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Austria’s former Finance Minister Karl-Heinz Grasser sentenced to eight years in prison

Austria’s former Finance Minister Karl-Heinz Grasser was sentenced to eight years in prison Friday for his involvement in a major corruption scandal, local media reported.

Grasser, who served as finance minister between 2000 and 2007 and was a member of the far-right Freedom Party (FPÖ) until 2003, was also found guilty of bringing €500,000 in cash into Austria, money that ended up in the same Liechtenstein bank account where illegal BUWOG payments were deposited. The former minister told the court he had received the money from his mother-in-law in Switzerland.

Karl-Heinz Grasser was found guilty of abuse of power and involvement in kickbacks totalling 9.6 million euros (S$15.53 million) over the sale of state-owned apartments.

During the trial, a co-defendant – who was also best man at Grasser’s wedding – admitted passing on insider information enabling a consortium to buy 60,000 government-owned flats for 961 million euros, one million euros more than a rival bidder. Grasser, who as finance minister had decided to sell the flats and knew of the bids, and his co-defendants received kickbacks totalling 9.6 million euros.

“Only Grasser could have passed on information” to the winning consortium, judge Marion Hohenecker said.

During his time in office, Grasser, now 51, frequently graced the tabloids with his wife, the heir to the Swarovski crystal empire.

At the time the one-time Haider protege was seen as a political star with a possible future as chancellor.

Heinz Mayr, former head of the law faculty at Vienna University who has followed the trial, said the defendants’ attempts to explain the events surrounding the deal at times seemed “very far-fetched”.

“There were a lot of inconsistencies that could not be explained,” he told AFP.

One of these explanations, highlighted in the verdict, was Grasser’s claim that the 500,000 euros he had deposited in cash at Vienna’s Meinl Bank – which filed for bankruptcy this year after it was accused of laundering more than 500 million euros – had been gifted to him by his mother-in-law.

His mother-in-law denied this and prosecutors were able to prove that he had not met her in Switzerland at the time he said she handed over the cash.

The case, which has attracted major media interest in the wealthy EU country, involved 14 defendants facing an array of charges including breach of trust, bribery, taking kickbacks, falsifying evidence, money laundering and fraud.

The case also touched on alleged corrupt payments related to the renting of an office block in the city of Linz.

The verdict was based on hundreds of witness statements as well as tapped telephone calls in which one of the defendants wonders how he could reasonably explain receiving hundreds of thousands of euros to the prosecution.

Grasser, along with several defendants who were also found guilty, will appeal, his lawyer said.

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