Corruption in Austria: Thomas Schmid Wants to Become a State Witness and Incriminates Kurz Government Heavily

PeopleOther ♦ Published: October 19, 2022; 23:36 ♦ (Vindobona)

The former head of ÖBAG and Secretary General in the Ministry of Finance, Thomas Schmid, has heavily incriminated ex-Chancellor Sebastian Kurz (ÖVP), his former close companion, in the Casag proceedings triggered by the Ibiza video and wants to become a state witness in the proceedings against Kurz. This was announced by the Economic and Corruption Prosecutor's Office (WKStA). Schmid had approached the investigators with the request, but a formal application had not yet been made.

Ex-ÖBAG boss Thomas Schmid wants to become a state witness in the CASAG proceedings. / Picture: © BMF - Bundesministerium für Finanzen / Austrian Federal Ministry of Finance

In the course of these investigations, Thomas Schmid approached the WKStA in April 2022 with the wish to cooperate and obtain leniency status. In this context, a total of 15 full-day hearings have taken place at the WKStA since June 2022, during which the accused was questioned extensively.

It has now become known that the former head of Austria Holding PLC (ÖBAG) and Secretary-General in the Ministry of Finance (BMF), Schmid, has incriminated the former Chancellor Sebastian Kurz, the President of the National Council Wolfgang Sobotka and many other companions of the Austrian People's Party (ÖVP). The points range from bribery to nepotism and show the alleged but probable extent of corruption of the Kurz government and the ÖVP.

Due to the possible risk to the investigation, the minutes of the interrogations were previously excluded from the inspection of files. They have now been added to the file, which means that the other parties to the proceedings are also aware of them.

In this context, the WKStA is conducting investigations against around 45 defendants (natural persons and associations) on suspicion of breach of trust, false statements of evidence, abuse of official authority, corruption, bribery and violation of official secrecy in various forms of participation. The presumption of innocence applies.

Thomas Schmid and Crown Witness

"After leaving ÖBAG, I decided to take a new path and draw a line under the matter. I started to work through the whole thing. We did things that were not in order," says Schmid and immediately goes on to incriminate Kurz. And he expresses his desire to be a key witness.

Based on the results of the investigation so far, in particular the previously mentioned interrogations of Thomas Schmid, new suspicious circumstances have arisen, according to WKSTa.

The change in thinking was also because he felt he was being used, Schmid says. After leaving ÖBAG and the house searches in October 2021, Kurz had put him under pressure to "take all the blame on myself" and to exonerate him, Kurz, in writing and hand over all chats and the backup.

More explosive statements follow: "I promoted Kurz and the ÖVP from within the BMF, used the BMF's resources to support the advancement of the ÖVP under Sebastian Kurz. This includes staff in the cabinet, staff appointments, "wordings", calculations, preparations for negotiations of a new government, staff appointments and this also sometimes past the minister for Sebastian Kurz and his purposes."

Schmid, according to the minutes, continued: "Knowing that BMF advertisements may not be placed or paid for election campaign purposes of the ÖVP, the BMF placed advertisements in all media around the 2017 election campaign." Kurz's spokesman had told him that the BMF's advertisements were "to be booked on Kurz." By that, the spokesman had meant that Kurz could specify which topics and which media coverage would be placed in the "Austria" media group in return. "When I was still working at the BMF, it was the case that I had to announce and "book in" at the Federal Chancellery which advertising budget and which and which ad budgets the BMF used."

Schmid further states that National Council President Wolfgang Sobotka (ÖVP) intervened with him to stop tax audits at the "Alois Mock Foundation or the Alois Mock Institute" as well as at the "Erwin Pröll Foundation." According to Schmid, "It has then been done in the sense of Mag. Sobotka."

On the survey affair surrounding the so-called Beinschab tool, Schmid writes: "I will take responsibility for this fact and will testify fully comprehensively. The suspicious situation presented in the file is essentially true." Ex-finance minister Gernot Blümel (ÖVP) is said to have known nothing about this, because "this is something Kurz and I agreed on." He had "already become nervous" when, for example, confidants of Kurz, such as Stefan Steiner and Gerald Fleischmann had called him in connection with the Beinschab tool.

When asked why Kurz did not approach him directly about the surveys, despite the good relationship between the two, Schmid replied: "I'm sure security considerations played a role in the fact that Kurz did not communicate directly with me, but had his closest colleagues carry out the administration and the meetings.

House searches at "two company sites"

According to WKSTa, there were "house searches at two company locations and further seizures" which could provide further evidence. According to ORF information, one of the house searches took place at Rene Benko's Signa Holding.

The information obtained through Schmid's interrogations would be examined and any further investigations focused on it would be carried out, the WKStA said. Two defendants are under investigation in one of two causes that are believed to have triggered Schmid's statements, the WKStA informed in another release this afternoon.

According to ORF, investigators from the Economic and Corruption Prosecutor's Office were apparently "looking for documents from appraisers who valued one or more of the group's properties in Vienna."

According to the WKSTa statement, in the period from 2016 to 2018, an "Austrian entrepreneur" is said to have offered Schmid, then Secretary General of Finance, a benefit, namely a well-paid management position in his group, in return for partisan support in the tax audit proceedings of his group, so that there would be no tax assessment or one as low as possible.

Embezzlement for party politics

On the other hand, according to WKSTa, three defendants are under investigation on charges of embezzlement in various forms of participation.

These investigations are centered around the suspicion that the Secretary-General of the Federal Ministry of Finance and another responsible person used budgetary funds to fund consulting costs for a consulting company in preparation for coalition negotiations for a political party in 2017, according to the WKSTa.

WKSTa Economic and Corruption Prosecutor's Office