Initially celebrated as a wunderkind, Sebastian Kurz resigned as Austrian chancellor over the weekend amid a far-reaching corruption probe. Documents from that investigation hint at a mafia-like system involving political leaders and the media built up over many years.
By Walter Mayr in Vienna
When the political bomb exploded in Vienna, Sebastian Kurz wasn’t even 20 kilometers south of the Austrian border. And he was in surroundings where he feels most comfortable – among Europe’s political leaders, including Angela Merkel, Emmanuel Macron and Mario Draghi. The Western Balkan Summit had brought the EU’s most powerful together, and if Kurz has achieved one thing during his tenure, then it is giving off the impression that he and his country are among the heavyweights in Europe and not one of the smaller member states.
It was shortly after 10 a.m. on a Wednesday and the European heads of state and government were sitting in a plenary meeting when the news began spreading in Vienna and in Brdo, where the summit was being held: In the early morning hours, the authorities had searched the Austrian Chancellery, the headquarters of Kurz’s Austrian People’s Party (ÖVP), the Finance Ministry and one of the country’s most important publishing houses. The search warrant, which DER SPIEGEL and the Austrian daily Der Standard have seen, granted the authorities permission to confiscate “electronic data and data storage devices, servers, laptops, mobile phones and thumb drives.”
It is nothing short of a political earthquake which has shaken the Austrian capital. And over the weekend, it looked as though it could ultimately mark the ignominious end of the meteoric political career of 35-year-old Kurz. “My country is more important to my than my person,” he said on Saturday in his resignation statement, handing over the reigns to erstwhile Foreign Minister Alexander Schallenberg.
Given the loyalty of the ÖVP party to Kurz, it is presumed that much of the power will remain in his hands. Still, it is a blow to the executive branch the likes of which hasn’t been seen in postwar Austria. On that Wednesday morning, information quickly spread that the Kurz and nine other suspects were under investigation. The focus of the probe: Suspicions of infidelity and abetment of corruption, while two media executives are under suspicion of infidelity and bribery. In addition, the media group Österreich is under suspicion as is the federal organization of the ÖVP.
Austria, in short, is facing an affair of state. At stake is whether the dazzling success story of Sebastian Kurz must be rewritten and whether his climb to the top of his party and to the pinnacle of state power was actually rooted in a corrupt system involving those surrounding him, his party and the most powerful media moguls in the country. That, at least, is the clear message of the search warrant obtained by state prosecutors from the office in charge of investigating white collar crime and corruption, WKStA for short.
Chance discoveries on mobile telephones that had been confiscated in a different case led investigators to conclude that they had sufficient evidence to go after the Kurz and his inner circle. At the heart of the investigation are suspicions that Kurz – earlier as foreign minister and then as chancellor – prompted his close confidant Thomas Schmid, general secretary in the Finance Ministry, to buy favorable coverage in outlets belonging to the media group Österreich. The publishing house is under the control of the brothers Wolfgang and Helmuth Fellner. The two brothers are thought to have been compensated in the form of 1.33 million euros worth of ads purchased by the Finance Ministry over the course of two years.
All of those under suspicion have denied the accusations leveled against them. But WKStA investigators seem rather sure of themselves. They say that with the help of “manipulated and thus falsified” public opinion polls, and with opinion polls that had allegedly been pre-formulated by Kurz’s team and which mostly appeared in the free newspaper Österreich, an attempt was made to improve the electorate’s opinion of an up-and-coming Sebastian Kurz. With the help of “faked invoices” for the sum of 144,000 euros, the costs for the image campaign on Kurz’s behalf was paid for using Finance Ministry funds. Taxpayer money.
If the accusations are substantiated, it would mean that the Kurz team had used taxpayer money to purchase manipulated public opinion polls and flattering media coverage in order to gain power – and to remain there. It is a serious accusation, an affair that would be unprecedented even in Austria, a country that has grown accustomed to scandal and cronyism. Comparable offenses are a rarity in Western democracies.
The investigators are accusing the 10 suspects of working closely together in the scheme. According to a WKStA statement, “everyone involved knew” that public money was being used “solely in the interest of Sebastian Kurz” and to promote his personal career. Because the sum involved is “certainly greater than 300,000 euros,” a guilty verdict could mean up to 10 years in prison. Confessions, of course, could result in less severe penalties.
