Testimony of Zsolt Balogh, IV. accused, at Kecskemét Tribunal on the Day of the 2nd of October 2012
Testimony of Zsolt Balogh, IV. accused, at Kecskemét Tribunal on the Day of the 2nd of October 2012 (detail)
The related testimony of Zsolt Balogh, IV. accused: Honourable Tribunal, I would like to state at the outset that I committed no offense, and I reject the accusation that I was a member of a criminal organization. At the time of the conclusion of contracts, invoices or payments of any kind, BKV was not suffering a financial loss. To my understanding of all working progress in which I attended and participated, the BKV concluded proportionally valuable contracts, and I never said otherwise.
During the search and seizure at dawn in my apartment, the investigators discovered no evidence but instead found my sleeping children. After the home search, later in the course of the investigation during an interrogation, I felt that if I wanted to go home to my family something should be said about the management of BKV. Therefore, without specific accusations reported against me, I gave a confession through an enumerable side. Minutes show that condition without a single question at various times. I continued to repeat my testimony during the repetitive interrogations. Protocol proves that there was such an interrogation, where two prosecutors and two investigating officers, so four of them, were interrogating me while my lawyer at the time was sending a trainee lawyer.
Since I'm not a hero, to me, only one thing was important: to avoid arrest, thus not receiving the same result as some of my colleagues. To this end, I also made statements to the press. However, I still didn't set the course of the investigation, that I caused even a cent of financial loss to my company, BKV, because this never happened. I've been proclaimed in the press as the witness for the prosecution, although the prosecution has accused me of the detrimental misappropriation of 750 million forints in assets in such a way that I was not suspected during the criminal investigation, and therefore I couldn't defend myself against it. In the end, the prosecution accused me of committing a crime with exactly six times the higher value than those of Miklós Hagyó.
The folowing recount is related to C.C. Soft Ltd.
In connection with this charge, I'd also like to say that no offense was committed. The first phase of the Szentendre suburban renovation - this is the section between Batthyány Square and Békásmegyer - started in 2004-2005. That was before the spring of 2007 when I had started at BKV. My work started at the end of April, and for this I will show a letter. A professional rapporteur told me, as a group leader, that I’d like to emphasize regarding this multi-billion job that some parts will not be finished. This is intimately integrated into the renovation, and without this, the handover of this entire section really cannot be imagined. This was the passenger information system.
Honourable Tribunal, imagine that there is a huge infrastructure investment and a suburban railway is part of it. For example, railway operations security and also the replacement of equipment, which were made by a big French company, Thales, were part of it. At the end of this production, passengers do not get any kind of surplus. By this, I mean there will be a modern safety interlock allowing for more frequent travel with suburban trains. In the event of an accident the possibility of the other trains to reroute is fine, while the necessary changes in audio and visual information necessary for passengers is not achieved. I was informed about this by the professional rapporteur when it was my first month at the company.
It is clearly perceivable that I alone, as the fresh head of the office, didn't decide which company would be assigned. Instead, there was a bidding process. As the result of this procedure, the committee accepted the offer of C.C. Soft Ltd. I personally, as Office Manager, only attended one meeting on the subject when the safety equipment maker, Thales, requested more than one billion HUF from BKV for the software for the safety equipment and public communication equipment. Then if I remember correctly, and the documents also show that is well-remembered, we were contracted to C.C. Soft. I didn't attend one meeting in connection with the passenger information equipment. In fact, this coincided with the original work by the fact that I took over the technical management board.
Since that date, the passenger information system was overseen by the Investment Department, personally ... Head of Department leadership did. HÉV service experts, the technical supervisor of investments, and other employees from the internal organization participated in the professional work. At BKV, the first task is the safe management and operation of each vehicle. So passengers' and workers' safety comes before everything else. We are talking about the iron wheel sector, so the metro, tram and HÉV have very strict safety regulations. For the safety of the buses and trolley buses, we made sure that dangerous devices could not go out because on the guided tramway, the driver cannot do anything else but brake or stop the vehicle. This was a special command. This meant that there was a so-called railway safety regulation. These specifications do not allow any kind of laxity, or derogation from the rules of any vehicles or infrastructure. So when the Deputy Mayor urged the transfer of the system, I looked for the responsible technical experts, and I got the answers from them. They reponsed that the trial run is not yet completed but it works perfectly, so I can calmly sign the certificate of completion for the system. At the same time I would like to say that since the beginning of 2008, so for five consecutive years now, the passenger information system has been in operation. With regard to this, I would like to show the internal investigation file about BKV's statistics.
