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Battle Between Argentine Media Empire and President Heats Up Over a Law

In her battle with Argentina's largest media empire, President Cristina Fernández de Kirchner has raided its headquarters with 200 tax agents. Her supporters have accused the conglomerate's largest shareholder of adopting two children thought to have been abducted from women killed during Argentina's "dirty war." Her vice president has disparaged its chief executive, Héctor Magnetto, as a "Mafioso."

And yet, the dispute between Mrs. Kirchner and the conglomerate, Grupo Clarín, one of the most contentious struggles over power and public influence in Argentina in years, is just heating up.

A showdown is approaching as a media law championed by Mrs. Kirchner is set to take effect in December, potentially forcing Clarín to divest most of its cable television operations. Those lucrative assets support an array of influential publications, including the group's flagship daily newspaper, Clarín, one of the most widely circulated newspapers in the Spanish-speaking world.

Mrs. Kirchner's ambitions of breaking up Grupo Clarín reflect the festering official resentment over the sway of the group, which has evolved over the decades from a newspaper on the brink of bankruptcy into a sprawling media giant at times publicly despised by presidents who have had to reckon with Clarín's power to shape public opinion.

For Clarín, the battle involves not only its economic interests but also the broader viability of independent media groups in a country where government officials are channeling a surge in public advertising to news organizations that favorably cover Mrs. Kirchner, whose approval ratings have recently plunged as Argentina's economy slows.

"This is about more than Clarín; this is about democracy," Mr. Magnetto said.

But critics of Clarín -- and there are many across the political spectrum here -- adopt a sharply different view. They contend that Clarín, founded by an Axis sympathizer in the 1940s, colluded with the military dictatorship in the 1970s, giving it advantages over competitors, before aggressively expanding by pressing democratically elected leaders to loosen antimonopoly measures.

"Clarín thinks in the same way as a government," said Roberto Caballero, the editor of Tiempo Argentino, a newspaper that is part of Veintitrés, a media group that relies heavily on government advertising. His comments about Clarín's size and clout echoed the sentiments of Martín Sabbatella, the director of the federal agency created to enforce the media law, who said the measure's aim was to guarantee a "plurality of voices."

In other parts of Latin America, leaders have clashed vehemently with the news media. President Hugo Chávez of Venezuela incurred protests by forcing a critical broadcaster, RCTV, off public airwaves, while President Rafael Correa of Ecuador regularly disparages journalists, some of whom have faced debilitating libel lawsuits.

But Mrs. Kirchner's battle with Clarín stands out because of the ties that once bound them together. For years, Clarín threw its support behind her late husband, Néstor Kirchner, president from 2003 to 2007; he regularly hosted Mr. Magnetto for lunches at the presidential residence and often delivered exclusive stories to Clarín's journalists.

Mr. Kirchner clashed with some of Clarín's top competitors, notably the daily newspaper La Nación, and in one of his last acts as president he instructed officials to approve Clarín's acquisition of Cablevisión, a major cable television provider. The deal gave Clarín a jewel in its crown of properties, including magazines, an Internet provider and television channels with some of Argentina's highest-rated news and entertainment programs.

Still, the relationship with the Kirchners began to sour in 2007, when Clarín published reports about a businessman who flew here from Venezuela with a suitcase containing $800,000 in cash, prompting allegations that the money was meant as a secret contribution for Mrs. Kirchner's presidential campaign.

Clarín's standing with the government deteriorated further in 2008, when Mrs. Kirchner raised export taxes on agricultural producers and Clarín sided with farmers striking against the measure. She accused Grupo Clarín of fomenting civil unrest; by the time she ran for re-election in 2011 -- with one of her slogans proclaiming "Clarín Lies!" -- her adversary seemed to be as much Clarín as the other candidates.

The dispute is nothing new for Clarín, which has bitterly clashed with other presidents, including Raúl Alfonsín and Carlos Menem, and whose influence, while under siege, remains feared in political circles.

"Behind the scenes, there are politicians satisfied with the weakening of Clarín," said Graciela Mochkofsky, the author of "Original Sin," a book about Clarín's rise within Argentina's political culture.

Still, Clarín's skirmishes with other leaders pale in comparison with the battle with Mrs. Kirchner, whose government encouraged an investigation into the adoption of two children by Ernestina Herrera de Noble, the widow of Clarín's founder, Roberto Noble.

Her children, Marcela and Felipe Noble Herrera, now adults and heirs to her stake in Clarín, became embroiled in efforts by human rights groups to determine the origins of an estimated 500 babies believed to have been abducted from women killed by the military dictatorship from 1976 to 1983. DNA tests ultimately determined that they were not among the abducted children.

Clarín was left exposed to such scrutiny after its dealings during the dictatorship resurfaced in the congressional debates over the media law, including a pact in which it and two other newspaper publishers gained stakes in Argentina's only newsprint manufacturer. Lidia Papaleo, the widow of the banker who had been a shareholder in the newsprint venture, was tortured and raped after her arrest during the dictatorship.

In addition to pressuring Clarín over its expansion during military rule, Mrs. Kirchner's government also focused its ire on Mr. Magnetto, an accountant who joined Clarín while still in his 20s, surviving various purges within its ranks to emerge as chief executive and the second-largest shareholder in the group, after Ms. Herrera de Noble.

After a battle with throat cancer, Mr. Magnetto's speech remains garbled from the various surgeries by doctors in the United States. Interviewed alongside Ricardo Kirschbaum, the editor in chief of the newspaper Clarín, who helped decipher responses to questions, Mr. Magnetto, 68, contended that Clarín was being unfairly singled out for retribution because of its journalism.

"The government's objective is not justice," he said, claiming that the efforts to break up Clarín were part of a plan to change Argentina's Constitution so that Mrs. Kirchner can seek a third term in 2015.

"For this to happen," Mr. Magnetto said, "the president needs to have a restricted press."

News organizations that are relatively uncritical of the government have expanded under the Kirchners. Through public spending on advertising, the government bolsters loyal print and broadcast companies while withholding advertising from news organizations viewed as adversaries. In one case, the Supreme Court ruled in favor of Editorial Perfil, a magazine publisher that sued the government over its advertising policies.

The government's budget for 2013 projects about $300 million in spending on advertising -- including television commercials for YPF, the oil and gas company the government seized this year; political ads criticizing government opponents during soccer matches on public television; and announcements of government-sponsored projects -- compared with $10.5 million in 2003.

Mr. Caballero, the editor of the pro-Kirchner newspaper Tiempo Argentino, acknowledged relying on such advertising, calling it "a policy of encouraging debate and promoting new voices."

The media law that would force Clarín to shed some of its cable operations was passed in 2009, and the authorities say it is aimed at "democratizing" ownership of television operations. Clarín has already challenged the law in courts, but the Supreme Court ruled in May that it has until Dec. 7 to comply.

As the deadline approaches, Clarín has held out hope that the law could still be declared unconstitutional. At the same time, Mr. Magnetto claimed that Mrs. Kirchner's government was intimidating the judiciary, making an objective ruling almost impossible after several judges resigned in recent weeks.

[Source: By Simon Romero and Emily Schmall, The New York Times, Bs As, 30Nov12]

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