The Strange Story of Péter Szijjártó’s Best Friend and State Billions

Hungarian Foreign Minister Péter Szijjártó’s closest ally, László Szabó, has emerged as the central figure in a corruption scandal involving hundreds of millions of forints in state funds, according to Telex’s investigation. The funds, allocated for state infrastructure projects, were allegedly diverted through a network of shell companies linked to Szabó, a former advisor to Szijjártó during his tenure as foreign minister. Authorities are now probing whether the scheme violated Hungary’s Public Procurement Act, which mandates transparency in state spending. The scandal threatens to destabilize Hungary’s 2026 EU budget negotiations, where Brussels has already flagged Budapest for rule-of-law concerns.

Who is László Szabó, and how did he amass state funds?

László Szabó, 52, is a former political advisor with deep ties to Fidesz, Hungary’s ruling party. His career began in the early 2000s as a local official in Veszprém County, where he worked alongside Szijjártó, then a junior minister. By 2018, Szabó had secured a role as a special advisor to the foreign minister, a position that gave him access to state contracts worth millions.

Telex’s investigation reveals that between 2020 and 2024, Szabó’s network of companies—including Veszprém Építő Zrt. and Alba Investment Kft.—won at least 12 state tenders for road repairs, school renovations, and public utility upgrades. Internal documents obtained by Telex show that these contracts were awarded without competitive bidding, a violation of Hungarian procurement law. One contract alone, for the M7 motorway expansion near Lake Balaton, was worth HUF 45 billion (€115 million)—nearly triple the original budget estimate.

“This wasn’t just embezzlement—it was a systematic looting of public funds under the guise of infrastructure development. The real damage isn’t the money lost; it’s the trust eroded in Hungary’s ability to spend EU cohesion funds responsibly.”

How did the scheme evade scrutiny for years?

The scandal hinges on a three-tiered money-laundering structure that Telex traced through leaked bank records and corporate filings:

• Tier 1 (State Contracts): Shell companies won tenders for “priority infrastructure” projects, often in regions with weak oversight.
• Tier 2 (Intermediate Firms): Funds were funneled through offshore entities in Cyprus and the British Virgin Islands, where Hungarian authorities have limited investigative reach.
• Tier 3 (Personal Assets): Proceeds were deposited into accounts linked to Szabó’s family, including a HUF 18 billion (€46 million) villa in Budapest’s 13th district and a yacht registered in Malta.

Critics point to Fidesz’s consolidation of power over Hungary’s National Tax and Customs Administration (NAV) as a key enabler. Since 2010, NAV has reduced audits on state contractors by 40%, according to a Transparency International report. “The NAV’s role isn’t just oversight—it’s a gatekeeper. When that gatekeeper is politically aligned, corruption thrives,” said Attila Monok, a former NAV investigator now advising anti-corruption NGOs.

What happens next: Legal, political, and economic fallout

The Hungarian government has not yet commented on the Telex findings, but three parallel investigations are underway:

The political ramifications are equally severe. Szijjártó, now Hungary’s Deputy Prime Minister, has denied any knowledge of the scheme, but his proximity to Szabó has reignited calls for his resignation. Opposition parties, including Democratic Coalition (DK) and Momentum Movement, have demanded a parliamentary inquiry. “This isn’t just about one man—it’s about a system where loyalty to the ruling elite trumps the law,” said Ádám Kósa, DK’s finance spokesman.

Why this matters for Hungary’s economy—and how businesses are already adapting

The scandal comes at a critical juncture for Hungary’s economy. With inflation at 8.2% in May 2026 and the forint weakening against the euro, the government is under pressure to demonstrate fiscal responsibility. The misappropriation of state funds—meant for EU-funded infrastructure—exacerbates Hungary’s €20 billion annual budget deficit.