In my opinion, as it can be read as an expert opinion of the investigation, if the passanger information system would be like the indictment alleges, during its five years of operation, the following statistics must be shown.
My first reason: With regard to railway standards, as summarized by an expert, and as described in the last three years, since I do not work for the company, if it did not work properly, then in the last three years why not correct these errors? In my opinion, because its effectiveness is clear, as stated in the expert opinions of my former colleagues. This would contradict the statistics, which I will show you.
The system went into operation at the beginning of 2008, and I was working as the acting CEO between February and September of 2008. As I said earlier, during this period Péter Takács worked as the acting chief technical officer, who at the time fulfilled my previous job. If anything was hindering normal operations or problem prevention within the system, it surely would have taken action.
My third reason is that on the 25th of November 2008, the board's chief engineer of the technical infrastructure indicated in writing the operational problems. Following the letter, I arranged for the legal directorate to force the system to correct the errors, or to seek compensation if something is really wrong. For this, I will show letters.
My fourth reason is that in connection with the letter, personally, I find it strange that between February and September of 2008, when I was not Head of the Technical Operations, why weren't these problems revealed to the Chief Engineer.
The fifth is that the material expertise described in chart will show different numbers.
The sixth reason is that in many places in Europe, to my knowledge, and I will also show you an example, a similar system is in operation. And finally, I would like to submit some newspaper articles. They will show that in Hungary many companies also introduced a similar passenger information system. In the near future, for example, BKV intends to introduce a new system worth 6.6 billion forints.
Zsolt Balogh, IV. accused, in connection with the charges against him, starts a slide projection.
Zsolt Balogh, IV. accused: According to the Control Board summary note shown on the page 1,039, the administrator of project management was authorized for payment throughout the competitive tender via invoices from project management office manager Zsolt Balogh who was later on the head of the investment department, deputy chief executive officer, and chief technical officer.
I do not want to publicly criticize the board of directors, but really the only thing which has not been described is that I was the one who bolted on the table.
Thus, the board of directors establised that I would be from the beginning of the investment the jack of all trades.
I'd attach...the letter of the the Head of Department to Z. D. on the 31st of May 2007, and draw attention to the administrator ... he is the professional rapporteur who repeatedly appears throughout the of the system project. So I would like to refute the Board's finding that it was me who generated this need. After a month of working at the company, the head of department said to the deputy chief executive that there is a need for this system. Not only has this been said, but the main contractor, Thales RSS Gesmbh, gave itself a symbolic deadline due to system bugs, and then implicitly wrote to the head of department and emphasized that compared to the previous deadline the could start so-called 55-day trial run there would be delays. In fact when I was at the company only one month, the head of the investment department realized that the passanger information system had been omitted from the previous multi-billion improvement, and gently communicated with the deputy CEO of the investment that Thales would therefore be delayed. The date is very important, the 31st of May 2007.
The following letter is from..., the head of the department. This is already one from June. Unfortunately, due to the data management, I do not have any of those letters which Mr. .... signed. So I can't have such letter which shows the BKV's own internal correspondence, but these will be transferred as printed copies. A few days later, the head of department changed and said that penalty should be imposed upon Thales, because they did not make the software on time.
In referring to this as the office manager, on the 5th of June I wrote for the public procurement office, who was completely independent of me, from the pen of ... that the penalty should be imposed on Thales, and Thales accepted without disscussion the 50-60% of the 40 million penalty during a meeting on the 1st of June. This is evidence that Thales virtually admitted that it was not finished on time. The following letter is dated from the 25th of June and from the pen of .... It was when I wrote to C.C. Soft Ltd. to express that clarification was needed about the six points of the received bids. These were all the professional clarifications: introduce the speaker and amplifier types and a description of the specifications for the type and manufacturer of the glass. So later during the investigation when the investment department referred to everything as unprofessional and the claims that old technologies were installed, these issues were already noted on the 25th of June 2007 by the professional rapporteur. It was true that I hade been working with the company for two months already as the office manager, so my subordinate asked the companies that had sent offers, inter alia C.C.Soft Ltd., to respond by the 2nd of June.