“If the accusations are true, then Ibiza is just a small island in the Mediterranean,” says political scientist Peter Filzmaier, referring to the Ibiza Affair, which was uncovered by DER SPIEGEL and the Süddeutsche Zeitung in 2019. That affair centered around a secretly recorded video showing Heinz-Christian Strache – who was the head of the right-wing populist Freedom Party of Austria (FPÖ) and vice chancellor at the time – on the island of Ibiza apparently discussing influence peddling and the handing out of state contracts. It triggered an avalanche of investigations that will continue to occupy the country for many years to come. While Strache attempted to merely play off his ramblings as the product of a drunken evening on vacation, it produced a number of investigations that kept creeping closer and closer to Kurz’s ÖVP.
The initial focus was on political appointments and party financing, but has now graduated to suspicions of media manipulation through the purchase of advertisements. Strache may have been drunk in the Ibiza video, but his blabberings are increasingly looking like an accurate reflection of reality.
Did Sebastian Kurz and his team do things that Strache only dreamed of in that Ibiza vacation home? What did Kurz really know of the current affair? Is he, who was the most popular Austrian chancellor in decades, really under suspicion because of a few “text message fragments” taken out of context, as he complained on Wednesday? Kurz has denied all of the accusations.
The WKStA, however, takes a different view. “Sebastian Kurz is the central person: All of the offenses were committed in his interests,” reads the search warrant. It is, the document continues, “clearly apparent that he made the fundamental decision on all important issues.” The reference is to those decisions that he felt necessary to become party head in 2017 and then chancellor. It can “be excluded” that Kurz was not in on the “scheme.”
Does that mean that Kurz, who originally promised to do everything different with his “renewed party,” has actually gone even lower than the level reached by his predecessors in a country that has become notorious over the years for its political affairs? That he used public money to spread false information and flattery to speed his path to power? Public prosecutors will have to produce evidence proving exactly that.
Kurz, meanwhile, was initially in a combative mood. In a Wednesday evening appearance on Austrian television, he was asked if he can really remain in office despite the accusations of inciting infidelity and abetting corruption that have been leveled against him. “Of course,” Kurz responded, adding that he was “extremely unperturbed” about what is now facing him. Still, he must have known even then that a firm denial wouldn’t be enough this time around.
In 2019, after Sebastian Kurz had won a second, decisive election victory following his first win in 2017, the New York Times branded him a “wunderkind conservative.” In the German media, including in DER SPIEGEL, Kurz’s steep climb was followed closely with a mixture of fascination and skepticism. At age 24, Kurz was already a state secretary, at 27 he was foreign minister – and then, at 31, chancellor.
The Austrian conservative awakened a sense of longing in neighboring Germany as well. Just two weeks ago, Tilman Kuban, the leader of the youth wing of Germany’s Christian Democrats, said: “We need a German Sebastian Kurz.” And he is far from alone with that sentiment. The CDU’s conservative wing has close ties to Vienna, and Health Minister Jens Spahn was in Vienna in 2017 to celebrate Kurz’s first election victory with him. The German tabloid Bild couldn’t get enough of the young Austrian chancellor.
What nobody realized for quite some time, though, is that the incredible career of the young party functionary, who broke off his university studies to pursue politics full time, essentially followed a strict screenplay from the very beginning. One of those responsible for that script is his strategist Stefan Steiner, who is also under suspicion in the current affair. Steiner was present at what has come to be considered the moment the “Kurz System” was born. On April 18, 2011, on the third floor of ÖVP headquarters in Vienna, advisers gathered until the early morning hours to discuss how best to prepare the young conservative Sebastian Kurz for his new position as state secretary for integration. Their focus was on his potential path to power.
Many of those present at that meeting continue to be part of the hermetically sealed core unit whose most important principle is loyalty to their leader Kurz. It is more of a community of faith than a group of work colleagues – a conspiratorial team with a healthy esprit de corps and, as has now become clear, more interest in power than restraint.
