Hungary Arrests Official, Citing Role in Red Sludge

„The managing director of the company whose reservoir unleashed a lethal torrent of red sludge on three villages last week has been arrested, the Hungarian prime minister said Monday, castigating the company for corporate greed before Parliament. »There’s probable cause to suspect that there were persons who had been aware of the dangerous weakening of the storage pond walls«, Prime Minister Viktor Orban said, »but they thought, because of their private interests, that it was not worth mending them and hoped the disaster wouldn’t happen«.

But the arrest also revealed the complex intersections of business and politics within the state companies that were privatized in a rush in the 1990s.

The arrested official, Zoltan Bakonyi, is the son of Arpad Bakonyi, a businessman who played a central role in the privatization of the country’s aluminum industry and is the largest shareholder of the company now under scrutiny, the formerly state-owned MAL. The elder Mr. Bakonyi is also a close business associate of a former prime minister, Ferenc Gyurcsany, who is Mr. Orban’s political archrival. The younger Mr. Bakonyi will be charged with criminal negligence leading to a public catastrophe, a government spokeswoman said. If convicted, he could face a sentence of up to 10 years.”