Then on the 27th of June ... wrote a letter to... ... ... and ... . ... the Head of Department, who wrote a letter in May to D. thus discovered that the passenger information had fallen behind. The legal adviser of the purchasing department, ... chief engineer of the suburban railway service, and specifically …, the Békásmegyer-Szentendre HÉV leader, I had also addressed. In this letter, the Thales company invited us to review the Szentendre HÉV interlocking connection with the current time delays. So at the end of June 2007, the company and its professional rapporteurs were aware that the former investment had fallen behind and the passenger information system could not be finished.
In the next letter, the administrator is also ....., with the signature of Mr. D. wrioe a letter to Mr. S.L., Deputy Transport CEO. The Deputy CEO sensed that something wass wrong and the passenger information system would not be ready. In conclusion, despite the operability of the large system the device would not operate, so passengers would stand there at the station deaf. They would not know which train would come at which time and on which track. Mr. D., therefore wrote a letter to the deputy transport CEO, in which he mentions that they can't tell when the passanger information system will be ready, so in the meantime, the passengers must be informed. This happened after the breakdown of estimates on the 3rd of July 2007. This is an evaluation report, attended by László Balogh from HÉV, .... Head of Department of public procurement, ... Investment Department Manager, ... and Zsolt Balogh. Here, there are five companies listed. Then I wrote to ..... I asked if he agreed to the protocol of assessment made by me. This wass just minutes, so I wrote down what these people said. Then I forwarded this protocol to Mr. D., who would then give his permission.
In comparison, here I attached the investigative material 32.057/A. and 31.779. page, where Mr. .... said, "To answer the question I tell that the contract conclusion took place without the Commission evaluation minutes, because the evaluation committee did not meet more than once. So no protocol has been signed. The contract conclusion has been approved by Z. D. at the request of Zsolt Balogh."
Well I, who was at the company only two months, could make the deputy CEO of investments, with whom I had such an affair as quoted on the second page, sign a contract. Z. D. said that "The project is led by Zsolt Balogh. I got him from the beginning of April 2007. I must employ him but originally not in this area." Well, to say the least, that was not a completely harmonious relationship with D., so this is completely absurd that I could make Mr. D. sign a contract.
On the tendering day, at 13 hours 42 minutes I wrote a letter to .... head of department. In that, I said if he could agree with the assessment protocol, then it should be sent to Mr. D., and it was not reported seperately to the CEO because Mr. D. informs him orally. Apparently Attila Antal had been notified that (until that point it had not been mentioned) we forgot to implement an important element into the project worth a few billion in investments. That is, we needed something that would actually communicate to the passangers. So this is what I wrote at 13:42, Mr. .... , at 13:50, so a few minutes after I wrote a letter to Mr. D. He sent the minutes of the evaluation committee and asked to accept and enable publication of the results of the negotiations and contracting. Mr. D., who did not sleep much on it, wrote a letter to confirm at 13:51. Subsequently, on the 9th of July, Mr. D. wrote a letter to Attila Antal, in which he tells him that there are two winners, C.C. Soft and C.C. Soft IT Ltd. I did not understand that, because C.C. Soff IT Ltd. was not even a competitor.
Shortly after, this wass complemented by the amount contracted and displayed that CEO Attila Antal signed on the 12th of July. What else could he have otherwise done when a major part of the investment was missing? Of course, he allowed the work to continue under these conditions.
Thereafter he wrote to Mr. D. in a letter dated the 13th of July. The tendering stage of the project had been completed, and that he had entered into the contract for the amplification system with another company that is working in parallel with the CC Soft Ltd. Then, one day later, they told me that it was okay; the public procurement purchase went OK, but they asked if I was aware that BKV, at the time of Botond Aba, outsourced all IT networks to a comnpany called Trafficom. I think for 32 years, they said, and that this large contract related to the outsourcing contrasted with the fact that they were trying to achieve a communications network. Trafficom, I do not know exactly how much, has a 1% or 2% owner of the BKV and 99%-98% owned by Siemens, or has a so-called pre-emptive right to work. This has been neatly concealed in front of me all the way from the Deputy CEO through my professional rapporteur. Of course as a suspect, now I say, emotionally overwhelmed, that it is easy to say to the internal control in the first report that Zsolt Balogh had found all this out. No. Here, serious things were concealed. Trafficom has therefore had a contract for pre-work, and this was what I could tell Trafficom. I received this very difficult contract. I do not know for how many years now, and no one knew about it at BKV.
In my next letter, I wrote to the procurement manager that something was wrong. The contract between BKV and Trafficom affects this new contract, so I requested a quick response. There was a project, for which we advertised a public procurement, announced the winner, and then when the winner was about to start the work it came to our minds that we should have not awarded this contract at all.
