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CEU Press | 2016 | Balint Magyar

Post-Communist Mafia State

The Case of Hungary

Magyar2016HungaryMafiaState.pdf

[W.Z. 2018.07.18: In Chapter 4 of his book, Balint Magyar defines the classical mafia as the organized underworld in contrast to the mafia state as the organized upperworld. The material in this book "Post-Communist Mafia State" describes how Viktor Orban of the Fidesz party has transformed Hungary from a functioning democracy into a Mafia State with increasing similarities and ties to the mafia states of the Russian Federation, Turkey, Azerbaijan and other ex-Soviet republics. The concept of the mafia state as an organized upperworld is very appealing to politicians in power in Europe, the United States and other countries throughout the world. In fact, in my opinion, Donald Trump is in the process of transforming the United States into such a mafia state.]


Table of Contents -- pdf-6 [vi]

Timeline of the Past Century of Hungary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xi
Acknowledgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xiii
Foreword by Kim Lane Scheppele . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xv

1. The system we live under . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
    1.2. Evolutionary forms of corruption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

2. The disintegration of the Third Hungarian Republic in 2010 . . . . . . . . . . . . . . . . . . . .. . 15
    2.1. The value system of the Hungarian society . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
    2.2. The political right and left: Two competing anachronisms . . . . . . . . . . . . . . . . . . . . 17
    2.3. Spaces of rational public discourse in demise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
    2.4. The actors and the instability of the new ownership structure . . . . . . . . . . . . . . . . .  23
    2.5. The responsibility borne by the coalition government of the
            socialists and liberals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
        2.5.1. Lack in symbolic, community-building politics . . . . . . . . . . . . . . . . . . . . . . . . . 27
        2.5.2. Distributive politics and its exhaustion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
        2.5.3. The shoddiness of freedom and hopelessness of the
                   dispossessed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
        2.5.4. Inefficacy in government, the incompatible attitudes of
                  the two coalition parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
    2.6. Frailty of the institutions guaranteeing the system of checks
           and balances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
    2.7. Fidesz as political apex predator . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
        2.7.1. From the close college fraternity to the adopted political
                  family, an alternative rebel turned godfather . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
        2.7.2. Socialist erosion, liberal vaporization and Fidesz’s
                  accomplishment of social embeddedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
    2.8. Pre-2010 political cold war, and the erosion of the institutional,
            two-thirds constraint . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
        2.8.1. Political cold war . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
        2.8.2. Economic trench truce: 70/30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
        2.8.3. Alternating corrupt regimes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53

3. Approaches of interpretation: from the functional disorders of
    democracy to a critique of the system . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
    3.1. Trapped in an interpretation along the democracy-dictatorship
           axis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
    3.2. Moving on to substantive concepts of description . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
    3.3. The limited validity of historical analogies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
    3.4. Proclamation of the Hungarian “illiberal state” . . . . . . . . . . .  . . . . . . . . . . . . . . . . . . 62

4. Definition of the post-communist mafia state . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
    4.1. Post-communist . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
    4.2. Mafia state . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
    4.3. The expansion of the entitlements of the patriarchal head of
           the family: mafia, mafia state . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70

5. Specific features of the mafia state: a subtype of autocratic regimes . . . . . . . . . . . . . . . . 73
    5.1. Concentration of power and accumulation of wealth . . . . . . . . . . . . . . . . . . . . . . . . . 73
    5.2. Key players of the mafia state: the ruling elite and its
           accessories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
        5.2.1. The poligarch . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
        5.2.2. The oligarch . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
        5.2.3. The stooge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
        5.2.4. The corruption broker . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
        5.2.5. The family security guard and the secret services . . . . . . . . . . . . . . . . . . . . . . . 102
    5.3. The political family’s expropriation of databases ensuring
           democratic control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
    5.4. Polipburo, in place of the former communist politburo. . . . . . . . . . . . . . . . . . . . . . 108
        5.4.1. Delineation of the mafia state’s ruling elite from other
                  historical analogies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
    5.5. “Law of rule” in place of the “rule of law” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113
        5.5.1. Constitutional coup d’état—the institutionalization of
                  autocracy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113
        5.5.2. Hostile takeover of the institutions of public authority . . . . . . . . . . . . . . . . . . .. 116
        5.5.3. Government: not there to take decisions, but to manage
                  decisions taken by the political family . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116
        5.5.4. The lexes -- custom tailored legislation . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . 117
        5.5.5. Suppressing the control functions of other institutions of
                  public authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122
    5.6. Administration through confidants and personal governors
           of the adopted political family instead of a professional
           bureaucratic administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125
        5.6.1. Array of devices employed to intimidate the professional
            administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125
        5.6.2. Max Weber on the historical path to modern professional
            bureaucratic administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126
        5.6.3. Dismantling the modern professional bureaucratic
                  administration under the conditions created by the mafia
                  state . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127
        5.6.4. Why the mafia state cannot be considered a patrimonial
                  system . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129
    5.7. Liquidation of societal autonomies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130
        5.7.1. Liquidation of local autonomies: “caretakers” in place of
                  local governments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131
        5.7.2. Liquidation of the autonomous positions of the
                  intelligentsia in culture and education . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132
        5.7.3. Domestication of Non-Government Organizations . . . . . . . . . . . . . . . . . . . . . 139
    5.8. Patron-client relations in place of class relations . . . . . . . . . . . . . . . . . . . . . . . . . . 142
        5.8.1. The changing patterns of existential vulnerability . . . . . . . . . . . . . . . .. . . . . . . 142
        5.8.2. The variety of the patron-client relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143
    5.9. The middle strata of the mafia state power hierarchy: service
           gentry and court purveyors -- the “new national middle class” . . . . . . . . . . . . . . . 149
        5.9.1. The service gentry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150
        5.9.2. The court purveyors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153
        5.9.3. Cementing the “new national middle class” . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154
        5.9.4. The sin above all sins: disloyalty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 156
    5.10. Tributes exacted as economic policy: the system of special
              taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158
        5.10.1. Some forms of special taxes prior to 2010 . . . . . . . . . . . . .. . . . . . . . . . . . . . . 160
        5.10.2. The systemic escalation of special taxes after 2010 . . . . . . . . . . . . . . .. . . . . . 161
        5.10.3. State penalization of critical reactions called forth by
                    special taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 171
        5.10.4. The inverse of special taxes: strategic agreements and
                    mutual benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  .. . . . . . . . . . . . . 172
    5.11. Takeover -- replacement of the economic elite . . . . . . . . . . . . .. . . . . . . . . . . . . . . . 173
        5.11.1. The alliance of Fidesz and the “Christian middle-class” . . . . . . . . . . . . . . . . . . 175
        5.11.2. The unique nature of property expropriation by the mafia
                    state . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 177
        5.11.3. A change of the owner elite and ensuring surrender . . . . . . . . . . . . . . . . . .. . . 178
        5.11.4. The offer that could not be refused . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 179
        5.11.5. Types of nationalization defined by function . . . . . . . . . . . . . . . . . . . . . . . . . . 195
        5.12. The rationale of power versus the irrationality of public
                  policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 201

