Vienna has never tried to curb the activities of foreign spies. Over the past century, it’s become the go-to stage for the dramas of global espionage

The year was 2000. The setting: an inconspicuous office building on Heinestraße in Vienna’s 2nd district. A man appeared around the corner and hurried toward the building, looking over his shoulder to be sure he wasn’t followed. A Russian physicist, he was to deliver a package of nuclear secrets to the Iranian UN mission in Vienna. As he reached the door, he was gripped by fear.

The nuclear missile plans the Russian was supposed to deliver contained deliberate design flaws, meant to derail what the U.S. suspected was a secret Iranian nuclear arms program.

If he were to show them the plans in person, he thought, they might smell a rat and he would be caught and arrested.

The Russian’s savior came in the form of an Austrian postman, who opened the front door for him. Slipping into the office building unnoticed, he simply pushed the secret package through the inner-door slot at the Iranian office.

His secret mission on the behest of the CIA had been completed. Once again, Vienna was the perfect place to do the deal.

The story of the 2000 mission later known infamously as Operation Merlin, is recounted in the book State of War by the New York Times reporter James Risen, highlighting one of the worst kept secrets in the world – the role of Vienna as spy capital of the world.

Since the Cold War, Austria, and particularly Vienna, has been a major theater of operations for spooks and informers from all over the world. A small, neutral nation at the crossroads of East and West, Austria has never effectively restricted the work of foreign spies on its territory.

The Land of 8,000 spies

Austrian law gives foreigners a lot of leeway for intelligence activity. According to the penal code, spying is prohibited only when it is “to the detriment of the Austrian state.” That means that foreign espionage activity is not a crime, per se.

This courtesy does not extend to military intelligence services, which are banned under the law. Yet the targets – most commonly diplomats and officials at international organizations in Vienna – remain unprotected.

To this day, between 7,000 and 8,000 foreign spies operate in Austria, estimates historian and espionage expert Siegfried Beer. And “nobody has disputed that number so far.”

Founder of the Austrian Center for Intelligence, Propaganda and Security Studies at the University of Graz, Beer believes that renewed tensions between Russia and the West are likely to keep Austria active as an important base for intelligence activity, as it was throughout the Cold War.

Recently, real-life spy stories set in Vienna have again been grabbing international headlines.

In 2010, the U.S. and Russia swapped four imprisoned American informants for 10 Russians suspected of being “sleeper” agents. The point of exchange was a place well-known in intelligence circles, the tarmac of Vienna International Airport. Among the returned Russians was Anna Chapman, a young woman whose KGB ties and glamorous life in London and New York captured the imagination of the global media. Touching down on Austrian soil, her cover was blown and her spy career came to an end.

One frequent victim of spying is the UN’s nuclear watchdog, the International Atomic Energy Agency (IAEA), as well as the Organization of Petroleum Exporting Countries (OPEC) and the Office for Security and Cooperation in Europe (OSCE), an important security forum for Russia and the West.

espionage / anna chapman vienna airport

Marathon surveillance

According to the Austrian Foreign Ministry, international organizations and foreign missions in Vienna employ more than 6,000 people. This diplomatic circle forms fertile ground for informants and leaks.

Since 2013, Vienna hosted  a veritable bugging Olympics during the Iran nuclear talks that ended in 2015. According to later accounts, intelligence agencies from all over the world scrambled to listen in on the high-stakes negotiations that aimed to rein in the controversial Iranian nuclear program.

Bugs were everywhere. Austrian authorities are still investigating implants found in June 2015 at Palais Coburg, the luxury hotel in Vienna’s inner city where most of the talks took place, said the public prosecutor’s office in December.

When the negotiations shifted to another venue, microwave radiation from surveillance equipment around the premises reportedly got so intense that participants had to go outside to get a signal on a cell phone – which might explain why one of the best-known pictures from the 2014  talks shows U.S. Secretary of State John Kerry taking calls on a park bench at Karlsplatz.

