A Pakistani sugar baron under investigation for money laundering. The head of a Lebanese bank on trial for financing Hezbollah. An Austrian company director accused of perjury. A wealthy Russian mayor’s wife whose husband is in jail for bribery.

What do they have in common? Hungary has appointed them as honorary consuls to represent Hungarian interests in their home countries. This diplomatic position was designed to help well-connected, affluent and influential appointees to build relations between the two countries. They do not earn money with the position, but they get prestige, access to the diplomatic world and most importantly: privileges. Under international treaty, their archives and correspondence cannot be seized. Their consular bags of any weight and size are protected from searches.

However, the system is broken, with honorary consuls often appointed because they know the right people and can pay their price, and not because of their achievements. After receiving the title no international organization monitors their work. This, combined with the privileges, opens the door to abuse of the position.

Although most honorary consuls are presumably doing their jobs honestly, an international investigation – in which Direkt36 was the only Hungarian contributor to participate – led by the International Consortium of Investigative Journalists (ICIJ) and the US-based ProPublica shows that the world of honorary consuls is full of criminal records and controversial stories.

The international team of journalists investigated thousands of honorary consuls and found more than 500 of them under investigation for suspected criminal offenses or abusing their positions in some way. They listed people suspected or convicted of arms dealing, drug trafficking, smuggling, money laundering, supporting terrorism, corruption, or other sanctioned offenses.

In Hungary 68 honorary consuls represent other countries, and there are 267 honorary consuls representing Hungary’s interests worldwide. The number of Hungary’s honorary consuls is growing dynamically despite a scandal that tarnished the reputation of the title twenty years ago. In 2003 a suspect in a highly publicized crime had managed to leave the country before his arrest by posing as the driver of an honorary consul using illegally obtained papers.

As a result of the case, the then Socialist-led Foreign Ministry withdrew the privileges of the honorary consuls, who have since failed to regain them. Among those who now hold the title of honorary consul in Hungary is Jordanian businessman Zaid Naffa, who was flagged by the secret service as a national security risk. And there’s János Veres, former finance minister under the Socialist governments, who is honorary consul to Moldova – in the small town of Nyírbátor in the Szabolcs region.

Most of the honorary consuls mentioned in our article and the Ministry of Foreign Affairs and Trade did not respond to our questions.

Terrorism, drug trafficking, smuggling

ICIJ has been investigating the abusers of the honorary consular system for months. 160 journalists were involved to check thousands of honorary consuls from six continents around the world. To identify terrorist operatives and other honorary consuls accused of violation of law, the journalists reviewed court records, police reports and news archives.

This was a one-of-a-kind investigation, as no international body oversees the consuls and most states do not check whether their appointees are worthy of the post. Many states do not even publish lists or biographies of their appointees, so it is almost impossible to track the number and activity of honorary consuls around the world.

The international project, called Shadow Diplomats has found that there are at least 500 people who still hold or have held the title, and have been investigated for various crimes or have abused their position to support controversial causes.

Among those are people suspected, accused or convicted of:

• supporting authoritarian regimes
• smuggling
• fraud
• sexual abuse
• murder
• arms trafficking
• drug trafficking
• association with terrorist groups

57 Honorary consuls have been identified who were convicted while they still held the title. Many used their diplomatic credentials to avoid prosecution, tax audits, searches or even a simple parking fine. (For more details on the results of the international investigation, see this article.)

ProPublica and ICIJ have also identified 9 honorary consuls who had been linked by various law enforcement agencies and governments to terrorist groups. Many of them were linked to Hezbollah, a Lebanese Shiite paramilitary organization.

One of them is the wealthy Lebanese banker, Adel Kassar, who represents Hungary as an honorary consul in Lebanon. Kassar is an influential figure in the Lebanese business world, and is the CEO of Fransabank, one of the largest banks in Lebanon. He has several Hungarian connections including family ties, operating the Hungarian airline company, Malév’s branch in Beirut and heading the Kassar family’s bank, Fransabank which had a division in Budapest for decades.

