Hungary, which according to Transparency International is the second most corrupt country in the EU after Bulgaria, is facing fresh allegations of graft, according to a report by the Wall Street Journal. The report relates to an investigation opened by the US Department of Justice and the Securities and Exchange Commission (SEC) into the sale of Microsoft products in the Hungarian market.
US authorities suspect that Hungarian middlemen, who had received products like Word and Excel at a steep discount from Microsoft before selling them on to government departments for nearly full price, may have used the difference to pay bribes and kickbacks to government officials. The products were procured from the middlemen companies by state bodies such as the tax office and the police and postal services in 2013 and 2014. The middlemen are said to have demanded from their government customers prices that were between 30 to 100 percent higher than what they paid for the software.
Microsoft has dismissed four employees from its Hungarian offices, including its country manager, Istvan Papp, after it ran an internal investigation into the allegations.
The Hungarian website G7.hu reported on Friday that following their dismissal, two former Microsoft employees received top jobs in the Hungarian government, including Istvan Papp, who served for a time as the head of the National Investment Agency. Viktor Sagyibó, who was the head of government business at the software company, was appointed “ministerial commissioner” in the Prime Minister’s office, overseeing all domestic and EU projects in Hungary.
The allegations against Microsoft follow similar accusations in the Czech Republic and Romania. In the latter case, Microsoft’s former country manager Călin Tatomir is due to start trial soon on charges of money laundering and employing corrupt methods to boost the sales of Microsoft products to government offices.
Microsoft itself was not accused of any wrongdoing in the Romanian case and has said it is working with US officials investigating the allegations in Hungary.