For all his charisma, Recep Tayyip Erdogan has never had an easy relationship with the media. As mayor of Istanbul in the 1990s, he suffered slighting commentary from urbane columnists who mistrusted his Islamist origins and populist touch. As prime minister, he has been apt to sue offending writers and cartoonists.
But Mr Erdogan’s latest confrontation with Aydin Dogan, the billionaire owner of more than half Turkey’s print and broadcast media, is more than a personal feud.
A record $2.5bn (€1.7bn, £1.6bn) tax fine imposed on the Dogan media group has shocked the business elite, stoked European Union concerns over press freedom – and delighted Mr Dogan’s enemies in an intensely partisan media where editorial lines often support owners’ other commercial interests.
Mr Erdogan has often lashed out at Mr Dogan, whose publications have portrayed his government as a threat to Turkey’s secular order, reported aggressively on corruption scandals and, in 2007, raised little protest when the military attempted to block his nomination of colleague Abdullah Gul to the presidency.
But he insists the fine is not politically motivated, telling guests at a dinner last week: “I have no thoughts of applying political or economic pressure on the media, but certain media establishments have no right to see themselves above the law.”
The finance ministry, which also fined Dogan about $600m earlier this year, said its inspectors were examining all media groups without bias. Ali Babacan, the economy minister, said: “Unfortunately, being honest in taxes isn’t very common in Turkey.”
Most commentators, though, assume Mr Erdogan is trying to put an awkward opponent out of business. Bankers in Istanbul are incredulous at the fine’s size – similar to the combined market value of Dogan Holding and its media arm Dogan Yayin – and the way it has been calculated. The group has not yet decided whether to seek a settlement from the finance ministry or to take legal action.
The Dogan group has certainly come under unprecedented scrutiny. A team of tax inspectors has been working on-site for two years, executives in the group say, and a string of other regulatory decisions has gone against group companies. The competition authority opened an investigation last week of its advertising practices.
The Organisation for Security and Co-operation in Europe has joined a chorus of international criticism, calling on Turkey to “practise self-restraint in employing the state’s legal power ... especially towards media offering critical voices”.
But journalists writing for non-Dogan papers, in a country where many have previously faced prosecution or harassment for speaking out, openly deride the suggestion that Dogan is suffering martyrdom for championing free speech.
Instead, many see the row as the result of a murky situation in which businessmen with interests in sectors susceptible to state influence have often exploited media ownership to wield political influence and win favours.
Mr Dogan was able to act as kingmaker in the era of 1990s coalition governments, and his group was “persistently criticised for rendering paper-thin the firewall between editorial independence and financial self-interest”, says Andrew Finkel, an Istanbul-based journalist.
“People go into the media sector with the sole purpose of supporting a political party in exchange for favours in other areas,” agrees a Dogan group columnist.
With the rise of Mr Erdogan’s Justice and Development (AK) party, a new class of conservative, pro-AK entrepreneurs has emerged to rival traditional business elites.
Media ownership is starting to reflect new wealth. In 2007, a company run by Mr Erdogan’s son-in-law won an auction for Dogan’s main rival, the Sabah group, aided by loans from state banks to pay a $1.1bn price that deterred other bidders.
Dogan journalists argue that if the group goes under, Mr Erdogan will be rid of his main critic ahead of elections in 2011. The AKP easily leads opinion polls but opposition parties are regrouping and it fears a backlash to sensitive plans to extend Kurdish rights and mend ties with Armenia.
For investors, the row adds to mounting evidence of political influence over the corporate sector. Several large privatisations have recently been handled by municipal authorities, who sought only advice from the independent privatisation administration. Mr Erdogan said this week that autonomous institutions were a “source of difficulty for us”, adding that he disapproved of the central bank’s autonomy.
Christian Keller, an economist in London, said the AKP was usually careful to treat foreign investors fairly but said the fine cast a new light on Mr Erdogan’s insistence, in talks with the International Monetary Fund, on keeping political control of the tax administration.
Dogan’s problems have certainly frustrated the group’s international partners. Axel Springer, the German publishing group, has lobbied the European Union to condemn Turkey’s actions.
Austria’s OMV, joint owner with Dogan of the fuel distributor Petrol Ofisi, is seeking a simpler solution: it is set to buy Dogan out.