But none of this is new: Vienna has been a hotbed of spying since the days of the Austro-Hungarian monarchy. At the turn of the 20th century, Vienna was a metropolis of some two million and a capital of a vast Empire. The city attracted many incognito visitors wishing to learn more about what was going on in parts of Eastern Europe and the ever-volatile Balkans region, setting a pattern for the future.

The most infamous agent at the time was Alfred Redl, a high-ranking Austrian intelligence officer who, on the eve of World War I, sold military secrets to Czarist Russia (and later also France and Italy) to finance his lavish lifestyle, which included cars, horses and pocket money for his male lovers.

When Redl was found out in 1913, it mushroomed into a major scandal and, according to historians, contributed to the defeat of Austria-Hungary in the Great War.

Helmut zilk

High noon in postwar Vienna

But Vienna really turned into a center for intelligence activity when Austria became the frontier to the communist East.

“Spying really took off at the start of the Cold War,” historian Beer said. “The Western secret services realized that their former ally, the Soviet Union, was becoming a foe rather than a friend.”

In the immediate aftermath of World War II, the U.S. and the Soviet Union took advantage of their status  – with France and Great Britain – as occupying powers and
created vast snooping operations.

The small republic of Austria, still controlled by the Allied Supreme Council, quickly turned into a lawless “wild west” for spies.

Some of the most daring operations later became known to the public and burnished Vienna’s image as a spy capital.

One of them was Operation Silver. In 1951, agents of the U.K’.s Secret Service dug four tunnels from the British occupation zone in Simmering to the main phone line in the Soviet-controlled suburb in Schwechat, in order to be able to tap cables coming straight from the Soviet HQ in Hotel Imperial.

For several years, British and U.S. agents listened in on all Soviet calls through a monitoring station disguised as a popular shop selling tweed wear, as R. C. S. Trahair recounts in his Encyclopedia of Cold War Espionage, Spies, and Secret Operations. It was the kick-off for decades of spying and counter-spying.

Tricky business

The Austrian capital became a favorite location for particularly delicate operations. These activities included rendezvous with informants and defectors from the other side.

More than once, things went awry. In December 1975, the defected Soviet naval officer and CIA agent Nikolai F. Artamonov, known as Nicholas Shadrin, mysteriously vanished on an assignment in Vienna. His orders had been to meet the KGB at Votivkirche under the pretense of switching sides again, and to trade faux American secrets for real Soviet ones. But Shadrin never returned from the meeting. The Soviets spread the story that Shadrin had been ‘disappeared’ by the CIA because he wanted to return to Russia.

Only after the fall of the Soviet Union did a far more likely version emerge. In 1993, former KGB officer Oleg Kalugin told The New York Times they had tried to kidnap Shadrin, but the defector had resisted his captors and died from what was probably a heart attack.

Vienna was also the central point of delivery for the John Walker spy ring, one of the most infamous steady leaks in Cold War history.

John Kerry
Former Secretary of State John Kerry takes sensitive phone calls in a public park after getting a scrambled signal inside Palais Coburg. // Courtesy of U.S. State Department

For nearly two decades, U.S. Navy Officer Walker and family members sold encryption codes and confidential information to the Soviet Union to pay off debt and finance their increasingly lavish lifestyle. Walker regularly met here with his Soviet handlers. Among his possessions, the FBI found a document entitled “The Vienna Procedure,” detailing an intricate set of security precautions for every meeting. In between secretive encounters, the American was wined and dined in various five-star hotels including the Intercontinental on the Stadtpark and the Hilton on Ringstraße.

Courting Walker in Vienna paid off for the Soviets. “There has never been a breach of this magnitude and length in the history of espionage,” KGB spymaster Boris Solomatin later said in an interview with the Washington Post Magazine. It wasn’t until his ex-wife turned over state evidence that Walker was found out and arrested in 1985.

Friends at the corner store

Cold War spying didn’t stop at foreigners. Only recently it has come to light that senior Austrian politicians and public figures were on the payroll of foreign services.

