'I Did It For Kurz'
Ex-Austria Holding PLC boss Thomas Schmid wants to flip and become a witness for a state as part of a federal investigation into corruption in the ÖVP
Servus!
At 11:00 on October 18, a bomb went off in People’s Party (ÖVP) headquarters. For many months now, Austria’s federal anti-corruption authorities, the WKStA, have been investigating the party and allegations surrounding its management of the finance ministry dating back to 20161. Now, it would seem as if they’ve had a crucial breakthrough, the Standard’s Fabian Schmid having reported that the ministry’s former general secretary Thomas Schmid wants to flip and become a witness for a state.
According to a memo published by the WKStA, Schmid—who resigned as director of Austria Holding PLC in 2021, a role to which he was appointed only two years prior—indicated his desire to flip in April. Beginning in June, the WKStA held fifteen day-long interviews with Schmid in order to ascertain whether or not Schmid had the goods on the ÖVP or not, for of course in helping the state Schmid is also trying to protect himself from prosecution. Schmid, the WKStA stated, still has not submitted a formal application to become a witness for the state. He is, however, due to address the parliamentary committee investigating the ÖVP’s corruption on November 3.
Irrespective of whether Schmid flips or not, the testimony he gave the WKStA is explosive. Schmid told them, for example, that Sebastian Kurz not only had knowledge of a plan to use finance ministry funds to pay for sexed-up opinion polling favorable to him, which was then published by Österreich—a friendly tabloid freesheet—but that he ordered the scheme himself. “To me it is important to emphasize that I deployed this tool because I received the order from Kurz,” he told the WKStA. “I deployed this tool for Kurz.”
The former chancellor was far from the only ÖVP politician implicated by Schmid’s testimony. He told the WKStA that president of the Austrian parliament Wolfgang Sobotka—who, unbelievably, continues to chair the parliamentary investigation into corruption in his own party—had personally intervened in tax investigations into two organizations with links to the ÖVP, the Alois Mock Institute and the Erwin Pröll Foundation2. ÖVP parliamentary faction boss August Wöginger, meanwhile, was said by Schmid to have interfered in the appointment of a new director for the tax office in Braunau, Upper Austria, on behalf of the ÖVP’s preferred candidate, a local mayor.
Schmid and the WSKtA’s conversations also extended to business-people with links to the ÖVP. Last week, it was reported that anti-corruption authorities had executed search warrants at two properties linked to Signa Holding, the real estate firm run by billionaire investor René Benko. Benko was said by Schmid to have offered him a position at Signa Holding in exchange for tax authorities going easy on him in the course of ongoing investigations. In Benko’s case, as in all the aforementioned cases, the presumption of innocence applies3.
Schmid’s allegations are a disaster for the ÖVP—and the country too. They appear to have exposed a culture of corruption within the party that goes far beyond the former chancellor’s alleged opinion poll scheme. The problem runs broad and deep, engulfing the federal party, state-level parties, and extra-parliamentary organizations with ties to the ÖVP. Cleaning up the party’s mess would, Martin Kotynek argued in this weekend’s Standard, require chancellor Karl Nehammer publicly admitting there’s a corruption problem, removing those responsible, and rooting out the culture of nepotism and trading political posts along party lines. Whether he can do the first—let alone the second and third—remains far from certain.
Bis bald!
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The finance ministry has been in the ÖVP’s hands since 2007.
Indeed, Sobotka was president of the Alois Mock Institute until the organization was dissolved in December 2021.
To wit: Kurz has denied the accusations and claimed in a Facebook post that Schmid was guilty of "making accusations against others" in order to protect himself from prosecution. Sobotka has also vociferously denied the allegations against him.