How Putin hijacked Austria’s spy service — and is now gunning for its government

24 May 2024 , 07:57

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Intelligence officials suspect Wirecard COO Jan Marsalek of colluding with the far-right Freedom Party on Moscow’s behalf.

The coup began with the sound of a doorbell.

Just after 8 a.m. on Feb. 28, 2018, Austrian police Commander Wolfgang Preiszler pressed the buzzer at the headquarters of the country’s domestic intelligence service and held his ID up to the security camera.

Within minutes, dozens of his colleagues armed with Glock pistols and a battering ram fanned out through the building in bullet-proof vests and balaclavas, seizing confidential data stored on the agency’s servers and sensitive documents lying on desks.

The incursion — pitting the police against the spy service, known as the BVT — unleashed a firestorm that shattered Austria’s reputation in the intelligence world and led to the agency’s closure.

More than six years later, the true scope of what transpired that day is only now coming into focus. Intelligence officials tell POLITICO that new evidence suggests the raid was part of a Moscow-led operation to discredit Austria’s spy services in order to rebuild them with new leadership under the Kremlin’s influence. Crucial to that effort, they say, was the junior partner in the government coalition at the time: the far-right, pro-Russia Freedom Party (FPÖ), which today is the most popular party in the country.

Last month, Austrian prosecutors revealed that the men believed to have laid the groundwork for the action were Russian agents directed by Jan Marsalek, the fugitive former chief operating officer of the collapsed payment processing firm Wirecard, who authorities say works for Russia’s GRU military intelligence agency.

The suggestion of a Moscow-led conspiracy is explosive for a number of reasons. For one, it appears to have nearly succeeded. Were it not for the so-called Ibiza scandal in 2019 (in which the FPÖ’s then-leader was caught on video trying to sell political influence to a woman he believed to be the niece of a Russian oligarch), there may have been nothing to stop the plan from coming to fruition. Instead, the Ibiza affair triggered the government’s collapse, pushing the FPÖ into opposition where it has remained since.

Most worrying, however, is that the man ultimately responsible for the BVT raid, then-Interior Minister Herbert Kickl, now heads the FPÖ — which makes him a leading candidate to become Austria’s next chancellor after elections later this year. Though seasoned political observers insist Austria won’t become a Russian vassal under the FPÖ, a Kickl chancellorship would still play into Russian President Vladimir Putin’s hands, allowing the Kremlin to exert more influence over the country behind the scenes, and echoing its success in co-opting the likes of Hungary and Serbia.

“Putin would naturally be pleased by the ambiguity about Austria’s position on Ukraine and the EU that Kickl would bring,” said Christian Rainer, a veteran Austrian publisher and commentator. “The danger for Austria is that it would be completely isolated.”

The honeytrap: How Russia recruited Jan Marsalek

In Marsalek, a well-spoken polyglot who had a taste for adventure and didn’t mind getting his hands dirty, the Russians found a perfect vehicle to infiltrate Austria’s security establishment.

The Vienna-born executive had an unorthodox CV for the No. 2 position in a blue-chip company. After leaving home and ditching school at 19, he joined Wirecard as its chief technology officer in 2000, when the firm’s core business was processing payments for online gambling and pornography.

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Jan Marsalek | PP Munich

Like many an espionage career, Marsalek’s began with what is known in the trade as a “honeytrap.” A lifelong bachelor with a reputation as a thrill seeker (one of his Russian handlers later took him to Palmyra in Syria to see the war there up close), Marsalek, then in his mid-30s, was ripe for the taking.

Her name was “Natasha.” An erotic model who had once played a Russian agent in a vampire B-movie called “Red Lips II-Blood Lust,” Natasha, aka Natalia Zlobina, met Marsalek in 2013.

Wirecard’s CEO had dispatched Marsalek to Moscow to drum up business, and he traveled there frequently. A Russian business contact suggested Natasha could help him, and the two hit it off. Investigators suspect that Natasha, with whom Marsalek enjoyed a jet-set life traveling around Europe from St. Tropez to Santorini, played a central role in his recruitment.