Helmut Zilk, the Social Democratic mayor of Vienna from 1984 to 1994, was found to have been on the payroll of the secret service of communist Czechoslovakia as a young journalist in the 1960s.

Archival material published in the Austrian weekly Profil in 2009 revealed that although Zilk didn’t give away any real secrets, he was handsomely paid in cash for reports on the political situation in Austria. Working under the code name “Holec,” at one point he even received a crystal chandelier as a gift from his handlers in Prague.

Shortly after the Zilk revelations came to light, spy expert Beer published material showing that renowned publicist Otto Schulmeister, a long-time editor of the center-right daily Die Presse, influenced Austrian public opinion of the CIA.

According to Beer’s report, Schulmeister’s mission included pushing U.S. interests in editorials, suppressing stories embarrassing to the Americans and reporting on off-record briefings with Eastern Bloc officials.

Carrying on discreetly

Even after 1989, the end of the Cold War did not end the relentless spy war between East and West.

Following the official dissolution of the KGB in late 1991, economic ties with the West became more important for Russia. The focus of intelligence work shifted towards industrial espionage.

In the early 1990s, former KGB operatives started dozens of companies in Austria, investigative journalist Kid Möchel wrote in his 1996 book The Secret War of Agents. The Russians sought to get their hands on Western technology, and finance their cash-strapped endeavors with cheap exports from the newly opened economy of the former Soviet states.  Among those eager to help was one Rudi Wein, the genial proprietor of Gutruf, a pleasantly run-down Lokal behind the Peterskirche in the 1st district. Operating under the code name “Procurer,” Wein turned out to have been head of the Vienna Residentur (i.e. intelligence outpost)  of the East German Foreign Intelligence Service for decades, making a comfortable living in the back room selling patented technology to the East – suspicions confirmed in archives of the Stasi, East Germany’s feared secret police, which was finally released in 2012.

Peter Pilz NSA Villa
The Green Party’s Minister of Security Peter Pilz leads a group of activitsts to the so-called NSA Villa. // © HERBERT P. OCZERET / APA /

Austrian authorities have been and are quite aware of how much spying goes on, and the status of Vienna as a spy capital is openly acknowledged in official documents.

“As in previous years, Austria has remained a highly attractive operations area for foreign intelligence services,” notes a 2015 report by the agency in charge of counter-espionage, the Federal Office for the Protection of the Constitution and Counterterrorism (BVT), which maintains a registry of all representatives of foreign governments in Austria.

The agency acknowledges that many foreigners accredited as diplomats in Austria are actually spies. The report wryly notes the “the number of intelligence officers posted to diplomatic representations has not been reduced.”

The establishment of the UN headquarters in Vienna in 1979 formed a perfect pretext for inflating the number of officials posted overseas, comfortably hiding a significant number of intelligence officers who enjoy full diplomatic immunity.

Thus at the height of the Cold War in the 1980s, the Soviet Union had over 1,000 people stationed in Vienna, according to journalist Möchel. Even today, the Russian embassy employees and family members number nearly 500 people, according to an embassy spokesperson. The U.S. embassy says it has 230 people accredited as diplomats.

You don’t pick on friends

Some argue Austrian law is deliberately fuzzy so as not to embarrass international partners and allies. The former head of BVT, Gert-René Polli, notes that his former agency is responsible for counter-espionage, but at the same time is tasked with combating terrorism – two goals that are frequently at odds, as foreign intelligence services might be partners in one cause but adversaries in the other, Polli said.

Occupied Vienna / espionage
Vienna was split among four powers from 1945-1955: American, British, French and Soviet, making it a hotbed of political intrigue. // © Ma / Interfoto /

Austrian authorities have long taken a hands-off approach with intelligence services, he said, especially those from the U.S. “The lesson from the cooperation with the Americans is this – you can’t touch them.”

In the past, tales of spying raised few eyebrows among the Austrian public. But revelations of widespread surveillance of private citizens by former NSA employee Edward Snowden have raised the stakes. Reports allege widespread wiretapping by the US and others in Austria, including neighboring Germany’s intelligence agency BND.

