Interview with József Kajdi – Episode 8

So far, I think we have covered a lot of topics, but mainly in chronological order. Now I will try to touch on a few issues that could be described as providing ammunition for attacks against the Antall government, or which were regularly used to attack it. The first such issue is the question of agents.

I haven’t really touched this topic yet, but it definitely needs to be mentioned, because one of the accusations against Antall and a critical point regarding the functioning of the Antall government is why he did not make the 3/3 agent files public, which, apparently, have still not been made public, even though it is now October 2023. There were several reasons for this, and Prime Minister Antall ultimately decided that they should not be made public.

The whole issue originally came to public attention when I mentioned the Dunagate scandal during the discussion, which took place at the end of 1989 and the beginning of 1990, when Major Végvári informed the opposition at the time that certain files were being destroyed on a large scale in the Interior Ministry, He smuggled in SZDSZ representatives and the producers and film crew of the Fekete Doboz (Black Box) film studio, and a film was made there, and destruction was indeed taking place on a large scale. Essentially, this was what brought down Horvát István, the Minister of the Interior, and it was then that the public became aware, although I think everyone already knew, that there was a fairly large network of informers operating in Hungary, which later became known as the “three per three,” which was also the official name of this organizational unit within the Ministry of the Interior. This term essentially referred to internal counterintelligence and the network of internal agents.

This issue was on the agenda throughout the early 1990s, and it was primarily opposition MPs who raised it and demanded that the Antall government make it public, as it was common knowledge that when Miklós Németh handed over power to József Antall in the prime minister’s office, he also handed over a list containing a few hundred names, but let’s think about it, we are talking about tens of thousands of agents, so these few hundred names were ultimately a heavily filtered list. So obviously, this could not be made public, because then only a fraction of it would be made public. But the most important argument for József Antall not to make it public and not to order it to be made public is the following.

Many 3/3 agents, former agents, approached him personally and confessed that they had indeed been recruited, that they had indeed made reports, but they also told him how they had been recruited. Most of these are small people who, through blackmail and coercion, ultimately agreed to be recruited and to report to the 3/3, or because they were threatened with imprisonment for committing some kind of public offense, and were told that that they would receive several years in prison, but they could get away with it if they signed a recruitment statement, or they blackmailed the person in question through their family, saying that they would not be allowed to go to university or abroad. So, essentially, these people agreed to be recruited through blackmail, which clearly affected their lives.

Let me tell you a story about this. The prime minister was in regular contact with the leaders of the parliamentary parties, including Gyula Horn, who once proudly said that “Your ranks are full of 3/3 agents and I will stand up and expose them.” József Antall replied as follows:

“Gyula, if you do that, I will stand up and point the finger at you and show that it was you who put these people in their positions.” Of course, Gyula Horn did not dare to spill the beans after that. This was one of the reasons why the 3/3 files were not made public in the end.

The other was a simple administrative reason. Historians and researchers investigating this issue agreed that it was only possible to reliably say that someone was a 3/3 agent if at least two or three documents confirmed this. So even if someone had signed a declaration of commitment, it was useless.

Even a payment receipt was useless, since they usually received remuneration for these. If this was all that was in the person’s file, or even if there was some kind of report, it still did not prove, at least from a historical point of view, that he was a 3/3 agent. This was partly because the authorities at the time deliberately smuggled in documents that did not actually correspond to reality.

This was how they tried to smear certain people. That is one part of the story. The other is that during the Dunagate scandal, a lot of files disappeared.

What’s more, around 1989, when it was already in the air that there was going to be a change of regime, György Aczél ordered a review of the files and simply removed the files of people close to him. So certain people were not in the files in the first place. The other thing is that, as I said, documents disappeared during the Dunagate scandal.

I won’t mention any names, of course, but there was an SZDSZ representative who regularly brought up this issue in the daily agenda, regularly demanding, excuse my language, with bloody fists, why the Antall government wasn’t releasing these files. In private, Antall repeatedly made his opinion known, angered, that „This man has the nerve to say this when he himself was a 3/3 agent. But he knows that his file is no longer in the records, so he can calmly demand that the files be made public.”

So there was a moral reason why Antall, ultimately, did not make the 3/3 case public. The other reason, as I mentioned, was administrative. So even if these files are made public, it is clear that they are incomplete, so many people who were actually 3/3 agents are essentially no longer in the records.

And one more thing you should know is that MSZMP members were not recruited as 3/3 agents. So I’m not saying that party members weren’t involved, but they did so voluntarily and not through coercion and recruitment. There was a journalist who later proudly stated that he had indeed voluntarily reported on his colleagues.

So this is clearly a different case. That is all I would like to say on this subject. This is still a rather sensitive issue to this day.

To this day, many people still dwell on it and blame it on the Antal government. This leads me to the next question, that of political purges and lustration. After all, in some countries, anyone who was a member of a political party, or at least a leading party official, was later barred from holding any public office.