At first, Russian intelligence was primarily interested in Marsalek for his connection to Wirecard. Investigators believe the Russians used the firm to launder money, pay off mercenaries and fund other illicit activities. Over time, however, they began to grasp the value of Marsalek’s Austrian connections.

As the capital of a neutral country at the crossroads between East and West, and one that hosts important branches of the United Nations, OPEC and other international organizations, Vienna had long been a hotbed for global espionage. That explains why Russia has more accredited diplomats and Russian support staff in the city — 258 — than almost anywhere else in the world. About one-third, intelligence experts say, are likely spies.

Moreover, Russia likely wanted to spy not just in Austria, but on Austria, for a simple reason: Despite its lack of political clout on the world stage, the country belongs to the EU and has long been within the Western fold (while not a member of NATO, Austria collaborates with the alliance), giving it access to the kind of information Moscow covets.

“Austria is interesting for the Russians because they can use it as a platform for spying operations against other European countries,” said Thomas Riegler, a Vienna-based historian who has written extensively on Austrian intelligence.

Marsalek quickly proved himself willing and able to deliver just what the Russians wanted.

The infiltration of Austria’s spy service

The Vienna-born executive was officially based at Wirecard’s offices in Munich, but from his shadow headquarters — a 19th-century, neo-baroque villa that once belonged to a Bavarian prince — he maintained close ties to his homeland and its political elite.

The villa, situated across the street from the Russian consulate, helped burnish Marsalek’s reputation as a serious player. After meetings there he liked to treat his guests to a meal at nearby Käfer, an exclusive Munich eatery. At one such gathering Marsalek brought together ex-French President Nicholas Sarkozy, Angela Merkel’s former top security adviser, Erich Vad, and Wolfgang Schüssel, the former chancellor of Austria.

The Wirecard offices in Vienna | Thomas Kronsteiner/Getty Images

By 2015 Marsalek’s connections had led to Martin Weiss, then head of operations for BVT, the domestic intelligence agency. Exactly when and where they met isn’t clear (Weiss claims he first encountered Marsalek in 2015 at a conference organized by the interior ministry), but the relationship would prove fateful for both.

As the head of the agency’s “Section 2,” its operations arm and largest and most important division, Weiss was arguably the best-informed intelligence official in Austria. He and another senior official at the agency, Egisto Ott, would eventually be accused by investigators of funneling information to Marsalek and onward to Moscow.

Ott was arrested on Good Friday this year on suspicion of spying for Russia at Marsalek’s behest. Weiss, Ott’s ex-boss, remains at large in Dubai, where he fled in 2021 with Marselek’s help. Ott, who is being held in preventive custody, denies any wrongdoing. Weiss could not be reached for comment.

Like most officials at the BVT, Weiss and Ott had a background in law enforcement. Housed within the interior ministry, the BVT’s primary mission was to protect Austria’s constitutional authorities and identify terror threats (hence its unwieldy name: the Federal Office for the Protection of the Constitution and Combatting Terrorism).

Both men began their careers as uniformed policemen in the 1980s and worked their way up the ranks, each joining a special anti-terror unit in the 1990s, where they met. Both came from humble beginnings.

Named for the Greek mythological figure Aegisthus (a notorious schemer), Ott was born to an Italian mother and an Austrian father. Though well-liked among his foreign counterparts, who readily shared confidential information with him, he was less popular within the BVT. Former colleagues describe him as abrasive and a “know-it-all.”

Weiss, meanwhile, was regarded as a shrewd analyst but a distant figure driven by his ambition to reach the top of the agency. Why he decided to collaborate with Marsalek, as authorities allege, remains a mystery.

What is known is that in 2015, Ott, who reported directly to Weiss, began making unauthorized queries in police computers, often inventing fake case numbers to hide his tracks, according to Austrian investigators. The searches typically involved the location of exiled Russians, especially those who had fallen out of favor with the Kremlin.

Weiss would receive requests from Marsalek and pass them on to Ott, who would report back to Weiss, according to investigative files seen by POLITICO. In one case described by investigators, Ott used his network to track down a Russian intelligence officer who defected by circulating his fingerprints and claiming the man was a terror suspect. Though Ott ultimately discovered the former Russian agent’s fake identity, the man managed to avoid assassination.

