No. 495

863.00R/7–1651: Telegram

The United States High Commissioner for Austria ( Donnelly) to the Secretary of State 1


186. For Perkins and Foster ECA. During visit today with Figl and Schaerf I told them reps of acct firm Andersen had informed me this morning of their decision to withdraw from investigation because of uncooperative attitude competent Aus officials. This decision was reached at earlier mtg with accountants and Ward OSR and Thibodeaux. Emphasizing that I was speaking frankly and as friend of Aus, I told Figl and Schaerf in view of unsatisfactory record of investigation, characterized by unilateral reversals on part of Min Margaretha of decisions reached by US officials and Aust Govt, I concurred in decision of accountants. I stated it was impossible to foretell consequences of this step and mentioned my telephone conversation with Foster in New York urging completion of investigation. I said accountants had discovered serious cases of dollar diversion harmful to Aus economy but cld not complete their findings because of mounting resistance on the part certain individuals against an independent audit. Because of this resistance, continuation of the investigation useless and waste of time and funds.

My statement made strong impression. Figl appeared visibly shaken, Schaerf exclaimed, “This is proof that Joham of Creditanstalt is stronger than Aus Govt and Aus Parliament.” When I left the mtg Schaerf remained behind, no doubt to discuss new situation [Page 1049] with Figl. I consider it likely that govt will make renewed effort to permit conduct of investigation.

  1. Repeated to Paris for Katz.