A Rambling Russia-Themed Video Fells Austria's Top Nationalist

(Bloomberg) -- Years of cultivating links with Russia came back to haunt Austria’s nationalist Freedom Party after a leaked video brought down its leader.

Heinz-Christian Strache, a prominent European populist and vice chancellor in the Austrian government, quit on Saturday after acknowledging he made “dumb” and “embarrassing” statements in 2017 during an alcohol-fueled night of “macho” political boasting to a woman claiming to be a Russian oligarch’s niece.

The seven-hour recording, made at a villa on the Spanish resort island of Ibiza, showed Strache suggesting he’d trade government contracts for campaign funds.

While he denied wrongdoing on Saturday, the leak prompted a government crisis and added an unexpected twist to next week’s European Parliament election.

Strache veered between contrition and defiance in responding to the video.

“This was a targeted political assassination,” he told reporters. He accused unidentified foreign intelligence officials of setting him up in the video, which first surfaced in two German publications.

Strache, 49, led the Freedom Party into government in 2017 for the first time in 12 years, part of a European far-right surge stoked by a record influx of refugees. Before the election in Austria, he traveled to Moscow to sign a “working agreement” with Russian President Vladimir Putin’s United Russia party. In November 2016, Strache also consulted with officials from Donald Trump’s campaign in New York.

Riffing on Austria’s neutrality during the Cold War, Strache’s party offered at the time to be a “reliable mediator and partner” between Russia and the U.S. It has consistently called for economic sanctions against Russia to be rolled back.

The Freedom Party also sent delegates to Crimea to participate in lobbying efforts to recognize Russia’s annexation of Ukrainian territory. Johann Gudenus, its parliamentary leader, went to Crimea in 2014 to observe the hastily-organized secession vote.

The video shows Strache explaining how to circumvent campaign donation limits. Gudenus, a fluent Russian speaker, translates the conversation. Both men are wearing T-shirts, smoking, drinking and appear relaxed.

--With assistance from Boris Groendahl.

To contact the reporter on this story: Jonathan Tirone in Vienna at jtirone@bloomberg.net

To contact the editors responsible for this story: Reed Landberg at landberg@bloomberg.net, Tony Czuczka, Ros Krasny

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