May 23, 2019 / 4:00 PM / a month ago

Austria audit body demands stronger powers over party funding

VIENNA (Reuters) - Austria’s court of auditors demanded tougher powers to police political parties’ finances after the government collapsed in a scandal in which the former vice chancellor discussed ways to work around funding rules.

The court of auditors, which audits public bodies, currently has the right to formally review parties’ financial reports but not to verify the statements. Small opposition parties have long criticised the system, complaining about lax reporting rules, loopholes which allow the secret funnelling of money and weak penalties.

Austria’s 17-months-old conservative-far right government collapsed over the weekend after far-right party chief and Vice Chancellor Heinz-Christian Strache was caught on video offering to fix state contracts with a woman posing as a Russian oligarch’s niece. He has resigned from both posts.

In the video, whose instigators are still unknown, Strache also described a way to financially support the Freedom Party via a non-profit association. Strache has denied breaking the law but accepted that the video was “catastrophic”.

The scandal reignited anger about party finances in Austria, after it was revealed in October that Chancellor Sebastian Kurz’s conservatives spent almost twice as much as allowed for the 2017 parliamentary election campaign. The party faces a penalty of up to 1.2 million euros (1.1 million pounds).

“We demand that the Court of Auditors can actually audit the finances of the political parties and the financing of the election campaigns,” Margit Kraker, president of the audit court, told broadcaster ORF on Thursday. Associations should be obliged to disclose donors and sponsors, she said.

The court of auditors needs effective tools at its disposal including the right to impose penalties, Kraker said.

Small opposition parties including the liberal Neos welcomed the proposal, while Chancellor Kurz said he would support stricter transparency rules.

“In principle, we are ready for talks,” he said when asked for comment at a news conference.

The main opposition Social Democrats said the issue should be discussed later with all parties. Chairman Thomas Drozda said he would support an upper limit for single donations of 10,000 euros and a 200,000 euros budget for election campaigns.

Freedom Party leader-designate Norbert Hofer called for a general cap for donations of 3,500 euros.

Austrian law requires parties to immediately report donations exceeding 51,000 euros and list individual donations exceeding 3,570 euros in their annual reports. Foreign donors are not allowed.

Reporting by Kirsti Knolle; Editing by Toby Chopra

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