Simultaneously, on the 19th of July 2007 - I have already mentioned in my introduction that in relation with CC. Soft Ltd. I took part in only one meeting - when the giant French company, Thales, announced that they would only complete for money the required, so-called Aramis transfer for the passanger information system. Aramis is the software's name. In fact, it was about that that Thales developed a rail safety device for billions of forints. It was exactly deduced that on the line of successive suburban trains where they were and compared this to the indicator lights that they show, and this information should be linked to the database of passenger information. Otherwise the passenger information automated system would say something incorrect.
The point was that the former HÉV had to be shut down because of a train accident, but replacements had to be ready to organize the stalled passenger traffic in the morning. As a result of this development, which rarely occured, both rails were busy. Therefore in these cases, the traffic employees redirect the trains to the non-defective track, and in fact what happened was that passangers were waiting for the train to come from the right, but it came from the left because it had been redirected. The passenger information system would organize these situations. Thales originally did not want to take on this software, and they didn't undertake it. Although it was a multi-million forint contract, it had been only a small part of it, and when they found out that there was a winner of the BKV tender that would do the passenger information - and it turned out that this interface, called Aramis, was not available - the French company said that they would make it for 1.2 billion forints. That was a lot of money for us. Thales is a French company working within the euro zone. I interpreted this as for a few tens of millions of euros they would have done this project which was not planned for us. Now this was what …, from Thales GmbH, told us on the 19th of July. This was that meeting in which I participated with several BKV members. I read pages 1059 and 1061 which showed that employees of the company who worked there for decades, and ...., who was Mr. S's head of department of the passenger information. After I realized that the company was not able to obtain data from Thales, they started to figure out which features CC. Soft Ltd. should build. Here I would not want to protect CC. Soft, because there is no need for this, but this whole business started because of a technical disposition in which no time limit, no technical content, nor the conditions were right.
Subsequently ... I quickly wrote a letter to Trafficom. The company, as I have already mentioned, had the IT development for the lines of BKV, and after our discussion related to the physical work on the 19th of July, they told us the work that would be possible to carry out.
I'm moving on, because this is one of the major materials that I put together. It can be tracked exactly that which happened to CC Soft and the matter of the passenger information.
Investigative page 3,697: Experts described the best layout for the suburban areas of the passenger information system, which in comparison to the technical area was much more proliferate. Then the contract was made. On my computer there is a contract draft where one can see that there are corrections.
And .... it says in the investigative material on page 32,057 that "To answer your question I was the technical inspector of the investment, but in September 2007 I had to give the administration of this matter over to the management of Zsolt Balogh, and from that on my colleague .... took over."
The Board says on page 1,061 that ... requested various changes. I attached ...'s two letters.
Then the Board, and when I refer to them it's because I don't have file archives at home, so obviously these documents are held by BKV. The Board said it was safe and that there was a presentation. Therefore, obviously because of the the payer's stuttering, that what kind of passenger information we want to do and what would be the technical content. CC. Soft offered a higher-level comfort monitor since it seemed that neither the time nor the technical content was feasible.
Here it is described in detail how the various technical parameters must meet, but I consider the second part of the text interesting. In two places, a registration number refers to my presentation, for example on the 25th of September deputy technical CEO Zsolt Balogh sent the request for amendment to Attila Antal, but the relevant administrators at that time were already ... and …, so I didn't get into this because of my increased tasks which where exactly the type of professional consultation which occurs at the moment. Then on the 3rd of October, Attila Antal, to our professional proposal , amended the contract.
In connection with this, I attached a letter dated on the 6th of October. It is a bit contradictory ... the testimony, as he said that since September he didn't work on this project, and here according to the protocol, the protocol was made by ... and ..., and also participated in these visits (page 4825.).
Then the large German company, FunkWerk, saw that hard work was not going to happen, and simply withdrew from the contract. They said that they failed to deliver the type of very high-quality equipment (AEG), and that C.C. Soft should resolve this as they wish.
At this moment, Honourable Tribunal, I don't have a document to present, but I can imagine that obviously the investment department noticed in May that Thales won't complete the forgotten and rediscovered passenger information because of the huge price of the software, and anyway a lot of internal professional consultation didn't happen in this case. So, at that time, the consultation from C.C. Soft began about that technology which they undertook. Here I would make a pretty big jump, because it was previously published in several articles that hair dryers were built into the LCD monitor, and such stupid things were said.
