René Benko on suspicion of bribery: the allegations of the investigators

The search warrant from the public prosecutor’s office, which is available to the Handelsblatt, specifies the allegations on more than 30 pages. After that, Benko is said to have tried to bribe a high-ranking tax official in order to influence investigations by the tax authorities. The authorities accuse him of having received a hidden dividend in the millions when selling a property.

Authorities opened tax proceedings against René Benko

The starting point of the story is the tax proceedings surrounding the Tuchlauben complex, a collection of expensive properties in the center of Vienna. The real estate investment changed hands several times and in a short space of time, but always remained at least partially owned by Benko’s corporate and foundation universe.

First, at the end of 2007, Bank Bawag, which was in financial difficulties, sold the properties to a consortium that also included Benko’s Signa group. But it didn’t stay that way for long. Already in September 2008, Signa sold the complex to the Luxembourg construct RB International. The Laura Private Foundation has a stake in it, and Benko is its beneficiary.

After just two weeks, RB sold the real estate to a holding company in which a Signa group company holds twelve percent. According to WKStA documents, RB received around 53 million euros more than they had paid for themselves. Austrian tax auditors therefore assume that the sale of Signa’s real estate to RB was not made at market value. If this is the case, there would have been a hidden distribution from Signa Holding to Benko.

The Austrian authorities have therefore opened tax proceedings against the entrepreneur. According to the search warrant, the investor then tried to influence the authorities. The high-ranking official Thomas Schmid is said to have been the gateway to the process. Between 2013 and 2019 he worked for several Austrian finance ministers as head of cabinet and general secretary.

Benko is said to have invited Schmid to ski tours and to a “men’s evening” in Vienna in order to influence him, the documents read. On one of these occasions, Benko Schmid is said to have asked directly to intervene in the submission process.

According to the allegations by the WKStA, Benko Schmid is said not only to have harassed him, but also to have made him a very lucrative offer. In October 2017, the investor is said to have presented the official with a “general agent contract” with the Signa Group. Schmid should therefore receive an annual salary of 300,000 euros. He was also promised a bonus of the same amount and a company car.

According to the corruption prosecutors, this offer was made for the “partial treatment of the tax audit proceedings”. Schmid would have made a big jump in salary, because in 2017 he received a gross salary of 128,000 euros. The change of sides ultimately did not materialize, and there is said to have been only an unfinished draft contract.

Instead, Schmid landed another dream job. He became head of Austria’s state holding Öbag, which holds shares in the oil company OMV, the electricity company Verbund and the telecom provider A1, among other things. Schmid is no longer the head of Öbag – and has probably unpacked extensively to the public prosecutor’s office.

Tax officer becomes a key witness for the public prosecutor’s office

Full of intrigue and a typically Austrian farce, the story is why Schmid was so talkative in the first place. In another investigation, prosecutors obtained thousands of chat messages that the officer exchanged with former Chancellor Sebastian Kurz and his followers.

These chats triggered a corruption affair in Austria, which the WKStA is also investigating. A circle around the former Chancellor is said to have bought benevolent reporting with advertisements from the Austrian media group from 2016 to at least 2018. Partially manipulated polls should make Kurz look good and his opponents in the conservative ÖVP look bad.

The accusation that money is said to have flowed from the Ministry of Finance to the media group for this also weighs heavily. According to the prosecutors’ interpretation, Kurz was not directly involved in the action; rather he instigated it. The former Chancellor continues to vehemently deny the accusation.

On Tuesday evening, however, it became known that Schmid offered himself as a key witness to the lawyers. 15 full-day surveys have already taken place. In these, Schmid not only commented on the advertising affair and other domestic political scandals, but also on Benko’s offer.

So he is said to have said that in all discussions with Benko the “tax matter” was in the foreground. According to his own statements, Schmid also used his influence in the financial administration to ensure that the tax issue was resolved in favor of Benko. However, the WKStA does not know whether this actually happened.

Signa bonds fall to all-time lows

The search at the Signa headquarters in Innsbruck should also shed light on this question. According to the search warrant, the investigators should secure e-mails, data carriers, laptops and paper files that are intended to substantiate the suspicion against the Galeria owner.

The German department store company Galeria Karstadt Kaufhof has nothing to do with any of these events. In view of losses in the hundreds of millions, it has to contend with completely different problems. But the owner is closely involved in the question of whether Galeria in Germany will receive a state loan for the third time.

>>Read here: Department store group Galeria Karstadt Kaufhof admits “existence-threatening emergency”.

Benko and his Signa Holding should probably give guarantees and take over part of the loan for Galeria – not least for reasons of EU state aid rules.

Transparency note: Like Signa Holding, the Handelsblatt Media Group is involved in the digital education platform Ada from Galeria owner René Benko.

More: Galeria’s high losses reinforce resistance to further government credit