6. The legitimacy deficit faced by the mafia state and the means to
    overcome it . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 209
    6.1. Domestication of the media . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 209
        6.1.1. 2010–2014: Media control in the period of establishing the
                  mafia state . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 209
        6.1.2. Media control in transformation after 2014, under
                  conditions of the established mafia state . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 214
    6.2. Manipulation of the electoral system . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 219
        6.2.1. Changes to electoral law after 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 220
        6.2.2. The Prosecutor’s Office as part of the campaign staff . . . . . . . . . . . . . . . . . . . 223
        6.2.3. Establishing the institutional means of electoral fraud . . . . . . . . . . . . . . . . . . . 224
        6.2.4. The 2014 spring parliamentary elections and autumn
                   municipal elections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 226
        6.2.5. Means of curbing election results retrospectively.  . . . . . . . . . . . . . . . . . . . . . . 227

7. Legitimizing the mafia state: the ideological arsenal . . . . . . . . . . . . . . . . . . . . . . . . . . . . 231
    7.1. Ideology-driven vs. ideology-applying system . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 231
    7.2. Target-ideological templates: God, homeland, family, workbased
           society . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 234
        7.2.1. Nationalism, antisemitism, racism . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 234
        7.2.2. Ideological pyramid scheme . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 235
        7.2.3. Religion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 240
    7.3. Instrument-ideological templates: the System of National
           Cooperation and the national freedom fight . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 241
        7.3.1. The System of National Cooperation (NER) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 241
    7.4. The national freedom fight . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 249

8. The Criminal State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 255
    8.1. Hungarian law on criminal organizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 256
    8.2. The Palermo Protocols . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 257
    8.3. The mafia state as a type of criminal state . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 258
        8.3.1. One example: criminal organizations expropriating
                  property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 260
    8.4. Classifying criminal organization actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 261

9. Pyramid schemes -- the limits of the mafia state . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 269
    9.1. Economic pyramid scheme . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 269
       9.1.1. Autocracy and autarchy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 271
    9.2. Foreign policy pyramid scheme -- “peacock dance” and
           Hungarian-style cunning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 272
        9.2.1. Dilemmas faced by the European Union . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 273
        9.2.2. Opening towards the East . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 277
        9.2.3. The disparate logic of EU and US sanctions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 283
    9.3. The precarious equilibrium of the mafia state . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 272

Annexes
Annex 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 298
Annex 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 299
Annex 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 300
Annex 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 301
Annex 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 302

List of accompanying studies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 304
Former publications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 306
Index of Names . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 309

Timeline of the Past Century of Hungary -- pdf-12 [xii]

1920 The Paris Peace Treaty establishes the current borders of Hungary
1920-1944 Hungary is a kingdom without a king, governed by Admiral Horthy
1941 Hungary enters World War II
1945-1989 Hungary is under Soviet occupation
1949-1989 Hungary is a People’s Republic
1956 Revolt against the Soviets and the communist regime
1956-1988 The Kádár-regime, after János Kádár, Hungarian communist leader
1990-1994 First democratically elected (center right) government, Prime Minister József Antall (†1993)
1994-1998 Socialist-liberal coalition government
1998-2002 First Fidesz government (with coalition partners), Prime Minister Viktor Orbán
2002-2010 Socialist government, until 2008 in coalition with liberals
2004 Hungary enters the European Union
2004-2009 Prime Minister Ferenc Gyurcsány
2009-2010 Prime Minister Gordon Bajnai
2010-? Second Fidesz government (re-elected in 2014), Prime Minister Viktor Orbán

Magyar2016HungaryMafiaState.pdf

Foreward -- pdf-16 [xvi] to pdf-24 [xxiv]

Kim Lane Scheppele notes that from 1989 to 2010 Hungary was a model of democratic evolution with massive foreign investment, an 84% vote to join the EU in 2004 and fair elections.
- However, with the election of Viktor Orban of Fidesz party, all democratic gains have been reversed and Hungary has become a "Post-Communist Mafia State".
- In this book, Balint Magyar gives a detailed account as to how this was accomplished and how the deterioration is continuing..

1. The system we live under  -- pdf-26 [1] to pdf-pdf-38 [13]
- In 1989-1990 there was an abrupt transition from a one-party dictatorship with a state monopoly of property into a multi-party parliamentary democracy based on private ownership of property and a market economy -- the so-called liberal-democracy.
- What has happened in Hungary "since 2010 is best compared with what has happened in most of the countries of the former Soviet Union: Russia under Putin, Azerbaijan, or other Central Asian former member republics of the Soviet Union."

1.2. Evolutionary forms of corruption  -- pdf-28 [3] to pdf-38 [13]
- "Where day-to-day corruption is concerned, private interests hold an illegitimate sway in state and local government decisions concerning allocation of resources, procurements, concessions, and entitlements."
- The organized underworld, the mafia has found its way into the topmost, political sphere of politics, and seeks to influence not only individual decisions -- about access or distribution -- but the system by which the rules are established and legislation as well.
- The organized upperworld, the mafia state nevertheless goes far beyond both the mentioned anomalies in party financing and the underworld’s ambitions for political influence.

