Australia’s Macquarie among lenders to Thames Water’s parent company


Julia Kollewe

THE GUARDIAN
9 April 2024·

Thames Water’s shareholders refused to stump up £500m as promised at the end of March.

Photograph: Toby Melville/Reuters

The Australian investment bank Macquarie, which has been criticised for its role in the privatisation of England’s water industry, is understood be among lenders to Thames Water’s troubled parent company.

The former Thames Water shareholder could, along with other lenders, play an important role in determining the fate of Britain’s biggest water company, after its parent company Kemble Water Finance defaulted on its debt.

Kemble said on Friday it had requested that its lenders and bondholders take no creditor action, but the development raised the prospect that the utility could face a significant restructure or even ultimately collapse.

Related: Thames Water funding crisis: the key players in the row over its future

Macquarie’s fresh involvement, first reported by the Times, is likely to spark further controversy, after the Australian group came under fire for loading Thames Water with debt and inadequate investment while receiving big dividends during its part-ownership between 2006 and 2017.

Macquarie has defended its stewardship of the utility, arguing that it invested more than £11bn in Thames Water’s network during the period, the highest per customer level of all water companies in England and Wales.

It emerged last week that the group of lenders to Kemble also include the Dutch bank ING, Allied Irish Banks (AIB) and the Chinese state-owned Bank of China and Industrial and Commercial Bank of China (ICBC).

Kemble has a £190m loan that is due to be repaid at the end of this month, but the banks are expected to agree an extension. Late last month Thames Water’s shareholders refused to stump up £500m needed by the end of March, some of which was earmarked to pay the Kemble loan.

Macquarie is thought to have invested £130m in Kemble’s debt in 2018 and 2020, equivalent to about 9% of the company’s debt instruments. This is not part of the £190m due later this month.

A spokesperson for Macquarie said: “We manage debt investments on behalf of long-term institutional investors in a range of infrastructure companies, providing long-term financing for essential infrastructure. Macquarie has not had any control or influence over Thames Water’s operating company since 2017.”

Macquarie sold its remaining stake in Thames Water seven years ago. The utility’s debt jumped from £3.4bn to £10.8bn during the Macquarie consortium-led ownership.

The Australian group is known for buying public infrastructure. It can then charge fees, and receive dividends for its part-ownership, as well as enjoy any increase in the asset price. Estimates have put dividends paid for Thames Water during the Australian bank’s 11-year stewardship at £2.7bn.

Days after Macquarie’s sale of its stake was announced in March 2017, Thames Water was hit with a then record fine of £20.3m linked to huge leaks of untreated sewage for offences in 2013 and 2014.

HSBC pulls out of Argentina as ‘anarcho-capitalist’ president battles hyperinflation


Michael Bow
9 April 2024

Argentine president Javier Milei is battling to get inflation under control after it rocketed to 140pc last year - Agustin Marcarian

HSBC is offloading its business in Argentina at a $1bn (£790m) loss amid a battle to calm hyperinflation by Javier Milei, the country’s new “anarcho-capitalist” president.

The bank will sell HSBC Argentina to Grupo Financiero Galicia, the largest private lender in the country.

HSBC, which is selling the operation for $550m, will take a $1bn loss on the sale and book about $5bn of historical losses once the deal closes, which is expected within the next 12 months.

HSBC Argentina comprises 100 branches and 3,100 employees.

The bank said that its Argentine arm has started to create volatility in its financial results.

It booked a $500m charge for hyperinflation in Argentina in February after translating HSBC Argentina’s earnings in pesos into US dollars.

Since taking office in December, President Milei has devalued the peso by 54pc amid an economic crisis in the country.

The president has also been battling to get inflation under control after it rocketed to 140pc last year.

Noel Quinn, chief executive of HSBC, said the bank's Argentine arm was generating 'substantial earnings volatility' for the group - Lam Yik

President Milei is a libertarian and self-described anarcho-capitalist who has praised Donald Trump.

During his election campaign, the former TV pundit campaigned wielding a chainsaw above his head as a symbol for his plans to slash state-spending.

Noel Quinn, chief executive of HSBC, said exiting Argentina would allow the bank to focus on better opportunities across its empire.

