Trial over Telekom Austria payments to rightist party starts

Reuters News
Posted: Jul 18, 2013 8:56 AM
Trial over Telekom Austria payments to rightist party starts

VIENNA (Reuters) - A former Telekom Austria executive authorized payments of almost a million euros ($1.3 million) to a right-wing party that later changed a law in the company's favor, a court heard on the opening day of his trial on Thursday.

Seven defendants including the ex-deputy chief executive are in the dock in connection with the second in a slew of corruption investigations concerning Telekom Austria to reach court. Local media have dubbed the firm the "political ATM".

Corruption remains rife in Austrian public life, where many deals are done on the back of friendships and favors, although a new generation of prosecutors and politicians in the Alpine republic is trying to change this culture.

The seven defendants in the current Telekom Austria case are charged with various combinations of breach of trust, money-laundering and falsifying testimony they gave on the issue dating back to 2006 to a parliamentary committee.

Prosecutor Hannes Wandl said ex-Deputy Chief Executive Rudolf Fischer had approved the payments, which appeared in accounts as fees for reports but in fact were channeled to Joerg Haider's BZO party, then part of a coalition government.

A BZO minister then amended a law that relieved telecoms operators of having to provide universal access to "0800" freephone numbers, the prosecutor said, saving the former state monopoly Telekom Austria an estimated 10 million euros.

The BZO has shrunk to a shadow of its former self since the death in a 2008 car crash of Haider, a charismatic firebrand. It could face extinction if forced to pay back the 940,000 euros.

The defendants are Fischer, prominent lobbyist Peter Hochegger, ex-BZO politicians Klaus Wittauer and Arno Eccher, ex-justice ministry spokesman Christoph Poechinger and advertising agency employees Kurt Schmied and Tina Haslinger.

Fischer pleaded not guilty at the start of the trial, admitting to approving the payments but saying he had to trust his staff and did not know for whom the money was destined.

Hochegger, Eccher, Poechinger and Schmied also denied the charges, according to the Austria Press Agency. Wittauer and Haslinger pleaded guilty, and Wittauer said Telekom Austria was reaping the benefits of the legal amendment to this day.

No current Telekom Austria executives are involved in the trial. Fischer has already been sentenced to three years in jail for share price manipulation in the first Telekom Austria case to come to trial, in February.

Telekom Austria was privatized in 2000 but is still 28 percent state-owned. A new major shareholder, Carlos Slim's America Movil, with 23 percent of the company, came onto the scene last year.

($1 = 0.7637 euros)

(Reporting by Georgina Prodhan; editing by Mark Heinrih)