2. The disintegration of the Third Hungarian Republic in 2010  -- pdf-40 [15] to pdf-80 [55]
- The fate of the Third Hungarian Republic "befell most of the republics emerging from the Soviet Union, while Hungary took a circuitous route."

2.1. The value system of the Hungarian society -- pdf-41 [16]
- Magyar argues that the value system of Hungarians was more closely aligned with that of the countries Eastern Europe than to that of Western Europe.

2.2. The political right and left: Two competing anachronisms -- pdf-42 [17]
- A split appeared between those yearning for a right-wing Horthy-type of regime (between the two world wars) and the left-wing Kadar-type of regime (following 1956).

2.3. Spaces of rational public discourse in demise  -- pdf-44 [19]
- No social integration is possible without linguistic integration grounded in a general consensus on public discourse.
- Interpretation and debate are the functions of the language of the liberal, left-wing camp.
- Cohesion and recruitment are the functions of the language of the rightwing camp.
- Fidesz managed to attract left-wing supporters by molding national populism with social populism.

2.4. The actors and the instability of the new ownership structure -- pdf-48 [23]
- People complained that the "privitization politics" was not fair -- labelled as “servants of international capital”.

2.5. The responsibility borne by the coalition government of the socialists and liberals -- pdf50 [25]
- The temptation to blame all of the disintegration squarely upon the utterly confrontational politics practiced by Fidesz is strong, however, one cannot spare the examination of the responsibility of the socialist-liberal coalition in clearing the path to the building of an autocratic regime.
-The democratic forces that could have stood up to emerging autocratic tendencies had no shared ethos or a modern social vision, nor an institutional background, and finally were left without capable political players too.

2.5.1. Lack in symbolic, community-building politics -- pdf-52 [27]
- In fact, ever since the regime change the Church had been fighting, not for its existence and survival, but for a new, assertive role both in politics and society.
- The socialists and liberals let the symbol of the 1956 revolution also slip out of their hands, leaving the surviving, once central leftist figures of those days to their own, while the now ritualized national remembrance suggests that right-wing radicals had dominated the revolution.
- Fidesz strips its opponents of intellectual and moral property in a symbolic space.

2.5.2. Distributive politics and its exhaustion  -- pdf-56 [31]
- The 50 percent wage increase for public servants, the doubled month’s pay and pension at the end of the year, as well as other benefits promised by the socialist-liberal coalition taking government in 2002 ... were all canceled upon the 2008 worldwide financial crisis, the support for the center-left evaporated.

2.5.3. The shoddiness of freedom and hopelessness of the dispossessed -- pdf-57 [32]
- Whole branches of industry dissolved with the loss of the traditional markets of the Soviet bloc, and after a virtually full employment came waves of unemployment in the hundreds of thousands.
- The Roma were especially hard hit.
- Just as citizens felt vulnerable to large institutions, so small entrepreneurs felt vulnerable as competitors and suppliers to the bureaucracy, the multinational corporations, and the banks.

2.5.4. Inefficacy in government, the incompatible attitudes of the two coalition parties -- pdf-60 [35]
- Both the socialists and the liberals were trapped by their ideology and past.
- The coalition of the socialists and liberals always carried the marks of a marriage “for the lack of a better choice”.
- The removal of the state secretaries of public administration.
- The relocation of the police directorate.

2.6. Frailty of the institutions guaranteeing the system of checks and balances -- pdf-64 [39]
- Racist examples in formation of Magyar Garda; ombudsman; prosecutor's Office; National Bureau of Investigations; police; Constitutional Court.
- The concerted surges of nationalist and socialist populisms not only brought to power an autocratic government by sweeping the socialists out to the periphery of political existence and the liberals even further, but also buried the institutional system of checks and balances.

2.7. Fidesz as political apex predator -- pdf-65 [40]
2.7.1. From the close college fraternity to the adopted political family, an alternative rebel turned godfather -- pdf-65 [40]
- The members of the socialist and liberal parties were only very loosely connected to each other.
- Fidesz, on the other hand, was formed from a small, very close and tightly knit college community of friends who had found their social bearings together -- through the literature of the anti-communist dissident movement and reform communist lecturers -- in virtually the same dormitory room. When it was formed in the spring of 1988 as an adversary of the Communist Youth Association, it defined itself as a liberal, radical, alternative -- indeed youth -- movement.
- Western oriented political party in 1990.
- Centralized party. The disciplining of the membership began in the early 1990s. TomasWachsler (challenger to Orban) was humiliated.
- Vassal party. The president (Orban) alone decides about the selection of the candidates for the national assembly both for the individual constituencies as well as the electoral party lists. -- Oath of loyalty. Exactly as in Coppola’s film, The Godfather.
- The first in Hungary to learn that the boss is not kidding were the members of Fidesz.

2.7.2. Socialist erosion, liberal vaporization and Fidesz’s accomplishment of social embeddedness -- pdf-70 [45]
- The story of Fidesz can be described as a reversed process: a chain of hierarchic vassal (patron-client) relations had replaced the communist nomenclature by 2010.
- Fidesz completed its modernized organizational halo and network in gradual steps.-- Catholic and Calvinist churches; Polgári Körök (Citizens’ Circles) movement; “national consultation” questionnaire.

2.8. Pre-2010 political cold war, and the erosion of the institutional, two-thirds constraint -- pdf-73 [48]
2.8.1. Political cold war -- pdf-73 [48]
- When in opposition, Fidesz served not to control government, but to put it under siege.
- Fidesz would only vote for something (even if they agreed with) if they received something in return, or they would not vote for anything, to preempt any success of the government.
- Fidesz’s confrontational policy on appointments did not leave the Constitutional Court unharmed either.

2.8.2. Economic trench truce: 70/30 -- pdf-77 [52]
- The 70/30 meant that the illegitimate resources acquired (or simply acknowledged) in common, would be divided with 70 percent going to the governing party, and 30 going to the opposition.
- With the sea change in 2010, in possession of the two-thirds majority ensuring quasi absolute power, Fidesz no longer had any reason to maintain the 70/30 system.

