Austrian Prosecutors Target Freedom Party’s Former Vice Chancellor in Probe

(Bloomberg) -- Austrian prosecutors raided addresses linked to the nationalist Freedom Party’s former Vice Chancellor Heinz-Christian Strache and the head of gambling company Novomatic AG on suspicions of graft and corruption.

The probe centers on the appointment of Freedom Party’s Peter Sidlo to the management board of Casinos Austria AG, a lottery and casino operator in which the Austrian government and Novomatic own stakes, a Casinos Austria spokesman said, confirming a report in Austrian newspaper Der Standard. Casinos Austria isn’t a target of the probe, he said.

Investigators are looking into whether Strache, former junior Finance Minister Hubert Fuchs, and others pledged to change laws in return for Novomatic backing the appointment at Casinos Austria, Der Standard said.

A spokesman for the white-collar prosecutors’ office in Vienna confirmed that raids took place Monday in relation to a graft investigation. The prosecutors suspect six individuals and one gambling company, he said. He declined to elaborate, citing the confidentiality of the investigation.

Novomatic Chief Executive Officer Harald Neumann and owner Johann Graf are among those being probed, Der Standard said. A spokesman for Novomatic declined to comment.

Strache said on his Facebook page the allegations were unfounded and were a political attack. Sidlo didn’t immediately return an email seeking comment. He was also appointed to the Austrian central bank’s supervisory board by the Freedom Party last year. The Freedom Party said the probe didn’t involve its current leadership.

Strache resigned as vice chancellor and Freedom Party Chairman in May, following the release of a video in which he was shown promising state contracts for cash to a woman claiming to be a Russian oligarch’s niece and plotting the takeover of Austria’s largest newspaper. He also mentioned Novomatic as a donor in the video, a claim Novomatic has denied.

Conservative Chancellor Sebastian Kurz, who had governed in a coalition with the Freedom Party, was toppled a few days later, and Austria will now have an election Sept. 29.

To contact the reporter on this story: Boris Groendahl in Vienna at bgroendahl@bloomberg.net

To contact the editors responsible for this story: Chad Thomas at cthomas16@bloomberg.net, Christopher Elser, Anthony Aarons

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