He said: “HSBC Argentina is largely a domestically focused business, with limited connectivity to the rest of our international network.

“Furthermore, given its size, it also generates substantial earnings volatility for the Group when its results are translated into US dollars. Galicia is better placed to invest in and grow the business.

“We remain committed to Mexico and the US, and to serving our international clients throughout our global network with our leading transaction banking capabilities.”

Gary Greenwood, an analyst at Shore Capital, said: “Argentina has been a problematic market for HSBC in recent years given hyperinflation in the region and a sharp currency devaluation, which has resulted in significant earnings volatility for the business.

“While there is significant accounting ‘noise’ associated with this disposal, we do not expect it to have a material impact on the valuation of the stock or the investment case.”

HSBC has cut back in several countries this year, selling both its Canadian business and its French retail business.

Klarna: 75 per cent of staff now use AI tools like ChatGPT as it looks to reduce hiring

Lars Mucklejohn
9 April 2024·

City A.M., 

Martin Elwin, head of AI at Klarna

Around three quarters of employees at Klarna regularly use tools like ChatGPT, its head of AI has told City A.M., as the buy-now pay-later (BNPL) giant leverages the technology to reduce hiring costs.

Senior engineering director Martin Elwin said the Swedish bank, which is the UK’s largest BNPL provider, had “something like 100-plus initiatives in development” as it pushes towards so-called superapp status and aims to get all of its more than 5,000 employees regularly using AI tools.

“Many other companies I’ve talked to have said they’re investing in this new AI department or something like that,” he added.

“We can’t figure out how to really transform our business into an AI-powered business and improve efficiencies across the board if we just drive this centrally. So we wanted to make sure that we put these tools and these new capabilities into the hands of everyone in the organisation.”

Klarna made headlines in February after saying its AI assistant, powered by San Francisco start-up OpenAI, was handling a workload equivalent to 700 full-time customer service agents and that it was on par with humans on satisfaction ratings.

The firm’s embrace of the technology comes as it looks to cut costs and return to annual profitability for the first time since 2018 after it began expanding aggressively.

While not currently planning layoffs, Klarna’s chief executive Sebastian Siemiatkowski said in December that the firm was no longer bringing on new employees other than engineers due to its progress on AI.

“It’s not about replacing people, but giving the people you have more, making them more efficient and giving them new skills,” Elwin told City A.M.

“And I think if we look ahead with these new capabilities, with these new tools, as we are expanding, we might not need to hire at the same rate as we did without them.”

Banks and other financial services firms across the world are moving quickly to expand their use of AI to boost productivity. Klarna expects its AI assistant alone to drive $40m in profit improvement this year.

Elwin added: “Even if you’re not necessarily an engineer there are values to get out of the services as well, and it might be something as simple as best practices for how to use ChatGPT Enterprise.

“Everyone not only can learn how to use these tools in the roles they sit in, but they can also contribute to identifying even more important use cases that we might want to invest more in.”

Klarna is gearing up for a blockbuster public listing, reportedly seeking a valuation of $20bn. It is expected to float in New York, but Siemiatkowski has yet to formally announce a location.

M&S invests £1m in tackling methane from burping and farting cows


Sarah Butler
9 April 2024

Cows and other farm animals are responsible for about 14% of human-induced climate emissions.

Photograph: Tony C French/Getty Images

Marks & Spencer is investing £1m in tackling cows’ carbon footprint by changing the diet of the herds that provide its milk.

The retailer is working with all 40 of the pasture-grazed dairy farmers in its supply base with the aim of cutting 11,000 tonnes of greenhouse gas emissions annually produced by cattle burps and manure.

It said giving the cows a feed supplement derived from mineral salts and a byproduct of fermented corn would help prevent the animals’ digestive enzymes from forming methane and reduce the carbon footprint of its main fresh milk by 8.4%.

M&S said it was setting up a £1m accelerator fund for its ethical project Plan A, working in partnership with longstanding and new suppliers to find novel ways of achieving net zero carbon emissions.

One of the first projects supported by the fund will involve asking customers to donate unwearable clothes to Oxfam, alongside reusable clothing. These unwearable items will be cleaned and used to support fabric recycling, where fibres are reused and turned into new material, preventing them going to landfill.

