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Austrian SpyGate? Nationalist Vice-Chancellor Resigns after Video Shows Alleged Corruption Involving 'Niece of Russian Oligarch'

Austrian Vice Chancellor Heinz-Christian Strache (Austrian Freedom Party), addresses the media during press conference.

The number two figure in Austria's ruling right-wing coalition resigned over the weekend after an explosive video showed him appearing to promise government contracts to the purported niece of a Russian oligarch in exchange for campaign support while he was running for office two years ago.

The secretly recorded video, according to Der Spiegel, shows Vice-Chancellor Heinz-Christian Strache of the nationalist and populist Freedom Party (FPÖ), Johann Gudenus, a member of the federal board of the FPÖ, and several other Austrians engaged in conversation with the purported Russian woman, Alyona Makarova, in a villa on the Spanish island of Ibiza in July of 2017.

According to Der Spiegel, "it is unclear at whose behest the FPÖ politicians were tricked and what their motivations were," but the sting seems eerily similar to the FBI's use of informants to entrap members of the nationalist and populist Trump campaign a year earlier.

Three months after the meeting, Strache was sworn in as vice-chancellor of Austria and Gudenus promoted to head of their party's parliamentary group.

The group mingling on the terrace on the evening of July 24, 2017, drinking champagne, eating tuna tartare and sushi, was discussing delicate topics: How could they make sure that a Russian investor was awarded contracts from Austrian businesses and the government?

They were thinking big. Nothing seemed impossible. They discussed casino licenses, the sale of an old luxury hotel, contracts for highway construction -- all of it for the Russian investor. They even discussed a takeover of the Kronen Zeitung, one of Austria's most widely circulated newspapers.

Six hours into the conversation, Strache whispered to Gudenus, "Trap, trap, it's a trap." But his friend was not concerned. "It's not a trap," Gudenus assured him.

But it was a trap. The house was "bugged and outfitted with several hidden cameras," according to Der Spiegel. While it's not known who set Strache up, the sting is reminiscent of the FBI's 2016 surveillance activities against the Trump campaign.

This time, rather than offering dirt on Hillary, the Russian was offering to buy a 50 percent stake in Kronen Zeitung and to make sure it supported Strache's Freedom Party. While he repeatedly stressed in the video that whatever they did had to be legal, Strache seemed to take the bait.

During a press conference on Saturday, Strache admitted to meeting the woman and said it was a "private conversation."

He said he was "drunk" but "no donations have been made to the party" as a result of the meeting.

"It was a typical alcohol-infused macho behavior. ... With this I have hurt the most important person in my life, which is my wife," Strache said.

Strache also denied doing "anything against the law," and called the allegations "a targeted political attack."

The scandal has thrown the Austrian government into crisis with more than 5,000 protesters gathered outside the chancellor's office in Vienna, calling for fresh elections.

Late Saturday, Austrian Chancellor Sebastian Kurz of the conservative People's Party (ÖVP) called for new national elections "as soon as possible," signaling the end of the ruling coalition of Kurz's ÖVP party with the FPÖ.

Now, Kurz himself is under attack for aligning his party with FPÖ.

"I'm here's because Strache resigned and the entire FPÖ is intolerable," Florian Gantner told CNN. "The chancellor has to react and the entire government should step down. We need a new election."

The managing director of Austria's Social Democratic Party (SPÖ) blamed Kurz for the scandal.

"He must confess to the Austrians this failure and take full responsibility for this chaos. He has brought Austria into this disastrous situation and put the stability of the country on the line," SPÖ's Thomas Drozda said in a statement.

German Chancellor Angela Merkel discussed the scandal on Saturday during a press conference in the Croatian capital Zagreb, saying that European politicians "must stand up to" far-right politicians "for sale."

Merkel, a heavyweight in the EU-wide centre-right EPP group, was speaking ahead of a gathering of Croatia's ruling conservative HDZ party as the European Parliament election campaign draws to a close.

Speaking still more forcefully at the event, she argued that "patriotism and the European project are not opposites".

"Nationalism is the enemy of the European project, and we have to make that clear in the last days before the election," she added.

The timing of the release of the video is interesting. Rather than before the 2017 election, it was released less than a week before the EU Parliament elections, which are being held from May 23 to May 26.

Said lefty journalist David A. Andelman at CNN: "The true cost of this scandal will likely be measured next weekend, when Austrians vote in the European parliamentary elections."

The scandal is expected to cause a backlash against the right in Austria.