I would refer to what was my whole basic idea of defence that, Honourable Tribunal, we are talking about a railway safety thing here. You therefore should not believe that exprets 4, 5, and 6. It can be tracked that they were there to keep the train services. Experts 4, 5, and 6 of the Technical Board and the Investment Department decided that either they would install hair dryers to the passenger information system or another junk solution, because quite simply rail safety did not allow this. I also proclaim this argument: I haven't worked at the company since July 2009, but even last night the same passenger information system was still working. So I ask myself: If this is so shoddy and not working, why is it still operating in its third year? The completion of the work schedule had been amended to the 22nd of October. Then according to the documents on the 30th of November, the technical acceptance began.
Then here in the documents there is a huge hole, and it seems that they had initiated the technical transfer several times. There have always been various shortcomings. However, later I'll show you a minutes report, which is signed by the company, and according to the report, these shortcomings were not technical barriers to the transfer. Yet, on the 5th of August 2008 - I was the Interim CEO until the 31st of August 2008, - inspection took place, in which the focus was technology that could be viewed on the site to gain experience in real-world conditions, dimensions, distances, light and heat conditions. On the 5th of August 2008 I wasn't busy with the conditions of the heat, light, and sound of the Szentendre passenger information system. But on the 31st of August 2008 the interim CEO agreement would end. So I had no idea that on the 5th of August 2008 the directorate of technical experts, specialized service of HÉV, and its leaders and the management board of HÉV had any questions about the sizes, distances, light and heat conditions.
I would like to say a few words about the financial settlement. According to the controlling board's report on page 1061, the invoices had been signed by Zsolt Balogh. The attached certificates also had been signed by ...., and on behalf of C.C. Soft, for me an unknown person. Then the factoring agreement, on the 18th of October, was signed and initialed by deputy chief economist N.T. and Zsolt Balogh, and here it is described who did sign the completion certificate on the 5th of November.
As I said to the Honourable Tribunal, there is a hole in the life of C.C.Soft between February and August of 2008, and it seems that the problem of this issue was not on the surface at the time. The Controlling Board found that, and this was around August or September 2008. At this time P.T. Was director of logistics. Two days later in his response to the stockholders, the external parties were prohibited to further communicate, and asked legal director Dr. GY.Sz. for help with the legal settlement of the case. Here are the emails from the administrator on the 22nd of September. The process is probably stuck here, in this respect, because there are no further documents.
On page 1,095 the first invoice from C.C. Soft dated on the 24th of October 2007 can be found. Honourable Tribunal, at that time I was the deputy chief technology officer at BKV. As I mentioned to you, I didn't have less than 17 signatory blocks on my calendar that had a half hour to an hour appointments. Obviously, if such a thing been said like “Can it be paid,” then I asked these two gentlemen. In October they said that it could be paid because the certificate of completion had been signed. Then I think the invoice from C.C. Soft came into my block where there was, of course, my signature, which I saw. I didn't write that it was accomplished, nor that it could be paid. I only wrote a letter "L" and “Zsolt Balogh,” the date of the invoice (October 15th), and the deadline for payment on December 14th. In other words, if on the 15th of October ... and ... wrote that it was accomplished, then I approved during this interval, and I saw the bill. After these, I signed the certificate of completion and, of course, below my signature there was the signature of ...., the investment manager.
On page 1099 the handover protocol and the start of the technical transfer can be found. The last sentence of this: "The completion the content and quality are in accordance with the contract."
Then there is the December invoice from C.C.Soft on pages 1,113 and 1,115 which show that the amount was to be paid from the Investment Facility. The amount of the invoice could have been paid by …. on the 11th of December 2007. Of course, it's my signature on the document and the verification of performance is beneath mine by ..., but that was not unusual. As I said with the earlier count, I didn't sigh the payroll sheet. There's just ...'s signature on it.
Then you can see the same on page 1,125: "I hereby certify the performance of the investment at the expense of the payable invoice." 19th of February 2008....
Then, regarding the defective completion measures which had been taken, such measures had no affect. So inaffective were they, that after contacting on 14th of May 2009, C.C. Soft received 480 million HUF from BKV. So they said that BKV did not take over the system on the basis of the performance. They had been hosting it ever since, and they therefore asked 480 million forints for it. Thus, C.C.Soft, in my opinion, were not defending themselves on a legal basis. So we attacked back. This is not true, because the certificate of completion and the technical transfer protocol is traceable. (page 1065)
Over that period - this section can be read on page 1769 - I do not remember from whom was the investigative material. Due to Attila Antal's sudden illness, Zsolt Balogh, during the performance of his general CEO tasks, from the 15th of April 2008 entrusted the employee with substitution tasks of CTO. Obviously it was P.T.