Adel and his brother, Adnan Kassar also received a Hungarian state award in 2013 for strengthening Hungarian-Lebanese relations.

Prime Minister Viktor Orbán praised them, saying that Hungary understands the message of the East, that money and success are important, but “it’s all worth nothing without friendship.” Orbán added that Hungary feels honored, to have many prestigious friends in the East.

However, in 2019, families of US soldiers killed in Hezbollah terror attacks in Iraq filed a joint lawsuit in federal court in New York against Fransabank and a dozen other Lebanese financial institutions. The banks allegedly participated in financing terrorist acts organized by Hezbollah and Iran, helping the organization to obtain weapons and launder money, according to the lawsuit’s documents.

Adel Kassar did not respond to Direkt36’s or ICIJ’s questions.

A year ago, Hungarian diplomacy in Karachi, Pakistan, gained a wealthy and influential supporter, when Makhdum Omar Shehryar, head of the RYK Group, one of the country’s major sugar-producing giants, was appointed as Hungary’s honorary consul. In the Pakistani press, the businessman is sometimes referred to as one of the country’s sugar barons, but his influence is not just business related: his two brothers are also active politicians, serving as ministers in the central government and in the government of the Punjab region. We did not find any record of Shehryar’s previous connection to Hungary, but it was reported in the Pakistani press that the businessman was under investigation in Pakistan a few years ago.

Pakistan’s Federal Investigation Agency began investigating him on suspicion of fraud and money laundering in 2020. It is suspected that members of a group of large sugar companies colluded to artificially inflate the price of sugar. Although stocks of sugar were lying unsold in their warehouses, according to FIA, they spread rumors of an imminent shortage of the product, creating an even greater demand for sugar. Investigators believe they not only deceived consumers but also hid the profit in unrelated accounts.

The strategy was discussed in WhatsApp groups, including a representative of the RYK Group, FIA suspects. Authorities consider Shehryar one of the persons responsible, along with several other businessmen and politicians involved in the sugar industry.

In addition, in 2020, an investigation was launched against Shehryar’s two brothers, both politicians, because their families’ fortunes “ballooned into billions” immediately after their political involvement, according to Pakistan’s National Accountability Bureau (NAB).

The investigations are still ongoing, and Makhdum Omar Shehryar did not respond to Direkt36’s request for comment.

Elada Nagornaya used to be the honorary consul of Hungary in Nizhny Novgorod. In 2017, her husband Oleg Sorokin, mayor of the city, was arrested for bribery. Russian authorities accused Sorokin of accepting bribes of up to $1 million. Nagornaya was not a suspect in the case, but Sorokin has since been sentenced to 10 years in prison for kidnapping and bribery.

Nagornaya has left the country with her family, Russian Kommersant reported earlier. She was later prosecuted for tax evasion, but she settled the debt by paying 215 million rubles (more than $3,500,000).

Her honorary consular title was terminated by the Hungarian Foreign Ministry in 2019, and there is no longer an honorary consul in Nizhny Novgorod to Hungary.

It is unclear whether Nagornaya’s dismissal is related to the case against her husband, as the Ministry of Foreign Affairs did not respond to Direkt36’s questions. However, Nagornaya sent a detailed reply and a document on her dismissal.

The document does not state the reason for the dismissal, but according to Nagornaya, her title was revoked because she fled the country as she “feared her children’s and her own life” and could not carry out her duties.

She stressed that she was not charged in the criminal case of her husband, who denies the charges to this day. According to Nagornaya, her family’s (not further specified) “sworn enemies” have been trying to smear her and ruin her business for many years.

The Austrian honorary consul of Hungary, Bettina Glatz-Kremsner was the former director of Casinos Austria, a partly state-owned Austrian gambling company. She is currently under investigation for allegedly giving false testimony on six points during her interrogation in connection with the CASAG scandal. CASAG is a major corruption scandal that rocked Austrian politics and reached up to the highest circles of the political elite.