Another test project will use AI data to predict six stores’ optimal heating, ventilation and air conditioning controls to reduce energy consumption.

Methane from cattle burps and manure is a big contributor to greenhouse gas emissions; globally, cows and other farm animals are responsible for about 14% of human-induced climate emissions.

The government said last year in its net zero growth strategy that it expected “high-efficacy methane-suppressing products” to enter the market from 2025 and could force farmers to use them if they prove effective.

More than three-quarters of M&S’s carbon emissions come from its supply chain. The business is aiming to reach net zero across the entire value chain by 2040 and within its own business by 2035.

Targets include doubling sales of vegan and vegetarian products by next year using 100% recycled polyester and 100% responsibly sourced palm oil by 2026.

M&S’s latest Plan A report reveals it is on target for most of its goals apart from plastic packaging, where it is yet to achieve its aim of 100% widely recycled packaging on food by 2022. Last year it reached 93%.

The M&S chief executive, Stuart Machin, said: “I talk a lot about the ‘magic of M&S’ – and a key part of this is our commitment to innovation. It’s in our DNA and, along with our unique model of own brand, long term supplier partnerships, it’s how we deliver the quality and trust our customers expect from us.

“By turning our obsession with innovation towards climate change and tapping into the entrepreneurial spirit of our suppliers we can turbo charge our drive to be a net zero business across all our operations and entire supply chain by 2040. I’m excited by the big difference these small changes could make to some of the toughest climate challenges we face.”

UK
Farmers warn of first year without harvest since Second World War

Emma Gatten
9 April 2024·

Record rainfall has meant that a lot of farmland is still under water, as on this farm near Bangor-on-Dee, Wales - Andrew McCoy /Getty Images

Farmers are warning of food shortages as record rainfall threatens to bring the first season without a harvest on some farms since the end of the Second World War.

Vast swathes of farmland are still under water following an unprecedented period of flooding, with 11 named storms since September and the wettest 18 months on record.

The Agriculture and Horticulture Development Board has predicted that wheat yields will be down 15 per cent, winter barley down 22 per cent and oilseed rape down 28 per cent – the biggest drop since the 1980s.

Joe Stanley, an arable and livestock farmer at a research farm in Leicestershire, said he and his colleagues were facing the first year without a harvest since the land was first farmed after the war.

“Unless it basically stops raining today and then it becomes nice and sunny and windy, we’re not going to get any crops in this year. That’s a real danger,” he said. “Many farmers will be in the same situation.”

Waterlogged fields at a farm near Outwell, in Norfolk, earlier this month - Getty Images/Martin Pope

Farmers are also facing the prospect that crops planted during the autumn will not have survived the flooding brought by repeated storms, the National Farmers’ Union (NFU) said.

It warned that households could feel the effects of low crop yields and reduced lamb numbers, because many lambs have not survived the unseasonably cold temperatures and heavy rainfall.

“It’s no exaggeration to say a crisis is building,” said Rachel Hallos, the NFU vice president. “While farmers are bearing the brunt of it now, consumers may well see the effects through the year as produce simply doesn’t leave the farm gate.”

She added that the situation was a “growing issue for UK food security”, and welcomed a new fund for farmers affected by flooding.

Mr Stanley said farms were facing “an existential moment” because of the changing climate, which could put many out of business, reducing UK food security.

“The problem that we’re facing is that weather is becoming so extreme that it is overwhelming our ability as farmers to continue to grow crops at all in some places,” he said.

Mark Chatterton, a director at business advisers Duncan & Toplis, has estimated that the impact on farm businesses could be significantly worse than the 2019 floods, which led to an 18 per cent reduction in profits.

Farms in areas around the Midlands and the South West hit by Storm Henk in January will be able to claim grants of between £500 and £25,000 under the new fund, three months after it was first announced.

Mark Spencer, the farming minister, said: “I know how difficult this winter has been for farmers, with extreme weather such as Storm Henk having a devastating impact on both cropping and grazing, as well as damaging property and equipment.

“The Farming Recovery Fund will support farmers who suffered uninsurable damage with grants of up to £25,000, and sits alongside broader support in our farming schemes to improve flood resilience.”