According to texts he exchanged with Weiss, Ott needed money. Over the years he received hundreds of thousands of euros for providing information, authorities believe. Ott denies this.

Marsalek’s Austro-Russian network and a secret dossier

In late 2015 Weiss went on sick leave after injuring his back. Though he was out of commission for more than a year, during which he had to relinquish control of Section 2, the flow of information continued, with Ott making hundreds of unauthorized queries for Marsalek via Weiss, according to the authorities.

In 2017, after Weiss returned to BVT in a different senior role, the two men undertook a more complicated mission for Marsalek, authorities allege.

Former Austrian chancellor Sebastian Kurz | Joe Klamar/AFP via Getty Image

It was a delicate moment in Austrian politics. The country was in the middle of an election season that promised to remake its political landscape.

After years of a grand coalition led by the Social Democrats, the center-right People’s Party, under a charismatic young leader named Sebastian Kurz, was favored to win the October ballot. Kurz’s likely coalition partner, the far-right FPÖ, was keen to take control of the interior ministry and, with it, the BVT.

For Marsalek, the power shift represented a chance to deepen Russia’s influence at the agency. And he knew just which buttons to push.

Founded in the 1950s by SS veterans, the FPÖ has always deeply resented the political establishment. If Marsalek wanted the FPÖ to go after the BVT, then, all he had to do was convince the party’s leadership that the intelligence deep state was out to get them.

Ott and Weiss, both with their own gripes against the BVT and its leaders, were perfect for the job. In April 2017 an anonymous dossier, which investigators believe was compiled by one or both of the men, began landing in the mailboxes of journalists and prosecutors in installments. The anonymous authors accused the agency’s leadership of corruption on a grand scale, including the mishandling of privileged data and the misuse of public funds for sex parties and other unorthodox pursuits.

Laced with authentic insider details about BVT operations and naming dozens of agency personnel, the dossier seemed credible at first glance, but the accusations didn’t stand up to scrutiny.

Michael Nikbakhsh, one of Austria’s top investigative journalists and a recipient of the dossier, spent weeks probing it only to reach a sobering conclusion. “It was bullshit,” he said. “It all sounded plausible, but it was a mix of fact and fiction.”

For Marsalek, “plausible” was good enough. He had just the vehicle to promote the dossier’s conclusions: the Austro-Russian Friendship Society, of which he was a prominent member.

Founded in the late 1990s to promote closer ties between the two countries, the Friendship Society’s membership included the CEOs of some of Austria’s biggest companies, including oil and gas conglomerate OMV, as well as prominent lawyers, lobbyists, at least one Habsburg, and senior politicians from the country’s major parties, including the FPÖ.

The main target of Marsalek’s campaign was the leader of the FPÖ’s parliamentary group, Johann Gudenus, an impressionable Russophile close to Heinz-Christian Strache, then the party’s leader.

As coalition talks between the People’s Party and the FPÖ were underway, Marsalek peppered Gudenus with negative information about the BVT’s leadership, warning his friend that powerful forces within the security service and aligned with Kurz’s party were trying to undermine the far-right group. To keep his communications secret, Marsalek sent Gudenus messages via one of the founders of the Friendship Society, Florian Stermann.

Austria’s far-right vs. the deep state

Marsalek had good reason to undermine the BVT. Ott, his trusty source within the agency, had just been suspended, following a tip from the CIA that he had forwarded work emails to his private account. The authorities had yet to find a smoking gun, but they were closing in.

With the clock ticking, Marsalek made a risky move. In November 2017 he forwarded Gudenus a confidential BVT case number, encouraging him to get his hands on the file and falsely claiming it held sensitive information the agency had collected on the FPÖ.

By the time the FPÖ took control of the interior ministry at the end of 2017, the party’s leadership was convinced the BVT was actively trying to undermine it.

In January 2018, Peter Goldgruber, the newly installed No. 2 official at the interior ministry who reported directly to Kickl, told a prosecutor who handled corruption cases that he had been ordered to “clean up” the ministry, according to notes the prosecutor took on the meeting. His first target: the BVT.

Goldgruber encouraged the prosecutor to pursue a case against the agency’s leaders on the basis of the information contained in Marsalek’s dossier. Though the accusations were vague, a key witness had come forward: Martin Weiss. Ultimately, the prosecutor signed off on a raid.

