For the first time in its 49-year history, World Vision (WV) has "disassociated" one of its international partnerships for "failure to demonstrate acceptable standards" in connection with $1.3 million in missing funds.

On December 8, the board of World Vision International, which represents the agency in 94 countries, voted to formally sever ties with World Vision Austria, which had a dozen employees.

The move came after several lengthy attempts by WV to demand accountability on the part of World Vision Austria personnel. Guenther Bitzer, executive director of World Vision Germany, told CT that Austrian tax authorities on November 27 arrested 38-year-old World Vision Austria national director Tina Krones-Taurer and her husband, Wolfgang Krones. Finance director Claudia Purschke was arrested a week later. The trio is being held in jail without bond for alleged fraud, although no criminal charges have been filed, Bitzer says.

They are suspected of diverting some of the agency's funds—including money given for child sponsorships—to help finance a political campaign of Karl Habsburg, a friend and business associate of Krones. Habsburg is an Austrian representative to the European Parliament.

Krones-Taurer became World Vision Austria director in 1995, and she quickly replaced key staff and board members with friends. WV, based in Federal Way, Washington, became suspicious last spring when auditors discovered a lack of adequate financial management, internal controls, and record keeping, according to WV spokesperson Dean R. Owen.

Owen says Krones-Taurer and Purschke stonewalled when asked repeatedly to supply data, and the director ignored a resignation demand in October. WV then turned over information to prosecutors and ...