Austrian conservatives face money laundering inquiry

VIENNA Thu Nov 21, 2013 9:53am EST

VIENNA Nov 21 (Reuters) - Vienna prosecutors said on Thursday they had extended a corruption investigation to include the conservative People's Party (OVP) on suspicion it may have used Telekom Austria funds for illegal party financing five years ago.

The investigation into the OVP, one of the big parties that have dominated post-war Austrian politics, covers suspicions of breach of trust and money laundering, prosecutors' spokeswoman Nina Bussek said, confirming a report by Format magazine.

The case is one of several inquiries into whether Austrian politicians illicitly used the former state monopoly telecoms group - which local media have dubbed "the political ATM" - as a source of funds for campaigning or pet projects.

The investigation centres on whether the OVP funnelled Telekom Austria funds via an advertising agency to finance election campaign ads, she said.

She confirmed that former Finance Minister Wilhelm Molterer and current Foreign Ministry State Secretary Reinhold Lopatka were suspects in the case. Molterer, now a senior official at the European Investment Bank, was travelling and not immediately available for comment, a spokeswoman said.

In a statement, Lopatka said he was involved in the case after Telekom Austria ex-deputy chief executive Rudolf Fischer "voiced the vague assumption" that he had been in contact with Lopatka and others about the 2008 elections.

But Lopatka stressed that he had left the party leadership at the end of 2006 and had nothing to do with 2008 elections.

The OVP, which is negotiating with Social Democrats on renew their coalition government after both big parties stumbled to historic lows in September elections, said:

"This concerns well-known accusations from years back. Of course we have the highest interest in clearing this up."

Many deals in Austria have traditionally been done on the back of friendships and favours, but a new generation of prosecutors and politicians in the Alpine republic is trying to change this culture.

Officials at Telekom Austria, which was privatised in 2000 but is still 28 percent state-owned, were not immediately available for comment. The company has said in the past it is trying to claw back millions from people suspected of bilking it in a web of corruption scandals that have damaged its image.

Fischer was convicted in two earlier trials of covertly channelling money to another political party and of share price manipulation. (Reporting by Michael Shields; Editing by Mark Heinrich)

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