At that pointmid-1998there were no rival claimants to Clarín. Darío Sainte-Marie had died in the early eighties. His will, obtained from government files on the case released to me, has a long list of bank accounts and properties, but no mention of Clarín. Another man whose name appeared on the Superintendent of Corporations registry, Emilio González, had also died and his will, too, contained no claim to Clarín.
Nevertheless, within a few months of the filing of Peys claim with the arbitration center, the heirs of Sainte-Marie, González, and two other men whose names appeared on the registry surfaced to file a joint claim in Chile, and in record time were granted a settlement of $9 million. (Needless to say, none of the recipients expressed any intention of publishing a newspaper.) The strategy and the governments actions are too complex to explain in detail, but the central elements were confirmed by two government officials involved in the deal and by government documents released to me through a petition using the Chilean equivalent of the Freedom of Information Act.
In the simplest form, here is what happened: the governments Committee for Foreign Investment, which was fighting the Pey arbitration case in Washington, hired a lawyer to make the legal argument, called a ”Study in Law,”against Peys claim of ownership. The lawyer did that in a twenty-page confidential document in which he concluded that only the people listed in the Superintendent of Corporations registry (or their heirs) were the legitimate owners, and that because Pey had failed to register the titles and transfer papers in his possession, ”a legally certified purchase”by Pey could not be demonstrated.
The same lawyer then approached at least two of the families mentioned in his report and made them aware of a possible financial windfall if they teamed up with him to make a claim. According to Roberto Mayorga, who was in charge of the case for the Committee for Foreign Investment and who hired the lawyer, ”What I know is that the heirs were not aware they had rights to Clarín, and they had learned about it through the Study in Law which was leaked and which concluded that they were the title holders to the stocks of the company that owned the newspaper.”He said the lawyers action in contacting the families was ”unethical”but not illegal under Chilean law. In exchange for their legal services, the lawyer and his partners received a $1.6 million share of the restitution paid to the families.
The governments minister of national property at the time, Claudio Orrego, who signed the administrative decree for the $9 million, also acknowledged that the payment was connected to the Washington arbitration of the Pey claim. ”I dont want to deceive you,”he tells me. ”The idea was that this [the $9 million restitution to the heirs] in some way would sanction the other pending issue.”He said he was presented with the case in his first month as minister and that there was ”urgency”to resolve it quickly. ”This was a strategy that came from before our arrival,”he says. ”I remember that the international case was invoked as one of the factors of urgency to be able to resolve the matter quickly.”
In the end, the tactic did not work. The World Bank arbitration judges refused to close the case. So the Chilean government was out $9 million and the arbitration continued to drag on anyway for several more years, until last year, when it appeared to enter its final phase. A confidential draft decision that runs over a hundred pages, which I have read, provides a strong indication that the board is leaning toward a resolution favorable to Pey. The document declares that the sale of Clarín to Pey ”was without doubt the real intention of the parties”and that the Chilean governments arguments that others were the true owners ”gave rise, to say the least, to abundant doubts and questions.”
The arbitration board conducted what the presiding judge said was its last hearing in January, and signaled that the next step would be the final ruling. The judge seemed to echo Joan Garcéss plea that time is running out for the ninety-two-year-old Pey. ”The tribunal has already set a working calendar,”the judge said, ”and we are aware that it is necessary to finish as soon as possible, because this is a case that has lasted too long, for a series of reasons that it would serve no purpose to recall.”
The arbitration tribunals decision, and the establishment of a settlement amount, if any, are not subject to appeal. A government spokesman, Ricardo Lagos Weber, said his government will accept the decision, whatever it is. ”Chile has to honor its international commitments, whether they are from ICSID or from the Inter-American Human Rights Commission,”he told me.