After being slapped with a hefty fine of $2.53 billion for tax evasion and accounting irregularities in Doğan Yayın Holding, the publishing arm of media tycoon Aydın Doğan’s multibillion-dollar conglomerate with business interests ranging from energy to construction, the group’s print and broadcast outlets have launched a campaign against the government, accusing officials of suppressing freedom of speech.
The group has failed, however, to enlist support from other media groups in Turkey precisely because of the fact that Doğan had never been hesitant to abuse his near-monopoly on power in the past to railroad rivals in the publishing industry or to launch smear campaigns against his competitors to secure his hegemonic power.
Let’s recall a couple examples from our recent history. Nazlı Ilıcak, a prominent columnist at the Sabah daily, invited the wrath of Doğan when she decided to publish the Akşam daily during the True Path Party’s (DYP) rule in the 1990s. The distribution monopoly held by Doğan refused to deliver Akşam, which eventually led to the formation of a new distribution company. The network was also fined by the Competition Authority following complaints from Doğan’s chief competitor that it refused to distribute the Star daily, owned then by the Uzan media group, which later went bankrupt.
In fact, Doğan has often been accused of violating the rule of editorial independence from the corporate side of the business when he took either a pro- or anti-government position in a bid to keep his business interests protected. Most columnists in Doğan’s newspapers rallied last week to write in defense of their bosses and tried to portray the case as a freedom of press issue. I think that itself poses a grave threat to press freedom in Turkey as it shows how a powerful media tycoon can direct editors and writers to assign whole columns in the defense of Doğan’s business interests.
We have no trouble recalling cases in which Doğan has used his power to influence politicians and pressure governments in a disguised or open manner by shaping his editorial policies based on business interests. When Prime Minister Necmettin Erbakan vowed to fight against the media cartels in 1996, Doğan helped to accelerate his downfall a year later through a sustained anti-government campaign in his newspapers and television stations. The group was supportive of the Mesut Yılmaz government, however, which was involved numerous financial scandals while in power and led the country to a major financial crisis after many banks went bankrupt in 2001 amid corruption and embezzlement.
The Justice and Development Party (AK Party) came into power in 2002 with a campaign of transparent government and promises to clean up the mess and corruption. The government first went after the Uzan family, one of Doğan’s rivals, after an investigation unveiled major incidents of theft and corruption at Imar Bank and Adabank, both owned by Uzan. Interestingly, Doğan did not cry out for freedom of the press and extended his full support to the government during the process, in which the government seized Uzan’s banks and assets, pushing it into bankruptcy.
Doğan also ran a campaign against another rival, the Çukuorova Group, owned by Mehmet Emin Karamehmet, and published stories detailing illegal transfers of funds from Pamukbank. The government acted upon the evidence and seized Pamukbank. Last year, Doğan ran stories casting a shadow on the funds raised by the Çalık Group, a newcomer to the publishing industry, to finance the $1.1 billion purchase of the Sabah-ATV media group from the Savings Deposit Insurance Fund (TMSF).
So it seems that only when the interests of his conglomerate are threatened does Doğan cry foul and raise the issue of freedom of the press. Therefore, the argument that freedom of the press is being violated does not hold much water in Doğan’s case.
Now we have learned that Doğan is seeking a settlement with the Finance Ministry for a reduced penalty. This is another indication that the company is not willing to drag the case to court, causing a further bleed in its shares in the stock market. The case is very technical and it seems auditors and investigators are sure that the government’s case is rock solid for tax evasion and accounting irregularities. There are rumors that more accounts belonging to the group and other tax returns that have not yet been audited are currently under review, which raises the specter of further penalties down the road.
Similar examples of tax evasion charges filed against media owners can be found in other countries as well. I remember that in 2001 the South Korean government went after six media companies and started criminal proceedings after the National Tax Service accused their owners and executives of tax fraud. Unlike Turkey, however, journalists and civic groups in South Korea had launched a nationwide campaign for journalistic freedom against the interests of powerful media moguls. Just recently in Japan, the Tokyo Regional Taxation Bureau fined major publisher Shueisha Inc. because the company had evaded about 500 million yen in taxable income over five years.
Doğan, who invokes democracy and freedom these days, carries a bad rap sheet and fails the sincerity test as his argument seems far from convincing to media professionals. His group has actively supported the intervention of the military into the democratic process in recent years. It campaigned against a constitutional amendment adopted by four-fifths of Parliament to give freedom of choice in the dress code for university students. It supported the closure case against the democratically elected government, which received almost 50 percent of the vote in the most recent general elections.
I guess the best phrase to describe Mr. Doğan’s case is “you reap what you sow.”