2.8.3. Alternating corrupt regimes -- pdf-78 [53]
- The post-communist states that were admitted to the EU -- with the exception of Hungary -- can be described in varying degrees as the alternation of corrupt regimes.
- The mafia state however is not the qualified case of state capture produced by classical underworld conditions, but represents rather a case where the head of a political venture disciplines and domesticates the oligarchs in the capacity, as it were, of the godfather, settling them into his own chain of command.

3. Approaches of interpretation: from the functional disorders of democracy to a critique of the system -- pdf-82 [57]
3.1. Trapped in an interpretation along the democracy-dictatorship axis -- pdf-83 [58]
3.2. Moving on to substantive concepts of description --pdf-84 [59]
- Magyar discuss various terminology that is often utilized including clientelist, crony capitalism, etc.
- the term kleptocratic differs from the mafia state in a number of ways:
• first, the mafia state carries out an aggressive takeover of property in contrast to the kleptocratic system, which mostly hijacks current revenue only, using classical mechanisms of corruption;
• second, the kleptocratic regime does not establish a system based on permanent patron-client relations of subservience, unlike the mafia state;
• third, the kleptocratic system is not necessarily centralized or monopolized (could also be decentralized, or eventually anarchic);
• fourth, in contrast to the mafia state, kleptocratic regimes do not employ coercion, or criminalize at all cost, but merely exploit the opportunities offered by the circumstances.

3.3. The limited validity of historical analogies -- pdf-86 [61]
- And yet, while the fascistoid, corporativist, or for that matter communist systems are essentially ideology driven, the post-communist mafia state uses ideology with value-free pragmatism.
- Attempting to explain the driving forces underlying the power machinery of the post-communist mafia state from nationalism, religious values or a commitment to state property is futile.
- Suggests features of a reincarnated feudal system of vassalage -- a neopatrimonial system.

3.4. Proclamation of the Hungarian “illiberal state” -- pdf-87 [62]
- Humgary now resembles Russia under Putin, Azerbaijan under Aliyev, and some Central Asian republics.
- It is there that the basic model evolved, though Orbán’s system approaches the Putin model of the mafia state by a detour, through the West, and establishes itself as a Trojan horse of the post-communist mafia states within the ramparts of the European Union.
- In a 2014 speech in Transylvania, Romania, Orban announced the liquidation of liberal democracy and the establishment of the Hungarian “illiberal state” as accomplished facts. -- with Russia, Turkey, China and Singapore as leading examples.

4. Definition of the post-communist mafia state -- pdf-92 [67]
- Since 2010: Neither intent, nor objectives have changed, only circumstances: with a two-thirds parliamentary majority, most institutional constraints on the exercise of power were removed.

4.1. Post-communist -- pdf-93 [68]
- The term post-communist implies that the system came about on the foundations of a communist dictatorship, as a product of the debris left by its decay.
- Magyar appears to have extended the definition of organized crime and  corruption into two categories:
Mafia = organized underworld -- recognized as illegal
Mafia State = organized upperworld -- claims to be legal
- The OCCRP (Organized Crime and Corruption Reporting Project) awarded Vladimir Putin (Russia), Viktor Orbán (Hungary), and Milo Đukanović (Montenegro) the titles of man of the year in 2014, with earlier awardees including Ilham Aliyev (Azerbaijan).

4.2. Mafia state -- pdf-94 [69]
- The term refers to the nature of organization and the order of the new ruling elite.
- It is built on a network of contacts grounded essentially in family relationships or the adopted family and later augmented with additions into an adopted political family.

4.3. The expansion of the entitlements of the patriarchal head of the family: mafia, mafia state
- The classical mafia -- as the organized underworld -- is no more than a violent, illegitimate attempt at giving sanction to the pre-modern powers vested in the patriarchal head of the family in a society established along the lines of modern equality of rights. The mafia is an illegitimate neo-archaism.
- The mafia state on the other hand -- as the organized upperworld -- is a project to sanction the authority of the patriarchal head of the family on the level of a country, among the scenes of the democratic institutional system, with an invasion of the powers of state and its set of tools.
- The mafia state is the privatized form of the parasitic state, the business venture of the adopted political family managed through the instruments of public authority.

5. Specific features of the mafia state: a subtype of autocratic regimes -- pdf-98 [73]
5.1. Concentration of power and accumulation of wealth -- pdf-98 [73]
- In the organized upperworld the adopted political family cannot operate a concentration of power and the accumulation of wealth as separate systems.
- This means that the organized upperworld legalizes its own business, as it were. It no longer hoards wealth clandestinely, in the hidden sphere, but has elevated their operations to the rank of state politics.

5.2. Key players of the mafia state: the ruling elite and its accessories -- pdf-99 [74]
5.2.1. The poligarch -- pdf-99 [74]
- While his political power is public, the economic power, his wealth itself is hidden. His previously inexistent personal wealth is secured from his political position and decisions.
- In addition to Viktor Orban, the two most decisive poligarchs are: János Lázár, minister of the Prime Minister’s Office, and Antal Rogán, leader of the parliamentary Fidesz faction.

5.2.2. The oligarch -- pdf-100 [75]
- The major entrepreneur undertakes legitimate economic activity, and his access to this activity is also legitimate.
- In contrast, the entrepreneur of the organized underworld mainly carries on illegal economic activities (drug trade, prostitution, oil bleaching, extortion, protection racket, etc.) under illegal conditions.
- The oligarch of the post-communist systems however, seeks to secure illegal support for legal economic activity by means of corruption.

5.2.2.1. Major entrepreneurs versus oligarchs -- pdf-101 [76]
5.2.2.2. A typology of the oligarchs --pdf-102 [77]
5.2.2.3. The Orbán–Simicska conflict: the first mafia war within the organized upperworld -- pdf-107 [82]

5.2.3. The stooge -- pdf-113 [88]
- The stooge has no real power: his formal position, legal standing -- whether in the field of politics or that of economy -- serves only to bridge the gap between the legitimate and illegitimate spheres.
- The political stooges are governors, while the stooges of the business ventures are stewards, so far as their sociological function is concerned.
- Magyar discusses political stooges; economoic stooges; permanent instruments of money laundering.

