Not So Silent Night for ÖVP, Engulfed in Another Corruption Scandal

By Florian Kappelsberger

Another week, another scandal in Austrian politics. On Monday, Vienna’s Public Prosecutor for Corruption and Financial Affairs (WKStA) raided three houses in yet another suspected case involving Thomas Schmid, former general secretary in the ÖVP-led Ministry of Finances, and the prominent manager Siegfried Wolf. As Falter reported, Schmid is under investigation for supposedly using his influence to waive almost €630,000 of tax liabilities in Wolf’s favour.

But let’s start at the very beginning. In 2016, the Viennese tax authorities informed manager and investor Siegfried Wolf that he was to pay seven million euros in tax arrears as well as €629,941 in penalty interest. Apparently, he had not paid appropriate taxes on some income from a position in Switzerland. Wolf, known for having close ties to Sebastian Kurz’ inner circle, protested and demanded a deferral of the penalty interest payment. The technical supervision of the Ministry of Finances, however, refused categorically.

Incriminating chat messages, once again

As documented by chat messages that have been analysed by the news magazine profil, Wolf now contacted prominent figures of the ÖVP-led Ministry of Finances. Among them: Thomas Schmid, a close associate of Sebastian Kurz and the ministry’s general secretary at the time. (Schmid is also under investigation for corruption because of his alleged role in the recent tabloid scandal, and happens to find himself at the centre of another affair surrounding his later appointment as director of the state-owned holding company ÖBAG.)

In this particular case, Schmid instructed an employee to intervene in Wolf’s favour, texting: “Don’t forget – you are working in an ÖVP cabinet!! You are a whore for the rich!”

Afterwards, Schmid supposedly instructed an official at the Viennese tax authority to accept a debt remission; in exchange, she would be rewarded with a promotion. As evidenced by various chat messages, said official even exchanged cordial messages with Siegfried Wolf and met the investor at one point to negotiate her reward…while entrusted with his pending case.

Thus, in July 2018, the Viennese tax office reduced Wolf’s debt by €629,941 – explicitly overriding the authority of the technical supervision. These irregularities were rediscovered during a routine audit at the Viennese tax office in the spring of 2019, which ultimately led to the investigations and the raids conducted by the WKStA on Monday.

An embattled Volkspartei

After being reported by Falter on Monday, this affair has once again caused widespread outrage. Christian Deutsch, federal chairman of the SPÖ, accused the governing ÖVP of corruptability and called upon the chancellor to break his silence: “Nehammer must take an unequivocal stand on the newly emerged chat messages and ensure full transparency as well as consequences,” Deutsch told ORF. Thomas Schmid has refused to comment until now, while Siegfried Wolf denied all allegations.

Arriving just before the holidays, this is only another straw in a series of scandals that have shaken the ÖVP within the past weeks – the dizzying corruption affair surrounding former chancellor Kurz, a national controversy over the party’s stance on Austrofascism and accusations of antisemitism against the newly sworn-in Minister of the Interior.

All of this has inevitably taken a political toll: Compared to their phenomenal result of 37% in the election of 2019, the People’s Party has lost more than 10 percent in recent polls. While the ÖVP has dominated Austria’s political landscape in the past four years, a central-left coalition between SPÖ, Greens and the liberal Neos is currently the most popular option among voters.

More importantly, the seemingly endless line of corruption cases involving prominent politicians gravely endangers Austrian democracy. As a survey has shown, these have had a considerable impact in undermining public trust in politics and the state.

But in the long term, this discontent might have the potential to bring about lasting change: Exasperated by these troubling revelations about Austria’s political culture, more than 80,000 people have signed a public petition calling for stricter laws in the fight against corruption. What a Christmas present that would be.