Bags of Cash Ex-FPÖ Head Strache Hit by New Corruption Allegations

Last May, right-wing populist Heinz-Christian Strache was forced to resign as Austrian vice chancellor and FPÖ party head due to the Ibiza Scandal. Now, he is alleged to have accepted bags full of cash from Eastern Europe in exchange for political favors.
Heinz-Christian Strache, former head of the FPÖ.

Heinz-Christian Strache, former head of the FPÖ.

Foto: Leonhard Foeger/REUTERS

They are photos that wouldn't seem out of place in a banana republic. High-resolution images showing bags full of cash, bundles of 100 and 50-euro notes bound together with rubber bands and apparently stored in the trunk of a car.

The images, which were leaked to DER SPIEGEL and the Munich-based daily Süddeutsche Zeitung, do not, however, come from the underworld of drug traffickers or from mafia infested regions of Italy or Kosovo. On the contrary, they were taken right in the heart of Austria and, according to investigation files, the photographer was a former bodyguard and confidant of Heinz-Christian Strache, the long-time head of the right-wing populist Freedom Party of Austria (FPÖ).

Two forensic experts engaged by DER SPIEGEL and the Süddeutsche Zeitung have examined the metadata of the smartphone-snapped photos, including the location coordinates. They found that the apparent cash transports took place in a number of different places -- sites that seem a bit unusual for those kinds of transactions. One happened directly next to Vienna City Hall, another was in front of a jewelry shop in the heart of the capital, and a third handover took place on the main street in the tourist town of Pörtschach am Wörthersee.

One photo of bundles of 50-euro bills was taken with an Apple iPhone on Jan. 9, 2014, at 1:12 p.m. According to the GPS coordinates, it was snapped at Rathausplatz 7 in Vienna, the square in front of City Hall. Right next door is where the FPÖ has its regional headquarters. At that time, a law firm belonging to long-time FPÖ politician Peter Fichtenbauer was also located in the same building.

Just a coincidence? Investigators with a special police commission looking into potential legal violations by Strache have now taken an interest in the bags full of cash. The special commission, which goes by the name "Ibiza," was formed after DER SPIEGEL and the Süddeutsche Zeitung published a video last May  which showed then-FPÖ head Strache and Johann Gudenus, who was the party's parliamentary group leader at the time, speaking with what they thought was the niece of a Russian oligarch. In the video, they offered her lucrative state contracts  in exchange for campaign assistance ahead of approaching parliamentary elections. In truth, however, the woman was merely a decoy sent to the villa with the mission of laying a trap for the FPÖ leadership. The entire villa, located on the island of Ibiza, had been bugged.

The Ibiza video triggered one of the most serious political crisis in Austria's postwar history and, because the FPÖ was part of the country's governing coalition at the time, led to the collapse of the government of Chancellor Sebastian Kurz , leader of the center-right Austrian People's Party. Strache, who was vice chancellor when the video was released, resigned from all political offices and was later also accused of massive expense account fraud. Viennese public prosecutors are investigating the former FPÖ leader on suspicions of embezzlement, though Strache continues to deny all of the accusations that have been leveled against him.

Suspicions of Corruption

The photos now in DER SPIEGEL's possession combined with witness testimony could give the scandal an entirely new dimension: If it is true what the investigation files seem to indicate, then Strache spent years living as though the laws of Austria didn't apply to him -- as though requirements to keep detailed records pertaining to the use of tax payer-endowed party funds could simply be ignored. Indeed, suspicions of corruption are mounting.

A designer gym bag with wads of cash.

A designer gym bag with wads of cash.

The spotlight is now trained directly at the transformation of Strache's lifestyle into one of luxury. And on the origin of the bundles of cash that were photographed in a car said by experts to resemble a BMW X6 of the kind that Strache used as his official vehicle back then. Did the cash come from Eastern Europe? Witnesses offering information that would seem to incriminate Strache include former political allies who only dared to come forward after the Ibiza video was made public and Strache was toppled from his post at the top of the FPÖ. These witnesses have asked that their names not be used in this article.

Anonymity is also a concern for the author of the two-page document that came out of a fax machine at the federal government's anti-corruption authority on Sept. 12, at 2:17 p.m. "HC Strache regularly received gym bags containing large sums of cash even before 2015," the document reads. It goes on to say that the money comes from "forces from Eastern Europe."

Is it true? Case file No. 14 Cg 36/16s in Vienna is a pending lawsuit in which the plaintiff, a businessman by the name of Ernst Neumayer, is demanding that the party and former FPÖ parliamentarian Thomas Schellenbacher pay him 2 million euros ($2.2 million). His justification is that it was only via his contacts that Schellenbacher was able to secure a seat in parliament.