A List of Precise Steps
Stefan “the brain” Steiner, a 43-year-old doctor of law who grew up in Istanbul, is considered the leader of the group. A conservative, law-and-order man, Steiner advises Kurz on all strategic questions. The WKStA accuses him of participating in “the use of public opinion poll results and their publication exclusively for party political purposes.”
Steiner is largely responsible for producing the masterplan for Kurz’s takeover of both the party and the government. The paper – early on called “Project Ballhausplatz” after the Viennese square on which the Chancellery is located – is a precise list of steps that must be taken for Kurz to reach the pinnacle of Austrian politics. DER SPIEGEL and Der Standard are in possession of the paper.
It describes what must be done to first topple the luckless ÖVP leader Reinhold Mitterlehner from power and then put an end to the ÖVP’s quarreling governing coalition with the Social Democratic Party of Austria (SPÖ). All of this, it should be noted, long before Mitterlehner’s eventual downfall.
“Project Ballhausplatz” is essentially a master plan for installing Kurz in the Chancellery. Last week, elements of it found their way into the search warrant against Kurz.
The key aspect of the game plan developed by Kurz and his strategists was their conviction that they would be able to change the ÖVP so significantly that they could sell the party as an “anti-establishment” force – even though the ÖVP had been part of the Austrian government for three decades. The paper notes that a competent, future-oriented team would be necessary along with young advisers at Kurz’s side. In some parts, it is nothing more than a collection of political catchphrases: There is a need, it says, for “FPÖ issues, but with a focus on the future,” which is a pretty good description of Kurz’s creed. It also talks about lowering the upper limit for the acceptance of asylum seekers and more closely emulating Switzerland.
The paper reads like a blueprint of Kurz’s eventual tenure as chancellor. Even the striking, pugnacious soundbites from his spin doctor Gerald Fleischmann for possible televised campaign debates are included. “I’ve never been chancellor. You have. And you failed.” Other talking points read almost like poems: “Strength is necessary to feel / We will need courage and strength / Austria is no longer an island of the blessed / Threats are on the rise / Terror and Islamism, migration pressure, violent conflicts.”
What reads like an outline of the current scandal is also included: “Commission a survey.” “Everything is better with S.K.” (a reference to Sebastian Kurz). “Place an order for ads.”
At the time, the ÖVP, which had lost its way both in terms of personnel and policy, was well behind the right-wing populist FPÖ in public opinion polls and also behind the SPÖ. Kurz had been appointed foreign minister by then and was waiting for his opportunity, but he still lacked sufficient funds and support within the party to risk an uprising against Mitterlehner, the party head and vice chancellor. And so the “Beinschab Österreich Tool” was invented – a lever to install the crown prince Kurz on the throne as quickly as possible with the help of the public opinion researcher Sabine Beinschab and the Österreich media group.
“Good survey, good survey,” wrote the foreign minister in a text message in December 2016 when Beinschab reported a record low of 18 percent support for the ÖVP. While his praise may sound absurd, it was exactly what Kurz needed. Just five months later, Mitterlehner resigned – and a short time after that, Kurz was able to celebrate his rise to the top of the party in Linz before 1,000 cheering party members and six former ÖVP leaders.
“Swamps and Sour Fields”
The surveys published by Österreich, which initially showed the ÖVP approaching rock bottom, only to spike upwards once Kurz was made head of the party, were partially manipulated, the investigators now say. An examination of the data performed by Der Standard reveals abnormalities: After the new survey company was commissioned, ÖVP support was consistently found to be around a record low of 18 percent, only to rocket upward to 35 percent once Kurz took over. The results are consistently at the extreme margins of the fluctuation range.
Kurz’s strategy proved successful. In mid-September 2017, sitting in economy class on a flight from Vienna to New York for a meeting of the UN General Assembly, he was bursting with optimism. Public opinion polls had him in the lead. Would he also consider forming a coalition with the right-wing FPÖ? You know, Kurz responded, right and left are merely “categories from the last century.”
Three months later, Kurz moved into the Chancellery as the leader of a coalition with Strache’s FPÖ – the party that “Project Ballhausplatz” aimed to absorb into the ÖVP.
