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.
if and when Clarín appears on the streets again, it will face an uphill battle to survive in Chiles homogenous media climate. Three other newspaper startups have tried and failed since the return of democracy to break the domination of the two media companies that publish El Mercurio and La Tercera, which account for about 90 percent of newspaper circulation and advertising in print media. None was able to attract advertising from Chiles conservative business community. Three other weekly political magazines that had survived, with international funding, during the waning years of the Pinochet dictatorship collapsed for lack of advertising in the first years of democracy.
The government has proclaimed a policy of nonintervention regarding the media, but in Chile the government has never been a passive actor on the countrys media stage. In fact, the government still owns the newspaper La Nación, a money-losing relic from the early part of the last century when state media were in vogue in Latin America. And La Nación, with a minuscule circulation and very little journalistic credibility because of its government ties, has been one of the factors preventing any new paper from surviving financially.
It certainly was a factor in the most recent failure of Diario Siete, which folded in June 2006 even though it had earned respect for its tough investigative reporting. ”We knew there wouldnt be many private ads,”editor Mónica González says. ”The businessmen in Chile are the most ideologically rigid in the continent.”
Instead, according to the papers confidential business plan and three inside sources, the success of Siete depended on the promise by President Lagos to finally close La Nación as a daily newspaper, thus freeing up its ample government and institutional advertising for the privately run Siete. When Lagos left office in March 2006 without following through on the promise, Sietes financial backersmany of them prominent Concertación political figurespulled the plug.