he asked my opinion about his future plans. I shared my thoughts with him, which he either took into consideration or not,” Borzován wrote.

A spectacular rise

Whatever ideas drove András Bódis in the launch of EU-Line, they proved to be fruitful. Even though the construction industry, as statistical reports showed, was then going through a rough period at the time, EU-Line delivered an enviable performance soon after its foundation in March 2011.

The 5th district was an auspicious environment for this rise.

Antal Rogán, a prominent government politician and former mayor of the 5th district of Budapest – Source: Belváros-Lipótváros Önkormányzata

A little more than 6 months after its launch, the company was awarded a contract worth HUF 140 million (EUR 466,000) from the municipality. EU-Line shared the work with its consortium partner Tér Bau Holding, a company owned at the time by János Borzován.

The companies were tasked to build and maintain the cobblestone areas prevalent in the district’s public spaces. There was another bidder for this job but later, when the need arose to continue the cobblestone maintenance, the municipality attempted to give the contract to the consortium of EU-Line and Tér Bau without any competition.

In the fall of 2012, the municipality launched a new procurement for the cobblestone work but this time it did not make a public announcement. It invited only the consortium of Tér Bau and EU-Line to make an offer. The municipality argued, records show, that the work is identical with the subject of the 2011 contract so it would be practical to continue working with the same companies.

The work description was indeed the same but the value was much higher than in 2011 contract. The municipality estimated that the work would cost HUF 962 million (EUR 3.2 million).

In the end the procedure fell through for an external reason. The Public Procurement Arbitration Board, a state agency in charge of overseeing procurements conducted without competition, launched an investigation after having concluded that “the laws regulating procurements may have been breached”. The arbitration board did not respond to questions about the details of its objections but the wording of its decision suggests that the board had doubts whether the municipality was justified in launching a procurement process without competition.

Following the board’s decision the municipality withdrew its procurement. EU-Line lost a chance to get a contract worth nearly HUF 1 billion that was in its reach. The company, however, did not have reasons to feel sorry. Shortly before the cobblestone procurement’s withdrawal, EU-Line was awarded an even bigger contract by the 5th district.

In October 2012, the municipality announced the result of the procurement for the construction work of the second phase of the district’s gigantic development project, “Budapest’s New Main Street.” The tender was won by an EU-Line-led consortium with a price of nearly HUF 2.6 billion (EUR 8.6 million). The consortium’s other partner was Penta General Construction, a company that has been in the construction business since 1990.

EU-Line’s success in this sizable tender was remarkable because the company did not have the required qualifications even shortly before the bidding was closed. This is revealed in a document concerning EU-Line’s management.

In the first year of EU-Line, founder and owner András Bódis also held the position of CEO. This could have been a busy period for him because in addition to his duties as a company owner and manager he was also working in the Hotel Central Basilica. He gave up his position as CEO of EU-Line only in the summer of 2012 when Lajos Tilli, a 71-year old construction professional, was appointed as the new top manager. Tilli and his family have had an engineering company for more than 20 years and he also worked as the CEO of Újpesti Városgondnokság, a company involved in the construction industry.

A company document reveals that Tilli’s appointment was very urgent for EU-Line. In July 2012, the firm’s lawyer submitted a document to the company courts, saying that Tilli took over as CEO on the 1st of July. The letter, written with a tone of urgency, asked the court to fast-track the registration of this change, explaining that EU-Line needed it for a procurement procedure.

“The company has to prove that it can comply with the professional requirements in the procedure. The company concluded a deal at the end of June with Mr. Lajos Tilli, who has the necessary professional qualifications”, wrote the lawyer. He added that the registration of this appointment is “indispensible for the company’s bid on the tender.”

The document does not identify the tender and EU-Line did not answer a question about which specific tender the letter alludes to. The dates, however, suggest that it was the 5th district’s “Budapest’s New Main Street” project.. The lawyer’s document notes that the tender’s deadline is July 20, 2012, coinciding with the deadline for the 5th district’s project. EU-Line did not apply for other tenders in the same time period, the government’s procurement database shows.

The lawyer’s letter stressed that it was “highly important” for EU-Line to participate in the tender because “the current economic crisis and the economic situation it generated are hitting the construction industry especially hard.”

EU-Line, however, could escape these difficulties. After winning the nearly HUF 2.6 billion-project, it was awarded four more contracts by the 5th district, including a contract worth of HUF 2 billion (EUR 6.6 million) for maintenance work on cobblestone streets.

Direkt36 asked the municipality to show the full documentation of all procurements won by EU-Line which could reveal how the company was able to defeat the other bidders. The district, however, did not respond to our repeated inquiries, violating the rules applying to public information procedures.

The district’s own website makes it clear that procurement decisions are made in several steps. First, a committee of council members decides what tenders will be announced. Then another committee evaluates the bids. Based on this evaluation, the first committee submits a proposal to the mayor, suggesting which company he should sign a contract with.