5.2.3.1. The head of the political family and the family VIP box -- pdf-119 [94]
5.2.3.2. The business ventures of the poligarchs, the inner circle oligarchs, and their stooges -- pdf-123 [98]

5.2.4. The corruption broker -- pdf-125 [100]
- The corruption broker connects participants of a corrupt transaction as a mediator, or legitimizes the illegitimate business deal as a judicial expert.
- They are involved in the writing of bids for tenders, legal advocacy, and the preparation of draft laws.

5.2.5. The family security guard and the secret services -- pdf-127 [102]
- The family security guard is composed of a wide spectrum of elements: Counter Terrorism Center; guarding the family estates; radical football fans; election monitoring.
- Securing control over the secret services was a key issue for Fidesz, right from the beginning.
- The survival of this system of political blackmail.
- The Counter Terrorism Center is furthermore legally authorized to secretly collect information on citizens without judicial authorization.

5.3. The political family’s expropriation of databases ensuring democratic control -- pdf-131 [106]
- Secret service data: Fidesz is obstructing the all-round public accessibility of the list of informers, their recruiters, and the document material on the one hand, while on the other, it is able to use the information available in them to protect its surrendered followers, or when necessary, to blackmail and stigmatize its political rivals.
- Tax authority documents: upon taking government in 1998, one of the first measures taken by Fidesz was to appoint Lajos Simicska.
- The Hungarian National Bank (MNB) has bought up GIRO Zrt., which handles all of the retail and corporate transfers.
- The software and digital database that handles tenders for EU resources ...
- The software used for the parliamentary and municipal elections ...
- The so-called Kubatov lists; elections, referenda and signature campaigns; so-called national consultations.

5.4. Polipburo, in place of the former communist politburo -- pdf-133 [108]
- This makes it more accurate to speak of polipburo, rather than politburo, with the topmost close circle of the adopted political family forming the real center of power.

5.4.1. Delineation of the mafia state’s ruling elite from other historical analogies -- pdf-134 [109]
- Magyar discusses several historical analogies.
- In the mafia state -- since the family is sacred, just as in the traditional mafia -- the trial by fire is not the sacrifice of family ties as in the Stalinist regimes, but quite the opposite, to gain inclusion into the adopted political family means the acknowledgement and sanctification of loyalty.

5.5. “Law of rule” in place of the “rule of law” -- pdf-138 [113]
- Magyar states that in Hungary, the ruler makes the law, rather than the law controlling the ruler.

5.5.1. Constitutional coup d’état -- the institutionalization of autocracy -- pdf-138 [113]
- The two-thirds parliamentary majority won by Fidesz in 2010, with the votes of much less than half the eligible voters, and the support of only 53 percent of valid votes made it possible for Fidesz to systematically dismantle the system of checks and balances that characterize a liberal democracy, and the development in turn of a new state of balance for the autocratic regime, a consolidation by means of restriction of individual liberties based on illegitimate coercion.
- Magyar discusses five institutions: Constitutional Court; Supreme Court; Fiscal Council; municipal governments; social security.

5.5.2. Hostile takeover of the institutions of public authority -- pdf-141 [116]
- The institutions of public authority cease to be the sites where real decisions are taken, those having been removed from the institutions into the realm of the adopted political family.
- It suspends equality before the law both individually and en masse.

5.5.3. Government: not there to take decisions, but to manage decisions taken by the political family -- pdf-141 [116]
5.5.4. The lexes -- custom tailored legislation --pdf-142 [117]
- Magyar lists 10 examples of  tailored legislation on behalf of the Mafia State to the detriment of the common citizen.

5.5.5. Suppressing the control functions of other institutions of public authority --pdfg-147 [122]
- Magyar refers to a multitude of institutiions that have been castrated: Constitutional Court; National Office for the Judiciary; State Audit Office of Hungary; Fiscal Council; Hungarian Competition Authority; the national public media channels; National Bank.

5.6. Administration through confidants and personal governors of the adopted political family instead of a professional bureaucratic administration
5.6.1. Array of devices employed to intimidate the professional administration -- pdf150 [125]
5.6.2. Max Weber on the historical path to modern professional bureaucratic administration -- pdf-151 [126]
5.6.3. Dismantling the modern professional bureaucratic administration under the conditions created by the mafia state -- pdf-152 [127]
5.6.4. Why the mafia state cannot be considered a patrimonial system -- pdf-154 [129]

5.7. Liquidation of societal autonomies -- pdf-155 [130]
- A wide range of instruments are applied to achieve complete control: nationalization, acquisition, forced surrender, domestication, ghettoization, exclusion, and liquidation.

5.7.1. Liquidation of local autonomies: “caretakers” in place of local governments -- pdf-156 [131]
5.7.2. Liquidation of the autonomous positions of the intelligentsia in culture and education -- pdf-157 [132]

5.7.2.1. Culture -- pdf-157 [132]
5.7.2.2. Education and sciences -- pdf-161 [136]

5.7.3. Domestication of Non-Government Organizations -- pdf-164 [139]
- The mafia state employs a multi-step domestication methodology. Its first step is the centralization of funding and its control by a governor.

5.8. Patron-client relations in place of class relations -- pdf-167 [142]
5.8.1. The changing patterns of existential vulnerability
- The obedience of the citizens or at least their enforced silence is required to maintain the concentration of power. Threats based on existential vulnerability are the tool to throttle critical attitudes.

5.8.2. The variety of the patron-client relations -- pdf-168 [143]
- The list of “most influential Hungarians" reflects beneficence of Viktor Orban.
- In the world of academia Orban's regime funded the loyal Hungarian Academy of Arts to counter the influence of the Hungarian Academy of Sciences.

