THE BILLION DOLLAR QUESTION

How Oligarchs Are Taking Over the World

Some get little attention in America, like the new Czech prime minister; some demand attention, like Berlusconi; and some become president of the United States.

Photo Illustration by The Daily Beast

PRAGUE—A few months before he first ran for office in the Czech Republic, the second richest man in the country made his way to the newsroom of the nation’s most influential daily and tried to convince its reporters that he was not going to use their paper, which he’d just purchased the day before, for political purposes.

“Write freely about things you want,“ he told them.

Of course, Andrej Babis didn’t keep his word. Four years later and Mladá fronta Dnes has turned from a paper that once helped bring down a prime minister, when he refused to tell its reporters where he’d gotten the money to pay for a luxury apartment, into what’s been called “a wreck without any investigative activity.”

Babis, on the other hand, was appointed as the new prime minister in Prague last Wednesday.

He managed to convince voters that he is the only person in politics rich enough to selflessly, as his campaign put it, “run the country like a business.” And this even though he was charged with fraud two weeks before the elections, for illegally obtaining E.U. subsidies to fund his luxury hotel in the countryside outside Prague.

You see, it’s not only in the United States that men who are, or claim to be, billionaires have soaring political aspirations and careers. Beyond ideology—sometimes on center stage, sometimes directing from the wings, and sometimes harnessed to a strongman—billionaires have become the key political players in many parts of Europe, from Rome to Tbilisi, from Budapest to Kiev and Moscow.

The common element has been the construction—or cooptation—of a pro-billionaire media empire.

And the common element, in most cases, has been the construction—or cooptation—of a pro-billionaire media empire.

In Prague, when Babis told reporters at MF Dnes they could write freely, lead investigative journalist Jaroslav Kmenta asked, “So can we write about you being a godfather?” He didn’t get a clear answer. At least, not then.

The billionaire, who is also described as a “very high energy person,” is still struggling to form a government. Those annoying fraud charges are partly to blame. Few potential partners want to risk a coalition with an alleged criminal.

Meanwhile, Kmenta, who quit his job at MF Dnes and now has to publish his work online at his own expense, gloomily compares the takeover in 2013 to “our 9/11 for free media.”

He might be right, but at least there are still independent news outlets in the Czech Republic that serve as a counterweight to Babis’s media holdings.

In Hungary, on the other hand, a group of Prime Minister Viktor Orbán’s associates have purchased a major chunk of the media while most of the remainder already belongs to the state anyway.

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The collapse of the old news media business after the financial crisis of 2008 has aided and abetted the billionaire takeovers all over the map. Silvio Berlusconi, who built his fortune with private TV networks, is back in a key position to influence Italy’s national elections next year. In the United States (never mind that the Donald Trump team’s Plan B was to set up Trump TV if they lost the election) the climate-change disinformation funding Koch brothers recently backed Meredith Corporation’s purchase of the faltering Time Inc. Meredith may sell some of Time’s weekly magazines, perhaps to the owner of the pro-Trump National Enquirer.

And then there is Sinclair Media, an ultraconservative broadcaster with a pro-Trump agenda that stands to become the biggest group of local TV stations in U.S. history—not least because the politically ambitious chairman of the Federal Broadcasting Commission, whom the Democrats want to investigate for liaising with both Sinclair and the Trump administration, has decided to slash some of the protections against monopolies in local broadcast news.

JIRI TILL, a friendly looking 28-year-old chain smoker whose favorite TV show is “Shark Tank,“ spent much of the past year making spreadsheets for the Babis campaign. He first admired the billionaire from afar at a career fair in Budapest years ago. And he’s still hooked. After a press conference in the summer, Babis invited his team to lunch at a hotel. The mogul, who had been tense earlier, ordered a glass of wine and got out his cell phone to rip apart the coverage. “He was like, ‘Oh my god, this reporter is so stupid,” Till says, then adds, “But he said it in a funny way!”

