US embassy cable - 05VIENNA739

UNCLAS SECTION 01 OF 02 VIENNA 000739 
 
SIPDIS 
 
SENSITIVE 
 
DEPARTMENT FOR EUR/AGS (VIKMANIS-KELLER) AND INR/EU 
 
E.O. 12958: N/A 
TAGS: PGOV, PINR, AU 
SUBJECT:  NEW STRAINS IN FEDERAL COALITION - BOTH SIDES 
PLAY HARDBALL 
 
 
This message is sensitive but unclassified. 
 
1. (SBU) SUMMARY:  Friction between Chancellor 
Schuessel's People's Party (OVP) and the junior coalition 
partner, the Freedom Party (FPO), is generating a new 
wave of media speculation about the stability of the 
federal coalition. Carinthian governor Joerg Haider, in 
an apparent attempt to distract from a bidding scandal in 
his home state, accused Schuessel and Interior Minister 
Prokop of wiretapping him and other FPO officials. 
Haider said Schuessel was deliberately provoking a 
government crisis in order to call early elections. 
Schuessel restored a measure of order by calling a 
cabinet-level "security summit" to soothe bruised egos, 
but FPO party manager Scheuch threatened Prokop with a no- 
confidence motion.  The current strains have their origin 
in the Freedom Party's constant need to sharpen its 
profile at the expense of the OVP.  Justified concern 
about its future electoral prospects is fueling real 
dissatisfaction within the FPO, increasing its inherent 
volatility.  End summary. 
 
SCANDAL OVER STADIUM CONTRACT LEADS TO WIRETAP CHARGE 
--------------------------------------------- -------- 
 
2.  (SBU) A political maelstrom erupted in Carinthia 
involving bid rigging, slush funds and financial 
mismanagement when a magazine published sealed bids for a 
lucrative stadium construction contract.  Governor Joerg 
Haider, apparently concluding that a good offense is the 
best defense, accused the federal Interior Ministry of 
illegally wiretapping him and 31 other Carinthian 
officials and businessmen.  Interior Minister Prokop 
promptly denied the charge. 
 
3.  (SBU) In fact, it appears a legal wiretap instituted 
in an unrelated case picked up a conversation in which an 
FPO official let slip that the governor wanted the bid 
for the stadium construction to go to a well-known 
Carinthian construction company -- possibly in return for 
promises of under-the-table contributions to the state 
FPO.  While Haider and the construction company flatly 
dismissed the reports, the federal Interior Ministry 
confirmed it had launched an investigation.  However, the 
Justice Ministry (which, the press noted, has a 
Carinthian FPO member at its head) declined to pursue a 
case, citing insufficient evidence. 
 
4.  (SBU) Haider, unconvinced, alleged that Chancellor 
Schuessel masterminded these "provocations" as part of a 
strategy to drive the FPO out of the current coalition in 
order to call new elections.  Schuessel, calling Haider's 
charges "a verbal derailment," challenged Haider to 
produce proof of his wiretapping accusations.  Interior 
Minister Prokop mused whether Haider could be suffering 
from "paranoia."  Federal Vice Chancellor Hubert Gorbach 
and Social Affairs Minister Ursula Haubner (who is 
Haider's sister), both FPO, offered him lukewarm support. 
 
5.  (SBU) Klagenfurt Mayor Harald Scheucher (OVP) 
announced March 7 that the committee evaluating the 
stadium bids had unanimously decided to award the 
contract to Vienna-based construction company Porr. 
Other bidders have two weeks to challenge the decision, 
or could sue on the basis of the flawed tender procedure. 
The rumor mill says that, in a typically Austrian 
compromise, Porr may sub-contract some work to Carinthian- 
based STRABAG, the company Haider favored. 
 
"SECURITY SUMMIT" FAILS TO ASSUAGE BRUISED FPO EGOS 
--------------------------------------------- ------ 
 
6.  (SBU) In a separate development, leading FPO figures, 
such as parliamentary caucus leader Herbert Scheibner, 
were sharply critical of Defense Minister Gunter 
Platter's announcement of a shortening of military 
service from eight to six months, saying the OVP had not 
consulted them.  Schuessel then called a cabinet-level 
"security summit" to discuss the full range of defense 
and homeland security issues, including the controversial 
reform of Austria's asylum law.  The meeting confirmed 
most OVP positions, however, leaving a bitter aftertaste 
for some, including FPO Justice Minister Miklautsch. 
 
7.  (SBU) On March 3, the FPO submitted a parliamentary 
inquiry to OVP Interior Minister Prokop (OVP) regarding 
the wiretapping allegation.  Prokop pointed out the 
difficulty of proving a negative, but said she would 
respond within a month.  In a March 4 interview, Freedom 
Party manager Uwe Scheuch accused Prokop of ignoring FPO 
proposals for more restrictive asylum legislation and 
also took her to task for an interview in which she 
expressed a preference for a "grand" coalition with the 
SPO over the current arrangement.  Scheuch darkly hinted 
that the FPO might introduce a no-confidence motion 
against Prokop unless Schuessel "called her to order." 
 
8.  (SBU) COMMENT: Hardly anyone outside Carinthia 
appears willing to believe Haider's latest theory of a 
conspiracy against him.  The failure of the "security 
summit" to restore outward coalition harmony, is, however 
a sign of other fissures, many of them internal to the 
FPO.  The increasing frustration of some senior FPO 
figures, not all of whom owe their careers to Haider, is 
palpable.  The current brouhaha appears to be below the 
threshold that would lead FPO officeholders to commit 
political hara-kiri by resigning from the government, 
although some senior politicians tell us they see an 
increasing likelihood of early elections. 
 
9.  (U) Septel reports the FPO's internal turmoil 
following a debacle in local elections in Lower Austria. 
 
BROWN