5.9. The middle strata of the mafia state power hierarchy:service gentry and court purveyors -- the “new national middle class” -- pdf-174 [149]
5.9.1. The service gentry -- pdf-175 [150]
- As a first step, a comprehensive political cleansing was carried out via mass layoffs.
- The second step was to force the groups of intellectuals in public service to join newly created professional chambers controlled by the government.
- Though all those belonging to the service gentry enjoy the advantages assured to them, they do not enjoy the freedoms that would belong to their feudalistic order.

5.9.2. The court purveyors -- pdf-178 [153]
- The other pillar of the new national middle class to be established is the order of court purveyors, virtually the exclusive beneficiary of any purchases and investments related to the state, and the added liberty to expand the organized upperworld’s influence on the funds secured from the European Union as development resources.

5.9.3. Cementing the “new national middle class” -- pdf-179 [154]
- The consolidation of the mafia state means that the adopted political family may draw those who are obedient into the system -- though at different levels of gratuity.

5.9.4. The sin above all sins: disloyalty -- pdf-181 [156]
- The fact that there is no peaceful means -- by individual volition -- of stepping out of the system is another evidence of the mafia culture that reigns throughout government.
- On the other hand, since only disloyalty counts as a sin, members of the political family who commit some other offence, whether against the law or decency, cannot be punished in the organized upperworld.
- What is being carried on is a highly subtle, utilitarian balancing act of reward and coercion.

5.10. Tributes exacted as economic policy: the system of special taxes -- pdf-183 [158]
- In the case of Fidesz, an economy subordinated to the purposes of power is determined by a duality of politically targeted allowances and tributes exacted.
- This was accomplished by the introduction of the flat rate tax and by grabbing the private pension funds.

5.10.1. Some forms of special taxes prior to 2010 -- pdf-185 [160]
- These included the National Highway Fund; National Cultural Fund; Innovation Fund; bank tax.

5.10.2. The systemic escalation of special taxes after 2010 -- pdf-186 [161]
- To counter the loss in revenue due to the introduction of the flat tax, Fidesz instituted a series of "crisis taxes".

5.10.2.1. agricultural support funds are—cial taxes -- pdf-188 [163]
5.10.2.2. Indirect special taxes -- pdf-194 [169]

5.10.3. State penalization of critical reactions called forth by special taxes -- pdf-196 [171]

5.10.4. The inverse of special taxes: strategic agreements and mutual benefits -- pdf-197 [172]
- Companies that can be forced to pay allowances are made into tributaries, or eliminated and their place taken over, while those that cannot be forced to pay allowances are offered strategic agreements: Audi, Coca-Cola, Daimler, GE, Microsoft, Richter, Samsung, Sanofi, Synergon, and so on.

5.11. Takeover -- replacement of the economic elite -- pdf-198 [173]
- Property relations in western countries developed through continuity over centuries; whereas the upheavals in Eastern Europe resulted in there being no sense of property being safe through generations.

5.11.1. The alliance of Fidesz and the “Christian middle class” -- pdf-200 [175]
5.11.2. The unique nature of property expropriation by the mafia state -- pdf-201 [177]
5.11.3. A change of the owner elite and ensuring surrender -- pdf-203 [178]
- By now the mafia state is redistributingwealth through the instruments of legalized robbery.
- This is done via the parliament, the government, the tax authorities, the prosecutor’s office, and the police.

5.11.4. The offer that could not be refused -- pdf-204 [179]
- Magyar lists examples where owners of two enterprises (BAV Rt. and MOL) were "encouraged" to sell their companies.
- In order for an offer of takeover by the organized upperworld to be an offer that could not be refused it must bear at least four potential threats: (1) unlimited command of legislative authority, (2) a secret service, prosecution office and police loyal to the head of the political family, (3) tax authorities willing to carry out the politically selective actions, and (4) complete control of state procurements and EU funding bids.

5.11.4.1. Ways of looting individual owners -- pdf-205 [180]
5.11.4.2. Ways of looting economic branches, networks and groups of owners -- pdf-211 [186]

5.11.5. Types of nationalization defined by function -- pdf-220 [195]
- Magyar discusses 7 categories of nationalization utilized by Fidesz.

5.12. The rationale of power versus the irrationality of public policies --pdf-226 [201]
- Magyar emphasizes that "rationality" hasx little influence on 'power".

6. The legitimacy deficit faced by the mafia state and the means to overcome it -- pdf-234 [209]
6.1. Domestication of the media
- Fidesz does not rely on the dictatorial form of censorship, all encompassing and administrative.
- Following the regime change, a mixed media ownership structure came about, overseen later by Fidesz using a variety of repressive means.

6.1.1. 2010–2014: Media control in the period of establishing the mafia state-- pdf-234 [209]
- Magyar describes the steps Fidesz took to bring the media under its control.

6.1.2. Media control in transformation after 2014, under conditions of the established mafia state -- pdf-239 [214]
- The repeated electoral victory of Fidesz in 2014, once again ensuring unbridled political power, gave Viktor Orbán the opportunity to -- as previously discussed -- wind up the dualist control of the political family and make his own exclusive role as leader explicit. The key moments of Lajos Simicska’s demotion within the adopted political family so far as the media was concerned were the following: [Magyar gives a long detailed description.]

6.2. Manipulation of the electoral system -- pdf-244 [219]
- In the totalitarian regimes everyone was under all-round surveillance and mobilization.
- The mafia state however employs a mixed technique of mobilization and demobilization. Since 2010 the conditions for free and fair elections have been in constant decline.
- Billions of public money are spent on party propaganda disguised as government information. The appropriation of the financial and communications environs of the elections by Fidesz in itself makes the electoral odds extremely unbalanced.

6.2.1. Changes to electoral law after 2010 -- pdf-245 [220]
- Fidesz positioned itself betwee the extremeright party, Jobbik, with about 15-20% support and the fragmented left and liberal parties.
- Fidesz introduced single-round elections in place of the two-round elections that had been in place before.
- The restructuring of campaign financing released an armada of insignificant “business parties” upon the electoral field.
- The decrease in the number of members of parliament from 386 to 199, along with the simultaneous introduction of the one-round election system in which relative majority wins the mandate favors the strongest party in relative terms.
- Creation of an electoral geography favoring the parties in government.
- Ethnic Hungarians living in neighboring countries were allowed to vote and their votes were collected by Fidesz supporters with no oversight.
- Meanwhile, hundreds of thousands  of Hungarian citizens (mostly critical of thegovernment) working in Westen Europe and the USA had difficulty voting.

