Graft probe reaches into the highest levels of Austria’s government

For weeks, rumours circulated about who Austrian prosecutors would possibly identify subsequent in a sprawling, high-level corruption probe.

Final Thursday morning, the investigation reached the best ranges of presidency when a squad of fraud police accompanied by forensic consultants raided the house of the nation’s finance minister, Gernot Blümel.

Blümel has now been formally named as a key suspect in a graft inquiry into the deep and complicated relationships between Austrian lawmakers, senior officers and the Austrian playing firm Novomatic. 

Blümel is as shut as anybody in Austrian politics to chancellor Sebastian Kurz. Within the warrant that judges authorised to raid Blümel’s home, the finance minister’s identify appeared 23 occasions. It named Kurz 42 occasions, signalling the place prosecutors could look subsequent.

A political corruption scandal sank Kurz’s first authorities with the far-right in 2019. An equally mettlesome set of allegations — this time towards allies in his personal social gathering — may show simply as damaging to his second.

The Novomatic case is a problem to a frontrunner whose political success was constructed on a promise of youth and reform — and an finish to the cosy and typically nepotistic politics of Austria’s current previous.

Revelations from the probe — and a parallel parliamentary inquiry — have shone an unflattering gentle on a permanent system of party-political patronage. It’s so ingrained in Austrian politics that it has its personal vocabulary: Parteibuchwirtschaft, or “social gathering guide economic system”.

Of their inquiry into Blümel, prosecutors mentioned they have been taking a look at whether or not in 2017 he agreed to assist Novomatic foyer the Italian authorities for a €40m tax rebate, in trade for political help in Austria. On the time, Blümel was an in depth confidant of Kurz, who was then Austria’s international minister.

Each Blümel and Novomatic have denied the allegations. Nonetheless the escalating scandal has caught Kurz on the again foot, political analyst Thomas Hofer notes.

“This investigation has develop into an enormous obstacle for the federal government,” he mentioned. “Blümel actually may be very shut [to Kurz]. He’s interior circle . . . The final six weeks have been very robust.”

The yr started for the Kurz’s authorities with the resignation of its labour minister in an embarrassing plagiarism scandal. Information in the meantime has confirmed the economic system to be among the many worst hit in Europe by the pandemic. And in early February, a damning official inquiry slated Austrian intelligence for failures that allowed a deadly terror attack to unfold in Vienna in November.

However the chancellor stays standard. Ballot scores for his Austrian Individuals’s social gathering have slipped from 40 per cent to 37 per cent over the previous two months, however are nonetheless comfortably forward of its nearest rivals.

Kurz’s calculation, based on chancellery officers, is that almost all Austrians see the scandal — broadly generally known as the “Casinos Case” — as he does: politically motivated by partisan officers in legislation enforcement against his political agenda. The proof towards Blümel, officers say, is flimsy at greatest.

This week Kurz has gone on the offensive, accusing prosecutors on the WKStA — the prosecuting bureau that ordered the raid on Blümel’s residence — of over-reach.

“There have been so many lapses that I imagine there’s an pressing want for change there,” he mentioned at a Tuesday press convention.

Of 40,00zero named suspects in WKStA investigations lately, the chancellor famous, simply 400 had been convicted. An abortive raid on Austria’s personal intelligence company earlier this yr broken relationships with key allies, he mentioned.

Kurz and his ministers now say they wish to create a brand new Federal Prosecutor’s workplace — akin to that in Switzerland and Germany — and sweep apart the WKStA altogether. Such a change would require a constitutional modification, however is more likely to be broadly supported throughout the political spectrum. Even Kurz’s political opponents admit the present system is susceptible to politicisation.

However the proposed reforms might not be sufficient to comprise the unhealthy headlines.

Dozens of different WKStA raids have taken place in the course of the previous few months on properties owned by former Novomatic staff. Different senior Individuals’s social gathering politicians, together with former finance minister Hartwig Löger and the pinnacle of the nation’s state holding firm, Thomas Schmid, have additionally been named as suspects.

Whereas Novomatic has denied improperly donating cash to the Individuals’s social gathering, investigators are additionally taking a look at massive sums of cash the corporate gave to dozens of small party-affiliated satellite tv for pc societies, golf equipment and assume tanks.

“They’ve seized a lot now that they principally have the total correspondence of the federal government — together with every thing that everybody despatched privately on their very own telephones — over the previous two years,” mentioned one political guide carefully concerned with the Novomatic probe.

In parallel to the WKStA’s efforts, a particular investigatory committee within the Austrian parliament can also be probing the case.

“It’s clear that a large quantity of political stress is now being exerted on the corruption investigators, who’re simply making an attempt to do their jobs,” mentioned Stephanie Krisper, a parliamentarian for the liberal Neos social gathering and a member of the investigatory committee. 

“We have now fairly the tradition of corruption and secrecy in Austria. On account of laws being saved weak, it’s very tough to make clear the move of cash to events and organisations near them.” 

Blümel was hauled in entrance of the committee final July. His testimony made headlines on the time when, in reply to greater than 60 questions, the finance minister mentioned he didn’t know or couldn’t bear in mind. 

“In most different international locations I’d have mentioned he must resign,” mentioned Krisper. 

“Not having the ability to bear in mind over 60 occasions about occasions within the final two years paints a fairly unhealthy image of a finance minister. However maybe it’s nonetheless a greater image than the one that may have emerged if he did.”