Sandor Kovacs, a Fidesz Politician, Is the Subject of a Tax Investigation

An ongoing tax investigation shows that Fidesz politicians are not beyond the scope of the law. It also shows that they use the same tax loopholes and tax planning strategies as other high-net-worth individuals.

The Investigation

Sandor Kovacs is known for his role as an MP and Fidesz politician. As such, he holds a Hungarian passport and residency. Kovacs is from Szabolcs-Szatmar-Bereg County. The tax investigation does not cover international investments. Instead, it focuses on Kovacs’ real estate properties and tourist establishments on them.

Investigators are examining the EU fund money that Kovacs used for those tourist establishments. In total, he used approximately 60 million HUF, the equivalent of 168,709 euros.

According to the Prosecutor’s Office in the County of Szabolcs-Szatmar-Bereg, the NAV directorate began the investigation on Oct. 14. As of mid-December 2020, the suspects, including Kovacs, had not been interrogated.

Previous Reports From 24

The interest in Kovacs’ real estate and foundation asset management is not a complete surprise. About the same time that Daily News Hungary reported on the tax investigation, 24 issued its own report, going into detail about the concerns related to Kovacs’ property.

Back in early September 2020, 24 had released a paper indicating the tourism investments on the property.

The Grant

As mentioned, the questionable grant is 60 million HUF. According to the report from 24, Kovacs used that grant to build a tourist showroom along with a summerhouse, guest house, and boathouse. This is despite the fact that Kovacs never officially received the grant in question.

What Kovacs Said

Before releasing its report, 24 interviewed Kovacs, and he denied any action related to the construction. According to Kovacs, his only role was providing the real estate, which he gave to the construction company. Interestingly enough, that construction entity has his son and wife as its managers, putting them in a director role. However, the property’s lease still has Kovacs’ name on it, as well as that of his mother. This indicates that he and his mother are beneficiaries, not the corporate tax of the company.

After talking to 24, Kovacs did adjust the names listed on the lease. However, 24 had already completed its investigation and crafted its report.

Not Kovacs’ First Criticism

This is not the first time that Kovacs has been the subject of trust issues, although he is not always as closely involved or even a shareholder in the controversy. Kovacs’ friend and his wife’s business partner also received a total of 1 billion HUF within several years. This is the equivalent of about 2.8 million euros. Those funds were only received for municipalities in the Fidesz politicians’ district. This particular issue not only incriminated Kovacs but other Fidesz politicians as well.

Since that controversy, Kovacs’ wife no longer has business ties with that former partner.

Other Fidesz Politicians Also Facing Scrutiny

In addition to not being the first time Kovacs has faced fiduciary scrutiny, he is not the only Fidesz politician facing this level of attention. Janos Nagy, the Deputy State Security for Land Affairs, which is part of the Ministry of Agriculture, is also under investigation. Details regarding his investigation were revealed at about the same time as the recent details regarding Kovacs’ case. While it does not involve a private equity fund, the investigation into Nagy is looking at abuse of office and bribery, among other crimes.

As of early December, Istvan Nagy, the Minister of Agriculture, began the process to dismiss Janos Nagy from his office. This was following his detainment under suspicions of corruption.


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