The “new style” that Kurz had promised in the campaign was also meant as a rejection of the cronyism and influence peddling that had come to define Austria. The country’s political landscape, said then-President Rudolf Kirschschläger way back in 1980, was full of “swamps and sour fields.” Sebastian Kurz and his team did not invent the practice of handing out peach jobs and sinecures to party allies. They merely maintained the tried-and-tested system – and improved it by ensuring that all of the profits, financial and otherwise, weren’t necessarily for the benefit of the party, but for that of a single person. Sebastian Kurz.
That is also true of the suspected advertising corruption at the heart of the current case. The practice isn’t exactly new in Austria, but the magnitude now described by investigators far surpasses anything that has thus far been revealed. “The excessive purchasing of advertisements started in the late 1990s during the tenure of Social Democratic Chancellor Viktor Klima,” says political scientist and anti-corruption activist Hubert Sickinger. Chancellor Wolfgang Schüssel of the ÖVP, Sickinger says, continued the practice. “Even during the grand coalition, the informal funding of the media took on grotesque proportions, but it grew even worse under Sebastian Kurz.”
The strategy involved the government or state agencies buying ads primarily in the high-circulation tabloids and free newspapers in the hopes of generating positive press coverage in return. Werner Faymann, who is a former Austrian chancellor, deployed the tactic in such determined fashion when he led the Ministry of Infrastructure that public prosecutors investigated him for more than two years. Ultimately, the investigation was suspended and a new and stricter law pertaining to “media cooperations” was passed.
Still, little has changed since then in this specifically Austrian form of “infusion-controlled journalism,” as former Austrian lawmaker Peter Pilz has called it. Ad purchasing under the Sebastian Kurz administration exploded during the coronavirus crisis in 2020. Record expenditures of 47.3 million euros are matched – whether by chance or by plan – by record support for Kurz’s ÖVP of over 40 percent in April 2020.
But not all media outlets benefited equally from the millions spent on advertising by the government. The primary beneficiaries were those papers with the highest circulation: Österreich, Heute and Kronen Zeitung. All of them are sympathetic to Kurz. Indeed, there were suspicions even before the current investigation that millions of state spending had been provided in exchange for favorable coverage.
Political leaders in Vienna, however, apparently didn’t see much of a problem. As Kurz confidant Wolfgang Sobotka – who happens to be president of Austrian parliament – put it in a discussion last December with the now inculpated publisher Wolfgang Fellner: “You know the deal. Ads are rewarded with reciprocity.” The new development is that the scheme could be part of a larger system. The Kurz system.
Fellner has been a powerhouse in Austria’s media landscape for almost half a century. Only very few top politicians dare turn a cold shoulder to him and his influential publishing house. Just 10 days ago on Saturday, Kurz was the guest of Fellner’s son Niki on the broadcaster oe24-tv.
“Still at Zero”
The chats analyzed by the WKStA provide the outline of a striking symbiotic relationship between politicians, civil servants and media executives. The Kurz confidant Schmid, who was first a senior Finance Ministry official before being promoted to head the state-owned holding company Öbag, offered the Fellners a taxpayer-financed advertising “package,” raving about it as a “wonderful investment. Fellner is a capitalist. If you pay, you get something. I love that.” Chancellor Kurz thanked Schmid, to which Schmid replied obsequiously: “Always at your service.”
But Schmid’s tone changed significantly on one occasion when the Fellners failed to publish survey results at the time promised. “We are really angry!!!! Mega angry,” he wrote. A press spokesman in his ministry who had yet to fully understand the rules of the game and who expressed surprise that a planned article hadn’t appeared in Österreich, helped Schmid get to the bottom of the mystery. The Fellners, he said, hadn’t been paid in time. “They’re still at zero.”
The impression created here of corruption among both politicians and media executives strikes at the very core of Austrian democracy.
In testimony pertaining to potential corruption within Kurz’s governing collation with the FPÖ delivered to the parliamentary investigative committee looking into the Ibiza scandal, former Austrian Foreign Minister Karin Kneissl expressed her astonishment at the established practice. “The purpose of these government advertisements is surely – as I have understood – partly that of buying favorable coverage.” Kneissl saw to it that the advertising budget of her ministry was cut significantly, resulting in fierce protests “from almost all newsrooms.”