The unsolved mystery of Edinburgh's hidden underground network of tunnels


Lee Dalgetty & Lee Dalgetty
9 April 2024·

The 'punch bowl' sits amongst the dimly lit passageways 

(Image: Flickr Creative Commons - Angus McDiarmid) 



We all know about Edinburgh's landmark attractions; we've got the castle, we've got Arthurs Seat, we've got Holyrood House.

What a lot of tourists, and locals, don't know about - is what's lurking underneath our streets.

In Gilmerton, an underground set of hand carved tunnels lay under the suburb, thought to date back to the 18th century.

While the origins remain a mystery, there are rumours the caves were used as a drinking den.

An ex-mining village, Gilmerton now sits right on the edge of the city four miles from the centre.

While the Gilmerton Cove is thought to have been there for centuries, it wasn't until 2003 that the newly restored cave was opened to the public.

The City of Edinburgh Council collaborated with Gilmerton Heritage Trust to open the cove as an educational resource for the community, as well as a visitors attraction.

Despite this renovation, little is known about the roots of Gilmerton Cave after extensive archaeological and historical research.

Scientists from the University of St Andrews and the University of Edinburgh did discover in 2017 that the network of passageways may in fact be far more extensive than currently exposed.

When excavators initially discovered the underground rooms in 2002, they found seven subterranean rooms that were thought to be untouched for over 200 years.

Whoever was behind the cove carved out tables, separate rooms and doorways - making an almost liveable space.

In one section, a circular hole in one of the 'tables' is thought to have been a punch bowl, which alludes to the theory that Gilmerton Cove was a drinking den.

The cove, which is built around a main corridor that stretches over forty feet, has two separate entrances carved from natural sandstone.

Also connected via a secret passage, was the nearby Hellfire Club.

The Hellfire Clubs were a nationwide association of high society members who engaged in 'immoral activities' and mocked religion, dining on 'Holy Ghost Pie' and 'Devil's Loin.'

LA REVUE GAUCHE - Left Comment: Search results for HELLFIRE CLUB 

Another contributing factor to the theory that Gilmerton Cove was an underground boozer comes from George Paterson.

George was an 18th century local blacksmith, who is thought to have lived in the cove between 1719 and 1724.

Parish records from the time show he was reprimanded for allowing alcohol to be consumed in the cove on the Sabbath, though it is not known if George carved the cove himself.

In 1897, an Assistant Keeper at the National Museum of Antiquities in Edinburgh made a detailed study of the caves.

He reported that it was unlikely that one man could have carried out the work in only a few years, and concluded that the Gilmerton Cove went back much further than the 18th century.

Aside from being the Gilmerton local drinking hole, another popular theory argues that it could have been used to house Covenanters in the 17th century.

Covenanters were those who supported the Presbyterian Church of Scotland, and were part of a religious movement following disputes with King James I.

The Covenanters took control of Scotland after the Bishop Wars, pushing against changes imposed on the kirk.

They became a persecuted minority after the 1660 Restoration, with death penalties and torture imposed for any Covenanters preaching in public - and many held services in hidden places to avoid persecution.

The cove's use as a hiding place also comes into play in another theory, which argues the tunnels were made in the 16th century at the time of the Battle of Flodden.

After King James VI and his army were destroyed by the English at the Battle of Flodden, many felt another invasion was imminent.

It's possible that locals created a hideaway to stay safe from invasion.

Other theories behind the the passageways include it being a Witches Coven and a Knights Templar Retreat.

Any and all of the speculations surrounding Gilmerton Cove's past could be true, though it's likely we'll never know for sure.

Guyana gas-to-power project to shave weeks off oil output, hit revenue

Fruit vendor organizes produce at a stand in Georgetown

Mon, Apr 8, 2024
By Sabrina Valle

GEORGETOWN (Reuters) - Guyana’s efforts to use its natural gas resources to fuel a power plant that would slash the South American nation's energy costs have snagged on construction delays and threaten to curtail the rising oil hotspot's revenue this year by about $1 billion.

