Corruption Scandals in Austria: A Web of Sleaze in Elegant Vienna

By Walter Mayr in Vienna

A series of corruption scandals revealing the close ties between politics and business has shaken Austria. Entrepreneurs have allegedly received multi-million commissions for non-existent services, and there are reports of cash-stuffed plastic bags changing hands in Vienna's back alleys. The population is losing faith inthe political establishment.

Photo Gallery: Something Rotten in the Heart of Austria Photos
DPA

The case takes place in central Vienna, between St. Stephen's Cathedral and Ringstrasse, in the first district. Here, where tourists are served up Viennese cakes and romantic cliches about Empress Elisabeth, it appears that shady deals were sealed behind the city's grand facades by politicians, lobbyists and unsavory characters in pinstripe suits -- in other words, by those who rub shoulders every day in the heart of the Austrian capital.

In the wake of the recent wave of scandals, an air of suspicion surrounds the country's political establishment. Anyone who still wants to participate in the current debate on Austrian domestic politics needs to be "an expert in criminal law," writes Vienna's Kurier newspaper. According to the Austrian tabloid, breach of trust has become part of "the basics" of politics, and abuse of office is now widely seen as a mere trifle.

Austrian President Heinz Fischer characterizes the revelations that have come to light as "shameful and sad." He is calling for a "clean hands" policy -- an allusion to the nationwide investigations into political corruption and mafia links in Italy during the 1990s. At the time, many of the old Italian parties were ultimately disbanded and new ones were formed.

In Austria, though, they still have a long way to go. The political parties are too busy hurling accusations at each other. They still disagree on the issues of the parliamentary investigations to be held, on the time schedule and on the legal implications.

Modern-Day Robber Barons

Since the turn of the millennium, so much seems certain, a band of modern-day robber barons with close links to the government, working out of offices and law firms in the center of Vienna, swindled the state out of billions of euros. Police are looking into the involvement of five former ministers from the days of the coalition of conservatives and right-wing populists (2000 to 2007) under then-Austrian Chancellor Wolfgang Schssel of the conservative Austrian People's Party (VP). The right-wing populists from the Austrian Freedom Party (FP) and the Alliance for Austria's Future (BZ) who are under investigation include former Vice Chancellor Hubert Gorbach and former Minister of Infrastructure Mathias Reichhold, both of whom are suspected of corruption in the so-called Telekom affair, which is one of a total of four scandals currently rocking Austria. Former Defense Minister Herbert Scheibner is being investigated under suspicion of bribery and money laundering.

The second scandal is the Buwog affair, in which former Finance Minister Karl-Heinz Grasser is allegedly guilty of abuse of office and embezzling funds in connection with the sale of 60,000 government-owned apartments. And former VP Interior Minister Ernst Strasser -- in scandal number three -- allegedly intervened in the awarding of a contract for a new digital police radio network worth hundreds of millions of euros in return for kickbacks. All of those under investigation deny the allegations levied against them.

Such claims of innocence are the only thing connecting these former members of the administration with the current government under Chancellor Werner Faymann of the Social Democrats (SP), which is under investigation in yet another case. The chancellor himself and his state secretary, Josef Ostermayer -- in scandal number four -- are suspected of abuse of office and misappropriation of public funds in the so-called advertisements affair. They allegedly purchased favorable media reports at taxpayers' expense, at a time when Faymann was the Austrian transport minister.

Finally, no portrayal of Austrian sleaze and corruption would be complete without the murky business deals of two lobbyists, Peter Hochegger and Alfons Mensdorff-Pouilly. Both men have collected millions of euros in commissions for vaguely defined services. These days they are being subjected to hours of police interviews -- and they deny all the allegations. Their testimony could play a crucial role in determining which politicians may have received payoffs in connection with privatizing public property or awarding public contracts -- and how much money changed hands.

Nouveau Riche Gone Wild

As in most countries, lobbying is legal in Austria, so, in a sense, political corruption in business deals has been "outsourced" to the lobbyists, says Walter Geyer, head of the Federal Public Prosecutor's Office against Corruption, which was established in 2009. Working with a staff of 14 rather moderately paid colleagues, Geyer deals with an average of 2,000 complaints a year. In order to get the best state prosecutors, he says, more financial incentives are needed. To clear up the largest cases, he argues, new laws and regulations would be helpful: stricter rules for lobbyists, legal protection for whistleblowers and a new political party financing law.

In the meantime, the Viennese continue to discover new unsavory details in their morning papers. Is Austria really "Europe's boil," as the late Austrian novelist Thomas Bernhard once scoffed? Has the Alpine republic become an open buffet, plundered at will by members of the nouveau riche gone amok?

"We reveled in life's pleasures and took delight in wine," wrote the poet Josef Weinheber, describing the prewar atmosphere in Vienna. In the end, he continued, everyone wanted to be a "little Rothschild." A memorial statue in his honor stands in Vienna's first district. It is as if little has changed since then.

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