VZCZCXYZ0000
OO RUEHWEB

DE RUEHBU #0973/01 1371753
ZNR UUUUU ZZH
O 171753Z MAY 07
FM AMEMBASSY BUENOS AIRES
TO RUEHC/SECSTATE WASHDC IMMEDIATE 8172
INFO RUEHCV/AMEMBASSY CARACAS IMMEDIATE 1241
RHMFIUU/HQ USSOUTHCOM MIAMI FL IMMEDIATE
RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC IMMEDIATE

UNCLAS BUENOS AIRES 000973 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR INR/R/MR, IGWHA, WHA, WHA/PDA, WHA/BSC 
CDR USSOCOM FOR J-2 IAD/LAMA 
SOUTHCOM FOR POLAD 
NSC FOR JOSE CARDENAS 
 
E.O. 12958: N/A 
TAGS: KPAO OPRC PREL KMDR AR
SUBJECT: MEDIA MAGNATE GRIPES TO THE AMBASSADOR ABOUT 
KIRCHNER 
 
 
CLASSIFIED BY: AMBASSADOR E. ANTHONY WAYNE; 1.4 (b), (d) 
 
 
SUMMARY 
------- 
 
¶1. (C) In a lunch punctuated by misgivings about the Kirchner 
Administration, ailing Clarin giant Hector Magnetto conveyed 
to the Ambassador that his vigor has not waned, despite a 
throat cancer that has diminished his ability to communicate. 
 As the Ambassador was feted by Clarin,s top brass, May 7, 
Magnetto appeared in good form and fully in charge of 
Argentina,s most powerful media conglomerate as it 
challenges a government facing its first major political 
scandal since it took power four years ago.  The main 
complaints against K focused on the lack of political 
dialogue and his economic policies.  The Clarin elite also 
suggested their opposition to Chavez.  Clarin,s executives 
reiterated appreciation for the Ambassador,s helpful actions 
to promote the U.S. standard for digital television and gave 
an update on the status of the decision.  END SUMMARY. 
 
 
THE POWER OF CLARIN 
------------------- 
 
¶2.  (SBU) Hector Magnetto, CEO and President of Argentina,s 
largest multimedia conglomerate, the Clarin Group, hosted 
Ambassador Wayne for lunch May 7, an invitation extended 
months before, but delayed due to Magnetto,s ongoing fight 
with throat cancer.  Magnetto brought with him the two men 
most often named to succeed him: Vice President Jose Aranda 
and Director of External Relations Jorge Rendo.  Also present 
were Ricardo Kirschbaum, Editor-in-Chief of the powerful 
group,s flagship, the daily newspaper Clarin, and leading 
political columnist, Eduardo Van der Kooy.  Ambassador Wayne 
was accompanied by the DCM, PAO, IO and the Senior FSN Press 
Specialist. 
 
¶3.  (SBU) The over-60-year-old newspaper, Clarin, is the 
best-selling paper in the country, with a weekly circulation 
of 400,000, which swells to 700,000 on Sundays.  Two decades 
ago, the Clarin Group began diversifying its business both 
within and outside the journalism industry, to become a 
powerhouse.  It owns shares in the two largest provincial 
papers, La Voz del Interior (Cordoba) and Los Andes 
(Mendoza), in addition to La Razon, the DyN news agency and 
Pagina 12.  It has printing companies and a controlling share 
(in conjunction with rival La Nacion and in partnership with 
the government) in the country,s main newsprint firm, Papel 
Prensa.  It owns three radio stations, including 
award-winning Radio Mitre.  Clarin also wields important 
influence in television, with ownership of open-air Channel 
13 and the creation in 1994 of Argentina,s first 24-hour 
cable news channel, Todo Noticias.  Moreover, it owns the 
country,s two largest cable distribution companies: 
Multicanal and Cablevision, although the latter awaits final 
approval from the government committee responsible for 
defending competition.  It has internet holdings and 
maintains a charitable arm, the Noble Foundation. 
 
¶4. (SBU) The Clarin Group employs 7800 people.  Figures on 
its estimated worth are not available publicly, though one 
executive ventures that it is worth three to four billion 
dollars.  Ernestina de Noble, widow of founder Roberto Noble, 
and three other shareholders own 82% of the conglomerate and 
Goldman Sachs owns 18%.  South African media giant Naspers is 
reported to be considering whether to acquire the Goldman 
Sachs stake. 
 
¶5. (SBU) Clarin has political agenda-setting powers and is 
often described as having the ability to bring down 
governments.  This is true to the degree that Clarin closely 
follows the tide of public opinion, which it continuously 
measures through polling firms.  It is said that the thing 
Kirchner fears most and checks first each morning is 
Clarin,s front page.  For example, it was only after Clarin 
started running front page stories on the Skanska corruption 
scandal - four months after it had been appearing in other 
papers - that Kirchner spoke in public about the case. 
 