In his interview last Wednesday, Kurz even appeared to admit as much. In response to a question as to whether he knew of quid pro quo in return for the advertisements purchased by the state, he initially waffled before saying: “I really hope that there was reciprocity, namely coverage and an advertisement, that’s the price you pay, after all.” Was this the admission that he thinks it normal that media coverage can be bought?
Either way, of the mass-circulation papers in Austria, only Österreich is mentioned in the investigative files of the WKStA There is no discussion of possible deals with the market leader Kronen Zeitung or the free paper Heute.
The recent revelations are likely to further convince media skeptics that journalists “are the biggest whores on the planet,” as Heinz-Christian Strache says in the Ibiza video. But from the perspective of Austrian prosecutors, as the files make clear, the behavior of politicians and civil servants is just as egregious.
The “objective and case-specific severity of the criminal acts under suspicion and the potential penalty of up to 10 years,” they write in their rational for the search warrant, justify the extensive searches targeting Kurz and his co-suspects. “The particularly problematic motivation behind the offense and their disdain for the core element of democracy – namely the free and uninfluenced decisions made by voters – must also be taken into consideration.”
The tone adopted by the prosecutors sounds like more than just professional indignation. And that could be the product of the chutzpa displayed by relevant Finance Ministry officials and by the public opinion researcher Beinschab, who went about their “secret business” under file names like “Study on Battling Corruption.” Fellner publications also interviewed Beinschab – formerly a business partner of Sophie Karmasin, who went on to become family minister – as an “independent expert,” giving her the opportunity to comment on the surveys that were manipulated on Kurz’s behalf. Both Beinschab and Karmasin deny all accusations, even as they potentially face lengthy prison terms.
Oscillating between Vulgarity and Obsequiousness
The focus of the state prosecutors on Kurz also means that one of the ex-chancellor’s most loyal advisers – Thomas Schmid – once again finds himself in the spotlight. The 45-year-old from Tyrol makes an appearance in several investigations dealing with Kurz’s ÖVP that began following the publication of the Ibiza video. In addition to Kurz, several other leading ÖVP members are in the crosshairs, including: Finance Minister Gernot Blümel and two of his predecessors: the ÖVP spokesman for judiciary affairs; a former deputy chair of the party; a former justice minister; and a top Justice Ministry official who has been suspended.
Some of the accused ended up in the position they are in because the communicative Kurz confidant Schmid failed to delete all of his text messages. Investigators were able to reconstruct close to 300,000 of them, in part with the help of a hard drive that turned out to be a kind of time machine. It contained content that has led investigators ever deeper into the swamp of conservative cronyism.
Schmid used to work for the conservative former chancellor Wolfgang Schüssel and was appointed to the power position of Finance Ministry general secretary in 2015. He apparently viewed taxpayer money as a kind of fiefdom over which he had full control. When the Foreign Ministry budget was increased by 160 million euros, he wrote to Kurz, who held the portfolio at the time: “We ONLY did it for you.” He then wrote to the future Finance Minister Blümel: “Now, Kurz can shit money.” From his position in the Finance Ministry, Schmid laid the groundwork for his promotion to head up the 26-billion-euro state holding company Öbag.
The tone of Schmid’s text messages frequently oscillates between vulgarity and obsequiousness, a fact which has contributed significantly to the growing disgust with Austria’s political leaders that has gripped many in the country since the first chat protocols were released. Chats such as the following, all of which were exchanged prior to Schmid’s promotion to Öbag head:
“I love my chancellor.” (Schmid to Kurz)
“I am one of your Praetorian guards who solves problems instead of making them.” (Schmid to Kurz)
“I am throwing myself in the Danube today and it’s your fault.” (Schmid to Blümel, as a problem arose); “Be careful that you don’t land on me.” (Blümel to Schmid)
“You get everything you want anyway” (Kurz to Schmid)
“Devoted love can also be nice.” (Blümel to Schmid)
It sounds almost as if a group of buddies were bending over a map and discussing who gets what. And again, in the most recent affair, the sense of propriety that appears to be most skewed belongs to Schmid, who last year was also investigated for drug violations. “Mitterlehner is an ass,” he writes in one of his texts. In another, he notes that one shouldn’t exaggerate when “computing” the public opinion surveys, “otherwise it might be implausible.” The WKStA writes that Schmid does not lack an understanding of his wrongdoing – which can be seen from his request that he not be sent compromising material to his work email.