The $1.9 billion gas-to-power project, Guyana's biggest effort to capitalize on its energy bounty, is embroiled in legal fights and risks cost overruns. The first phase of a 300-megawatt (MW) power plant is running six months behind schedule and full operation is not expected until the fourth quarter of 2025, officials have said.


Exxon Mobil, which operates all the oil and gas production in Guyana, is building a 140-mile (225-km) gas pipeline from its offshore Stabroek block to supply the government's project onshore: a power plant, a related natural gas processing facility and transmission lines.

The U.S. oil major's part of the project, the about $1 billion pipeline, will be ready by year-end as promised to Guyana, said Exxon Guyana country manager Alistair Routledge. That is despite having nothing to connect it to onshore because of delays on the works managed by the government.

The Stabroek block, site of the country's first commercial oil and gas discovery in 2015, currently produces crude - about 645,000 barrels per day (bpd). The new power plant will be the first to use the associated gas produced from the oil field that to date has been re-injected underground.

The gas pipeline completion will require Exxon to pause production in the third quarter at two oil production vessels to connect them to the undersea pipeline, Routledge said.

If the tie-in lasts four weeks, Exxon and its consortium partners Hess and China's CNOOC would have to halt up to 12 million barrels of oil output from two platforms that produce 400,000 bpd at peak levels.

Based on Guyana's recent sale at $85 per barrel, that could mean over $1 billion in deferred oil revenue.

An Exxon spokesperson last week declined to specify how long the production halt will last. Routledge had said the pipeline connection and maintenance works would take "weeks, not months."

The executive said Exxon is not worried about having to shut production this year for a project that will not be ready to accept the gas at least until sometime in 2025.

When the gas-fired power plant is ready is "a question of timing," said Routledge.

"It's hard to have all the facilities ready at the same time." As soon as the onshore facilities are ready, "the whole thing will start up and all those benefits will flow to the country," he said.

Guyana will miss the chance to slash its power costs this year because of the project delay. It imports expensive fuel oil for an aged and often faulty power facility. When fully running on natural gas, the new plant will reduce the nation's power costs by 50%, officials have said.

"Of course we are doing the best we can, but we have to be realistic," Winston Brassington, who coordinates the power project as a consultant for Guyana's Ministry of Natural Resources, said in an interview in February.

While it is not uncommon for major projects to run behind schedule, Guyana's government faces a presidential and parliamentary election next year and is keen to deliver tangible benefits to the nation's 750,000 residents.

"There is more pavement in the city," says fruit vendor Michael Bharrat, 23, when asked about the most visible signs of development brought by the nation's oil boom. "The government could be doing more to help poor people," he said.

Government officials are anxious to fulfill a 2020 election promise to cut residents' energy costs and want to use the gas for industries that can create jobs or for exports as liquefied natural gas.

The government has been pressing Exxon and its partners, which prior to this project have focused on oil, to develop the country's gas resources.

"There is a window of opportunity between now and the end of the decade to monetize and maximize the value of Guyana's natural gas resources," President Mohamed Irfaan Ali told oil executives during a conference in Georgetown in February. "We need to develop our gas now."

UNANSWERED QUESTIONS

Critics of the project say there are a lot of decisions yet to be made and little clarity over the next steps, including who will operate the power plant and market the gas-liquids such as propane produced by the related gas-processing facility.

Meanwhile, two contractors hired by the government for the project have filed for arbitration over costs overruns of $90 million and residents have filed lawsuits claiming unfair compensation for land taken to build the project.

“What rate will Guyana be paying for the unusable or unused gas? Is the gas sales agreement completed?" asked Elizabeth Hughes, a land owner whose family land was expropriated for the project. "There are so many questions unanswered, there is no transparency at all.”

Bharrat Jagdeo, Guyana's vice president, told Reuters in February the project is following its new schedule and will stay within its original budget.

"We believe this is nothing to worry about," Jagdeo said. "It is a two-year project, will take a few more months, but not a year" to complete.

Wally David, 66, a retired trolling boat mechanic, smiles when asked if the government he voted for in 2020 will deliver on its promise to build the gas-to-power project as promised.

"I think it will get done someday," he says from his home in Georgetown, where he complains a road construction project outside his house run by the government is behind schedule.