This is what József Antall was, in part, referring to when he said: “Maybe you should have made a revolution.”, since here in Hungary there was a peaceful, negotiated change of regime, which obviously did not allow for such a drastic step to be taken. But let me tell you a nice story about this. This was at the end of the 1990s, when I was invited to lunch by a businessman who was not a member of Fidesz but was a strong financial supporter of the party, because he wanted to get to know me. In addition to this, I later learned that he had acquired his fortune through cigarette and alcohol smuggling in Ukraine.

This had made him relatively wealthy, and he also owned the Normafa fishing lodge (Halászcsárda). At that time, Fidesz regularly held its meetings and informal discussions there. So I had to meet this gentleman there.

I don’t want to go into the details. The point is that I showed up in a suit and tie, while he sported a rustling tracksuit. It was a very pleasant lunch, until he bluntly told me that we had ruined the regime change because we did not hang the former party members, referring to the members of the MSZMP.

I was forced to ask him if he was serious, saying that according to him, 850,000 people should have been hanged back then, to which he replied yes. At that point, the first Fidesz government was already in power, so this story took place sometime around 1999. To which I was forced to remark that if that happened, half his cabinet would be among the ones hanged.

He was shocked, and then we started going through who the MSZMP members were, i.e., the members of the state party before the change of regime, and it turned out that a sizable portion of the government, at least the Fidesz government at the time, was indeed made up of members of the former party. He dropped the subject, and it was never brought up again. But returning to the issue of lustration, József Antall was repeatedly accused, and this sometimes came up at government meetings, that the government was not functioning successfully because the apparatus was full of MSZMP party members, or at least former party members, and that the apparatus was essentially sabotaging even the best government decisions.

In this regard, I am compelled to say that, having had serious insight into the functioning of the public administration, being the State Secretary for Public Administration, I can state with certainty that this was not true in general. In fact, in the case of the government office, it was 100% not true. So I repeat, I assert that the administrative apparatus was indeed loyal to the government.

Obviously, mistakes were made, because I don’t believe that flawless operation is possible, but I consider it impossible that this was done deliberately to obstruct the government at the time, or at least I did not see any evidence of this. There was bureaucratic laziness, as I believe there still is in any administration today, but it was not conscious political resistance. This was partly because when it became clear that the Antall government was coming to power, all those in the ministries and the government office itself who could not accept this politically, left, and in the spring of 1991, a team of five lawyers also left the government office at my request, because they too had not really been able to come to terms with the fact that it was not the SZDSZ or the MSZP, MSZMP’s legal successor that had won the elections, and we parted very amicably, peacefully.

They left to join a law firm, namely the Raft law firm. But since I now mentioned Miklós Raft, I have to return to the previous topic for a moment. It is also common knowledge that at the end of 1989, Miklós Raft had a truckload of documents transported from the archives of the Ministry of the Interior.

It is not difficult to guess what these documents might have contained. It is obvious that these documents were of a political nature, documents that, if made public at a later date, would have had a negative impact on the former government forces. The next issue that was a target for attack, or rather a source of constant attack, partly unjustifiably, and mostly unjustifiably in my opinion, is the economy and, within that, privatization.

I do not wish to dispute this, as it is a fact that Hungary was experiencing huge inflation and huge unemployment. More than a million people became unemployed, but perhaps I have mentioned this before, but I am compelled to return to it again, because unfortunately, the fundamental cause of this was the planned economic system that characterized the previous era. And the fact that there was no unemployment, which is not really true, because unemployment existed within the factories.

I mentioned the specific example of a factory, an assembly hall, where one worker’s job was to assemble something, while the person standing next to him had to disassemble it, but at least they had work and were paid. But from the point of view of the economy and the budget, it is clear how much profit this generated. The other thing is that the Hungarian economy, and primarily industry and agriculture, produced for the socialist market.

The Soviet Union was the main market for these two industries, and for a very long time, the Soviet side paid only in transferable rubles. After a while, it became insolvent. By the time of the regime changing, the Soviet side owed us nearly a billion dollars, which debt then continued to grow, of course.

Essentially, apart from the fact that barter trade was also common, we were able to sell goods to the Soviets that the Western market was simply unwilling to buy later on. So the quality was, to put it mildly, below par, but understandably, we managed to sell all of this on the Soviet market at the time. But I would like to turn to privatization itself, as there have been widespread accusations that Hungarian privatization was characterized by appalling corruption.

But when it comes to privatization, it should be mentioned that privatization did not begin during the Antall government, and the largest privatization did not even take place during the Antall government, at least in terms of volume. With the adoption of the economic law after 1988, spontaneous privatization began. There were many people who had been members of the party state, who simply left the party apparatus and, interestingly, became successful entrepreneurs.

This is how Kaola, for example, was privatized spontaneously, along with quite a few other former state-owned companies, which by the time Antall’s government took office had already been privatized, essentially for a penny, despite representing very significant state assets. Furthermore, we inherited a state-owned enterprise portfolio, which I have already mentioned, that was in a very poor state and produced very poor quality goods. No matter how much we wanted to privatize it, we simply could not do so because of its quality. What could have been privatized, or what was possible to privatize, was grouped into the portfolio of the State Property Agency (Állami Vagyonügynökség).