It is investigated by the WKStA, the Austrian Investigative Prosecutor’s Office for Economic Crime and Corruption and focuses on the background dealings of the online gambling monopoly Casinos Austria. In relation to the investigation WKStA in 2020 accused Glatz-Kremsner of perjury, according to a leaked document, because her mobile phone messages obtained by the authorities contradicted several points in her testimony in the case.  According to court documents, Glatz-Kremsner denies that she gave false testimony.

Glatz-Kremsner was appointed honorary consul of Hungary in 2013.  Born in Vienna, she spent her childhood in Hungary and speaks Hungarian as well as her mother language. She did not respond to Direkt36’s request for comment.

The Honorary Consul’s driver

On 29^th of September 2022, the ambassador of the Maldives to Hungary hosted a reception at the National Museum to celebrate the opening of the new consulate in Budapest, which will be led by an honorary consul, Radu Morar. Morar read a short speech in English then the elegantly dressed guests enjoyed the champagne reception accompanied by gypsy music. Along with some ambassadors, several honorary consuls also attended. Among them was a short, elderly man, Endre Erdős, who has been the honorary consul of Kyrgyzstan to Hungary for decades. Erdős appears rarely in the public spotlight (he refused to talk to Direkt36), but among the honorary consuls working in Hungary, everyone knows his name and the old story he was part of, which still casts a shadow over them all.

It is one of the most notorious Hungarian fraud cases of the 2000s, also known as the broker scandal and the Kulcsár case, which caused political waves. One of the main protagonists was Attila Kulcsár, who, as a broker of K&H Equities, unlawfully wagered the money of high-profile clients – including state-owned companies and local governments – through offshore companies, promising high returns and causing at least HUF 8 billion (more than $20 million) damage. The court case dragged on until 2017, when Kulcsár was sentenced to five years in prison for embezzlement (by the time he had served most of the sentence).

An episode occurred before the case exploded, that has since had an impact on the way honorary consuls are judged in their home country.

The story started with a license plate. In 2003, there were diplomatic license plates for honorary consuls: red plates starting with HC (honorary consul), two for each consulate. There were about 30 to 40 of these plates in circulation when a 600 Mercedes with the plate HC-0077 appeared on the streets of Budapest, told Direkt36 a source who was familiar with the world of honorary consuls in Hungary at the time.

The honorary consuls – who kept in touch with each other – were guessing who the lucky one with a third license plate was, until they finally found out that the car belonged to the Kyrgyz consulate led by Endre Erdős and driven by Attila Kulcsár.

Kulcsár had an identity card showing that he was working as a driver for the consulate. This and the registration number were approved by the Ministry of Foreign Affairs, then headed by László Kovács.

This had particular significance when the broker scandal exploded. Before the investigators could arrest Kulcsár, the diplomat left the country for Austria in an honorary consulate car with an official license plate.

After the incident, Foreign Minister László Kovács had the driving licenses of honorary consuls reviewed. The process, led by his secretary of state, Márta Fekszi, ended with the revocation of diplomatic plates and the subsequent withdrawal of tax benefits previously granted to honorary consuls.

The consuls – and their organization, the Honorary Consular Board (TBKT) – tried to get these privileges back. They have tried several ministers and secretaries of state, without success.

No breakthrough has been achieved since then, even after the Socialist government was replaced in power by Fidesz. Although Foreign Minister Péter Szijjártó had a special ministerial commissioner for honorary consuls for a few years, György Suha, former honorary consul of The Gambia, did not succeed in getting their former privileges back.

Since the Kulcsár case, the prestige of the honorary consuls has not been restored. For example, the former president of Hungary János Áder never invited them to the usual New Year’s reception for diplomats accredited to Hungary.

A source familiar with the system interprets the situation as the Hungarian foreign ministry considering them as “second-class ambassadors”, “soldiers of fortune” or, in the worst case, “criminals on the run”.

Even if the state that has appointed them does not have its embassy in Hungary, and there is no one else to represent them in the country.

