Austrian politician quits over kickback scandal

Reuters News
Posted: Jul 25, 2012 10:38 AM
Austrian politician quits over kickback scandal

VIENNA (Reuters) - The head of Austria's conservative People's Party (OVP) in the province of Carinthia resigned on Wednesday after admitting in court he took part in a kickback scheme to milk money from the sale of state bank Hypo Alpe Adria in 2007.

The abrupt departure of Josef Martinz follows a series of corruption scandals that have dented confidence in public officials and prompted Austria's parliament in June to adopt a sweeping ethics package before elections due next year.

Martinz acknowledged that he plotted to siphon off for party coffers part of an inflated 12 million euro ($14.5 million) fee that was paid to tax adviser Dietrich Birnbacher for his three weeks of work on the bank sale.

Birnbacher has confessed and has also implicated other local politicians in Carinthia, a stronghold of the far-right Freedom Party, which is making strong gains in opinion polls against the ruling national coalition of Social Democrats and the OVP.

Members of the rightist Freedom Party of Carinthia (FPK), which governs with the OVP in the province, have denied wrongdoing in the affair.

"What Birnbacher says is correct," the Austria Press Agency quoted Martinz as saying at his breach of trust trial in the provincial capital of Klagenfurt. He quit his party post with immediate effect.

People's Party leader Michael Spindelegger, also Austria's foreign minister, said he would not put up with behavior that brought shame on the OVP.

"It was correct and necessary that this (resignation) took place immediately. I personally am deeply disappointed in Josef Martinz," he said in a statement.

Former Carinthian Governor Joerg Haider, the right-wing leader who died in a 2008 car crash, was a prime architect of the 2007 1.6 billion euro sale of Hypo Alpe Adria to German landesbank BayernLB. Birnbacher has said Haider also sought to get kickbacks from the deal.

Austria nationalized Hypo Alpe Adria in 2009 to avoid a collapse of the then BayernLB-owned bank that would have sent shock waves through central and eastern Europe.

(Reporting by Michael Shields. Editing by Jeremy Gaunt.)