There are a number of signatures which were signed together. I was the Interim CEO, and P.T was the responsible deputy chief technology officer. In this connection, I would like to say that to me, Mr. Péter Takács never indicated that there was a problem with this provided system.
The technical handover protocol can be read on pages 3,729 and on 3,731. Here is the attendance list on page 3,729. I put a question mark next to the page number because the number is not fully readable, but it can be inferred on the previous and the last page.
On page 3,733 is the rectification statement of the irregularities. On pages 1,091 and 1,089 there are two statements from the inner Controlling Board about types of correspondence and the arrangements which had been made with the CC. Soft's passenger information system.
For me, the most striking and interesting document can be found on page 3,793. This was examined by BKV's own system, the computer system. I attached more of these. Here are listed approximately 30 items, and the availability percentages are on the side. Almost 90% of these show that the passenger information system is 99.9% available. In some cases when it is less, and some items are in the range between 0, because the passenger information system was not installed at those points. This is a multi-week interval. These studies show several weeks. Such as on page 3,795.
Finally, the Controlling Board of Directors on page 4,319 examined the construction diary. I could not get this. As stated, the technical inspector for BKV was ... .
I would like to compare the value of the installed system in a few cases between Austria and Hungary. A source in Debrecen wrote on the 18th of May 2012 that the passenger information system of DKV valued at 170 million broke down, and the source considered whether or not to dismantle. In Debrecen, there is only one. Tram line 1 has such a passenger information system, which shows what time it is, and how many minutes has passed since the last tram departed. This was then 170 million HUF. In Szabolcs and Nyíregyháza works another system. They wrote that it was nearly half a billion, and doesn't know as much as this one. In Győr the system is completed, and the article says that it is a half billion investment. In Kaposvár, where it serves regional and sub-tasks, the system is 600 million. The latest news is, if it's true, that BKV plans to apply for 6.6 million forints for its whole network.
I went around among my colleagues and I asked them where similar looking technological systems exist, such as Szentendre passenger information system, and they said Graz.
I traveled to Graz in 2012 to take pictures of the system, because in the investigation material the expert said that it is difficult to read the signs. I would like to show to the Tribunal how readable are the same signs in Graz. In summary, I don't feel guilty related to C.C. Soft Ltd.
I would also like to respond in relation to the second accusation, according to which Miklós Hagyó instructed me to obtain 15 million HUF per year for him. Briefly I would like to say the following: Although with this act the prosecution is not formally accussing me, but instead accussing Miklós Hagyó under the same act of bribery and extortion. The bribe was to my knowledge, not only a passive but an active subject as well. This would suggest to me that the prosecution could potentially accuse me of bribery, so I learned from the process so far in this round I do not want to make any statement.
Honourable Court, please include as part of the trial material the documents which I have presented, and I wish to say the following about my current situation: Since August 2009 I have hardly found any work. Due to the proceedings against me, I'm in effect welcome nowhere. Currently I work at a foreign-owned real estate investment company, and in the coming months, the company will decide about me. Over the past three years, I have physically degraded. I must take antidepressants. My blood pressure is high, and I can confirm this with medical documents. Basically, my family keeps me alive. I have turned inward. I don't really have friends. The whole thing is that I live as a great failure. The fact that they have treated me as an investigative object during the past three years has been terrible. I feel that I was misled. My first defender led me to believe that I would not be accused in the case. He also declared that to the media at the time.
I ask the Honourable Tribunal, because of the lack of evidence to the criminal accusations, to release me from the charges. The past three years and my honor, I will not get back. I said everything to the best of my knowledge. Furthermore I'd like to use properly my speech. Due to the ongoing trial, I sustain my negotiating statement, and I do not wish hereafter to make any other statement or to answer such questions.
The lawyer of Zsolt Balogh, IV accused, to the question of the Council President: My client declares in connection with AAM Inc.
