Borvendég Zsuzsanna: Fabulous Spy Games. How international trade networks with the West developed after 1945 - A Magyarságkutató Intézet Kiadványai 24. (Budapest, 2021)
‘THE HUNGARIAN MAFIA’ - A Cold War Hungaricum
'THE HUNGARIAN MAFIA' country, whereby the western partner slipped back some of the profit made to the account of the trader who ensured the favourable conditions. In the last few weeks of 1969, for example, the Lenin Kohászati Művek steelworks in Diósgyőr undertook a delivery of 2,700 tonnes of tungsten steel at the initiative of Metalimpex. The order came from firms operating in West Germany that had long-standing business relations with the management of Metalimpex. It was already clear upon the signature of the contract that this was an impossible undertaking as the steelworks in Diósgyőr did not have that kind of capacity. The plant could have fulfilled an order of no more than 200 to 300 tonnes and did not even have the necessary raw materials available. This resulted in a massive loss. The contract fixed prices at 1969 levels for the time of performance, even though the world market price of wolfram was rather volatile, so it was common to fix prices only a few weeks in advance. In January 1970, the price of wolfram skyrocketed to ten times its previous value, so the Hungarian economy would have suffered damages of 300-400 million forints even if the necessary raw material had been available to the steelworks. The company itself suffered major losses on the procurement costs, even though the emergency reserves of the country were mobilised (without authorisation). On top of all this, the steelworks had no choice but to involve Czechoslovak firms in manufacturing to avoid defaulting on the performance of the contract, for a much larger fee, of course, than they could expect from their original client. In spite of all its efforts, the steelworks ended up having to pay a late performance penalty. Although Metalimpex coughed up half the loss, this was far from a case of personal liability as damages were paid from the budget of the state-owned company, so the economy absorbed the cost. Even conservative calculations suggest the total loss exceeded 50 million forints in the currency at the time. There is one thing we can be certain of in regard to this case: the secret commission from the sizeable profit of the West German firms ended up in secret bank accounts, but the case did not make it to the courts since the statute of limitations had expired by the time investigations were carried out.239 239 About the case in more detail cf Borvendég 2018, p. 78-83 87
