Why a spy's arrest in 'Europe's spy capital' has created a scandal

The recent arrest of a former Austrian intelligence officer suspected of espionage for Russia has reignited concerns over Vienna’s historical role as a hub for espionage amid the contemporary East-West geopolitical tensions.

Throughout the Cold War, Vienna stood as a focal point for clandestine intelligence operations, and the recent developments have brought renewed attention to the city’s espionage landscape.

Chancellor Karl Nehammer’s call for heightened security measures underscores the gravity of the situation, prompting a National Security Council meeting to address the “serious accusations” against Egisto Ott, the former intelligence service employee arrested on March 29.

According to information from the public prosecutor’s office, Ott stands accused of “systematically” divulging information to Russian secret services, marking a significant breach of security protocols.

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His arrest was prompted by the interception of written communications between fugitive businessman Jan Marsalek and a suspected spy detained in Britain, shedding light on a complex web of espionage activities.

Marsalek, the former chief operating officer of Wirecard, a prominent payments firm, has been on the run since 2020 amidst allegations of fraud in Germany. Believed to have sought refuge in Russia, Marsalek’s purported involvement in espionage activities underscores the extent of clandestine operations intersecting with financial improprieties.

Despite ongoing geopolitical conflicts, including Russia’s aggression towards Ukraine, Vienna continues to serve as a fertile ground for espionage operations. Reports suggest that “moles” remain active in the city, perpetuating a legacy of covert intelligence gathering that persists despite evolving geopolitical dynamics.

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Allegations linking Ott to Marsalek’s espionage efforts in Austria, including surveillance activities targeting a journalist investigating Russian spy networks, underscore the gravity of the situation.

These developments underscore the imperative for heightened vigilance and robust security measures to safeguard against foreign espionage activities within Austria’s borders.

In the latest case, Ott – who was previously arrested in 2021 but then released – has also been accused of passing the smartphone data of three senior government officials to Russia in return for payment.

Contacted by AFP before his arrest, Ott denied he had spied for Russia.

The Alpine country of nine million – host to multiple UN agencies – has traditionally seen itself as a bridge between the East and West, but has been known for its past cozy relations with Russia before the 2022 invasion of Ukraine and its lax spy laws.

“We have been for decades much too Putin friendly,” historian and intelligence service expert Siegfried Beer told AFP.

The government has scrambled to contain the scandal, with Interior Minter Gerhard Karner promising a “complete clarification” following the arrest.

Conservative Chancellor Nehammer has suggested the strengthening of the intelligence services, while his justice minister Alma Zadic, from the Greens, wants to amend the law to widen prosecutions for spying.

“Legal loopholes have so far made it possible for foreign intelligence services to spy in Austria with impunity. We have to close these,” Zadic said, describing Austria as accused for decades of being “an island of blessings for secret and intelligence services from all over the world”.

Beer also evoked Austria’s “weak” intelligence service with recruits from police and military ranks rather than elite universities. He estimated that there are some 7,000 foreign agents in Vienna, which is a “favourite place” because of its high quality of living.

The revelations following Ott’s arrest have refreshed accusations against the far-right FPOe (Freedom Party), currently leading polls ahead of elections expected in September.

Nehammer last week warned Austria had to prevent Russian spy networks from “infiltrating or exploiting political parties or networks,” referring to the FPOe.

The party has dismissed all accusations, pointing out to AFP that it let a “cooperation pact” with Putin’s party expire in 2022.

It was under current FPOe leader Herbert Kickl’s time as interior minister in 2018 that authorities raided the country’s intelligence service, seriously damaging its reputation.

The then FPOe-appointed foreign minister, Karin Kneissl, in 2018 made headlines when she invited Putin to her wedding, where she danced with him.

Beer said he doubted the current scandal would dent the FPOe’s support.

In the past, several cases – including deaths of high-profile figures – have raised eyebrows.

A former Jordanian intelligence chief, a former Libyan oil minister and the disgraced ex-son-in-law of a Kazakh president all died in Austria. No foul play was officially found in any of the cases.

With inputs from AFP