Who You Gonna Believe
Today and tomorrow, Austria's parliament will address the corruption allegations against the ÖVP raised by ex-Austria Holding PLC boss Thomas Schmid
Servus!
After a quiet few days on account of the National Day and All Saints’ Day holidays, Austria’s parliament is back in session for two potentially explosive sittings. Today, right as this newsletter is arriving in your inbox, the lower house is sitting for a special session called by the Social Democratic Party (SPÖ) and far-right Freedom Party (FPÖ) intended to hold the government to account over the allegations raised by ex-Austria Holding PLC director Thomas Schmid during his 15 conversations with federal anti-corruption authorities (WKStA) held over recent months1.
Schmid, you may remember from last week’s newsletter, has signaled his willingness to flip and become a witness for the state as part of the WKStA’s ongoing investigation into the People’s Party (ÖVP) and corruption allegations surrounding, among other things, its management of the finance ministry dating back to 20162. Those very same allegations are the subject of a parliamentary investigation right now, and on Thursday, Schmid is due to sit before the investigative committee chaired (under normal circumstances) by none other than president of the Austrian parliament Wolfgang Sobotka, whose name has come up in relation to those investigations.
A reminder of what Schmid has alleged in conversation with the WKStA (with the proviso that, in all cases, the presumption of innocence applies):
Former chancellor Sebastian Kurz ordered Schmid 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;
Sobotka personally intervened in tax investigations into two organizations with links to the ÖVP, the Alois Mock Institute and the Erwin Pröll Foundation;
ÖVP parliamentary faction boss August Wöginger 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.
Billionaire real estate investor René Benko offered Schmid a position at Signa Holding in exchange for tax authorities going easy on him in the course of ongoing investigations.
Three things are worth keeping an eye on when it comes to today’s proceedings. The first will be the way in which chancellor Karl Nehammer chooses to defend his party from the allegations made by Schmid when he addresses parliament. Second, the vociferousness of the confrontations between Sobotka and Wöginger on the one hand and the opposition on the other. Third, whether or not any Green Party politicians decide to break ranks and vote with the opposition on a motion to dissolve parliament and bring forward elections not due until 2024. By my count, it would need six Greens to rebel in order for the coalition to fall apart, though coalition discipline having held for this long in the face of so much difficulty, even one seems unlikely.
As for tomorrow, Sobotka will not be chairing this particular session of the investigate committee. That task has been handed to the deputy president of the Austrian parliament, Doris Bures of the SPÖ. The ÖVP’s lead member on the committee, Andreas Hanger, will be looking to test and needle Schmid, and his line of questioning is sure to be far from seemly, in-keeping with his general conduct throughout this investigation. The test will be whether Schmid sticks to the lines he gave to the WKStA, the Greens or the opposition can draw out any new information, or the ÖVP can find a way to blow a hole in Schmid’s testimony. Brace, brace.
Bis bald!
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Higher And Higher
Provisional estimates show the rate of inflation in Austria hit 11 percent in October, up from 10.5 percent in September. For the first time since the beginning of this inflationary crisis, Statistics Austria observed “significant price increases” in the cost of clothing in addition to food and fuel.
Going Down
The ÖVP’s share of the vote in Lower Austria is set to drop almost 12 percentage points in forthcoming elections in the state, according to a new poll published by the Standard. The ÖVP are on course to win 38 percent of the vote in early 2023, with the SPÖ second on 25 percent and the FPÖ third on 20 percent.
Payback
Wien Energie has paid back over €1 million of the €1.4 million the city government lent the energy company it itself owns when it began to experience a credit crunch over the summer. In July and August, the city government used emergency powers to give Wien Energie two €700 billion lines of credit, bypassing the city council.
Schmid was the finance ministry’s general secretary before he was appointed to lead Austria Holding PLC.