Turkey: Government Using "Tax Terror" to Muzzle Independent Press -- Critics

Is the Turkish government trying to break the back of a media conglomerate that has served as its most vocal opposition by slapping it with a whopping $2.5 billion tax penalty?

That's the question being asked in Turkey and abroad after authorities levied a record-breaking fine on the Dogan Media Group, which publishes several influential newspapers (Hurriyet, Milliyet and Radikal among them) and owns CNN-Turk, the Turkish-language version of CNN, among other channels. The penalty (which nearly equals the entire value of the company) comes on the heels of a $500 million tax fine issued against Dogan a few months ago.

"It raises question marks, absolutely," says Bulent Aliriza, director of the Turkey Project at the Washington-based Center for Strategic and International Studies. "The sum involved is astronomical. Clearly this is enough to break the back of any corporation and it opens up the question of what is the goal of the government?"

According to Turkish tax officials, Dogan engaged in deceptive practices and failed to pay tax on income earned through the sale of a company and through the transfer of shares between companies within the group itself. According to the Dogan Group, everything has been above board and the government, through its taxmen, is out to get it by twisting the country's financial rules to suit its purposes.

Over the last few years, the Dogan Group's media outlets have emerged as perhaps the most vocal critics of the governing Justice and Development Party (AKP). At one point earlier this year, Turkish Prime Minister Recep Tayyip Erdogan even called for his supporters to boycott the group's publications. Interestingly, relations between the AKP, which is moderate Islamic in its orientation, and the media group turned especially sour after some of the Dogan publications aggressively reported on the financial misdeeds committed by the German branch of a Turkish Islamic charity with close ties to the AKP leadership.

According to its critics, the Turkish government is now involved in an attempt to silence one of its detractors, as part of a larger plan to create compliant media.

The emergence in recent years of a powerful Islamic press and some questionable moves by the AKP - such as the sale of the bankrupt but influential Sabah ATV media conglomerate to a business group run by the prime minister's son-in-law - has given the government unprecedented influence in the media, critics charge.

"Without any legal ground, such a practice could not be welcomed anywhere in the world," Fikret Bila, Milliyet's Ankara representative and one of Turkey's leading veteran journalists, recently wrote. "These two consecutive tax levies are nothing but 'tax terror' against the company owner, Aydın Dogan. This is obviously a confiscation process, not just tax penalties."

The government insists the massive fine is simply the result of tax inspectors doing their job.

What makes the case somewhat murky is the fact that Aydin Dogan, chairman of the Dogan organization, is not a scrappy newspaperman fighting for his life, but rather a media baron and business magnate who is a kind of Turkish Rupert Murdoch, controlling a very large slice of the Turkish media scene.

Writing in the English-language Today's Zaman, columnist Andrew Finkel points out that "as Turkey's press baron extraordinaire, [Dogan] openly promoted his allies and intimidated his foes to carve out a world favorable to himself." Finkel added that the Dogan Group has faced criticism for blurring the lines "between editorial independence and financial self-interest."

Tax officials and Dogan might enter into negotiations that could lead to a settlement of some kind, but observers inside and outside Turkey say the size of the initial fine does raise questions about press freedom in the country.

The European Union, which Turkey hopes to join, has already expressed its concern, with a spokesman in Brussels stating; "When the sanction is of such magnitude that it threatens the very existence of an entire press group, like in this case, then freedom of the press is at stake."

And in a recently released statement, the powerful Turkish Industrialists' and Businessmen's Associations (TUSIAD) took the government to task for its action against the Dogan Group. "These enforcements, which comply with neither justice, nor the concept of modern tax and revenue administration, target press freedom and pluralism besides creating unrecoverable material and moral losses," the statement said. "The situation makes the sincerity of Turkey's recent democratization process questionable, also endangering its sustainability.