Clarn Group had achieved this steady expansion amid crises both political and financial. In 2001, Argentina s economy was wracked by turmoil, threatening to buckle under the weight of high foreign debt. Capital flight exacerbated the crisis as investors panicked in the aftermath of emerging market meltdowns elsewhere. Between December 2001 and May 2003, Argentina cycled through some four presidents in rapid succession, as each proved unable to calm the markets and consolidate political authority. In the meantime, Argentina announced it was suspending payments on most of its foreign debt. Its $94 billion default was the largest sovereign debt default in history. [1] At the same time, the government froze citizens bank accounts while devaluing the currencythe pesoto roughly a third of its former value, and Argentines watched helplessly as their savings were wiped out. Those on fixed incomes were plunged into near penury, unemployment climbed to 20 percent, and the poverty rate skyrocketed. Amid seething political turmoil, as often-violent protests swept the nation, Nstor Kirchner was elected president in May 2003. [2]

Nstor Kirchner.
Courtesy Presidencia de la Nacin Argentina

Representing a left-leaning faction of the ruling Pernist partywhich emulated the populist, worker-centric posture of former president Juan PernKirchner and his wife, fellow politician Cristina Fernndez, began their careers as activists in the anti-dictatorship movement of the 1970s. [3] Fernndez had been a senator in the far-southern region of Santa Cruz, the couples home region; when he assumed the presidency in 2003, Kirchner had served as Santa Cruzs governor for 12 years but was relatively unknown elsewhere in Argentina.

He moved quickly to consolidate state control over the economy. At the same time that high global commodity prices delivered enormous profits to Argentina s dominant agricultural sector, Kirchners aggressive program of state stimulus, selective price controls, and low valuation of the peso contributed to a rapid and dramatic economic turnaround. [4] Kirchners four-year term saw average yearly GDP growth of over eight percent and a steep drop in unemployment and poverty. [5]

At the same time, Kirchner purged from his government remnants of the despised military regime of 1976-1983 and brought new trials against accused human rights abusers from the era. His economic stewardship and anti-dictatorship zeal proved popular with large swathes of Argentine society. Argentine living standards rebounded to a degree few had thought possible amid the chaos of 2001. As the owner of large mainstream media, Clarn counted itself part of the seeming societal consensus in Kirchners favor. Remarks Gustavo Sierra, an international reporter for Clarn newspaper:

The government of Nstor Kirchner was, in general, by Argentinean standards, a very good government That was a general consensus in the society, and Clarn is part of the mainstream in that way. [6]

Listen to Sierra explain why Clarn initially supported Kirchner.

Yet Kirchner had an uneasy relationship with the media. Unique among modern Argentine presidents, Kirchner did not hold a single press conference throughout his entire four-year term. It was so difficult to get information out of his spokesman, Miguel Nuez, that reporters jokingly referred to him as El Vocero Mudo , the mute spokesman. [7] Argentine media, furthermore, often relied on government-funded advertisingwhich provided information about hospitals and schools, among other thingsfor a significant share of their revenues. Many of them were therefore dependent on the good graces of the government in power.

A 2007 investigation by the nonprofit Committee to Protect Journalists (CPJ) found that Argentine governments at both the national and local level had long sought to influence coverage through their control over advertising dollars. Noted CPJ:

Because national and local governments are not bound by clear rules governing the placement of their advertising, CPJ and other analysts have found, the targeted influx of ad dollars influences coverageincluding news about the presidential and legislative elections. News outlets that provide favorable coverage of incumbents get lots of ads; organizations that are critical get few or none. [8]

Kirchner himself had been particularly generousand particularly discriminatingwith government ad money, both as governor of Santa Cruz and as president. [9] Over his 20032007 presidential term, he expanded the national advertising budget by 354 percentfar outpacing Argentina s high rate of inflationand disbursed ad dollars most freely during political campaigns. [10] One radio host in Kirchners southern home state of Santa Cruz told CPJ: Without state advertising, it is almost impossible to survive. [11]

Grupo Clarn had staked out an advantageous position in this environment. Its financial strength largely insulated it from the whims of the executivestate advertising accounted for only about five percent of the companys ad revenue. [12] In 2007, in a further effort to improve its finances, Clarn CEO Hctor Magnetto sold shares of the company on the Buenos Aires and London stock exchanges for the first time, raising $463 million for 17.5 percent of its shares. [13] US investment bank Goldman Sachs owned another nine percent of the shares. Further, Clarn enjoyed relatively good relations with the Kirchner administration; the presidents general reticence notwithstanding, Clarn journalistsboth in print and on televisionhad better access to his government than most, which often meant exclusives.

Meanwhile, after four years in office, Kirchner announced on July 2, 2007 his decision not to stand for a second term as president. Instead, he endorsed his wife Cristina Fernndez for the top spot. She campaigned vowing to carry on her husbands popular policies and to include him in executive decisionmaking, billing her candidacy as an opportunity to elect two capable leaders at once. Like her husband, Fernndez eschewed press conferences; she did not convene one for the duration of her presidential campaign.

Fernndez won the October 28, 2007 election handily with 45 percent of the vote, nearly double the vote share of her nearest rival. Her party also won wide majorities in both houses of Congress. In an editorial, Clarn hailed Fernndezs victory, as well as Kirchners willingness to give up power in a nation with a history of strongmen, writing:

The first-round victory introduces an element of innovation and generational renewal. A majority of public opinion has broadly endorsed the direction of the outgoing government. President Nstor Kirchner is, in that sense, a principal tributary of the support received by his wife and will be able to realize another historic first: it will be the first time a democratically elected president has ended his mandate with high levels of support and stepped down without hoping for re-election. [14]