There is a moderate risk of corruption in Austria’s public procurement sector. Bribes and irregular payments in the process of awarding public contracts and licenses are fairly uncommon (GCR 2015-2016). Businesses perceive favoritism in decisions of government officials as common, but diversion of public funds is perceived as fairly uncommon (GCR 2017-2018). The most cited risk of corruption in public procurement is the evaluation criteria being tailor-made for certain participants (EUACR 2014). Companies believe that close links between politicians and businessmen has led to corruption (European Commission, Feb. 2014), and almost half of surveyed citizens believe that bribery and abuse of power are widespread among procurement officials (European Commission, Feb. 2014). The lack of a solid Freedom of Information Act means that there is little transparency when it comes to obtaining a comprehensive picture of procurement spending (GDACI 2015). A shortage of transparency within defense procurement is identified through the lack of disclosure on purchases and of a systematic procurement strategy, and procurement agents and subcontractors are found to be insufficiently controlled (CESifo Dice, 2013).
Allegations of major irregularities in the EUR 2 billion sale of 18 Eurofighter jets by airplane manufacturer Airbus to Austria have surfaced (FT, Oct. 2017). It is alleged that Airbus made illegal payments to politicians, civil servants, and other parties in order to win the deal (FT, Oct. 2017). Airbus is facing separate inquiries from Austrian and German prosecutors (FT, Oct. 2017).
Austria’s former finance minister Karl-Heinz Grasser is standing trial on charges of bribery and embezzlements along with fifteen other former high-ranking politicians (US News, Dec. 2017). The charges are related to the privatization of public housing company Buwog in 2004 (US News, Dec. 2017). The tender was allegedly tampered with to favor the bidder who then paid millions of euros in commissions to Grasser’s associates (US News, Dec. 2017).