By Kirsti Knolle
VIENNA (Reuters) - An Austrian former finance minister went on trial on Tuesday accused of bribery and embezzlement in one of the biggest corruption cases in the country's recent history.
Karl-Heinz Grasser and 15 former high-ranking politicians, managers and bankers are charged in connection with the privatization of state housing company Buwog in 2004.
Grasser, 48, was one of Austria's most popular politicians and became the country's youngest finance minister in 2000 when he was appointed aged 31 to serve in a coalition between the conservatives and the far right Freedom Party.
He is accused of embezzling part of a commission for the sale of 60,000 federal apartments. He denies the accusations and said in a television interview on Monday he was glad the trial was starting so he could prove his innocence.
Defense lawyers say the case is politically motivated at a time when conservatives and the far-right are working to form a government to replace a coalition led by social democrats.
Investigators spent eight years gathering evidence and working on an indictment that runs for more than 800 pages.
It says he under-priced the biggest ever sale of state-owned flats. The tender came down to two bidders and the contract was awarded to a financial consortium that offered just 1 million euros ($1.2 million) more than its competitor.
After the sale, millions of euros in commissions flowed to two Grasser associates suggesting insider dealing, according to prosecutors.
Grasser, who is married to socialite Fiona Swarovski, the heir of the Swarovski crystal manufacturers, says he is a victim of prejudice from the media and the judiciary.
The trial is the latest to stem from the tenure of Chancellor Wolfgang Schuessel who took power in 2000. Others have concerned the telecoms and real estate sectors.
The court rejected a petition by Grasser's defense lawyer Manfred Ainedter to remove the chief of the four judges, Marion Hohenecker, due to conflict of interest because of tweets critical of Grasser sent by her husband who is also a judge.
(Editing by Matthew Mpoke Bigg)