The former golden boy who fell from grace

The Local
The Local - [email protected] • 22 Jul, 2014 Updated Tue 22 Jul 2014 10:32 CEST
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Former Austrian politician Karl-Heinz Grasser has been widely criticized in the press after failing to appear as a witness at his own civil trial against his former tax consultant and the agency Deloitte.


He was diagnosed with a lung infection whilst on holiday in Capri, but was then photographed on a boat in shorts.

Some newspapers reported that there are suspicions that Grasser wants to avoid potentially incriminating statements from his former tax advisor Peter Haunold and Deloitte, before the case moves to a criminal trial.

Grasser was finance minister from February 2000 to January 2007. At the time he was very popular and credited with consolidating Austria's budget, but he has since become known for his alleged involvement in major corruption scandals.

He is married to socialite Fiona Swarovski, the heir of the Swarovski crystal manufacturers in Tyrol, Austria.

Grasser was born in Klagenfurt, Carinthia, where he studied business administration at the University of Klagenfurt from 1988 to 1992.

He soon joined the far right Freedom Party and became the second deputy governor of Carinthia in 1994, but after a dispute with his mentor Jörg Haider he left politics to work for Magna Europe.

In 2000 he returned to politics, when a coalition was formed between the People’s Party (ÖVP) and the Freedom Party. At the time, he was the youngest minister of finance ever to hold office in Austria.

When the coalition broke up in 2002, Grasser left his party, but after national elections in November and the re-establishment of the coalition under the lead of the ÖVP, he again became minister, this time nominated by the ÖVP.

Things began to go sour in 2011, when investigations by Austrian district attorneys into suspicions of kickback schemes and back room deals brought Grasser into the spotlight.

He has been named in a number of corruption cases, including the allegation that he embezzled funds in the course of privatizing 60,000 state-owned flats (run by the Buwog company) in 2003-04.

Moreover the former minister is in trouble over unpaid taxes. In 2011, reports said that Grasser placed €18,000 in a share depot in Canada and did not pay tax on it between 2002 and 2008.

In 2010, with other finance inquiries closing in on him, he finally reported the matter to the Austrian tax authorities himself. Under Austrian law this cleared him of penalties, which caused great outrage at the time.

Grasser owed the huge sum of €5.4 million in back-taxes between 2003 and 2010. Grasser's critics allege he dodged taxes by transferring money to Liechtenstein, Cyprus and elsewhere.

He maintains his innocence on all counts and is suing a number of people, including his tax advisor.

Editor's Note: The Local's Austrian of the Week is someone in the news who - for good or ill - has revealed something interesting about the country. Being selected as Austrian of the Week is not necessarily an endorsement.

Photo: APA/Fohringer



The Local 2014/07/22 10:32

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