€50,000 for an honorary consular title

The appointment of honorary consuls is not a transparent process. Money is not the main attraction of the title anywhere in the world, as there is no salary attached to it. The various privileges, immunities and prestige that go with it are more precious for the honorary consuls. That is why some people are willing to pay for it.

There is a market for them: for example, if someone wants to become an honorary consul in Hungary, there are a few people embedded in the diplomatic world who are worth contacting. This intermediary will try to find countries that are open to appointing an honorary consul. In return for their help, the intermediaries ask for €50-300,000, György Suha, who also deals with this kind of work and sees himself as a kind of bounty hunter, told Direkt36. However, he prefers to help foreign ambassadors find ideal candidates for honorary consulships, not in Hungary but in Asian and Middle Eastern countries.

In such cases, the price of the placement usually ranges between €20-100,000.

“It’s a market,” said Suha.

However, payments for honorary consular titles are considered suspicious by the authorities in some cases. A recent example is when in September, the Central Chief Prosecution Office of Investigation arrested a man who accepted €50,000 from another man to buy honorary consular titles from diplomats in African countries.

According to HVG, the Hungarian man arrested, János B., worked as the ambassador of Burundi in Vienna, but was once also the honorary consul of Sierra Leone in Budapest. The prosecutors told Direkt36 that János B. is suspected of commercially motivated influence peddling and bribery and is currently in pre-trial detention.

According to Suha, the difference between peddling with influence and “intermediary” work is that the latter is a regulated relationship, it is a service provided through a consultancy contract. He says that in Hungarian practice also happens that a Hungarian ambassador, realizing that they cannot manage the job alone, looks for someone in the country who is wealthy, preferably with Hungarian roots and interested in the position. However, to the best of his knowledge, Hungary never pays intermediaries. Honorary consuls appointed by Hungary are always under the professional direction of the ambassador of the country closest to them. Honorary consuls are, in his view, “their serfs”, who are often expected to provide financial support to the organization of embassy events, for example by paying for a banquet. Apart from the ambassadors, no one in the foreign ministry supervises the professional work of the more than 260 honorary consuls now appointed by Hungary, and recalls are rare.

Candidates for honorary consuls must pass a simple national security clearance and, in theory, their appointment is renewed every few years. However, the field is uncontrolled, and selection is handled informally by intermediaries or ambassadors.

The Hungarian Foreign Ministry’s website provides the contact details of the current honorary consuls but does not publish their biographies or other information. It is therefore impossible to know anything about their work from official sources. We have sent several questions to the ministry on the allocation of honorary consulships, the transparency of the process, and the monitoring of the work of the consuls, but have not received any reaction.

One of the most high-profile honorary consuls in Hungary in the past years is Zaid Naffa, who has represented Jordan in this position since 2003 (one of his brothers is now the Hungarian Ambassador to the United Arab Emirates and the other brother is an honorary consul in Aqaba).

As a wealthy honorary consul, Naffa has hosted one dinner after another for important figures in business and politics, said a source familiar with the work of Hungarian honorary consuls. He said Naffa was so active that he “had a bigger mission than an ambassador.”

Despite his closeness to some Hungarian politicians, Naffa had problems with national security clearance when he asked for Hungarian citizenship. The influential Jordanian businessman, who has lived in Hungary for decades, has twice had his application for Hungarian citizenship rejected because the secret services said there was a national security risk, said the Foreign Ministry in response to questions from opposition members of the parliament. However, it was not revealed what specific risk the secret services saw in him.

Despite all this, Naffa had spectacularly good relations with the Prime Minister and his family: he was photographed having lunch with István Tiborcz, son-in-law of the Prime Minister; the building of the Jordanian Consulate, which he owns, is located near Viktor Orbán’s Cinege Street house on Béla King Road; and Orbán has appeared with him at public events on several occasions.

