Corruption Scandals in Austria A Web of Sleaze in Elegant Vienna


By in Vienna

Part 3: Culture of Cronyism Continues

In reaction to the daily new disclosures, a long-serving ÖVP strategist speaks of unsightly glimpses into the "bowels of the republic." Speaking in the Do&Co restaurant high above Vienna's Stephansplatz square, the strategist says he objects to only conservative politicians being condemned. Austria's culture of cronyism, he contends, continues to flourish under SPÖ Chancellor Faymann.

But observers point out that it was former ÖVP Chancellor Schüssel who took office in February 2000 with the promise of clearing away the old structures. Flanked by the then-FPÖ leader Jörg Haider, Schüssel said that he intended to break up the symbiotic relationship between business and politics. "More private sector, less government," was his slogan. "Who, if not him?" was the slogan for Schüssel's 2002 re-election campaign. Nowadays a more appropriate question would be: Who, if not him, as head of government, could have put an end to the wheeling and dealing at taxpayers' expense?

On Sept. 5, 2011, after 32 years in the National Council and 18 years as a member of the government, the former chancellor threw up his hands and announced his resignation from politics. Although he is credited with achievements in fiscal consolidation and reforms, Schüssel now has to make himself available as a witness for public prosecutors. Mark Pieth, an expert with the Organization for Economic Co-operation and Development, says that Austria has degenerated into a "corruption haven."

Insisting on His Innocence

In an office on Vienna's Kärntner Ring, decorated with a stuffed mouflon sheep and pieces of scented cedar wood, someone who may know the truth recently granted an interview: Count Mensdorff-Pouilly, lobbyist and husband of the former general secretary of Schüssel's ÖVP. After being briefly remanded in custody in both London and Vienna, the count is a free man again -- and he intends to keep it that way. He says that he was recently questioned for eight hours. Even the United States Securities and Exchange Commission has been investigating Mensdorff-Pouilly on suspicion of "improper payments" that he allegedly received in the form of a €2.2 million fee from Motorola. Talking to the newspaper Kurier, the count insisted on his own innocence, and also said that Schüssel knew nothing.

There is no telling what still lies in store for the ÖVP, other political parties and especially for Austria's judicial system. It's as if one domino after the other has been falling since the global financial crisis sparked this series of scandals in Vienna. Indeed, it was only by coincidence that investigators stumbled across suspicious transactions in the wake of the near-collapse of the Viennese real estate company Immofinanz AG in 2009. Among the eye-opening discoveries was a €9.6 million fee that was paid to lobbyists Hochegger and his pal Walter Meischberger in connection with the purchase by Immofinanz of 60,000 government-owned apartments. Meischberger was Finance Minister Grasser's best man at his wedding.

Investigations were launched into the role of Grasser, Meischberger and Hochegger. All three deny the allegations.

Since then, the country has been plagued by one scandal after the other. The tracks left by Hochegger's PR empire led investigators to the shady dealings of Telekom and other companies with close ties to the government. As a trader of political inside information and an expert on the associated bribes, Hochegger was apparently active on many fronts. He is regarded as a key witness by investigators.

'In Our Day, There Were Also Black Sheep'

Their problem, however, continues to be that, in many respects, Austria's legal system is in need of modernization. The proportions of the political parties in power determine which public prosecutors and influential high-ranking justice officials remain in office. Apparently nothing has changed for decades in the basic constellation that made corruption in Austria possible in the first place: "The sensitive area is where politics meets businesses that are closely linked to the government," says Geyer, the anti-corruption state prosecutor -- in other words, in the areas of telecommunications, rail networks, energy or interstate highways. "That was already the case back in Kreisky's day."

Geyer knows what he's talking about. Starting in 1970, the Social Democrat Bruno Kreisky united his people and opened up his country during his 13-year tenure as chancellor -- and he had a promising heir apparent: Hannes Androsch, his finance minister who also served as vice chancellor for a number of years. Androsch was brought down after a host of scandals, and Geyer was the young state prosecutor who charged him with tax evasion in 1984.

Androsch is now 73 years old. He is an entrepreneur estimated to be worth hundreds of millions of euros, and still so fabulously well-connected that his fellow party members in power continue to seek out his advice.

"In our day, there were also black sheep," says Androsch, without batting an eye, when asked about corruption in Austria. "But we didn't allow them to get to the top. Compared to back then, they shamelessly cashed in under Schüssel, virtually out in the open, in broad daylight and systematically. They acted as if their motto were: Now that we're together at the trough, let's really pig out."

Call to Arms

Incriminating documents recently surfaced concerning SPÖ Chancellor Faymann. Primarily the ÖVP, but also the right-wing populists of the FPÖ and the BZÖ, appear determined to spread suspicions of corruption to their political rivals. As a result, the Austrians soon learned that while Faymann was still transport minister, he allegedly ordered state-owned and partially state-owned companies like the railways to run advertisements worth millions in publications that were well-disposed to him, at the taxpayers' expense. The firms had no choice but to pay for the ads and play by his rules. Investigations are underway against the chancellor and his strongman, Secretary of State Josef Ostermayer. Both men deny the allegations against them.

Voters are now punishing all the parties by refusing to show them respect or give them any attention. According to a recent opinion poll, the number of Austrians who are interested in domestic politics has halved since 2000, falling to just 26 percent. Partly in reaction to this dismal situation, two weeks ago a group of veteran politicians established a platform called "The Last Call to Arms." They propose using referendums to spur reform of the country's democratic structures. Their circle of supporters includes the political satirist Florian Scheuba.

Scheuba's reputation as an Austrian cult figure was cemented when, in front of an audience of thousands, he lampooned former FPÖ politician Walter Meischberger by reading out transcripts of wiretapped conversations containing such gems as "Now I'm super-naked." The height of the fun was when the millionaire lobbyist tried to remember what he was actually supposed to have done in return for his fees and asked his co-conspirators over the phone: "What were my services?"

How to Buy a Country

This follows on the heels of earlier brilliant Scheuba performances, such as in the TV series "Living Richer with Martin Schlick," in which the character of Schlick -- who is obviously based on billionaire Austrian businessman Martin Schlaff -- gives tips on how to buy a republic.

Virtually every sentence from this television satire could come from Viennese public prosecutors and investigators. The real Schlaff threw a party with champagne and oysters for SPÖ Chancellor Alfred Gusenbauer on the evening of his inauguration in 2007. Schlaff also took ÖVP Chancellor Wolfgang Schüssel on trips in his private jet and arranged for former Vice Chancellor Hubert Gorbach to receive a position on a supervisory board.

There are no current investigations into Schlaff, the grand master of cultivating politicians. After all, he only helped out a little, at most -- for example as a middleman in transactions in Bulgaria and Belarus, when Telekom simply couldn't make any progress.

For someone who pulls the big strings in the Austrian capital, cases involving bundles of cash in plastic bags or ministers neglecting to pay their taxes are little more than embarrassing, amateurish slip-ups.

In other words: cases for the public prosecutor.

Translated from the German by Paul Cohen


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