German prosecutors under fire for questioning Austrian HGAA reporters

Journalist representatives are outraged over an investigation by German prosecutors into Austrian reporters for citing from interrogation records.Munich juridical authorities decided to question profil writers Ulla Schmid and Michael Nikbakhsh Kurt Kuch from weekly magazine News after they revealed statements made by former Hypo Group Alpe Adria (HGAA) decision-makers.German state prosecutors controversially regard the Austrian business journalists as defendants in investigations considering HGAA’s near collapse. The Klagenfurt-headquartered bank, which was taken over by Germany’s BayernLB (Bayerische Landesbank) in 2007, was nationalised last December following soaring losses.News and profil have uncovered various secret investigation developments over the past few months.It is a breach of law to cite from records of interrogations but legal in Austria. Munich prosecutors stressed what mattered to them was that both magazines were on sale in Germany. Journalists in Germany face up to one year in jail and a fine for citing from secret interrogations.The Union of Austrian Newspapers (VÖZ) is infuriated after it emerged yesterday (Thurs) that Viennese prosecutors assisted their German colleagues when being asked to do so.The Austrian branch of “Reporters sans frontiéres” (Reporters without Borders) said it was “alarmed” by the developments.Ilse-Maria Vrabl-Sanda, a spokeswoman for the Viennese state prosecution, said today the decision to cooperate with Munich prosecutors regarding the questioning of the three Austrian writers was “a mistake and a misunderstanding”.Vrabl-Sanda stressed the Viennese authority will not assist German investigators when they decide to press charges against Schmid, Nikbakhsh and Kuch in the matter.Kuch said: “This is a serious attack by Germany against the Austrian freedom of press.”Nikbakhsh announced he considered the developments an “incredible juridical scandal.”Kuch revealed statements by former BayernLB CEO Werner Schmid made when being questioned by prosecutors in Munich who are trying to find out who was to blame for the dire state HGAA is now in.The Munich-based bank paid 1.62 billion Euros for a major interest in HGAA, and the State of Bavaria lost around twice the sum subsequently when the Austrian government enforced it to participate in bolstering the bank to avoid its demise last year.Gottwald Kranebitter, who took over as HGAA boss earlier this year, announced recently he wanted to restore the ailing institute’s finances in the next two years to sell it with profit.The European Commission (EC), however, said it doubted whether HGAA would ever be profitable again considering its debts and credit responsibilities.HGAA suffered net losses of around half a billion Euros in the first six months of 2010.Meanwhile, Austrian investigators of the special SoKo Hypo and CSI Hypo groups said they were investigating around 40 suspects across Europe in connection with the bank’s controversially lax lending policy for real estate deals in Croatia and other south-eastern European countries. Ex-HGAA chief Wolfgang Kulterer was put in custody last month.