It is thought the various foundations in question - including Together for a Third Millennium, the 21st Century Cultural Association, the Alliance for a Modern Hungary - made improper use of more than Ft50m in grant funding.
Ferenc Szabo, spokesman for the Bacs-Kiskun county chief prosecutor, said prosecutors began investigating the foundations in 2005. He said: "Over the course of the investigations, we began to suspect accounting fraud, since several foundations and associations were unable to account for the expenditure of grants received from central government and the local authorities."
The spokesperson did not deny that "Janos Z" was in fact Janos Zuschlag, Socialist Party president in Kiskunhalas. He added: "Though Janos Z's signature was not on the documents establishing the foundations, witness statements and other evidence made it clear that he was always there in the background."
We asked if this meant Zuschlag had issued instructions to the employees of these organisations. The spokesperson said this was the case. He declined to give further details, since the investigation continues. "The seven accused have appealed. Several of the accused have indicated their wish to make a written statement, while others have said they may be prepared to do so in future. The Highest Prosecutor will hear their appeals within a few weeks," the spokesperson said. He also said that a further person is sought in connection with the affair: Istvan Lados, Zuschlag's former private secretary.
If convicted, the individuals concerned could be imprisoned for between two and eight years, though if the charge is one of organised crime, the penalty could range from five to 10 years.
Janos Zuschlag told hvg.hu that he had nothing to say beyond confirming that he had appealed against the investigation.

Brigitta Csikász