Day 1 COFAG Committee

Real estate mogul Benko in the committee’s spotlight

(Bild: APA/ROLAND SCHLAGER)

He wasn't even there yet and yet he was omnipresent. On the first day of the committee of inquiry, the focus was on coronavirus compensation payments to real estate juggler René Benko as well as his alleged tax avoidance tactics. Wolfgang Peschorn was the first respondent to take a hard look at the business model of Benko's Signa network of companies. The second respondent was a former tax official who brought to light some juicy facts about the Wolf tax scandal. The "Krone" was there live.

• The tax official described how, in 2019, the then Finance Minister Eduard Müller - now head of the Financial Market Authority - became loud when she informed him about her complaint in the Wolf tax scandal. He asked whether everyone had "gone stupid".
• The committee began chaotically and late, with media representatives complaining that their work was being obstructed and made more difficult.
• The head of the Green parliamentary group presented a document stating that René Benko had received an annual salary of almost 26 million euros in 2019 alone. "For what?" she asked, as he was not officially the managing director.
• The Kika/Leiner bankruptcy remains an important chapter. According to Wolfgang Peschorn, reclaims by the Republic will be an issue here.
• The Signa model is "like the climate crisis" because it exacerbates problems in the future, said the head of the Financial Procurator's Office on Benko's opaque corporate network.

Abuse of power, millions in subsidies and billionaires. The committee of inquiry into COVID-19 Finanzierungsagentur des Bundes GmbH, or COFAG for short, which starts today, is a tough one. But what is it all about? As is well known, the measures taken in connection with the coronavirus pandemic brought the whole country to a standstill in March 2020. The government came under pressure to act on economic policy. In April, a COVID-19 legislative package was passed to take the necessary measures to contain the virus and provide economic aid for the Austrian economy. A whopping 38 billion euros were pledged to support the red-white-red economy during the coronavirus crisis.

Wolfgang Peschorn is the first respondent in the U Committee

(Bild: APA/ROLAND SCHLAGER)

Real estate juggler Rene Benko

(Bild: Sepp Pail, APA/Roland Schlager, Krone KREATIV)

"Quick and efficient"?
19 billion of this, the funds from the so-called Corona Aid Fund, were managed by the specially established COVID-19 Finanzierungsagentur des Bundes GmbH, or COFAG for short. According to COFAG, its task was also "to take financial measures quickly, efficiently, transparently and comprehensibly to maintain the solvency and bridge liquidity difficulties of Austrian companies during the coronavirus crisis". Guarantees, fixed cost subsidies, loss compensation, default bonuses and lockdown revenue compensation were provided.

Criticism from the Court of Auditors
For reasons of transparency, the agency also provided for "regular reporting to the National Council". However, the agency then became an issue for other reasons. The Court of Audit sharply criticized the agency, and the Constitutional Court even overturned its foundations. In November 2023, Kai Jan Krainer (SPÖ) and Christian Hafenecker (FPÖ), the two tried-and-tested leaders of the parliamentary sub-committee, agreed to set up a committee of inquiry into the agency. The NEOS spoke out against it.

ÖVP-affiliated billionaires favored?
The subject of the committee, which starts today, is the possible preferential treatment of persons who can be attributed with assets of at least one billion euros and who have supported the ÖVP, for example through donations or whose support was solicited by the ÖVP. The investigations will focus on COFAG and its payments to billionaires with close ties to the People's Party. The focus is particularly on payments to real estate juggler René Benko and billionaire Siegfried Wolf, who, according to Krainer and Hafenecker, are alleged to have received preferential treatment.

The tax files of entrepreneurs Franz Rauch, Stefan Pierer and Johann Graf were also requested from the Ministry of Finance. Based on the chat messages of the former head of the Austrian holding company ÖBAG, Thomas Schmid, some of which are already known, connections and subsidies are to be scrutinized more closely. The Greens even want to summon an employee from the tax office to appear before the committee in connection with Benko.