Schellenbacher's alleged Ukrainian contacts, including the billionaire Ihor Kolomoisky, were said to have business interests in Austria. To secure the deal, they promised to produce, according to Neumayer, 10 million euros, including 4 million for the FPÖ and 2 million each for party head Strache, for the power broker Fichtenbauer and for the plaintiff Neumayer. Were the financiers hoping to gain control of representatives in Austria's parliament?

'Played Me for a Sucker'

It may sound like a dime novel, but in reality it is a fact claim, strengthened by Neumayer's testimony in addition to the sworn deposition of an additional witness. The case has now made it all the way to Austria's Supreme Court of Justice. According to Neumayer, the master plan was concocted during a number of meetings on the premises of Fichtenbauer's law firm. The money, Neumayer says, then "came from Switzerland. It was two bags that they carried up." But Neumayer complains that he didn't end up with any of the cash. "They played me for a sucker."

Neumayer's first attempt at a lawsuit was rejected. But the photos supplied by Strache's former bodyguard put Neumayer's testimony in a new light. The pictures of the cash bundles in a designer gym bag not far from Wörthersee were taken on June 28, 2013. Those of the backpack stuffed with money in downtown Vienna were taken on July 1, 2013. The images, of course, could easily have been staged without Strache's knowledge in order to harm him. But a lawyer for the bodyguard says "that both the backpack and the gym bag were each set into the car by Strache himself."

Only one day after the photo with the backpack was taken, the FPÖ head presented businessman Schellenbacher, who had virtually no political experience, as a surprise candidate on the list of party candidates from Vienna for federal parliament. A text message indicates that Strache made sure that Schellenbacher, whom he had mistakenly called "Schellhammer" just a short time before, was hastily provided with an undated membership form.

Speaking to an Austrian public broadcaster, lawyer Fichtenbauer dismissed the claim that Strache had picked up the black backpack filled with money at his law office on Rathausplatz on July 1, 2013, as an "outrageous lie." Strache has refused to comment on the allegation that he obtained cash from Ukrainian oligarchs. On Facebook, however, he wrote: "I have never had a gym bag filled with money in my car - at most it was filled with sweaty gym clothes."

Sources within the FPÖ, however, say that a meeting with Ukrainians did take place on one occasion at Strache's home, a gathering that was also attended by potential future member of parliament Schellenbacher. Those sources also note that Strache's opulent lifestyle and financial behavior were an open secret. "In some cases, staff members received cash with which they were to book the Strache family's vacations," party sources say. On one occasion, sources say, a private jet was chartered at short notice.

Blurring the Lines

One source, a confidant to the politician in Vienna, says Strache's expenses became exorbitant. He also says that "I'll pay for that" or "I'll take care of that," could be heard frequently in meetings with the FPÖ boss. "People would keep drinking even after he left and then bill the party for it afterward."

Strache served as head of the FPÖ for 14 years and catapulted the party from rock bottom to almost the very top. At times, the party even led in the polls. His self-importance grew in proportion to his success.

He created a system in which the lines between professional and private expenditures were no longer clear. "The tax adviser returned a lot of receipts because they couldn't be used," including such things as visits to McDonalds, children's allowances or cigarettes, reports one person close to Strache. "Staff at party headquarters had to come up with alternative receipts." At times, this required that they "spend a half day driving across the entire city." It's not a big stretch to suspect that not all of those receipts collected after the fact had to do with work expenses, and investigators are now trying to find out whether Strache was mixing public and private outlays. Strache declined to answer questions on the issue. He wrote on Facebook: The attempt to substantiate the accusation of expense fraud by means of "baseless allegations" will lead nowhere. After he gets the chance to review the receipts, he wrote, he will prove that the FPÖ had covered professional expenses "and that private expenses were paid for by me or, at the very least, reimbursed by me."

Conviction for misappropriation offenses can carry a sentence of up to three years in prison in Austria. Cases involving damage sums of over 300,000 euros can carry a sentence of up to 10 years. An investigation is also underway into Strache's wife Philippa, who has been an independent member of parliament for a short time. She has spoken of "slander" and "untrue allegations."

On Friday, the FPÖ stripped Strache of party membership. The local FPÖ chapter in Vienna voted unanimously to expel Strache for behavior damaging to the party. "For us, it's a liberation because it makes Ibiza history and allows us to look to the future," FPÖ head Norbert Hofer said in a Friday press conference.

'A Case for the Courts'

It is in the FPÖ's own interest, and that of the entire country's political elite, to clarify the allegations that have been made against the former Austrian vice chancellor. It's not just the fact that in 2016 the FPÖ entered into a partnership with the United Russia party, which is controlled by the Kremlin. The mere suspicion that Strache made himself vulnerable to blackmail from Ukrainian oligarchs has made things much worse.