CLARIN NO LONGER DANCES TO KIRCHNER,S TUNE 
------------------------------------------ 
 
¶6. (C) Magnetto,s ability to communicate is severely 
 
hampered by the surgeries on his throat, which cause him to 
speak with the use of a special voice box.  Otherise, he 
appeared tan and in good form, fully at the helm of the 
Clarin Group.  He and his team expressed to Ambassador Wayne 
their frustration with the government,s refusal to engage in 
political dialogue, as demonstrated by the unrest in 
Kirchner,s home province, Santa Cruz, where teachers have 
been striking.  They also complained about the inability to 
get an interview with Kirchner, who is famous for harassing 
journalists and not giving press conferences.  On the 
economy, several complaints were made about price and export 
control policies, the manipulation of inflation data and 
inattention to long-term economic planning.  The executives 
were baffled by a complete absence of measures that could 
increase and/or attract foreign and domestic investment.  The 
views expressed indicated that despite its often 
left-leaning, populist content, Clarin represents 
Argentina,s industrial elite and its bottom line is 
business. 
 
¶7.  (C) Growing business gripes may explain in part Clarin,s 
recent decision to aggressively cover the Skanska corruption 
scandal, which it had downplayed for months.  For several 
years prior, the company had refrained from such 
anti-government coverage because it was beholden to Kirchner 
for saving it from a post-crisis bankruptcy threat from 
foreign creditors, and also because the public was desperate 
for political stability.  However, a series of political 
setbacks in several provinces, along with Clarin,s recovery 
to financial health, have now ended Kirchner,s grace period 
with the Clarin Group. 
 
CRITICAL OF CHAVEZ 
------------------ 
 
¶8.  (C) Magnetto raised the question of Venezuelan President 
Chavez and asked if the ongoing U.S. business relationship 
limited the extent of U.S. concerns, reflecting Clarin,s 
official line that Chavez was not a real threat.  In a 
separate conversation, a deputy to Kirschbaum told us that 
the paper is firmly opposed to Chavez, despite the wide range 
of opinions it prints.  Further to this notion, a television 
journalist told us that there were explicit and firm 
instructions to downplay coverage of Chavez,s stadium 
appearance while President Bush was in Uruguay.  The 
Ambassador explained that the U.S. was concerned about 
Chavez,s anti-democratic policies, his concentration of 
power and his destruction of institutions and press freedoms, 
but that he posed more of a threat to democracy in other 
countries of the region than the U.S. 
 
 
AMBASSADOR,S LOBBYING DELAYED DECISION ON DIGITAL TV 
--------------------------------------------- ------- 
 
¶9.  (SBU) Rendo confirmed that Ambassador Wayne,s actions to 
lobby for the U.S. standard for digital television had 
stopped the government from going through with a decision it 
had already made to opt for the European standard. 
Kirchner,s ties with Spain were cited as the driver of this 
preference.  Internal disagreement, however, coupled with 
Ambassador Wayne,s strong public show in support of the U.S 
standard, prompted the government to postpone its decision, 
which will not likely be made before presidential elections 
in October 2007.  Rendo observed that the Japanese have taken 
advantage of the opportunity to aggressively position 
themselves for more serious consideration.  Rendo confirmed 
positive results from the trip organized by the Embassy 
Commercial Office with the ATSC Forum for key decision makers 
to attend the National Association of Broadcasters Expo and 
Convention in Las Vegas.  The Argentines who attended 
returned impressed with the U.S. standard and admitted they 
had underestimated its benefits and capabilities.  All agreed 
that it would be useful for U.S. ATSC partner, South Korea, 
to now engage the Argentines more energetically. 
 
THE EMBASSY-CLARIN RELATIONSHIP 
 
¶10. (C) Like President Kirchner, Clarin,s front page is one 
of the first things the U.S. Embassy looks at each morning. 
Depending on how an issue is portrayed, a Clarin headline can 
trigger negative reactions.  For example, when a routine GSP 
review was portrayed by Clarin as economic sanction against 
Argentina, President Kirchner lashed out against the U.S in 
public.  On a separate occasion, Clarin published the 
Embassy,s letter to the editor in response to an article 
 
that reported false information about Ambassador Wayne. 
 
¶11. (C) While the Embassy and Clarin can have a prickly 
relationship because the paper is not always managed in as 
responsible a fashion as we would like, we do have a strong 
working relationship.  We communicate up and down the line of 
management, engaging in daily conversation with Clarin 
editors and reporters on the bilateral relationship and 
routinely including them in training programs in the U.S. 
Aside from placing our op-eds, Clarin appreciates that we 
actively support their journalists, professional 
development. 
 
¶12.  (SBU) The Ambassador asked about anti-American sentiment 
in Argentina, to which Magnetto responded that prevailing 
political views derived from two factors: 1) that the U.S is 
closely associated with the policies of discredited former 
President Menem; and 2) the conflict in Iraq.  Magnetto 
appreciated that on the contrary, Embassy staff are received 
hospitably and warmly by Argentines on a personal basis. 
Accordingly, the Ambassador explained Embassy efforts to 
enhance its outreach to youth and marginalized populations. 
As a result, we are exploring possible areas of cooperation 
in education with the Noble Foundation. 
 
COMMENT 
------- 
 
¶13.  (C)  Hector Magnetto and his team left the clear 
impression that Clarin is no longer satisfied with the 
current administration,s management of the country.  The 
Clarin powerhouse is on the same side as the Embassy in 
promoting a government decision in favor of the U.S. HDTV 
standard, ATSC, and good business is likely to be the basis 
of our dialogue in the future. END COMMENT. 
 
WAYNE