Benko and Chalet N.

(Bild: Krone KREATIV, Karl Schöndorfer, Andreas Fischer)

The two Green MPs Nina Tomaselli and David Stögmüller also submitted requests for the delivery of all files relating to Signa Holding, Laura Privatstiftung, Signa Luxury and Schlosshotel Igls, and later Chalet N. Benko is said to have been his best guest at the luxury resort, reported the "Krone". The Ministry of Finance provided parts of the files - including on rent arrears in the millions, but refused to provide information on Chalet N. and Privatvilla for the time being. Both are not attributable to Benko.

The companies attributed to real estate juggler Benko alone received 18.7 million euros from the Covid Financing Agency (COFAG) during the coronavirus pandemic. This is according to figures from the Ministry of Finance's transparency portal. For the Freedom Party leader Hafenecker, this is too much. The limit of 14 million euros set by the EU Commission for business associations has thus been exceeded.

(Bild: Krone KREATIV)

Most of the funding went to the Kika/Leiner Group. Specifically, the sum for these companies in the years 2020 to 2023 amounts to around 9.1 million euros. In the committee, the NEOS are also focusing less on COFAG and more on the business of the real estate juggler and processes in the financial administration. To this end, they are going back to 2018, when Benko bought Kika/Leiner, the furniture store chain that later received millions in coronavirus aid and went bankrupt last year.

The Erwin-Schrödinger-Lokal is being questioned from today.

(Bild: Parlamentsdirektion/Michael Buchner)

There are indications that it was already known in 2018 that Benko was only interested in the real estate, never in saving 5,000 jobs, as claimed by the then turquoise-blue government. In addition, explosive chats - from Schmid's cell phone, which continues to be very productive - are to be presented.

Benko and banking secrecy
Meanwhile in Vorarlberg, the Managing Board of Hypo-Landesbank went public following allegations that the bank had recklessly granted loans to the Signa Group. Released from banking secrecy, CEO Michel Haller spoke of "complex facts" that had apparently been "incompletely" or "misrepresented". However, Hypo was involved in "Chalet N" in Lech (secured with 20.8 million euros in liens) and in two other projects with liens of 4.1 million and 5.2 million euros. According to Haller, loans granted to the "Benko Family Private Foundation" amounted to 47.3 million euros. As Haller also explained, the foundation's balance sheet at the time of the loan decision in 2020 showed a reported result of 102 million euros. The proportion of borrowed capital was low. However, it is still uncertain how much money the bank will actually lose due to the various bankruptcies in the Signa bubble palace.

Benko arrives on April 4
Back to the committee: Benko himself was originally already summoned for the second committee day on Thursday. Benko's lawyer Norbert Wess canceled this appointment for his client, but agreed to attend the hearing on April 4.

The four topics of evidence

1. COFAG

2. disclosure of information and interventions

3. cooperation between state-affiliated companies

4. state supervision

The committee is investigating a total of four topics of evidence and a period from December 18, 2017 to November 23, 2023, the date on which the committee was set up - and therefore from a time when there was no talk of the pandemic and the agency. Krainer and Hafenecker justified this by also wanting to scrutinize donors to the "Ballhausplatz" project. The former Minister of the Interior and current head of the Financial Procurator's Office, Wolfgang Peschorn, and a former employee of the Ministry of Finance have been invited to the first of seven planned committee meetings today.

Peschorn could shed light on the extent of the damage in the various cases - and whether the Republic will join criminal proceedings as the injured party. Meanwhile, the former employee was responsible for supervising the board of the large company audit - for example, how much tax Signa Holding has to pay. It is hoped that she will provide insights into important appointments and controversial cases: the alleged tax rebate for entrepreneur Wolf, which is being investigated, and the relocation of Benko's Signa headquarters from Vienna to Innsbruck, presumably to save taxes. The NEOS suspect the Innsbruck tax office of structurally favoring certain players. They want to find out why in the U-Committee. The "Krone" is there for you with a live ticker.