Rupert Murdoch Embroiled in the Caucasus

By CLIFFORD J. LEVY
NYT/November 18, 2007
TBILISI, Georgia

TO the world out there, the recent events here on the rim of the old Soviet empire may have fallen under the heading of One More Upheaval in a Place I’ve Never Heard Of. The opposition in Georgia held major protests. The president was displeased. Riot police were dispatched. Hostilities broke out. A television station was violently shut down. And so on.

But then the owner of the television station howled, and that voice was hard to ignore. How did Rupert Murdoch end up in the middle of all this?

It turns out that Mr. Murdoch’s expanding television empire began managing the most popular station in Georgia last year just as tensions were building over the station’s supposed support for the opposition to President Mikheil Saakashvili, whose critics say he is not the democrat he has claimed to be.

When the president accused the station of fomenting a coup and padlocked its doors, Mr. Murdoch was caught up in the convoluted alliances that have long played out in this region.

As a result, Mr. Murdoch’s News Corporation has found itself going up against Georgia’s president, a friend of Mr. Murdoch’s own friends in the White House. And that could conceivably wind up having an impact on a much larger game, the competition between the United States and Russia in the Caucasus.

Mr. Murdoch has publicly upbraided Mr. Saakashvili, who the administration had thought represented a new generation of democratically oriented leaders in the former Soviet republics.

But Mr. Saakashvili had been coming under fire at home, where rivals accused him of trying to concentrate power in his own hands. And his standing abroad plummeted when he imposed a state of emergency on Nov. 7, the night he shut down the News Corporation station.

He lifted the state of emergency only on Friday, under White House pressure, and with the station’s license still suspended. Still, what remained was Mr. Saakashvili’s firm attachment to the idea that Russia should have less, not more, influence in the Caucasus, and that close ties to the United States were in his deepest interest.

By challenging Mr. Saakashvili, the News Corporation had to some extent put events in motion that President Vladimir V. Putin in Russia might be able to benefit from, as he skirmishes to regain control over the Caucasus.

American influence has grown in this area, which Moscow once ruled.

The United States, among other geopolitical calculations, has backed a pipeline to Turkey through which oil has begun to flow from the Caspian Sea area through Georgia, bypassing Russia’s own pipelines on its way to Turkey and Europe beyond.

Russia regards Mr. Saakashvili, and his decided preference for doing business with the United States, as such an irritant that it has stirred up two separatist rebellions on the Georgian-Russian border and restricted trade between the countries.

Mr. Saakashvili in turn has blamed Russian spies for many of his misfortunes, and suggested that the News Corporation television station, Imedi, is a Kremlin tool.

Imedi, which means “hope” in Georgian and which transmitted both news and entertainment, does not consider itself an opposition station, and says it has no ties to the Russians. Its executives say they invited members of the government to appear on news shows, only to be rebuffed.

Aides to the country’s leader note that the News Corporation’s former partner in the station, Badri Patarkatsishvili, who is Georgia’s richest man (and no friend of Vladimir Putin, by the way), has grown increasingly hostile toward Mr. Saakashvili and is now planning to run against him.

For the United States, the recent rivalries in Georgia and its leader’s recent undemocratic actions have become a challenge. American diplomats have alternately tried to charm and chasten Mr. Saakashvili, opposition politicians, and News Corporation and Imedi executives into making peace and toning down their disagreements.

Matthew J. Bryza, a senior State Department official who came here last week to ask Mr. Saakashvili to lift the state of emergency, said he was hopeful that Imedi could reopen soon, given the News Corporation’s ability to repair the extensive damage that government riot troops did to the station.

“Their American partner is one of the world’s all-time-greatest media people,” Mr. Bryza said, speaking of Mr. Murdoch. “He knows how to make things happen.”

This being the Caucasus, the hubbub over Imedi does not end with Mr. Murdoch.

Remember “convoluted”? Try this:

Imedi’s founder, Mr. Patarkatsishvili, let the News Corporation manage the station for a year, then sold it outright to Mr. Murdoch’s company last month.

But don’t assume that Mr. Patarkatsishvili is a friend of the Kremlin just because he is an adversary of Mr. Saakashvili. Mr. Patarkatsishvili is a confidant of Boris Berezovsky, the Russian oligarch-in-exile who is a bitter enemy of Mr. Putin. Both Mr. Patarkatsishvili and Mr. Berezovsky are wanted men in Russia.

For now, Mr. Patarkatsishvili is out of the picture and the station is fighting a legal battle to recover its license. Bidzina Baratashvili, the station’s general director, said he expected that when it began broadcasting again, it would attract public sympathy.

Asked whether the News Corporation was angered by the closure, he said: “I don’t think so. They are clever enough to understand that just for the business, it’s a very good step. Because when we get back on air, this channel will be twice as popular as it was.”

http://www.nytimes.com/2007/11/18/weekinreview/18levy.html?_r=1&ref=business&oref=slogin