EU-Line received every contract from the 5th district while it was led by mayor Antal Rogán, whose term ended in October 2014. Some of EU-Line’s contracts bear his stamp, others were signed by his deputy. Rogán, who has been focused on his leading the governing party’s parliamentary majority since his mayoral term ended, did not respond questions about EU-Line.

The municipality of the 5th district said in a statement that they only selected companies which complied with the necessary procurement requirements. “We tried to ensure fair competition in every procurement procedure we conducted”, they said.

Recently, EU-Line has been awarded a high-value state contract in the 8th district as well. The local municipality concluded a procurement in December 2014, choosing a consortium that includes EU-Line, for a nearly HUF 1 billion (EUR 3.3 million) project to renovate and expand the district’s health clinic.

The municipality, led by, Máté Kocsis, another prominent politician of the governing Fidesz party, said that all of their procurements were conducted lawfully. To the question whether they are familiar with the ownership of EU-Line, they said that this “has no relevance in the evaluation process of a tender”

András Bódis claims that EU-Line has also won a tender not only in these two districts but also from the Municipality of Budapest, the capital. The official procurement database, however, does not list such a tender and the municipality said that they have no contract with EU-Line. Bódis’s reaction to this was that he had given the information about the procurement “to the best of his recollections.” He suggested that EU-Line’s management might be able to give more detailed information. “Mr. Bódis does not participate in the company’s daily operations and therefore the information was not completely accurate,” said Lajos Tilli, EU-Line’s CEO in an email.

An investigation in the heart of Budapest

While EU-Line has been on the rise, the total revenues of János Borzován’s companies started to fall. He also quit several of them in recent years.

One of his former companies, BAU Holding 2000, did a lot of construction work for the 5th district’s municipality. From 2000 to 2010, even before Rogán’s term as mayor started in 2006, the company had been awarded contracts by the municipality worth more than HUF 6.5 billion (EUR 21.6 million) by the municipality. An analysis of procurement data shows that in this period the value of the contracts won by BAU Holding 2000 from the municipality was not exceeded by another company.

One of BAU Holding 2000’s last big contracts from the district was “Heart of Budapest,” a gigantic project renovating several streets and squares of downtown Budapest. Two tenders were announced for the project in 2009, one conducted by the 5th district municipality and the other by the Municipality of Budapest. Both tenders were won by a consortium of two companies. One of them was Bau Holding 2000.

Although the projects were worth as much as HUF 8.4 billion (EUR 28 million), there were no other bidders. This raised some eyebrows in the European Union, which partly financed the projects, and two of its institutions launched investigations into the procurements.

The European Commission, as first reported by Index in 2012, had concerns about the tenders’ conditions, which, according to the Commission, could only be met by the consortium including Bau Holding 2000. In January 2015, Vs.hu, another news portal, reported that an investigation by OLAF, the EU’s anti-fraud office, also found procurement violations with the Heart of Budapest project.

Both the Commission and OLAF confirmed that they conducted investigations into the procurements but they declined to disclose details about their findings.

The Hungarian Prosecutor’s Office confirmed, however, that OLAF shared its report with them, and they decided to launch an investigation based on the document. They assigned it to the Department Against Corruption and Economic Crimes of the Metropolitan Police, which said that the investigation “concerns a company” and it is being conducted against an “unknown perpetrator” with the suspicion of “budgetary abuse”.

The police declined to provide further details about the alleged crime. The notion of “budgetary abuse” is vague (it can refer to any kind of misuse of public money). They did not answer questions about which company is concerned by the investigation.

BAU Holding 2000, one of the companies working on Heart of Budapest, is not in operation any more. In 2010, it transformed into two companies, with one carrying forward the construction business. This was Tér Bau Holding, the company later working with EU-Line, owned by Borzován until 2014. Borzován told Direkt36 that he was not aware of any police investigation regarding the Heart of Budapest project. The EU institutions earlier investigating the project had not approached him or his companies either, he added.

The 5th district municipality also said that they have not been contacted by the police and they have no information about the investigation. When the concerns were first raised by the EU years ago, the 5th district rejected them, claiming that their procurements were conducted lawfully. One of their arguments was that when the renovation work – which started with the “Heart of Budapest” project – continued with another procurement in 2012, it was not awarded to the allegedly favoured BAU Holding’s consortium but to other companies.

The winner of that HUF 2.6 billion project was a consortium led by EU-Line. The 5th district’s municipality, when asked whether they were aware of the links between EU-Line and the former owner of Bau Holding, said that “as far as the company’s owners are concerned, we emphasize that the municipality has no right to examine the ownership.”

Jimena Abad contributed reporting from Montevideo, Uruguay.

Collecting information on foreign companies was assisted by Investigative Dashboard. For Hungarian business records, we used the services of Céginfo and Opten.