6.2.2. The Prosecutor’s Office as part of the campaign staff -- pdf-248 [223]
- The Prosecutor's Office often targets political opponents
- Such selective law enforcement adjusted to campaign objectives can equally target innocents.
- Following the Prosecutor’s Office however the court has also been able to function as a government campaign tool.

6.2.3. Establishing the institutional means of electoral fraud -- pdf-249 [224]
- But if all of the above had failed, the law for electoral procedure ensures the possibility of fraud as a final lifebelt.

6.2.4. The 2014 spring parliamentary elections and autumn municipal elections -- pdf-251 [226]
- All the gerrymandering and manipulation since 2010 has resulted in Fidesz increasing its majority to 66.8% while its percentage of votes  dropped from 52.7% to 43.6%.

6.2.5. Means of curbing election results retrospectively -- pdf-252 [227]
- Magyar lists a number of irregularities in the municipal elections, such as disqualifying an opposition candidateafter he had won the election.

7. Legitimizing the mafia state: the ideological arsenal -- pdf-256 [231]
7.1. Ideology-driven vs. ideology-applying system
- Rather than driven by ideology, the mafia state relies on ideological templates of various sorts, and their use is determined by political expediency.

7.2. Target-ideological templates: God, homeland, family, work-based society -- pdf-259 [234]
- The most important ideological templates of the legitimation of power are arranged around the concepts of “God, homeland, family”.

7.2.1. Nationalism, antisemitism, racism
- The nationalism of the mafia state, however, is not directed against other nations, but against those within the nation who are not part of the adopted political family, who are not subordinated to that family as vassals, and the family’s opponents.
- “The nation” is in fact a euphemistic term for the adopted political family.

7.2.2. Ideological pyramid scheme -- pdf-260 [235]
- Their targets are not “Jews” -- rather, they regard antisemites as a political target audience. They are not racist either -- they just want to win
over people who have racist inclinations to their camp.
- This xenophobia is not ideologically driven; it is merely exploited for pragmatic reasons.
- The government has closed the Serbian-Hungarian, and later the Croatian–Hungarian border to refugfees with a 175-kilometre long and 4-metre high fence and hints at the possible construction of further walls if required.
- The government’s claim that Hungary does not need economic immigrants11 is especially hypocritical in light of the fact that in 2014 the number of Hungarians employed in Western countries ran to at least 300 thousand, and their remittances grew twelvefold between 2008 and 2014, to 127 billion forints (approx. 410 million euro).

7.2.3. Religion -- pdf-265 [240]
- The link between the Church and the political power is businesslike, in a very secular way.
- The idea behind his [Orban's] attitude is clear, but it is driven by power rather than by a Christian commitment.

7.3. Instrument-ideological templates: the System of National Cooperation and the national freedom fight -- pdf-266 [241]
- In Hungary nowdays the  meaning between "us" and "them" no longer applies to Hungarian citizens and foreigners, but to members of the Fidesz political family versus political opponents.

7.3.1. The System of National Cooperation (NER) -- pdf-266 [241]
- Following the 2010 election victory Orban declared: The Hungarian nation has committed the newly established National Assembly and the new government to resolutely, uncompromisingly and steadfastly direct the work with which Hungary is going to build the System of National Cooperation.

7.3.1.1. The substantive, value-based justification of the NER -- “the new principle of justice”
7.3.1.2. The justification of NER in terms of handling power -- “the art of friendship”

7.4. The national freedom fight -- pdf-274 [249]
- The secular religion of the mafia state is the nation, defended in a national freedom fight.

8. The Criminal State -- pdf-280 [255]
- Magyar refers to David O. Friedrichs, who makes a differentiation between corporate crimes and state crimes.
- Three separate categories follow from this: state-facilitated corporate crime, corporate-facilitated state crime, and state-corporate crime, which occurs when the two act together on an equal basis.

8.1. Hungarian law on criminal organizations -- pdf-281 [256]
- According the Hungarian Criminal Code, “criminal organization: a group of three or more people, formed for an extended period of time and acting in concert, with the objective of (…) intentionally perpetrating criminal offenses.”
- This is the standard definition for describing criminal acts in the organized underworld, but is inadequate for criminal acts in the organized upperworld.

8.2. The Palermo Protocols -- pdf-282 [257]
 - The Palermo Protocols against transnational organized crime, adopted in 2000 by the United Nations and ratified by Hungary in 2006, extends the definition to include  representatives of state authority, who can themselves form the core of the criminal organization.

8.3. The mafia state as a type of criminal state -- pdf-283 [258]
- Magyar compares a series of crimes committed by the underworld with those committed by the upperworld including: "What is robbery compared to the expropriation of property through laws and decrees?"
- In a mafia state, the criminal organization perpetrating criminal offenses, is the “polipburo” itself.

8.3.1. One example: criminal organizations expropriating property -- pdf-285 [260]
- Magyar presents a detailed example of the outdoor advertising company ESMA.

8.4. Classifying criminal organization actions -- pdf-286 [261]
- Magyar discusses 6 definitions of criminal actions by the mafia state:
1. The nature of damage caused by criminal organization actions of the state, broken down by damage caused to either private or public parties:
2. Connectedness of the actions by a criminal organization:
3. The institutional scope of managing corrupt transactions by a criminal organization:
4. Extent of the authority of the institutions involved:
5. Type of collaborating institutions according to their branch of power
6. Statutory definition of crimes committed by a criminal organization:

9. Pyramid schemes -- the limits of the mafia state -- pdf-294 [269]
- The mafia state’s need for legitimization requires pulling the strings of democratic background mechanisms.