The Prime Minister has also been a guest of Naffa at least once. Orbán attended a party hosted by Naffa at the Jordanian consulate in 2014. There he met Ghaith Pharaon, a Saudi oil billionaire who died in 2017 but had been wanted for money laundering and financing terrorist organizations by the United States. Pharaon’s Hungarian visa application was handled by Naffa personally. After it emerged that Pharaon had been wanted by the FBI for decades, the government was forced to explain the case in public. Zaid Naffa continues to represent Jordan today as an honorary consul and has not responded to our requests for comment on his position or his national security clearance.

Consul from the opposition

Among the honorary consuls working in Hungary representing other states is János Veres, former Minister of Finance of Ferenc Gyurcsány, now the leader of one of the main opposition parties. Veres, a socialist politician, has been working as honorary consul of Moldova since the end of 2021 and is based in Nyírbátor, a small town of 12,000 inhabitants in the region of Szabolcs.

The choice of location is unusual, as in our research we have not found any examples of any country opening a consulate in Hungary in towns of lower rank than county capitals. Veres’ assignment is also noteworthy because the appointment of honorary consuls requires the consent of the host state. This means that the foreign ministry under Péter Szijjártó has agreed to open a consulate in Nyírbátor and to give such a diplomatic rank to a well-known socialist politician.

“There’s nothing bombastic about it,” János Veres told Direkt36 in his office on the ground floor of Nyírbátor’s town hall. The room is decorated with special solid wood office furniture and a Moldavian flag, as well as framed memories on the wall, Veres’ parliamentary ID cards, certificates, ribbons from ceremonial presentations, decorative swords, and photos of the parliamentary football team in which Veres and Viktor Orbán were once teammates.

Veres said he lives in Budapest, not in Nyírbátor, but he visits the office regularly. Nyírbátor is his hometown, where he also works as a senior adviser to the local government (he also has two businesses).

He added that he and his wife – Alexandra Dobolyi, who has a foreign affairs background – have had “a good relationship with Moldova for fifteen years,” which began when they met Oleg Tulea, now Moldovan ambassador to Budapest, through the Socialist International, an umbrella organization for socialist parties around the world.

Around 2017, the ambassador asked him to be honorary consul, Veres said, but it was not until 2020 that Péter Szijjártó went to Moldova for a meeting, and the ambassador at the table asked him to approve Veres’ appointment. “I was the first thing on the agenda and Szijjártó supposedly gave his approval for my appointment within a minute,” Veres recounted what he heard from the ambassador about the meeting. The opening of the embassy in Nyírbátor was also attended by Tamás Varga, Fidesz Minister of State for Foreign Affairs.

Asked why his appointment went so smoothly despite the political differences, the former Minister of Finance said he could not answer that, but added that this was supposed to be the normal attitude. He noted that his experience in local politics is that there are some issues where it is possible to work with government politicians despite party politics. He said that he had played a role in the opening of a Danish company producing medical plastic products in Nyírbátor in the 2000s, and when the Coloplast company invested in the new plant, Viktor Orbán came to shake his hand at the handover ceremony and thanked him personally for his role.

Veres said he is committed to developing Moldovan-Hungarian economic relations in eastern Hungary as honorary consul. For this reason, he has already sent a Moldovan business delegation here, and is trying to set up cooperation in the canning and wine-making sectors, among others.

In the chaos that followed the outbreak of the war in Ukraine, he once helped to ensure that Moldovan truckers stuck on the Slovak-Hungarian border could cross the country under police escort and return home. He said that although the truckers never knew that they had been able to return home thanks to his help, it felt good to do good.

What motivates Veres in his work is, among other things, that with this consulate in the countryside, “I have put Nyírbátor in the first place in something.” He added that he does the job “not for a commission,” but because he has always tried to make the world “a better, fuller place” through his own means. And to do this, he said, he “doesn’t need a license plate.”

Cover picture: Peter Somogyi (szarvas) / Telex

Contributors to this article: Johanna Mattinen (YLE, Finland), Will Fitzgibbon (ICIJ), Hala Nasreddine (Daraj Media, Lebanon), Umar Cheema (The News, Pakistan), Besar Likmeta (BIRN, Albania), Michael Nikbakhsh (Profil, Austria)