City is canceled with comparative damage
It is about the legal and procedural costs in the so-called swap process, which was settled in December 2021. The reason for the revocation, which was revoked by the city, is apparently open tax law issues. The two parties are likely to meet again in court.
After the guilty verdict against damage due to breach of trust in July 2017 and the final judgment in October 2019, the Salzburg municipal council decided in September 2020 to reclaim the costs of 542,000 euros reported by the city from the ex-mayor. The city initially offered Schaden – like two top officials convicted in the swap case – an out-of-court settlement and wanted 260,000 euros.
260,000 euros were ex-mayor too much
That was too much for the long-term mayor. His pension was reduced as a result of the conviction. His lawyer Bettina Knötzl told the Austria Press Agency (APA) at the time that he was of an age where he could no longer earn a lot, and the bank no longer gave him mountains of credit. More than 200,000 euros cannot afford damage, argues Knötzl.
After the result of a solution initially did not lead to anything, a conditional settlement was reached in court on September 1, 2021. Schaden agrees to pay back 250,000 euros to the city – but on the condition that the Constitutional Court (VfGH) decides in his favor in a procedure that was still open at the time and withdraws the pension cut associated with the conviction.
Appeal dismissed by the Constitutional Court
However, this was not the case: the Constitutional Court rejected the ex-mayor’s appeal. Then, in December, Schaden and the city surprisingly agreed on a sum of 230,000 euros in out-of-court talks.
Tax concerns arose
Now, however, doubts of a tax nature have probably surfaced. A legal examination by the tax office in the course of the comparisons made with the top officials has shown that the reduced amount in the event of damage is seen as income and income tax is therefore payable, said a spokesman for Mayor Harald Preuner (ÖVP) to the APA.
“The question is whether the city, as a former employer, is liable to pay the fee.” The conditional comparison will therefore be revoked – the deadline ends on March 1st – and the question will be clarified in the course of renegotiations.
Side aspect of the Salzburg financial scandal
The swap process was a side aspect of the Salzburg financial scandal that blew up in December 2012. In 2007, the city transferred six negatively rated interest rate swap deals to the state of Salzburg without receiving anything in return.
This caused the country damage of at least three million euros, taken together by the court. The charge is infidelity. Damage received – as one of a total of seven accused – three years in prison, one year of which is mandatory. He is serving the sentence with electronic ankle bracelets.
An official report is to be submitted to the city senate in February so that the conditionally concluded settlement can be revoked or terminated in good time. If there is a political majority for this, the proceedings will take place on April 20, 2022 at the Salzburg Regional Court.
According to a spokesman for Mayor Preuner, the comparisons that have been made with the two top officials of the magistrate can no longer be shaken. “The settlements are final. We didn’t know then that there was an income tax obligation.”
Claims lawyer: “No understanding”
Claims attorney Knötzl shows little understanding for the city’s step: “I think that we have found a fair comparison for both sides, also given the process risk. Even if the amount that damage is supposed to pay is still crazy,” Knötzl told APA on Thursday.
In any case, you cannot understand the announced revocation. “I suspect there are political considerations behind it that escape me.” After all, the ex-mayor of the city gave the city a considerable advantage at the time.