Austria Indicts Former Finance Minister for Corruption

(Bloomberg) -- Austria indicted a former finance minister and 15 other people for corruption linked to a 2.45 billion euro ($2.7 billion) sale of state assets.

Karl-Heinz Grasser, 47, and the others will face charges of corruption following a seven-year investigation into 55 people, the Justice Ministry’s office for prosecuting white-collar crimes said in an e-mailed statement Thursday. Grasser’s lawyer, Manfred Ainedter, told Austrian public TV station ORF that the charges are baseless.

“There’s nothing to the allegations,” Ainedter said. “It was to be expected that the prosecutors weren’t going to say after seven years that all their efforts were in vain.”

The case stems from Austria’s decision to sell 62,000 state-owned apartments in 2004. Prosecutors allege information from Grasser’s finance ministry helped the eventual auction winner by signaling how much would be needed to bid to acquire the properties.

A confidant of Austria’s late Freedom Party leader Joerg Haider, Grasser rose to prominence when he became finance minister under ex-Chancellor Wolfgang Schuessel in 2000. Grasser was the youngest person ever appointed to head that key ministry, which he led for seven years. 

Under Grasser’s reign, a group led by Immofinanz AG won the auction with a 961 million euro cash offer that marginally exceeded the bid of runner-up CA Immobilien Anlagen AG. During the course of a separate investigation five years later, prosecutors found that Immofinanz paid a lobbyist a 10 million euros for information that led to the bid.

Officials interrogated 700 suspects and witnesses, according to the statement from the prosecutor. Another 660 investigative measures -- such as raids, wiretaps and bank-account analysis -- were used during the probe, according to the statement.

Grasser could face as many as 10 years in prison if he’s found guilty. The corruption charges also cover a second case related to the ministry’s choice of office space in Linz, Austria.

To contact the reporter on this story: Boris Groendahl in Vienna at bgroendahl@bloomberg.net. To contact the editors responsible for this story: Patrick Henry at phenry8@bloomberg.net, Jonathan Tirone, James M. Gomez