Financial scandal in Austria (daily newspaper Junge Welt)

Helmut Fohringer / What-Pool / APA / dpa

Former Finance Minister Karl-Heinz Grasser (right) sees a lot to come in the Buwog trial

It didn’t take a second until the leader of the Greens in the Austrian National Council, Nina Tomaselli, found an answer on Monday when asked about her role model: her former party colleague Gabriela Moser, who has since passed away. In the ongoing committee of inquiry into the »Ibiza Affair«, Tomaselli is currently regularly scrutinizing her coalition partner ÖVP. On Wednesday she added it there. The People’s Party and its benevolent donors are said to have benefited from various “real estate deals” during the coalition with the FPÖ. A constellation that Tomaselli’s role model should not have been unfamiliar with: 17 years ago Moser started the biggest corruption process in Austrian post-war history. At that time, too, the ÖVP and FPÖ ruled and handled various “deals” which, from today’s perspective, seem anything but clean.

After a total of 168 days of taking evidence with 150 witnesses, the judges’ senate, chaired by Marion Hohenecker, withdrew to deliberate on the judgment last week. A total of 15 people are accused in the mammoth trial. A verdict is expected in mid-November.

At the center of the process are the former FPÖ finance minister Karl-Heinz Grasser and his role in the privatization of 60,000 federal apartments of the “Bauen und Wohnen GmbH” (Buwog). Grasser, who was finance minister from 2000 to 2007, is accused of embezzlement, gift acceptance and forgery of evidence. He is said to have used his ministerial post to enrich himself and others by passing on inside information.

The so-called Buwog affair began in 2003 when the privatization of the 60,000 federal apartments was put out to tender. With a bid of 961 million euros, the contract was awarded to a consortium of bidders that included Raiffeisenlandesbank Oberösterreich (RLB OÖ) and the real estate group Immofinanz. This means that the real estate company CA Immo, the highest bidder to date, was – curiously enough – outbid by just one million euros. Grasser’s former head of cabinet Heinrich Traumüller accuses the former finance minister of having passed on inside information about the amount of the CA Immo bid. Michael Ramprecht, a former cabinet employee of Grasser and as managing director of Bundesbeschaffungs GmbH (BBG) responsible for the Buwog privatization at the time, also spoke of a “game in hand”.

The intermediary is alleged to have been the former lobbyist Peter Hochegger, who – via a mailbox company – received 9.6 million euros from Immofinanz (which corresponds to one percent of the subsequent purchase price). In addition to Grasser, parts of the commission should also have received his best man, the former FPÖ politician Walter Meischberger. The fourth main defendant is real estate agent Ernst Karl Plech. He is also said to have received part of the 9.6 million euros, but left for health reasons at the beginning of the proceedings. The indictment speaks of a “joint crime plan” by Grasser, Hochegger, Meischberger and Plech.

Hochegger, who was already serving a prison sentence as a result of the so-called Telekom affair, claims not to have known about a “crime plan”, but made a partial confession in the course of the proceedings. In this he burdens Meischberger and Grasser heavily. Both are said to have received 2.4 million euros each for the deal, which they deny. Another central charge is Grasser’s role in renting the tax authorities in the Terminal Tower office tower in Linz. Here, too, he is said to have cashed in, with a total of 200,000 euros in commission. Grasser and co-defendants deny that.

Investigators discovered the inconsistencies in the Buwog privatization in 2009 through a chance discovery in the course of another process. In the course of the investigation there were 15 raids in January 2010, twelve of them in Austria and three in Liechtenstein. After seven years of research by the Economic and Corruption Public Prosecutor’s Office (WKStA), the proceedings began in December 2017. A verdict is due to be made in mid-November.

In their closing arguments, except for Hochegger, all of the main defendants denied the allegations. According to Grasser and Meischberger, the accusations of the public prosecutor and those that Hochegger had made in his partial confession are all unfounded. The latter only wanted to evade another prison sentence by means of willingness to cooperate. Even after three years of trial, the end result is one statement against one statement.

So far, nothing has been made public about how the final judgment will be. Neither lawyers nor judges commented publicly on the alleged outcome of the proceedings. If convicted, Grasser faces up to ten years in prison.