"Maybe in three, four years, just not now."

(Reporting by Sabrina Valle; Editing by Marguerita Choy)

Denmark’s ‘Cultural Heritage in Flames’ After Huge Fire Rips Through Copenhagen's 400-Year-Old Stock Exchange

Gabrielle Rockson
Tue, April 16, 2024

Everyone inside was reportedly evacuated and some of the historic paintings were rescued



IDA MARIE ODGAARD/Ritzau Scanpix/AFP via Getty ImagesCopenhagen's Stock Exchange building, in Copenhagen, on April 16, 2024

Denmark’s 400-year-old stock exchange has been engulfed by fire.

In a statement on the tourism website, Visit Copenhagen, Danish Tourist Offices confirmed on April 16 that the cause of the fire is currently unknown.

“Update 16th of April, 2024: This page will not be updated with news in regard to the devastating fire. The page will be changed when the full extent of the fire is known,” the statement read of the historic building, which was built in 1625 and is one of Copenhagen’s oldest structures.

According to the BBC, Culture minister Jakob Engel-Schmidt said that 400 years of Danish cultural heritage had gone up in flames.

Meanwhile, the outlet reports that everyone inside was evacuated and some of the historic paintings were rescued.



IDA MARIE ODGAARD/Ritzau Scanpix/AFP via Getty ImagesCopenhagen's Stock Exchange building, in Copenhagen, on April 16, 2024

Related: Plane Passenger Outs Woman for Cheating at Wordle on a Flight — but Fans of the Game Are Divided on the Rules

Videos shared on X (formerly known as Twitter), featured the building going up in flames before clouds of smoke entered the atmosphere.



Ida Marie Odgaard/EPA-EFE/ShutterstockDenmark's 400-year-old stock exchange on fire

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Per the BBC, emergency services revealed that the majority of the building has been damaged, with most damage taking place around the tower.



IDA MARIE ODGAARD/Ritzau Scanpix/AFP via Getty ImagesPolice cars park as flames engulf the Copenhagen's Stock Exchange building on April 16, 2024

It’s reported that emergency services, as well as chamber of commerce director Brian Mikkelsen, were helped by members of the public in saving some of the building’s art.

Related: Couple Accidentally Gets Divorced After Lawyer ‘Clicks Wrong Button’ Using Online Portal

Per the BBC, Local craftsman Henrik Grage told Danish TV that Copenhagen’s fire was "our Notre-Dame," in reference to the fire that burnt the cathedral in Paris in 2019.



IDA MARIE ODGAARD/Ritzau Scanpix/AFP via Getty ImagesFormer Danish Minister of Culture and current CEO of Danish Business (Dansk Erhverv), Brian Mikkelsen (Left) assists with the evacuation of paintings from Denmark's stock exchange

The outlet adds that fire department chief Jakob Vedsted Andersen said responders dealt with an almost impossible task in trying to access the area under the old copper roof. A witness also reportedly told Danish media, "I'm completely speechless — this is an unparalleled tragedy.”

"This morning, we woke up to a sad sight, as smoke over the roofs of Copenhagen gave evidence of the destructive fire at Børsen," Frederik X, the king of Denmark, said in a statement per CBS News. "An important part of our architectural cultural heritage was and continues to be in flames."

"Until today, we have considered the historic building as a beautiful symbol of our capital and a structure that we, as a nation, have been proud of,” he added.


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Protesters in southern Mexico set state government building afire and torch a dozen vehicles

Associated Press
April 8, 2024·



Firefighters put out a fire where a truck was set fire by rural teachers' college students protesting the previous month's shooting of one of their classmates during a confrontation with police, outside the municipal government palace in Chilpancingo, Mexico, Monday, April 8, 2024.

 (AP Photo/Alejandrino Gonzalez)

CHILPANCINGO, Mexico (AP) — Protesters in southern Mexico set the state government building afire Monday and torched at least a dozen cars in the parking lot.

The protests occurred in the violence-wracked city of Chilpancingo, the capital of the Pacific coast state of Guerrero.

The protesters are demanding answers in the case of 43 students at a rural teachers college who disappeared in 2014. Another student from that college was killed in a confrontation with police in March.