The next task was to find police officers to carry out the operation. All of the country’s elite units had ties to the BVT leadership, meaning there was a great risk the agency would catch wind of the raid before it happened. Goldgruber settled on Commander Preiszler, a local FPÖ politician who ran a special street-crime unit.

“Good morning, comrade, we’re here for a meeting,” Preiszler told the BVT security guard after he rang the bell. Once inside the first gate, Preiszler’s tone turned less friendly, according to eyewitness accounts, and he ordered the guards to hand over a master key and electronic pass for the premises.

Preiszler knew his destination: “Where is the entrance to Section 2?” he barked at the guards. Once there, he and his officers made a beeline for the unit that investigates right-wing extremism, including organizations with strong ties to the FPÖ, such as the so-called identitarian movement.

The officers didn’t know what to look for, so they grabbed everything they could find, from printed documents to servers and thumb drives. A printout on the desk of the unit’s director was likely of particular interest to Preiszler — an invitation to an event sent by convicted Austrian neo-Nazi Gottfried Küssel, with Preiszler among the invitees. (A former head of the BVT unit described the document, which has gone missing, during a recent parliamentary hearing.)

Herbert Kickl was interior minister at the time of the BVT raid | Christian Bruna/Getty Images

No shots were fired, but by the time Preiszler’s team finished its work that evening, the real target of the operation — the BVT — had been neutralized.

The trouble was that Preiszler’s unit, which spent most of its time chasing drug dealers, was ill-prepared for a search that involved highly classified information.

Among the 40,000 gigabytes of data seized by police during the BVT raid was a copy of the “Neptune Databank,” a hard drive containing years of top-secret information shared with the Austrians by other Western intelligence agencies, including the CIA, MI5 and Mossad. (Whether the Russians managed to make a copy of the drive in the chaos that followed the raid isn’t clear.)

If the cloud of suspicion unleashed by the action wasn’t bad enough, the seizure of a top-secret hard drive with information from partner services was crippling. In the fraternity of global intelligence, such an indiscretion, regardless of the circumstances, was unforgivable. The Austrians were soon cut off by their partners.

Marsalek’s plan to remake Austria’s spy services

Marsalek had every reason to be pleased with himself.

The agency was discredited. Its director, Peter Gridling, had been suspended amid the investigation, and Weiss had left the BVT and gone to work for Marsalek directly in Munich out of his villa. Finally, in an unrelated decision, an Austrian court had lifted Ott’s suspension.

Though Ott had been reassigned to another corner of the interior ministry, he still had access to the information Marsalek wanted, and the relationship between the two men continued to pay high dividends.

In the wake of the Salisbury poisoning of Russian defector Sergei Skripal, a former military intelligence officer, and his daughter by a nerve agent known as Novichok, the Hague-based Organization for the Prevention of Chemical Weapons commissioned an analysis.

The Russians were eager to know what the OPCW knew about Novichok. Moscow dispatched several agents to The Hague in early October 2018, according to Dutch authorities. They tried to hack into the OPCW’s computer system but failed.

Ott had more luck. Shortly after the failed Russian effort, he secured a copy of the report, which included the OPCW’s breakdown of the formula for Novichok. Authorities believe Ott handed the report, a copy of which was found on his phone, to Marsalek.

Authorities in Austria didn’t move to shut down Marsalek’s network until 2021, and even then didn’t understand its full scope | Joe Klamar/AFP via Getty Images

Amid the chaos at the BVT, Moscow moved to fully infiltrate Austria’s security services, the intelligence sources say. Whether the sources based their conclusion on hard evidence or inference isn’t clear. What is clear is that Marsalek was working behind the scenes to reconfigure Austria’s intelligence services under a single “national secret services coordinator.”

In messages to the FPÖ’s Gudenus, Marsalek offered his views on how a new intelligence service should be structured. He even proposed a candidate to lead the new service: the Vienna attorney who had accompanied Weiss when he offered himself up as a witness to the abuses alleged in the dossier.

In addition to “trying to undermine the senior leadership of the BVT, there was an attempt to influence a reform of the BVT in terms of its personnel and organizational structure,” investigators concluded in a summary shared with POLITICO.