Ibiza reloaded: “That’s not who we are. That’s not what Austria is like,” said Austrian President Alexander Van der Bellen in his 2019 speech to the nation after the Strache video was released. Since then, though, it has become clear that the ÖVP didn’t just spend almost twice as much as allowed on its 2017 campaign. But also that large donors like the billionaire scion Heidi Goëss-Horten and businessman Klaus Ortner each sent the ÖVP sums in the neighborhood of a million euros. State prosecutors are also looking into a number of associations with close ties to the ÖVP on suspicions that they may serve to conceal party finances.
Indeed, the following question isn’t even a central element of the investigations that have thus far been publicized: Where did Kurz actually get the money that allowed him to finance an almost American-sized campaign, and did he promise anything in return?
The billionaire investor René Benko, a close confidant of Kurz, has now purchased almost a quarter of the still influential Kronen Zeitung. Martin Ho, a well-known Viennese restauranteur originally from Vietnam – a man who Kurz calls a friend and with whom he is frequently photographed – finds himself under significant pressure due to violations of corona rules and because of allegations that his clubs are home to illegal drug sales.
To those who have followed Kurz closely over the years, it is clear that he has become more irascible. “I will never be able to change the fact that a lot of people attack me every day. But it doesn’t particularly surprise or bother me after all these years,” he told DER SPIEGEL on a summer evening in the back of his official sedan on a return trip to Vienna. It didn’t sound particularly convincing. Nor reflective. The erstwhile chancellor, it is clear, finds himself at a crossroads.
A Red Network?
For Kurz, the only direction was up for a long time – until the Ibiza video. The young superstar in his navy-blue, slim-fit suits seemed like he could do anything – until state prosecutors began combing through files pertaining to the ÖVP and the FPÖ, beginning with the mobile phones of Strache and his right-hand man Johann Gudenus.
When Kurz was forced to testify before a court in Vienna on September 3 due to suspicions of lying to a parliamentary investigative committee, it became quite clear just how fed up he has become: “I don’t know what you think of me, but I’m not a complete idiot,” he says. He’s not, Kurz continued, the kind of “half-wit” who would lie when tens of thousands of text messages pertaining to his entire tenure in office were available to prove the contrary.
It is unclear what comes next for Kurz. Now that he has resigned, there is one moment he isn’t likely to forget for quite some time: An off-the-record conversation with journalists on the evening of Jan. 20, 2020, in the Alois Mock Room of the ÖVP party academy, not far from Kurz’s apartment in the Meidling neighborhood of Vienna.
Without offering proof, Kurz spoke of a “red” network of state prosecutors inside the WKStA. The accusations found their way into the media and have weighed heavily ever since on relations between the anti-corruption investigators and the government camp. On Tuesday, Kurz ally Andreas Hanger, an ÖVP parliamentarian who doesn’t mind getting his hands dirty on his benefactor’s behalf, spoke publicly of a “leftist cell inside the WKStA” and of the attempt by a handful of people to “take control” of the country. In fact, though, WKStA investigators have also gone after SPÖ politicians in the past, and conservatives have almost always had the say in the Justice Ministry, a fact which also speaks against the idea of a left-wing conspiracy.
The opposition, meanwhile, has defended the WKStA as a pillar of the rule of law in an Austria where Kurz and his allies have shown a lack of respect for the division of powers. Not only have they heaped criticism on elements of the judiciary, they have also loudly complained of unflattering media coverage. The 40 investigators at the WKStA have now attracted a rather unaccustomed degree of attention, the sign of a society that is deeply divided when it comes to assessments of their Kurz.
Despite those deep divisions in society, it remains to be seen whether they will weaken Kurz’s power base within the ÖVP. He has not resigned from his position as head of the party, meaning, as Der Standard wrote over the weekend, “he will continue to have control over the ministers who are loyal to him.” He is, the paper wrote, still “master of the political situation.”
For now, perhaps. But he finds himself in unfamiliar territory. For the first time in a long time, he no longer has control over his ultimate political fate.
This article was originally published in German on Friday. The English version has been updated to reflect Kurz’s resignation over the weekend.