Austria's Vice Chancellor Quits After Video Surfaces Of Meeting With Russian Investor

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Updated at 3:15 p.m. ET

Austria's vice chancellor has resigned after German media published a video that purportedly showed him offering government contracts to a woman posing as the niece of a Russian oligarch, in exchange for media coverage and political funding.

The scandal drove Chancellor Sebastian Kurz to call for snap elections instead of trying to revive his weakened coalition government. "Enough is enough," he told reporters on Saturday in Vienna.

Vice Chancellor Heinz-Christian Strache announced he would step down earlier in the day at a press conference in the capital. Crowds stood outside the chancellor's office waiting for news.

Strache, who leads Austria's far-right Freedom Party, described the incident as a "targeted political assassination."

It comes less than a week before European Parliament elections.

On Friday, German news magazine Der Spiegel and daily newspaper Süddeutsche Zeitung published the calamitous video. It shows Strache sitting on a couch in a T-shirt, discussing potential deals with a Russian investor.

She proposes to buy a 50% stake in Austria's Kronen-Zeitung newspaper and Strache promises her construction contracts if she helps his political party. The group also discusses how to disguise a donation to the party through an association. Their meeting was said to have lasted six hours.

It's unclear who orchestrated the recording. The publications did not reveal their source but said a forensic video expert had verified the footage.

The video was reportedly filmed in a villa with hidden cameras on the Spanish island of Ibiza in July 2017 — just months before Austria's national election in October. Strache's party received 26% of the vote and 51 seats.

Strache told the German publications that he had done nothing illegal; that he said to the woman that Austrian laws must be followed. He said he never gave her government contracts or received donations from her.

In November 2018, Austrian retail and real estate company SIGNA bought 49% of a German media company that holds Kronen-Zeitung — marking its first investment in media.

Strache chalked the exchange up to "alcohol-induced macho talk" that was "probably trying to impress the attractive hostess," according to Deutsche Welle.

Austrian President Alexander Van der Bellen supported Chancellor Kurz's proposal for snap elections. He said the video presented a "disturbing image" of Austria and that it was "important to restore trust" in the government. He also commended the free and independent media for doing its job.

Kurz, Austria's 32-year-old chancellor, faced mounting calls by the opposition to hold new elections. His conservative Austrian People's Party governs the country in coalition with the Freedom Party.

In the wake of the video, Kurz said the abuse of power, taxes and interference in media affairs were among his concerns.

In the past, he has distanced himself from the Freedom Party following reports of anti-Semitism and racism. The Freedom Party was founded and first led in the 1950s by Anton Reinthaller, a former Nazi.

In recent years, the Freedom Party has built a relationship with Russia. According to the New York Times:

"Mr. Strache first met Mr. Putin in May 2007. In 2014, at least two Freedom Party members took part as election observers during the Russian referendum after the annexation of Crimea. Then in 2016, just seven months before the meeting in Ibiza took place, Mr. Strache traveled to Moscow to sign a formal cooperation agreement between the Freedom Party and Mr. Putin's United Russia party."

Johann Gudenus, another prominent Freedom Party member, was secretly filmed in the Ibiza villa meeting with Strache. That prompted calls for his resignation.

Strache said he would step down from his party leadership position, with Transport Minister Norbert Hofer to replace him.

He also vowed to take legal steps to address the video.