Zsolt Balogh, IV accused: Honourable Tribunal, during the investigation I was not suspected with that offense. A crime was not committed in connection with AAM Inc. To my knowledge, AAM Inc. worked with BKV since the beginning of the year 2000. This was later on confirmed. I have prepared for this, too, a copy of an AAM contract dated on the 20th of March 2000. According to it the company, as early as 2000, created the coordination tasks of the Metro 4 project. According to the numerous photocopies, the company for this external work, as it has always been expected, just concluded continuous and smaller contracts. During the Metro 4 project, the owner Capital City brought a difficult situation to the company. Indeed, as the organization was not ensured, it was expected that the Metro Line 4 investment performance task would be done by the company's own resources. That's why the AAM contract in question was signed in 2007 December. After they had generated a storm of the Municipal Assembly with the so-called advisory contracts, the Company's management was caught between two fires. On the one hand it was expected that AAM would make the Metro 4 monthly reports for the capital. On the other hand we did not receive any protection against the political attacks to the company and its employees. The table of completed contracts in the indictment were given by leaders of certain expertise, and I'm going to show you this. Under consultation, I only undertook those performances which were recognized by certain leaders who the company would recognize. At this time an approximately 2-month-long consultation was launched. Meanwhile, Dr. L.B. continued to have AAM produce more Metro 4 monthly reports with the signature of the Deputy Mayor and presented to the General Assembly. This generated a new accounting controversy which was in the end certified in the indictment by Á.B., the project manager. Within this context, I do not understand that if he certified these items, which the prosecution accepted without naming him as a suspect, then why do they impose the the arithmetic sum on me? I would like to show you this. The chart has two elements.
There is the sum of the first contract which were from the certified project manager Árpád Balogh, and the prosecution added that sum to my charges. The management signed off on the daily work, and so the items have been accounted for in the table. I will also show such a table, where my signature shows that I didn't accept it, or I had crossed it out. Therefore the accounting of a very strong certificate of performance took place at a time when it was clear that the consultancy contracts, which were for political reasons, would not be tolerated by the company.
Overall, I stress that from 2007 to 2008 the contracting with AAM wasn't a special case. Based on the available investigative material, since 2000 they had been continuously working with the company. In 2007 and 2008, the company implemented mainly administrative staff reductions. Due to that and the work of AAM, labor was needed. The completion certificates were signed by the management in the different areas. I would like to present a few pictures.
Zsolt Balogh, IV accused, begins a slide projection.
Zsolt Balogh, IV accused: On page 1,255 the type of expert work AAM carried out is shown. Feasibility studies, analyses, studies on priority projects, management processes, ensuring products of the priority projects, case management, general management and expert advice. The text related to the featured projects cover the construction of Metro Line 4 almost without exception.
Two contracts were concluded. These are presented on pages 1,255 and on 1,257. The bigger DBR contract shows the parties connected to the technical assistance of the investments for the Metro Line 4 projekt. In the contract, the contact person is Á.B.
Here are the various documents I found on page 4,491. Here is an example dated on the 4th of April 2008, and I would like to inform the Tribunal that from March to April of 2008 - so when Attil Antal became ill and I spent my first 30 days of mandate - this was the fulfillment of the period when the joke of the political campaign, in connection with the consultanting contracts, was in full swing at the town hall and at the Assembly. Here is the signature of F.O., while AAM was working on different tasks.
Then there is the performance protocol of Á.B. on page 4,511. These protocols of performance were deemed justifiable by the prosecution's indictment, which I signed, but as Zsolt Balogh, they are not considered legitimate. Page 4,545 again shows the signature of Á.B. Here Mr. O. crossed out his signature and said - I remember this conversation - that Á.B should sign because he is responsible for the project.
I present page 4,585 because there was an item that I crossed out with my signature, as such item did not exist. So piece by piece I went through these AAM documents. I had to because there was a continuous public shaming in the Assembly. Thus, number by number, I had to look through these fulfillments from AAM. According to the indictment's 23rd page, I committed the crime alone. Á.B. project director certified item number two. Therefore the certificates of completion are signed like Á.B./Zs. Balogh. This means that Á.B. signed as before, but Mr. O. didn't, and above there are BKV associates with tasks performed according to its own rules of procedure. There I will show the certification of completion documents from the Chief Information Officer, the General Counsel, and the Director of Logistics. Only in their agreements, in the original AAM contracts, Attila Antal was named as a confirmed CEO.
Attila Antal stopped working in February. Therefore, as the interim general manager, I just had enough sense to sign with the leaders in the fields. Now, according to the indictment in the second table, Á.B. is innocent. I’m sure he is.