Kolomoisky, a controversial supporter of the current Ukrainian president, appears in connection with Strache not only in the Vienna court case pertaining to the 10 million euros in financial support for the FPÖ and associates - payments on which he chose not to comment when contacted.

Even in the Ibiza video from 2017, a full-length version of which both DER SPIEGEL and the Süddeutsche Zeitung have in their possession, Strache says: Kolomoisky and his friends had "billions and are now shitting themselves" - ostensibly "because they made the mistake of not getting their money" out of Ukraine. The High Court of London, on request of the government in Kiev, ordered the freezing of Kolomoisky's assets in 2017.

How, then, will the party handle Strache's legacy and his ties to Eastern Europe? Manfred Haimbuchner is clear on this issue. Inside his office in Linz, the seat of the government of the state of Upper Austria, the FPÖ's deputy leader says: "If the allegations in the investigation files prove to be even partly true, then Heinz-Christian Strache will be a case for the courts." He also adds: "But the FPÖ also needs to be asking itself how all this could have happened."

The party's second-in-command speaks of a "rotten culture when it comes to money." He says the party, himself included, must admit that it learned nothing from past scandals involving Jörg Haider, the controversial, long-time FPÖ leader who died in a car accident in 2008. The latest improprieties showed that "cleaning up" had obviously not been successful with "this Viennese sociotope," judging by the contacts to dubious characters that had been maintained and how Strache had been allowed to be "worshipped like a popstar."

Haimbuchner says that while he didn't think money from dubious sources had flowed to the party through Fichtenbauer, the attorney, he does believe that there should be consequences for Strache's financial misconduct. "We're going to have to go on the offensive and probably file a civil lawsuit for damages." The Strache case and all the scandalous stories that have come out of it are a serious challenge for the FPÖ, he says, "But we're a strong party with great self-healing powers."

Haimbuchner, who had a tradition of showing up in front of thousands of supporters drinking beer with Strache on May 1 in Linz, has also admitted that he had to process "a great deal of disappointment personally." This is similar to what one person from Strache's inner circle says during a meeting in Vienna. This person, too, requests anonymity. "With Heinz, it was always me, me, me," the source says, "For him, employees were always as replaceable as furniture. He even managed to forget my name, temporarily, after 20 years of knowing each other."

These are insights into the inner workings of a party whose leadership ran a very tight ship for decades. They are only possible now that the party's armor is chinked and its esprit de corps damaged. For years, Strache's Ibiza vacations made political careers, the person from ex-vice chancellor's inner circle says. "Anyone who was allowed to visit him there in summer, something became of them. Presumably they had to then dig into their pockets, because no one in the party believed that Heinz was paying for these vacations himself."

Strache's Undoing

In any case, the person says, only "an idiot" would treat his own bodyguard poorly - a "man who knows more than your own wife, who hears every conversation you have in the car" and who, of course, isn't going to miss a bag full of money in the trunk. Not to mention the fact "that Strache didn't talk on the phone like Sebastian Kurz, but took care of everything via SMS and never bothered to delete anything." That was his undoing. "And, lastly, after the Ibiza video, he turned down the party's offer to take a year off in Paraguay, where our Martin Graf is doing business." FPÖ chief Norbert Hofer denies that the party's leadership had anything to do with the Paraguay suggestion.

To this day, very few people have access to the madhouse that is Strache's world. One of these people, who was willing to speak with DER SPIEGEL and the Süddeutsche Zeitung, described some bizarre quirks of the long-standing Strache regime. For instance, fearing that the European Union would abolish paper money, the FPÖ boss invested heavily in gold, preferring bullion coins minted with the design of the Vienna Philharmonic. This was confirmed by another one of Strache's confidants. Strache is also said to have put in place an emergency fallback plan in case, for example, NATO were to invade Austria. The FPÖ leader would then have been whisked away with party officials and their families to the Defereggental valley in East Tyrol, to "their fortress." There, in August, investigators had uncovered stockpiles of gold at the Pension Enzian guesthouse. Beyond that, confidants affirm that Strache had hoarded canisters of gasoline in his office and had occasionally carried around "pieces of metal in his underwear" that were "supposed to have healing powers."

All this provides an intimate look into the world of delusion of a politician who presented himself as an advocate for the common man and his legitimate grievances, while at the same time living in the lap of luxury. Until his last day in office, Strache was of the opinion that he had nothing to apologize for.

Even as FPÖ leaders gathered around a computer screen earlier this year on May 17, waiting for DER SPIEGEL and Süddeutsche Zeitung to publish the first Ibiza videos at 6 p.m., Strache was still playing innocent. One person who was there says the former vice chancellor at first used words like "in conformity with the law" and "nothing happened."

The former Austrian interior minister, Herbert Kickl, was the first to properly characterize what Strache's behavior in Ibiza meant to the FPÖ party. "This is the ultimate meltdown."

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