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- Why did Mazsihisz’s budget collapse?
- What austerity measures are trying to cope with the situation?
- To whom and why does Mazsihisz have to pay a success rate of almost 100 million right now?
- Is it possible to negotiate the award for success, is it possible to withdraw from the agreement?
- What do Mazsihisz employees say about all this?
Some people don’t have questions anymore, And there are those who read the Index.
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On April 11, the legal leader of the Association of Jewish Communities in Hungary sent a circular to the organization’s leadership, the presidents of the Budapest Jewish Community and members of the Rabbiship, a total of 45 people. In a document in possession of the Index, Márton Rosta wrote that the church organization’s success rate for tourism revenue had an unusually high ceiling, and the amount became remarkably high in 2019 compared to what was accepted in business.
They didn’t listen to the lawyer
Mazsihisz said he made an agreement that was contrary to good morals, so it is void. However, as he wrote, the legal settlement could also be terminated due to the financial crisis caused by the epidemic, and the money should not be paid. In the circular, Rosta also emphasized that she also raised suspicions of dishonest treatment that Mazsihisz’s wealth management executives were not trying to negotiate the amount of the success fee despite the obvious force majeure situation.
Rosta’s action was unsuccessful: on April 17, Mazsihisz announced in an internal announcement that the tourism sector would be operated with the existing associated company under the same conditions in 2020 and 21, and the gross tourism success rate of 93 million for 2019 in 2021. until May, in installments. It was also announced that management had accepted the dismissal of Márton Rosta.
Index knows that in the 14-member presidency, only the president of the Budapest Jewish Community, Tamás Mester, voted against the payment, already opposed to the unlimited success rate system when the deal was signed. We were curious about his reasons, but the Master did not want to comment on Mazsihisz’s internal affairs. The embarrassing case was first read on Tuesday on the blog of Jonathan A. Megyeri, one of the founders of the United Hungarian Jewish Community (EMIH), which is not particularly friendly to Mazsihis.
Tourism has been reorganized
Since the Mazsihisz administration changed in 2013-14, the organization’s administration has become much more transparent than before, and financial scandals and police investigations have not altered the mood on Síp Street. Internal due diligence also resulted in the tourism business being put into a whole new position since 2017 after the previous contract expired.
The Dohány Street Synagogue (and the Jewish Museum) is one of the most attractive tourist destinations in Budapest, which traditionally means a certain source of income for hundreds of millions. However, the 2014 review found that the area has significant reserves. Starting in 2017, Mazsihisz signed a contract with a renowned tourism specialist, Róna Iván GARI Kft., To manage the transformation and manage the tourism business.
The gist of the deal is that Róna’s company works for a fixed monthly rate, to which, if tourism revenue exceeds HUF 1.1 trillion gross, 10 percent of excess sales revenue is added. András Heisler, president of Mazsihisz, told Index that at the time of the agreement, they did not believe that the income was so high as to significantly exceed 1.1 billion, but they did not regret it at all, as Mazsihisz realizes nine times the Commission.
Photo: Koszticsák Szilárd / MTI
Traffic grew in the sky, everyone was fine
As a result of the transformation led by Iván Róna, Mazsihisz’s own tourism organization was established, and the previously outsourced use of tourism at Dohány Street attractions was returned to the association’s administration. The development was spectacular: Compared to the net base of 640 million HUF calculated in 2016 in a completely different system in 2016, net tourism revenue became 1,091 billion HUF in 2017, 1,293 billion HUF in 2018 and increased to 1,771 billion HUF in 2019.
Heisler recalled that the tourism contract was unanimously ratified by the administration of 14 Mazsihisz members in 2019, since the organization receives significant financial income with it without risk. According to him, the risk is entirely assumed by the contractor. As he said, management is well aware of the appeal of the Dohány Street Synagogue, but thanks to the entrepreneur’s activities, Mazsihisz’s tourism revenue has increased many times above the national average for tourism growth.
The success was also reflected in Gari Kft’s success rate. Or, as it’s called in Mazsihisz, its billing commission: According to Mazsihisz, it amounted to HUF 22.5 million net in the first year, HUF 42.7 million in 2018 and HUF 73 million net last year. So the amount in the first two years was not as high as in 2019, it was not even shown to anyone.
And then came the epidemic
Last year’s final accounts were completed in March, when the exact amount of the success rate due to GARI was determined. The date roughly coincided with the time when Mazsihisz’s leadership was forced to realize that tourism, which would halt as a result of the coronavirus epidemic, would void the 2020 budget and should be completely rewritten. Under the original plan, 59 percent of the freely available resources and 36 percent of the total budget would come from tourism.
In the first round, all planned investments and renovations were postponed. With that, they captured 760 million forints, but estimate that they will have to save or generate another 540 million quietly. No one was fired, but as of April 1, by the end of the year, everyone’s wages had dropped by 20 to 40 percent, except those who work in hospitals, nursing homes, kitchens, security and cemeteries. With a salary cut called frustrating but necessary in internal communications, an additional cost of 100 million has been reduced.
Meanwhile, due to the impending public relations disaster, Heisler called an extraordinary management meeting, to which Ivan Róna was also invited. According to Mazsihisz, they could not rely on force majeure due to the epidemic, since these are income obtained in 2019. Finally, it was agreed with the contractor that the net 72 million due to GARI Kft. They will be paid in three installments by May next year. This year, the net monthly operating rate of 1.7 million this year will be reduced by 40 percent by the end of the year, and Róna’s company promises to remain unchanged. The system will continue its work in 2020 and 2021.
According to András Heisler, they are satisfied with the work of Róna and his company, and completed contracts are always paid to all business partners for the good reputation of Mazsihisz’s business. It is also obvious that although 2020 started with better results than last year, this year tourism revenue will not even come close to 1.1 billion, so they will not have to pay a success fee later.
They got stuck in Mazsihisz
The letter from the legal leader, followed by Mazsihisz’s decision to reduce restrictions here or there, to pay a 2.5-fold success fee to Róna’s firm, has sparked encouragement among the organization that operates the extensive institutional system. Although András Heisler told Index that the austerity agreement managed to resolve the matter fairly, not everyone sees it that way.
We have spoken to several people, and while it is clear to most that it is a coincidence, it is still a common outrage that while the pressed wage is cut, someone is cutting almost a hundred million. Others spoke of what happened, which strongly undermined loyalty to the Mazsihis.
(Cover image: Tourists in the courtyard of the Dohány Street synagogue next to the Emanuel Memorial Tree in 2017 – photo: Faludi Imre / MTI)
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