In September 2013, Green Party parliamentary Minister for Security Peter Pilz led dozens of activists and TV cameras to an alleged surveillance outpost in Vienna, the so-called “NSA Villa” in leafy Pötzleinsdorf, which he says monitors Austrian telephone and internet communication.

For the first time, many Austrians took notice of foreign snooping in Vienna.

Pilz and others have since alleged that U.S. intelligence services run several spy posts in Austria, including a high-tech surveillance post run by the Austrian military intelligence agency HNaA at Königswarte on the Slovak border, and a listening station at the IDZ office tower close to UN headquarters in Vienna’s 21st district.

“Under the eyes of the authorities, Vienna is the scene for shameless illegal spying and surveillance,” according to Pilz.

The veteran parliamentarian complains the Austrian authorities are complicit in the spying by not stepping in. “This happens simply because our interior minister is afraid of his American, British and German colleagues,” Pilz claims.

The Austrian Ministry of the Interior says that it does not see a conflict of interest in tasking the same agency with counter-espionage and fighting terrorism. Ministry spokesperson Karl-Heinz Grundböck says he is certain that authorities are not reluctant to confront the U.S. or other important partners in cases of possible espionage activity on Austrian territory.

But in any case, few believe that spying in Vienna will end anytime soon. Some even see it as part of the city’s identity.

“For some people, it is associated with tourism and somehow confirms our importance, that such things take root here,” historian Beer said. Reports about spy swaps at Vienna airport and bugs at international conferences have been more a source of curiosity for ordinary Austrians than a source of alarm. For Beer, this is quite telling.

“It is a strange situation, that might say a lot about the way Austrians think.”

Now & Then: Vienna’s Top 10 Spy Locations

vienna map

  1. UNO CITY – The UN organizations based across the Danube river in Vienna’s 22nd district and surrounding diplomatic quarters are a common target for intelligence agencies operating in Austria.
  2. AMERICAN BAR – Designed by architect Adolf Loos in the early 20th century, the elegant watering hole off Kärntner Straße is said to have been a favorite meeting place for spies throughout the Cold War.
  3. PALAIS COBURG – The five-star hotel just off Ringstraße was found to be bugged while it was the main venue for the Iran nuclear negotiations in 2014 and 2015.
  4. HOTEL IMPERIAL – Host to many a diplomat and government delegate, the luxurious hotel on Ringstraße has seen more than one snooping operation and discreet handover over the years.
  5. VOTIVKIRCHE – The front stairs of the majestic neo-Gothic church north of Ringstraße was the site of the abduction and probable death of US-Russian double agent Nicholas Shadrin in 1975.
  6. SCHLOSS SCHÖNBRUNN – The vast gardens of the Imperial Palace in the 13th district were a KGB favorite for rendezvous between operatives amid the tourist masses.
  7. VIENNA INTERNATIONAL AIRPORT – For years, the transit areas at Schwechat have been rumored to be a secret meeting place for agents flying in from all over. In 2010 Russia and the U.S. swapped captured spies on the tarmac.
  8. KAHLENBERG – In the past, the Heurigen taverns on the scenic peak in Vienna’s 19th district reportedly served as informal debate club venues for Western spy agencies seeking to escape the crowded city.
  9. ‘NSA SPY VILLA’ – (Pötzleinsdorfer Straße 126–128 ) – The US compound in leafy Pötzleinsdorf in the northwest of the city is believed by the Austrian media to be operated by the NSA to listen in on Viennese telecommunications.
  10. VIENNA’s SEWER SYSTEM – Dating back to the Roman Vindobona ca. 100 AD, the canals connect the whole city via a 2400km underground network.
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Alexander Fanta is a foreign news reporter with Austrian Press Agency since 2011. His beat in Vienna includes UN, OSCE and Austrian diplomacy, with the occasional lost dog story thrown in between. Follow him on Twitter: @FantaAIex