According to a politician who used to work with Babis, expressing a widely held view, “People are either his servants or his enemies.”

The new prime minister isn’t just sensitive about his Slovak accent, sometimes sneered at by political commentators. Even after the government made him put his media company in a trust, he couldn’t help but call up a reporter to discuss exactly what scandalous items about his political rivals should be published “before the election” or saved for “next year.”

A tape of this conversation was posted on Twitter earlier this year. But it hardly fazed Babis’s supporters, since many sincerely believe the mogul when he claims his enemies (or those not on his payroll) are ganging up on him. Naturally a candidate frequently and unfairly slandered would need to dictate the content of his own newspapers to set the record straight.

Meanwhile, Babis still says he lets his reporters “write freely.” Being sleazy is bad for business, he likes to argue. After all, he is the kind of man, who, even as he mocks the E.U. to a cheering crowd, would never do anything to endanger the Michelin-rated restaurant that he owns on the French Riviera. Still, his media group’s consistently dire revenue predictions suggest that the billionaire did not buy the company because he thought it was going to be profitable.

Which is something he has with other local oligarchs who’ve been shopping around Central Europe for stakes in the media. One newspaper owner in Slovakia openly admitted that he didn’t consider media investment to be a “classical investment” but “more about politics and an attempt to protect the investor’s interest.”

IN HUNGARY there’s a slightly different model. Viktor Orbán’s government didn’t wait around for economic pressures to take their toll—they pressured foreign media conglomerates to sell off their assets. A lot of those are now in the hands of a small group of people, including Andy Vajna, a Hollywood producer turned government employee. His loss-making TV channel broadcasts character assassinations of Orbán’s opponents to a national audience. And it wouldn’t survive without the generous amounts of state advertising that the government pours into it.

Vajna, who fled to the United States in the 1950s when he was 12 years old, decided to move back to his native country in the year that Orbán got elected. With blockbuster movies like “The Terminator” and “Rambo” on his resumé, he got a job working for the new government as a film commissioner.

“Maybe I am an idealist. I am not doing this for the money, but to make Hungarian films great again,” he told the German paper Die Welt in 2011.

But, yeah, there is a lot of money involved, too.

Even Vajna’s critics admit that he is not doing a bad job commissioning good films. But the opulence of his lifestyle has a lot more to do with the fact that he is the only person allowed to operate casinos in Budapest. And, as Polyak Gabor, an analyst at Mertek Media Monitor, puts it, “You do not get such gifts in exchange for nothing.“

Indeed, the 73-year-old billionaire was not just able to use his gambling profits to purchase the second biggest commercial TV channel in the country. He also bought a radio station in Budapest, which, between the pop songs, broadcasts announcements denouncing the supposed conspiracies of George Soros, widely viewed as a good-guy billionaire for supporting civil society and the rule of law.  

To say the pen is mightier than the sword is to indulge in anachronisms.

And now Vajna is turning his radio station, Radio 1, into the only national commercial radio network ahead of next year’s elections—by making local stations an offer to lease their airtime that, as one mayor from the ruling Fidesz party said, “they could not refuse.”

Gabor knows one station owner in Pecs, a city close to the Croatian border, who agreed to run Radio 1’s morning show. In return, he didn’t just get paid handsomely. He was also gifted with an extra regional frequency by the media authority, just by virtue of having done some business with Vajna. The local market is weak, Gabor says, “It pays to play along.”

The Czech Republic is still a long way from becoming Hungary. And yet, whether it’s a populist leader who buys high quality newspapers or the oligarchs appointed as puppet CEOs by an illiberal government, the obvious result, according to Joerg Forbrig, a political scientist from the German Marshall Fund, is that “the press becomes limited in how it can act as a check on democracy.”

To say the pen is mightier than the sword is to indulge in anachronisms. The question is whether the media in any form can stand up to the power of billionaire oligarchs. In much of Eastern Europe, at least, the oligarchs are winning.