On page 23, above point I/B, it can be read that BKV under a contract signed for unnecessary services to AAM by Zsolt József Balogh, IV accused, and until his dismissal a 133,521,600 HUF had been paid.
Prosecutor questions the Council President: The prosecution imposes the expense included the cumulative amount of the asset disadvantage as well. It is possible that this is just an administrative error, and that this is left out of from the list of the affecting counts of the IV accused. He is accused of continuously committing the counts.
Zsolt Balogh, IV accused: I shall comprise the AAM certificates that one which is on page 4,793 which entrusted AAM ...., from the payer myself, Zsolt Balogh had signed, because the contract includes Attila Antal. So I was forced to sign, and this was verified by L.S. Deputy Transport CEO since it was the completion certificate of the advisory work used by the Directorate of Transport.
In the same way, on page 4,795 there is the signature of R.N. On page 4,793, there is P.T's. On pages 4,823 and on 4,821 P.T. and N. signed. On page 4,821, there is L.S. On the next page L.S. and R.N. signed, and read at the end of the line, so each line has also been verified. These documents are otherwise found in the documents of the controlling board.
On page 4,897 there is such, which to the Board of Directors, ....submitted to Cabinet of the Chief Executive Officer, and this has such an item which I accepted and those that I didn't and I crossed out with my signature. For case management I would say it was so, that I received in a completion to verify the IT Board of Directors performance of the AAM. I wrote to Mr. N.T. that I had no entitlement to do anything related to information technology, so could he please sign off on the IT contract completions dated on the 26th of March.
Incidentally, and this sheet is dated on the 31st of March 2008, such a double, or more, in the case of the DBR were much higher performance certificates. Point five describes whom he discussed, and in what matter and for how long. The signature is fro Dr. P.T., since he was the deputy to the technical leader. The same with R.N., Mr. S., or...., or..... So these signatures all can be found in the investigation material. Overall, I'd like to point out that I'm not sure if AAM felt guilt about the contracts from 2007 and 2008.
Lawyer Dr. György Szigethy, the attorney of Zsolt Balogh, IV accused: the slides material related to Vision Consulting Ltd. under No. 46/Vé/40., the slides material related to Smsystem Ltd. under No. 46/Vé/41., the slides material related to Suvet Research Ltd. under No. 46/Vé/42., the slides material related to C.C. Soft Ltd. under No. 46/Vé/43., the slides material related to PQS-Plural Ltd. under No. 46/Vé/44., and the slides material related to the employment contracts under No. 46/Vé/45. are attach.
Observation of Dr. András Kádár lawyer, the attorney of Miklós Hagyó, I accused: Not included in the summary of financial loss, as indicated by Zsolt Balogh.
The Council President warns Zsolt Balogh, IV accused, that failure to testify shall not prevent the continuation of proceedings, in this case to describe his investigative testimony or if is requested to be read out. The same goes for the accused associates and the witnesses as they can't be confronted, unless he decided before to testify. Failure to testify shall not affect the questioning, commenting, right of petition and request for information. Furthermore, as the trial testimony and the testimony of investigative material has discrepancies, hence a description is needed.
To the question of the Council President Zsolt Balogh, IV accused:
I understood the warning. I still hold my right to refuse to testify.
To the question of the Council President, the prosecutor:
Honourable Court, the 64th Volume of the investigative documents on pages 41.721-41.727 in the protocol of the hearing of witnesses parts of the documents that can not be made into the investigative documents material. That the prosecution did not wish to attach.
Lawyer Dr. András Kádár, the representative of Miklós Hagyó, I accused: I would like to ask from the prosecution what do they mean by it cannot be attached? The fact that it is not part of the investigative documents, we can see for ourselves. But what does it mean that "it cannot be added?"And why?
Lawyer Dr. Balázs Gyalog, the representative of Attila Antal, III accused: The IV accused, moreover, relies on the investigation by the then authorized defense counsel who sent a letter to the Public Prosecutor at that time, which is also not part of the investigation documents. Despite that, the IV accused referred back regularly.
Prosecutor: All I wish to declare is that this hearing protocol is made under another case number, and it belongs to a matter of secrecy, which status has still not been resolved, therefore I'm not at liberty to give any information in this regard.
To the question of the Council President, the prosecutor: The secret host is the Municipal Prosecutor. The Chairman of the Council fully describes the investigative testimony of Zsolt Balogh, IV accused, first from the pages of the investigative documents 41.729-41.745.