In 1970, Sainte-Maries friend, Senator Allende (whom he had known since childhood), ran for president on a radical platform of agrarian reform, nationalization of Chiles copper mines, and state control of the economy. He had run twice before and lost, but this time he had two significant new assets: his party had gained control of one of the largest radio networks, and there was Sainte-Marie and Clarín, which was selling 150,000 copies a day all over Chile, putting it in the league with the staid dean of the Chilean press, El Mercurio.
The paper lavished favorable coverage on Allende and another reformist candidate. But Sainte-Marie was most effective in ridiculing the right-wing candidate, Jorge Alessandri, a bachelor former president whom Clarín referred to relentlessly as ”La Señora.”
Overcoming huge odds, including a covert plan by the CIA to discredit him, Allende won a plurality and was confirmed by Congress. An abortive coup attempt, sponsored by the CIA, ended in the assassination of the commander of the Chilean army. But Chiles democracy survived, and Allende was inaugurated in October 1970, promising a unique political experiment: to bring socialism not by violent revolution but by electoral victories.
Sainte-Maries Clarín became the backbone of Allendes leftist experiment, and the acerbic editor was not shy about claiming credit. ”Many people deny this for political reasons, but the reality is that the difference of votes between Allende and Alessandri [less than one and a half percentage points] would not have existed if it had not been for the action of Clarín in the campaign,”Pey says. ”Sainte-Marie said to Allende, I made you president. He said it many times, in front of me.”
Allende, himself a man of colossal ego, reacted by distancing himself from his old friend. Sainte-Marie grew increasingly resentful of Allendes social snubs and lack of appreciation. He responded with bouts of drinking; his marriage to a much younger woman was unraveling disastrously, and he feared a public scandal that would be seized upon by the right. Sainte-Marie had soured on his own success and wanted out.
Pey, meanwhile, had assumed a more active role in the paper. Claríns circulation had surged to 280,000 each weekday, overtaking El Mercurio. The paper again needed newer, faster presses to keep up. Pey took on the task of importing a modern, color rotary press. Clarín also purchased a large building (its third major piece of real estate) in the center of Santiago, near the Defense Ministry, in whose basement the press was to be installed. ”One day Saint-Marie called me and said, Old friend, I have to leave, and next week is when Im leaving. You who have been with me and have seen all of this, you should keep the paper, ”Pey recalls. Pey used the week to pull together his assets, borrow money, and decide to buy the paper. He made a series of payments totaling about $1.3 million. It was a fire-sale price, Pey says, because the paper was booming and the value of the buildings and new presses alone far exceeded the selling price. He traveled to Portugal, where Sainte-Marie had fled, to finalize the bill of sale.
Thats where the story gets murky and the disputes begin. Pey had documentation of the bank transfers to Sainte-Marie, the bill of sale, and stock certificates signed over by Sainte-Marie and others who appeared on corporate ownership papers. But Chiles September 11the Pinochet coupintervened, forcing Pey into exile before he could register the transaction with the Superintendent of Corporations, a regulatory body.
It was a violent, chaotic time. The country was wracked with protests for and against Allende, the economy was paralyzed with inflation topping 500 percent, and the president and his coalition parties were rapidly losing control. On September 11, 1973, General Pinochet (with well-documented U.S. encouragement) overthrew the Allende government in one of the most violent military coups in Latin American history, leaving thousands dead and tens of thousands political prisoners.