9.1. Economic pyramid scheme -- pdf-294 [269]
- The mafia state uses taxation and budgetary tools, such as high value added tax and social spending cuts, to redistribute income to the benefit of wealthier social groups.
- In this economic pyramid game, there are three losers to each winner.

9.1.1. Autocracy and autarchy -- pdf-296 [271]
- Global market institutions extend beyond the authority of autocratic legislators: no matter how many holes the autocratic measures of state coercion attempt to patch up, no matter what obstacles are raised to market logic, market forces are always able to burst through the dams built by non-market coercive measures.
- Paradoxically, the freedom allowing the enrichment of the adopted political family is mainly fuelled by European Union funding, ranging from the agricultural single area payment scheme to large infrastructural developments.
- Large donor countries will sooner or later have to face the sensitive political issue of how much longer their taxpayers will be willing to finance the personal enrichment of the beneficiaries of the Hungarian mafia state, definitely not figuring among the objectives of European Union funding.

9.2. Foreign policy pyramid scheme -- “peacock dance” and Hungarian-style cunning -- pdf-297 [272]
- Beyond the ideological and economic pyramid scheme, there is also a political pyramid scheme playing out at the international level, with increased bidding, dubbed by Miklós Haraszti as a strategy of “sailing in a western boat propelled by eastern winds.” While the national freedom fight is a cold civil war aimed at
subjecting Hungary’s own citizens in internal politics, in external relations a “peacock dance” is being performed, swaying between transatlantic and eastern obligations.

- The peacock dance aims to maintain this external policy balance, giving Hungary access to European Union funding while maintaining sufficient leeway for the adopted political family to use these funds arbitrarily for private purposes and to cement the mafia state’s position serving this objective.

9.2.1. Dilemmas faced by the European Union -- pdf-298 [273]
- Orbán’s regime is unique in the sense that his effort to reshape the system is taking place within the European Union. Hungary is slipping back from a liberal democracy to a fully-fledged autocratic system, “back to the future.”
- It [the European Union] is forced into debates on specific topics, while struggling in vain to legitimately criticize the broader autocratic context.
- Magyar suggests 3 options available to the EU to come to grips with the problem. These involve remain a victim of the system of blackmail; opt for a twospeed
Europe; a federal Europe.

9.2.2. Opening towards the East -- pdf-302 [277]
- Magyar discusses Orban's overtures to the Eastern autocratic states as a counter-balance to his connections to the EU.
- The absurdity of fathoming Hungary as the “eastern gate of the EU,” “Central and Eastern Europe’s financial and logistics center” or other similar dreams, and the failure of its attempts to replace IMF loans with resources from Middle Eastern autocracies or China have narrowed down Hungary’s options of opening towards the East to Russia or a handful of ex-Soviet republics of Eastern Asia (Azerbaijan, Kazakhstan, Turkmenistan).

- The real danger lies in the fact that while the Hungarian government is carrying on its freedom fight with Brussels, it is becoming a useful tool for Moscow’s offensive energy diplomacy designed to gain influence: not only does it do nothing for reducing Hungary’s eastern energy dependency, it even exacerbates it.

- Magyar lists several  Hungarian projects related to Russia:
- expansion of the Paks nuclear power plant, to be funded for the most part by a 10 billion euro Russian loan.
- Hungary staunchly supported plans for the South Stream pipeline despite opposition from the EU, until the Russians abandoned the project.
- a number of natural gas shenanigans benefiting Russia's Gazprom; questionable electricity shenanigans, etc.

- It should be noted that Russian corruption of the political elite that it wishes to draw into its circle of influence through the energy sector is not an exclusively Hungarian phenomenon. “Hungary, the Czech Republic and Slovakia have become Russia’s Trojan horses within the European Union over the past years.”

9.2.3. The disparate logic of EU and US sanctions -- pdf-308 [283]
- We have reason to fear that the Hungarian mafia state will not be a unique phenomenon among the ex-communist member states of the European Union.
- The European Community lacks not only the effective tools for expulsion, but even for the disciplining of countries conducting themselves this way.
- One avenue is the European Court of Human Rights.
- The other main, specifically European set of tools (EU sanctions in the strict sense) consist of restricting or suspending member state funding.

- Although in April 2015, the European Commission suspended 708 billion forints in payments to Hungary’s Economic Development Operational Program and instituted a 10% fine, Magyar points out that these EU sanctions are akin to the military tactic of carpet bombing, where the victims are mostly civilians .

- As the most conspicuous of US sanctions, in October 2014 a rightwing daily reported that members of the Hungarian government had been listed among the persons denied travel visas by US authorities pursuant to Presidential Proclamation 7750 To Suspend Entry as Immigrants or Nonimmigrants of Persons Engaged in or Benefiting from Corruption.
- The US sanctions applied after a few preliminary warnings struck the mafia state’s Achilles’ heel: the essence of the mafia state consists of the adopted political family protecting the executors of the infringements, endorsed or even ordered by the polipburo, positioned at the various public organizations.

- Magyar suggests: Setting up the public prosecutor’s office for the European Union and passing European laws on the persecution under penal law of the mismanagement and misuse of European Union funding.
- If EU funds are misused by member states, that is used corruptly, on a mass and systemic scale, international juries should be applied in the member states’ tender procedures.

9.3. The precarious equilibrium of the mafia state: the spiral of delegitimization and the constraints on use of coercion or violence --pdf-315 [290]
- The various pyramid schemes have come to a breaking point, and their aggregate impact has disrupted the regime’s state of equilibrium, creating a spiral of delegitimization:
- Magyar lists: failure of the economic pyramid scheme; recommendations for supporting the “national middle-class”; quasi-legitimized open corruption of the adoptedideologized interventions in private life;political family; gang war between Orbán and Simicska; identity-shaping element.

- The ruling power could only break this delegitimization spiral exerting a downward pull by expanding its tools of lawful and unlawful coercion, and establishing a new equilibrium for its rule, albeit with decreased legitimization.

- At a Friends of Hungary event held in May 2015, Orban said: "The truth is that we do not agree with the school of thought that calls itself progressive that has gained traction in Europe.”

Magyar2016HungaryMafiaState.pdf

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