The Guerrero state government said in a statement that it “regrets and condemns the violent acts.” The government noted the state interior secretary had resigned following the March confrontation with students. The police officers involved are under investigation in the death.

Images of the protests showed at least a dozen vehicles engulfed in fire and flames shooting out of the windows of the state office building, which is near the main highway leading from Mexico City to Acapulco. The building, which houses the governor's office, was ransacked.

Students at the radical Ayotzinapa teachers’ college, located on the outskirts of Chilpancingo, are known for their violent protests, which often involve hijacking buses and delivery trucks.

In March, protesters allied with the college commandeered a pickup truck and used it to ram down the wooden doors of Mexico City’s National Palace.

They battered down the doors and entered the colonial-era palace, where the president lives and hold his daily press briefings, before they were driven off by security agents. The palace is a historic structure dating back to the 1700s, and was built on the site of the Aztec emperors’ palace.

The demonstration, like many others over the years, was called to protest the abduction and murder of 43 students a decade ago. The mass disappearance remains one of Mexico’s most infamous human rights cases.

In 2014, a group of students were attacked by municipal police in the southern city of Iguala, Guerrero, who handed them over to a local drug gang that apparently killed them and burned their bodies. Since the Sept. 26 attack, only three of their remains have been identified.

After an initial cover up, last year a government truth commission concluded that local, state and federal authorities colluded with the gang to murder the students in what it called a “state crime.”

The under-funded radical rural teachers’ colleges in Mexico have a decades-long tradition of violent protests. In fact, when they were abducted, the students themselves had been hijacking passenger buses which they were going to use to travel to another protest.

An espionage scandal rocks Austria, laying bare alleged Russian spying operations across Europe

STEPHANIE LIECHTENSTEIN
April 8, 2024


LA REVUE GAUCHE - Left Comment: Search results for WIRECARD 






 Austrian Justice Minister Alma Zadic of the Austrian Green party attends the first parliament session in Vienna, Austria, on Jan. 10, 2020, after the new government was inaugurated. Austria faces its biggest espionage scandal in decades as the arrest of a former intelligence officer brings to light evidence of extensive Russian infiltration, lax official oversight and behavior worthy of a spy novel. (AP Photo/Ronald Zak, File)

VIENNA (AP) — Austria faces its biggest espionage scandal in decades as the arrest of a former intelligence officer brings to light evidence of extensive Russian infiltration, lax official oversight and behavior worthy of a spy novel.

Egisto Ott was arrested March 29. The 86-page arrest warrant, obtained by The Associated Press, alleges among other things that he handed over cellphone data of former high-ranking Austrian officials to Russian intelligence, helped plot a burglary at a prominent journalist's apartment, and wrote up “suggestions for improvement” after a Russian-ordered killing in Germany.

Ott is suspected of having provided sensitive information to Jan Marsalek, a fugitive fellow Austrian wanted on suspicion of fraud since the collapse in 2020 of German payment company Wirecard, where he was the chief operating officer. The warrant says chat messages provided by British authorities link Marsalek directly to the Russian intelligence agency FSB.

German and Austrian media have reported that Marsalek is believed to have had connections to Russian intelligence since at least 2014. He is now thought to be in Russia.

Thomas Riegler, a historian and espionage expert affiliated with the Austrian Center for Intelligence, Propaganda and Security Studies, said the case has “the potential for one of the biggest espionage stories in recent Austrian history.”

“The case is special given its international dimension and the fact that it is not only about espionage but also about the infiltration of the Austrian political system and the weakening of the country’s internal security,” he said.

Austria, which was located next to the Iron Curtain during the Cold War and long had good connections with Moscow, is a European Union member with a policy of military neutrality — and a longstanding reputation as a spying center.

UNRAVELING THE SPIDER'S WEB

Ott, a former police officer, was an intelligence officer in Turkey and Italy from 2001 to 2012 before moving on to manage undercover agents at Austria's now-defunct domestic intelligence agency, the BVT.

He was suspended from the BVT in 2017 when allegations emerged for the first time that he could be spying for Russia, but reassigned the following year to work for the Austrian police academy. In 2021, he was suspended pending further investigation into his alleged ties to Russia and taken into custody. Authorities concluded the evidence was too thin and released him about four weeks later.