At the same time, Ott was working on a blueprint for a new secret service within the foreign ministry, where he would play a central role. “You will definitely be a part of this,” a senior FPÖ MP close to Kickl told Ott in a text exchange recovered by investigators. “We’re going to find a good solution for everyone who has helped here.”

Austria’s foreign minister at the time was Karin Kneissl, a politician known for her friendly stance toward Russia. That summer, in August 2018, her wedding made global headlines after Putin showed up and waltzed with the bride.

The most memorable moment came at the end of the dance, when Kneissl stepped back and bowed before the Russian president.

Vienna tries, and fails, to shut Marselek down

Before Marsalek could complete his grand plan to rebuild Austria’s intelligence service around his agents, however, Ibiza got in the way.

A private detective released a video showing Strache, then FPÖ leader, offering lucrative government contracts in exchange for campaign help from a woman he believed was the niece of a Russian oligarch.

The hours-long, alcohol-fueled encounter at a finca on the Spanish island had been filmed two years earlier in 2017. But the ensuing scandal enveloped the FPÖ like a wildfire, triggering the government’s collapse and forcing the party from power. With his political allies out of office, Marsalek’s operation collapsed.

By then the Wirecard COO also had bigger worries. The Financial Times had published a series of articles pointing to grave irregularities in the firm’s accounting; the authorities were circling, and investors were fleeing. On June 18, 2020 Wirecard acknowledged that nearly €2 billion, one-quarter of its assets, were missing from its accounts.

Heinz-Christian Strache was caught on camera offering lucrative government contracts in exchange for campaign help from a woman he believed was the niece of a Russian oligarch | Thomas Kronsteiner/Getty Images

Later that day, Marsalek met Weiss at an Italian restaurant for dinner, then quietly left Munich headed for Austria. In Vienna the following evening he took a taxi to an airfield outside the city, where Weiss had arranged for a Cessna to fly Marsalek to Belarus. He has yet to return; investigators believe he went from Minsk to Russia, where he remains.

In most spy tales, that would be the end of the story. Marsalek, however, was far from done. He continued to run both his Austrian cell and a separate London-based ring of Bulgarians, authorities say.

In December 2020 Weiss sent Ott a text message asking him to dig up the address of Christo Grozev, the Bulgarian-born investigative reporter who had helped expose the Novichok poisoning. Ott delivered the info, as well as photos from Grozev’s residence; Marsalek’s Bulgarian team subsequently broke into Grozev’s apartment, stealing thumb drives and a computer.

U.S. intelligence didn’t know about the break-in but had other indications that Grozev was in danger and recommended that he leave Austria, where he had lived with his family for 20 years. He now resides in the U.S.

Authorities in Austria didn’t move to shut down Marsalek’s network until 2021, and even then didn’t understand its full scope. After investigators pieced together his escape and discovered that Weiss, with the help of a former FPÖ politician, had arranged the private flight to Minsk, police arrested the former BVT official on Jan. 22 of that year.

Weiss defended his role in helping Marsalek, arguing there wasn’t an arrest warrant out for his boss at the time. He admitted to engaging Ott to dig up information on dozens of names but downplayed the significance.

After keeping him in custody for two days, the authorities, who didn’t have enough to charge him, let Weiss go under the condition that he cooperate with the investigation. Instead, with Marsalek’s help, he jumped on the next flight to Dubai.

“I just managed to evacuate my Austrian guy to Dubai,” Marsalek wrote to one of his Bulgarian agents that day. “That was quite an adventure as well. We were worried they’d arrest him again at the airport.”

Some in the BVT speculate that Weiss turned against the agency out of anger because he wasn’t promoted to deputy director. But Gridling, the agency’s former chief, says Weiss didn’t even apply for that position. Running Section 2 was the job Weiss spent years trying to land, he said.

“I find it difficult to explain his actions,” Gridling added. “If he had been patient, he could have been director one day.”

Shortly after Weiss was arrested in early 2021, the police also took Ott into custody. After officers broke through the door Ott tried unsuccessfully to destroy his phone, according to police. After six weeks in detention he, too, was released pending an investigation.

