Have Turkey’s secularists and Islamists reached a decisive point in their battle for control of the country’s media?
This week’s government action to slap a fine of $2.5 billion on the Dogan Yayin media group for alleged unpaid taxes from 2005 to 2007 has the makings of such a crisis.
The reason is that the colossal fine -- if collected -- could easily break the back of the country’s only remaining secular and liberal media giant.
The fine -- which is double the amount the state says it is owed in back taxes -- is roughly equivalent to four-fifths of the combined market value of Dogan Yayin and its parent company, Dogan Holdings.
Just the news of the fine was enough to send the value of Dogan Yayin shares plunging 20 percent when it was announced on September 7.
So, it is little surprise that the action has sent shock waves through Turkey’s ranks of secular journalists.
Many journalists see it as the latest -- and potentially decisive -- battle in Turkey’s long-running media wars between themselves and the Islamist-rooted government of Prime Minister Recep Tayyip Erdogan.
"The AKP government, led by Prime Minister Erdogan, has attained such power, such unparalleled power, that you can find no precedent in Turkish history,” said Taylan Bilgic, economics correspondent for "Hurriyet Daily News" in Istanbul.
Bilgic continued: “The government is still popular after all these years, there is no credible alternative, and somehow at some point in time, the government seems to have decided to create ‘its own media.’"
The “Hurriyet” newspaper, along with CNN Turk television, is internationally the best known outlet of the Dogan Media Group.
Second Strike
The colossal fine is the second to be levied against the media group in a little over six months. In February, the government levied a tax penalty of more than $500 million in a case that is still being litigated.
Bilgic says the legal actions against the Dogan Group come as the ruling AK Party has already made huge gains in building a loyalist media.
"The first and the most important step was the confiscation of Sabah ATV media group by the state because of its previous debt,” Bilgic said. “And then the group was sort of handed over to a businessman regarded as close to the government. And now this media group is following a political line that basically supports the government at all costs.”
The Sabah ATV group was bought at a government auction in December by Calik, an energy and construction conglomerate with close links to the ruling AK Party. Calik Holding's general manager is Prime Minister Tayyip Erdogan's 29-year-old son-in-law, Berat Albayrak.
The Calik group, which is Dogan’s main rival in Turkey’s mass media wars, is not the AK Party’s only asset.
The government also can rely on Islamist newspapers and broadcasters, which have gained strength since the AK Party came to power in 2002.
By contrast, secular journalists say, the only remaining liberal media apart from the Dogan group are some radical newspapers and journals with limited influence.
Government officials say they are not trying to put the Dogan group, which owns two of Turkey’s three top-selling newspapers and two of the four most-watched television stations, out of business.
Erdogan has said the fines are part of a legal process brought by the Tax Ministry and have nothing to do with his office.
Critical Coverage
Still, it is no secret that there is bad blood between Erdogan and the Dogan group.
Erdogan has publicly criticized billionaire media magnate Aydin Dogan for his media empire’s critical coverage of the government, particularly over corruption allegations.
The verbal war became markedly personal during Turkey’s recent local elections in March, when Erdogan called on AK Party members to refrain from buying the Dogan Group’s newspapers.
Now, after the March elections saw the AK Party lose some seats to the opposition, but Erdogan retaining his unrivaled position as the country’s political leader, secular journalists say the fines send two messages.
One is that media that disagree with him may find themselves fighting for their financial lives.
The other is that Erdogan may no longer feel the need to get backing across the political spectrum for his major initiatives.
“The general perception is that Prime Minister Erdogan calls and seeks support from opposition parties and from the rest of the political spectrum for his Armenian and Kurdish initiatives,” Bilgic said. “But the facts on the ground are a bit cloudier.”
“So people have begun asking whether Erdogan really wants that kind of support, or perhaps just wants to use the pretext that the opposition is saying ‘no’ to go ahead and do things the way he pleases,” he continued. “And I think the second case is correct.”
Erdogan’s government is seeking to normalize ties with Armenia. But Turkey's two main opposition parties have criticized the effort as making unilateral concessions, because there is no sign the border opening will be tied to an Armenian withdrawal from Nagorno-Karabakh, an Armenian-dominated enclave within Turkey’s ally Azerbaijan.
Similarly, opposition parties have criticized Erdogan for not giving any public details about his plan for ending the separatist conflict in southeastern Turkey. The plan is believed to include greater cultural rights for Kurds, some form of local autonomy, and incentives to PKK fighters to lay down arms.
Popular Leader
Erdogan may feel emboldened to try to go it alone because of his 35-40 percent popularity rating, compared to 15-20 percent support for opposition parties. At the same time, the AK Party has an absolute majority in parliament.
The question now is whether the fine on the Dogan group can be collected by the Tax Ministry as the case moves into litigation.
Bilgic says the precedent when there is no charge of criminal wrongdoing is to compromise over the amount due.
“This is the normal procedure: companies apply to the ministry and ask for reconciliation, and normally in the end the company generally pays 10 percent, 20 percent of the total fine involved,” Bilgic said. “We will see if that path will be open or not. Still, 10 percent or 20 percent of $2.5 billion makes a considerable sum.”
That sum would be between $250 million and half a billion dollars.
The tax dispute focuses on the Dogan Group’s failure to pay tax on share transactions between different companies within the group.
Dogan Yayin’s chief financial officer, Soner Godik, says no tax is due because the transactions were part of internal restructuring within the group, and no sales were made and no cash changed hands.
Godik told the Bloomberg financial news service this week that the group would ask the government to re-evaluate the tax demand, which he said was assessed “subjectively.”