Essentially, the State Property Agency, which was established by the previous government and was subject to parliamentary oversight, was responsible for the privatization of these companies. The Antall government made the decision to return it under government control. A law was passed making this legally possible. The reason for this was that whatever happened in the field of privatization, everyone would blame the government.

So it was better to be able to look at it and exercise some control over privatization. And that was when Ferenc Mádl became minister without portfolio, essentially the chairman of the State Property Agency, and then the Antall government really had a better overview of privatization. But there were a huge amount of other state-owned assets that had to remain in state ownership, partly on the basis of deliberate decision, as these were strategic assets, such as the Post Office, the railways, and certain banks, which were necessary to maintain the economic sovereignty of the government and, indeed, the economic sovereignty of the state as a whole.

However, it was clear that the rest would probably have to be improved in some way so that they could be sold, and essentially for long-term state asset management, perhaps the best term for this, the State Property Agency was established as a joint venture, which József Antall envisioned as a holding company. This concept was quite unusual in Hungary at the time and was not even fully understood by the ministers. He initially appointed two Hungarian citizens living abroad, who would alternate in the position.

Mr. Teleki and then Szabolcs Szekeres. Many questioned this decision, wondering why he had chosen foreigners. The decision was clearly based on the fact that these people had seen Western market economies in action and possessed expertise that was lacking in Hungary.

We had experts here too, but they had gained their knowledge primarily in the former socialist sphere and era, and therefore obviously could not understand what they had learned from textbooks, even if they understood the theory, but not at all in practice. And that is why he trusted these experts more. By the way, the decision was not a bad one at all, but it is another matter that, in keeping with Hungarian custom, both gentlemen were essentially hounded out of their positions.

So they were unable to implement everything they wanted to in this area. Regardless of this, I can only speak highly of the work of both of them, because they were truly engaged in an activity, an asset management activity that advanced the Hungarian economy and economic development in general. It is another question that they were forced to take on certain conflicts.

I sometimes experienced this firsthand at government meetings. One of the main sources of conflict, and this should not be forgotten, was that during this period of global economic recession, there were conflicts around the world, such as the collapse of the socialist camp, the collapse of the Soviet Union, the South Slavic crisis, and then war, or even the Gulf War in the early autumn of the 1990s, which coincided with the taxi blockade. So, in practical terms, I have to say that it was very difficult at that time to take steps that would have clearly led to progress, or a way out of the crisis, at least in a visible way.

Of course, steps were taken, and I would like to use a relatively grand expression here to say that the most important steps towards economic reform were taken during the Antall government, and 1991 itself was a peak period for the government, when the popularity of the government itself skyrocketed, which, I repeat, was not helped at all by the state of world politics at the time. Returning to privatization itself, I dare not say that there was no corruption in the government. I think corruption exists everywhere in the world, but I can say with certainty that there was no systemic corruption, nor was there any corruption that József Antall knew about.

József Antal was very careful about this, and was very sensitive to all such issues. Let me give you just one example of this. One of the members of the advisory board that existed at the beginning, I won’t mention any names, but one of the members regularly traveled around the country, fondly referring to himself as a member of the Prime Minister’s personal advisory board, but he used this to create more favorable opportunities for his own business.

When this came to the attention of József Antall, this gentleman was immediately forced to leave the advisory board. So, I would like to emphasize once again that József Antall was particularly sensitive to this issue. For example, he never sat down to negotiate with the heads of foreign companies, so as not to be accused of bias in any direction.

He entrusted this to his ministers, although it goes without saying that decisions of this nature were generally made by him or by the cabinet after preparatory work by the government. But I mentioned why privatization was a critical issue, given that the budgetary situation was constantly, and I must say, constantly, in serious difficulty at that time. At the very beginning of the discussion, there was talk about what we had inherited, what a wonderful legacy we had, whether referring to the $21 billion debt or the foreign exchange reserves of a few hundred million dollars.

Essentially, privatization revenues were always included in the planned budget, and I must admit that these were always a little overestimated. Tamás Szabó regularly protested against this during the preparation of the budget law, always saying that it was impossible to generate this privatization revenue, but somehow the deficit that could be accepted during the IMF negotiations always had to be made up. József Antall considered it very important that the agreement be reached with the IMF, as this would confirm our international economic credibility and acceptance by the outside world, and it was also very important from the point of view of borrowing.

It was clear that Hungary could only maintain itself with loans, and I repeat, this slight overestimation of the budget was primarily due to the underperformance of privatization revenues, but this was a realistic, expectable failure. Another issue that was also raised as a concern was that certain ministers, and this is of course well known, this is about the 1994 elections, when we are no longer talking about the Antall government but the Boross government that Lezsák and Tamás Szabó tried to ask companies for money for the election campaign. Well, they were generally unsuccessful, as can be seen from the election results, because it is obvious that this was not the only reason for the 1994 election results.