Buwog affair – The biggest corruption scandal in Austria

Karl-Heinz Grasser, the former Minister of Finance and shooting star of the last FPÖ ÖVP government, along with the most powerful lobbyists in the country, are about to be tried for corruption, .

Christine Tragler
Christine Tragler Der Standard, Austria
Source: Der Standard
affair – The biggest corruption scandal in Austria - NewsMavens
Karl-Heinz Grasser. Wikimedia Commons

Why this story matters:

What is this lawsuit about? First of all, about the commissions for the privatization of Buwog, i.e. about 62,000 federally owned apartments. And second of all, about Karl-Heinz Grasser and his friends who, in a very short time, became filthy rich and located millions of euros on offshore accounts.

The trial of Karl-Heinz Grasser will be a journey full of dark plot twists and suspicions.

The affair itself came to light in September 2009, by coincidence. During an investigation into the bankruptcy of Constantia Privatbankstießen an unusual commission payment to the PR consultant Peter Hochegger and his business partner (lobbyist and former FPÖ politician Walter Meischberger) was discovered. It turned out Grasser was reimbursing his acquaintances and thus the first of his extremely dubious business practices were exposed.

"And just like that , by accident, we learned about one of the biggest criminal cases in the Austrian post-war history ," Der Standard editors, Renate Graber and Andreas Schnauder, wrote in their dossier on the trial that started this week.

The core of the 825-page indictment is that Grasser is accused of filling his pockets at taxpayers' expense.

"The Buwog affair is not only a criminal case of unique consequences but also a chapter in Austrian politics."

For, as Graber and Schnauder wrote, Grasser is also a representative of the “black-blue coalition” (from the traditional colors of the two parties FPÖ and ÖVP), led by Wolfgang Schüssel and Jörg Haider, that have governed Austria since 2000.

"Eight years later, the trial has begun. Not only those accused tried to delay the process, but also the judiciary which continued to make mishaps, such as the seizure of specially protected documents from the lawyers at the Ministry of Justice. The avoidable delays in the investigation have pushed us back about one year," Der Standard dossier claims.

Without a doubt, it is the biggest and most exciting corruptionscandal of the Second Republic.

Details from the story:

  • Karl-Heinz Grasser was the Austrian Minister of Finance from February 2000 to January 2007.
  • In the so-called “Buwog affair” he is accused of infidelity, illegal agreements and commission payments during the privatization of 60,000 German Federal Housing Developments (BUWOG) by the then Austrian Minister of Finance, Grasser.
  • Up to one billion euros have been laundered and stolen from The Republic of Austria, according to the statement of Greens MP Moser.
  • The affair came to light in September 2009 by accident.
  • Eight years, around 700 interrogations and 660 house searches later; after multiple seizures, telephone surveillance and account openings as well as a corruption investigation committee, 15 defendants must answer to the judge. The giant process encompassing 166 witnesses has begun on December 12.
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