Scandal Probe at Salzburg Festival Drags On, Director Says

There’s nothing the opera world likes better than hubristic downfalls.

They don’t come much bigger than the $5 million fraud and embezzlement scandal that rocked the Salzburg Easter Festival last year. As the new season prepares to open, the breezy new managing director Peter Alward reflects on his year in charge.

Alward, the former head of EMI Group Ltd.’s classical-music division, took over the festival in February 2010.

His predecessor, Michael Dewitte, had been fired in December 2009. Two months later, Dewitte’s colleague Klaus Kretschmer reportedly attempted suicide by throwing himself off a bridge. The Salzburger Nachrichten reported in May 2010 that Kretschmer could walk again and was expected to almost fully recover.

Since then little has been in the news. I ask Alward, speaking by phone from Salzburg, about the latest developments.

“The two men have since been charged with misappropriation of public funds, in the case of Dewitte for 2.1 million euros ($2.9 million), and in the case of Kretschmer for 1.5 million euros,” he says. “It’s all in the hands of the justice department now.”

The figure is higher than the initial $4 million suggested last year, before formal investigations began. Full details of the amount alleged to have been fraudulently taken will be revealed in court, said Simon Millward, a spokesman for the festival.

Source: Salzburg Easter Festival via Bloomberg

Peter Alward, managing director of the Salzburg Easter Festival. The former president of EMI Classics took over the festival in February 2010 after a $5 million embezzlement scandal rocked the city. Close

Peter Alward, managing director of the Salzburg Easter Festival. The former president... Read More

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Source: Salzburg Easter Festival via Bloomberg

Peter Alward, managing director of the Salzburg Easter Festival. The former president of EMI Classics took over the festival in February 2010 after a $5 million embezzlement scandal rocked the city.

Both Dewitte and Kretschmer denied wrongdoing in newspaper interviews last year.

“Austrian law is very thorough,” says the 60-year-old Alward, with a sigh. “It’s also not the fastest. We’re still waiting for the date of the trial.”

Head on Plate

He’d like to see this chapter in the festival’s history closed. I wonder if he’d also like to take a tip from Strauss’s “Salome,” this year’s opera, and see the head of his predecessor served up on a plate -- metaphorically, of course -- for all the trouble he left behind him.

“There’s no point in dwelling on the past,” Alward, a Briton, says. “It’s important to look to the future.”

He has reason to sound cheerful. The main sponsors, Swiss bank Vontobel Holding AG (VONN) and German carmaker Audi AG, have proved loyal. Vienna Insurance Group AG and its Wiener Staedtische Versicherung unit also are continuing their sponsorship of the chamber-music strand this year.

Herbert von Karajan

That’s good news for a festival that receives only 8 percent of its 6 million euro budget from the public purse. The rest of its income comes from ticket sales and sponsorship. (The Easter Festival was founded by conductor Herbert von Karajan in 1967 and is separate from the larger summer festival.)

Photographer: Jim Rakete/Salzburg Easter Festival via Bloomberg

Simon Rattle, principal conductor of the Berlin Philharmonic Orchestra, is an EMI recording artist, and has had links with Alward for many years. Close

Simon Rattle, principal conductor of the Berlin Philharmonic Orchestra, is an EMI... Read More

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Photographer: Jim Rakete/Salzburg Easter Festival via Bloomberg

Simon Rattle, principal conductor of the Berlin Philharmonic Orchestra, is an EMI recording artist, and has had links with Alward for many years.

What did Alward say to keep the sponsors on board? “Our clients are their sort of clients,” he replies. “Here in a city where people spend a lot of money on their tickets, there are lots of potential customers for a bank, an insurance company, and a carmaker. We’ve seen that the unfortunate events of last year haven’t affected their loyalty or the loyalty of our audiences. It’s gratifying.”

Why is that? “We have the Berlin Philharmonic Orchestra and Simon Rattle in residence to an extent that doesn’t happen anywhere else. They go into the theater pit every year, and play for a new production of an opera. To use ghastly marketing jargon, that’s our USP.”

Top-price subscription tickets for a package of four concerts, including the opera, cost 1,230 euros, plus a 300 euro membership fee. It’s not unknown for flocks of private jets to bring audience members to the city.

Exclusive Quality

Is it too exclusive? “We’re exclusive, yes,” Alward says. “I want to stress the positive meaning of the word, however, to stress its links with quality. I really don’t want it to mean that we’re excluding people.”

After the subscription packages have been offered, single tickets become more generally available at prices comparable to other European opera houses. The top price for a chamber-music concert is a manageable 30 euros.

What have been the most surprising things about taking over the festival? “It has been one huge learning curve,” says Alward. “I’d never run an opera house or festival. I spent 35 years in the recording industry, which is a completely different animal. I had no idea about the costs of an opera set, or costumes.”

Having discovered the cost, one of Alward’s innovations has been to introduce the concept of co-production with major houses to spread the burden. “Always on the understanding that the production opens in Salzburg,” he says.

He also has had to learn to deal with politicians to defend public spending on the festival.

Stress Level

The stress level sounds high. Why did he agree to helm the event? “I go back with the Berlin Philharmonic and Simon Rattle a long way, from my days at EMI,” Alward says. “And I worked closely with Herbert von Karajan, who founded the festival, for the last 12 years of his life. I felt I owed these people a great deal because they’d helped me in my career. What else are friends for? Besides, they twisted my arm!”

Another self-discovery made during the year is that a career on the boards won’t be beckoning any time soon.

“Dealing with the curtain going up is a novel experience for me because coming from a recording company everything is for the can,” he says. “Last year, we had a singer cancellation, and it was my job to go on stage and announce it. I can tell you, my knees were knocking.”

The Salzburg Easter Festival runs from April 16 to April 25. Information: http://www.osterfestspiele-salzburg.at.

(Warwick Thompson is a critic for Muse, the arts and leisure section of Bloomberg News. The opinions expressed are his own.)

To contact the writer on the story: Warwick Thompson, in London, at warwicktho@aol.com.

To contact the editor responsible for this story: Mark Beech at mbeech@bloomberg.net.

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