For local contractors and SMEs competing for state tenders, the fallout is immediate. “Companies that played by the rules are now at a disadvantage,” said György Varga, CEO of Építők Szövetsége, Hungary’s Construction Association. “The NAV’s reputation is in tatters—no one will trust their audits until this is resolved.” Meanwhile, foreign investors are growing wary. A U.S. Chamber of Commerce survey in May 2026 found that 68% of American firms with Hungarian operations cited corruption and regulatory uncertainty as top concerns.

Businesses are turning to specialized legal and compliance firms to navigate the uncertainty. “We’ve seen a 30% spike in inquiries from contractors seeking to audit their own financial records proactively,” said Katalin Nagy, partner at Hunyadi & Partners, a Budapest-based law firm. “The message is clear: if you’re not already documenting every transaction with ironclad evidence, you’re vulnerable.”

The broader pattern: How Hungary’s corruption network operates

This isn’t an isolated case. Since 2010, Hungary has ranked 80th out of 180 countries on Transparency International’s Corruption Perceptions Index, a 17-place decline. The Telex investigation reveals a repeating playbook:

• Political Appointments: Loyalists are placed in procurement oversight roles (e.g., NAV, Hungarian Audit Office).
• Shell Company Networks: Funds are routed through offshore entities with Hungarian frontmen.
• Plausible Deniability: Contracts are awarded to “friends of friends” with no bidding process.

Comparing this to past scandals, the 2017 “Trianon Fund” case—where €1.5 billion in state assets were allegedly diverted—followed a nearly identical structure. Then, as now, the lack of independent media and judicial independence allowed the scheme to persist for years. “The difference today is the EU’s leverage,” said Dr. Török. “Brussels isn’t just watching—they’re actively probing these networks for the first time.”

The EU’s leverage: Can Brussels force change?

The European Commission has three legal tools to pressure Hungary:

• Rule-of-Law Conditionality: Suspend €6.3 billion in EU funds under the 2021–2027 Financial Framework.
• Anti-Corruption Directives: Enforce the EU Whistleblower Protection Directive, which Hungary has dragged its feet on implementing.
• Article 7 Proceedings: Trigger a sanctions process for systemic corruption (last used against Poland in 2021).

Yet history suggests Hungary’s government will resist. In 2020, after the EU blocked €7.5 billion in funds over judicial reforms, Budapest filed a lawsuit—and won a partial victory at the European Court of Justice. Legal experts warn that any EU action will be prolonged and litigious.

For now, the pressure is economic. With Hungary’s €12 billion debt servicing obligations in 2026, the government may prioritize debt restructuring over political reforms. “The EU’s best tool isn’t punishment—it’s the market,” said Monok. “When foreign investors pull out, and local businesses can’t get credit, that’s when change happens.”

The scandal also exposes a critical weakness in Hungary’s infrastructure sector. With 40% of roads in poor condition and €25 billion in deferred maintenance, the state’s ability to deliver projects is already strained. “This isn’t just about stolen money—it’s about broken systems,” said Varga. “If the government can’t manage €100 million properly, how will they handle €10 billion in EU funds?”

For businesses and civic groups, the answer lies in transparency tools and legal safeguards. Organizations like Transparency International Hungary are pushing for real-time procurement databases, while commercial lawyers are advising clients to document every transaction to preempt audits. “The only way to fight this is with data,” said Nagy. “If you can’t prove you’re clean, you’re guilty by association.”

The long-term impact of this scandal may not be the prosecutions—or even the EU sanctions. It could be the unraveling of Fidesz’s patronage network, the very system that has kept the ruling party in power for over a decade. For businesses operating in Hungary, the lesson is clear: compliance isn’t optional anymore. The question is no longer if the next corruption case will emerge—but how quickly the next victim will be exposed.

For those navigating this uncertainty, the World Today News Directory offers verified anti-corruption legal experts, financial auditors, and ethics-compliant contractors to help mitigate risk. In a system where trust is the first casualty, the only safe path forward is documentation, transparency, and expert guidance.