WASHINGTONAt a time when an entire industry is fretting about the foreseeable demise of newsprint, there is something charmingly passe about Argentine President Cristina Kirchner salivating over Papel Prensa, her countrys predominant producer of the product. Or rather it would be charming if her governments actions to control the company did not threaten freedom of the press.
Papel Prensas private ownersArgentinas leading newspapers Clarin and La Nacionare accused of unlawfully acquiring the newsprint company with help from the military dictatorship in the 1970s. The Kirchner government alleges that Papel Prensas previous shareholders, who were kidnapped by the regime, were forced to sell the company.
The president, accompanied by her husband, former president Nestor Kirchner, who is a power behind the throne, recently suggested that Clarin and La Nacion were complicit with crimes against humanity. A host of judicial and parliamentary investigations were announced.
It was the last chapter in a long-standing campaign that has included limiting ownership of radio and TV stations, revoking the license of Fibertel, a Clarin-owned company, to provide Internet service, and breaking the contract between the soccer association and a cable company regarding broadcast rights.
Clarin and La Nacion can be faulted for having been too close to some governments in the past, a relationship that may have helped Papel Prensa since the state has a seat on the board of directorsthe type of cronyism so prevalent in Latin America. But there is not a shred of truth in the accusation that the papers ownership of Papel Prensa is unlawful. Nor is the newsprint provider a real monopoly, as the Kirchner government also alleges.
The company was originally set up under a dictatorship in the 1960s. With the advent of Juan Perons third government, the friends of the regime who controlled it sold the shares to a financial group run by David Graiver and his family in the early 1970s. The stock was placed under three names: a company belonging to the Graiver group, a straw man acting for the head of the Graiver family, and David Graiver himself, whose personal subscription was small.
In 1976, after a new military dictatorship was installed, the original owners plotted to retake the firm. But the death of Graiver that same year prompted the heirs, burdened with heavy debts, to sell to a consortium made up of three newspaper companies: Clarin, La Nacion and La Razon. Most of the stock was transferred to the current owners, while the small portion under the Graiver estate remained in legal limbo because a judge failed to rule.
Five months later, the military junta later expropriated the Graivers assets, seizing the minority shares of the estate and giving the government the participation that it still retains in Papel Prensa. The Graivers were kidnapped and sent to detention centers where they were tortured. They were accused of complicity with an extreme-left terrorist offshoot of the Peronist movement called the Montoneros. Some of the groups funds obtained through ransoms had been under the custody of David Graiver.
With the return of democracy in the 1980s, the Graivers were part of the complex trials involving abuses of the military era. David Graivers close connections with the Montoneros notwithstanding, the family was indemnified by the state for the harm they suffered. Not once did they claim they had been pressured to sell Papel Prensa to the current owners or accuse Clarin and La Nacion of complicity with their fate.
Lidia Papaleo, Graivers widow, is siding with the Kirchners, but Isidoro Graiver, the brother who negotiated the deal, reminds us that the sale was made in November of 1976 and the family was kidnapped in March and April of 1977: The sale and our kidnapping are two unconnected events. In fact, after Papel Prensa was acquired by Clarin and La Nacion, the new owners tussled with the junta over its attempts to meddle.
Papel Prensa is not a monopoly. Newsprint from other producers is imported into Argentina, so newspapers have alternativesof which they readily avail themselves. The price reduction Papel Prensa offers in exchange for big-volume sales is open to any client and was approved by the government.
But the Kirchners know that if they take over Papel Prensa, they will enjoy a monopoly of newsprint since they are the ones who dictate import tariffs. They could make all print media beholden to purchasing newsprint from the government.
With presidential elections coming up next year and the Kirchners pursuing a third consecutive term, the thought is repellent.
Alvaro Vargas Llosa
Alvaro Vargas Llosa is Senior Fellow of The Center on Global Prosperity at The Independent Institute. He is a native of Peru and received his B.S.C. in international history from the London School of Economics. His weekly column is syndicated worldwide by the Washington Post Writers Group, and his Independent Institute books include Lessons From the Poor: Triumph of the Entrepreneurial Spirit, The Che Guevara Myth and the Future of Liberty, and Liberty for Latin America.
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