Putin has never made his interest in Austria a secret | Gavrill Grigorov/Sputnik/AFP via Getty Images

Though authorities suspected the Russians had had a hand in Weiss and Ott’s dealings, it wasn’t until late last year that they discovered the depth of Moscow’s involvement. In September, British counterintelligence broke up an alleged U.K.-based spy ring of six Bulgarians that authorities say worked for Marsalek.

As part of the U.K. probe, investigators stumbled on chat communications between the ring’s alleged leader, Orlin Roussev, and Marsalek that pointed to intensive engagement by Moscow.

Most surprising was that Ott appeared to have continued to work for Marsalek unabated even after his 2021 arrest. In June 2022, for example, he allegedly handed over three mobile phones that had belonged to senior Austrian officials to Marsalek’s Bulgarian crew. Ott acquired the phones from a former colleague in the BVT, according to Austrian law enforcement.

According to the chat communications recovered by British authorities, Marsalek was in constant contact with his agents during their Austria visit, even asking one to purchase two Sachertorte, the Viennese chocolate cake, on their way home.

A few months later, Ott delivered a so-called SINA laptop, a highly encrypted computer used by German intelligence, to Marsalek’s helpers in return for €20,000, authorities say. Police discovered two more of the laptops during a search of Ott’s home.

What an FPÖ government would mean for Europe

Ott, whose latest arrest came as a result of the information U.K. authorities provided to the Austrians, is unlikely to be released from prison soon, Austrian officials say.

That might be wishful thinking.

Kickl, who was interior minister at the time of the BVT raid, now leads the FPÖ; with a national election due before the end of the year, the party has a comfortable lead in the polls.

If the FPÖ wins and forms a government, both Ott and Weiss, who remains in Dubai (which doesn’t have an extradition treaty with Austria), may yet get a reprieve.

The bigger question for Europe is what an FPÖ-led government would mean for Vienna and its broader relationship with Moscow. Austria’s critics argue that the country is already dangerously dependent on Russia. The center-right government might take a tough line on Moscow in public, they say, but has dragged its feet when it comes to disentangling Austria’s economy from Russia.

Herbert Kickl (right) and Peter Goldgruber arrive for an EU-Interior Ministers Conference on Security and Migration | Hans Punz/AFP via Getty Images

The country has been slow to wean itself off Russian energy despite persistent pressure from Brussels and Washington, for example. In the financial sector, Austrian-owned Raiffeisen Bank International continues to operate one of the largest retail banks in Russia, despite a longstanding pledge to withdraw.

If Moscow really was behind the effort to take over Austria’s spy service, as Western intelligence officials claim, it’s clear that the Russians regard the country as an important prize and are willing to go to great lengths to influence its politics.

In the Kremlin’s effort, Kickl and the FPÖ proved at worst eager accomplices and at best useful idiots. Though Kickl hasn’t been as overtly pro-Russian as some of his colleagues, he has been a vocal opponent of European sanctions against Moscow and critical of Western military support for Ukraine.

With Kickl as chancellor, it’s a safe bet that Vienna would pursue even closer economic ties with Moscow. And with both Slovakia and Hungary already leaning toward Russia, Austria’s entry into the Kremlin’s sphere of influence would create a Putin-friendly bloc stretching from the Carpathians to the Eastern Alps, posing a fundamental challenge to European security.

If the rest of Europe is surprised by the Austrian turn, it shouldn’t be: Putin has never made his interest in the country a secret. In 2018, just months after the BVT raid, he accepted an invitation from the Austro-Russian Friendship Society to celebrate 50 years of Russian gas deliveries to the country. Several weeks later, he returned for Kneissl’s wedding. (Describing herself as a “political refugee,” the former foreign minister has since left Austria and now runs a think tank in St. Petersburg.)

“We’ve had very good and close relations with Austria for a long time,” Putin told Austrian television just months after the raid on the BVT. “Austria has traditionally been a reliable partner for us in Europe.”

Intelligence officials suspect Wirecard COO Jan Marsalek of colluding with the far-right Freedom Party on Moscow’s behalf.

Matthew Karnitschnig

Illustration by Robert Carter for POLITICO

Thomas Brown

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