Wolfgang Peschorn, President of the State Financial Procurator’s Office, calls for a yellow-red card system in the economy to address economic misconduct. He emphasizes the need for accountability within organizations like the bankrupt real estate group Signa, linking past crises to real estate bubbles. Peschorn highlights the mismanagement of assets and the impacts of climate change on youth. He advocates for clear judicial processes regarding insolvency proceedings and expresses a desire to continue his role in the Procurator’s Office.
Wolfgang Peschorn, the long-serving President of the State Financial Procurator’s Office and the leading legal authority in the Republic, has proposed a yellow-red card system for the economy, mirroring the rules seen in soccer. Currently, the state finds itself on a reactive path, trying to address economic misconduct amidst numerous legal challenges, with penalties set at levels that discourage intentional malfeasance.
Trust Is Essential
Peschorn emphasized the necessity of a functional state in the economy, stating, “We adhere to the guidelines we have established.” He remarked that the recent bankruptcy of the real estate conglomerate Signa reflected a blatant disregard for these regulations.
This breach is particularly disheartening in a society founded on trust, as highlighted by Peschorn during a discussion at the Club of Business Journalists. He pointed out instances of a “structural abuse of trust” that are currently under criminal investigation, notably where select investors exercised their put options in the crisis’s height.
The Real Estate Bubble
Peschorn noted that real estate should be viewed as a reservoir of wealth. He pointed out that major economic downturns in recent decades have often stemmed from real estate bubbles. He holds that accountability falls not only on the governing bodies of the bankrupt Signa but also on the banks and insurance firms in the financial sector, rather than on individual small business owners.
It’s essential to conduct a thorough investigation into Signa as a whole and assess the roles and actions of its investors. Peschorn commented that when a bank backs a project, it’s typically seen as a positive signal.
Protecting Future Generations
The Republic’s lawyer identified two significant issues affecting younger generations: climate change and the realization of future profits today. “By capitalizing on profits meant for the future now, we are depriving younger individuals of their rightful gains,” Peschorn stated. He described this phenomenon as stemming from “multiple failures” within the system. He also criticized the culture of flouting regulations, noting that at Signa, debt was reportedly disguised as equity, creating a complex web of treatment where numerous companies were misused for internal monetary flows.
Peschorn posed the question of what citizens expect from the state, insisting that its focus should be on effective governmental administration, with energy and transport identified as pivotal sovereign responsibilities.
Regarding the contentious restructuring plan for Signa, which is under scrutiny by the State Financial Procurator’s Office, Peschorn anticipates a prompt decision from the Supreme Court (OGH), asserting that the arguments presented by the Republic are “very valid.” The financial prosecutor is advocating for bankruptcy proceedings to ensure comprehensive clarity regarding the events related to the multi-billion euro bankruptcy of Signa.
Peschorn also remarked that the judiciary needs to sharpen its focus on often prolonged litigation in high-profile cases. He noted that the insolvency proceedings concerning Signa’s bankruptcy might span several years. The total debt owed to the state remains unclear, as audits are still in progress. If it were up to Peschorn, he would continue his role as President of the Procurator Fiscal, expressing his desire to stay engaged in the case.
Recently, the Finanzprokuratur made headlines when the Republic of Austria became a private party in the scandal involving allegedly manipulated favorable reporting in the media. The Procurator’s Office is pursuing claims for damages against various individuals involved, while retaining the option to pursue additional claims if necessary.
Peschorn has held the position of President at the State Financial Procurator’s Office since 2006. The Viennese lawyer, born in 1965, has garnered public attention for his involvement in investigating the Hypo Alpe Adria bankruptcy and the Eurofighter procurement scandal. He served as Minister of the Interior in 2019 under the expert-led government of Federal Chancellor Brigitte Bierlein, a period he described as “exciting” during a recent reflection.