At the BVT, Ott served under Martin Weiss, the former chief of Austrian intelligence operations. Prosecutors alleged that Ott and Weiss have a “close friendship.” In the arrest warrant, they say that Weiss began to work for Marsalek and Wirecard after leaving the intelligence agency in 2018, and that he passed orders from Marsalek and Russian operatives to Ott. According to the arrest warrant, Marsalek said in a text message that he helped "evacuate" Weiss to Dubai.

Ott’s lawyer declined to comment, saying he had only recently taken over Ott’s defense. Ott has previously denied the espionage allegations and any wrongdoing.

Marsalek, 44, appears to be “the spider in the web” who is “pulling the strings,” Riegler said. There was no immediate response to an email seeking comment from Marsalek's lawyer.

DISSIDENTS, SPIES AND DATABASES

Between 2017 and 2021, the Austrian warrant says, Ott collected sensitive information on people of interest to Russia “for the purpose of transmission to Jan Marsalek and to unknown representatives of Russian authorities" by conducting numerous searches in national police databases and making requests to other European police officers, including in Italy and Britain.

Ott also allegedly requested data from the information system of Europe's border-free travel area to ascertain whether suspected Russian operatives and former Wirecard employees were wanted or subject to travel restrictions.

The warrant contains a long list of people who were spied on, including Russian dissidents, businesspeople and a former officer who had quit the FSB.

A BURGLARY, SOAKED CELLPHONES AND LESSONS LEARNED

While allegations that Ott sought information for Russia first surfaced in 2017, British intelligence recently provided Austria with significant new information.

Five Bulgarian citizens who allegedly worked as part of a network with Marsalek were arrested last year in Britain and another in February. According to the Ott arrest warrant, chat messages between Marsalek and one of the suspects in that case, Orlin Roussev, that were seized by Britain's MI5 intelligence agency point to further operations by Marsalek and his Austrian helpers.

Just five weeks after Ott was released from custody in 2021, prosecutors say he requested the address of Bulgarian investigative journalist Christo Grozev in Vienna and supplied it to Marsalek. They say Marsalek later commissioned a team to break into Grozev’s apartment and steal a laptop and USB stick.

Grozev, who tracked down Russian officers allegedly involved in the poisoning of former Russian intelligence officer Sergei Skripal in 2018 and Russian opposition leader Alexei Navalny in 2020, relocated from Vienna last year after Austrian authorities told him they could no longer guarantee his security.

Ott also allegedly got hold of the cellphones of three former high-ranking Austrian Interior Ministry officials, including a former minister's chief of staff, when they were supposed to be repaired by BVT IT specialists after falling into the water during a boat excursion on the Danube in 2017.

Prosecutors say the phones were given to an unknown agent working for Marsalek at the Vienna apartment of Ott's former son-in-law and “transferred to Moscow for further analysis.” They say the phones contained “sensitive official and private data.”

Ott also allegedly helped Marsalek smuggle a stolen SINA computer, a device used by many European governments for transmitting classified information, to Moscow. After a handover at the same Vienna apartment, Marsalek wrote in a message that the device was successfully transported to the Lubyanka — where the FSB has its headquarters in Moscow — according to prosecutors.

Investigators also found a lessons-learned analysis on Ott’s mobile phone that contained “suggestions for improvement” for Russian intelligence operations in Europe following the 2019 killing in Berlin of a Georgian citizen of Chechen ethnicity. A Russian man was caught and convicted in that case; German judges said he acted on the orders of Russian authorities.

WHAT IS AUSTRIA DOING NOW?

Ott remains in custody awaiting a decision on whether he will be officially charged, a process that will likely take a while.

However, the case has dominated the news headlines, with the various political parties blaming each other for the failure to stop Ott earlier.

Austrian Chancellor Karl Nehammer has convened a meeting of the National Security Council for Tuesday and said the country needs to boost its security to thwart Russian infiltration.

His justice minister said she plans to tighten the country's laws on espionage, which currently is explicitly banned if directed against Austria itself but not if it targets other countries or the many international organizations Vienna hosts.