Ruling by the Press Ombudsman
5 August 2015
This ruling is based on the written submissions of Ms Moira Granny Seape, CEO and Director of Ahanang Hardware and Construction (Pty) Ltd, and those of Sharon Chetty, deputy editor of the Business Day newspaper.
Complaint
Seape, a former chairman of the National Home Builders Registration Council (NHBRC), is complaining about two articles and an editorial in Business Day.
The stories were headlined:
· Big payouts for low-costing housing watchdog four years after probe – Multimillion-rand ‘loss of income’ settlements for former quality watchdog National Home Builders Registration Council chairwoman and a council employee, after the one resigned and the other was fired (12 May 2015); and
· R20m payout despite doubts over NHBRC probe – Special Investigating Unit may reopen its probe into the unexplained payout to businesswoman Moira Granny Seape (1 June 2015).
The headline to the editorial read, Secret payouts are an abuse of power – The lack of transparency at state institutions amounts to abuse of process, power and public resources (2 June 2015).
Regarding the first article, Seape complains that the:
· journalist made up his mind that she was corrupt even before he “approached” the story;
· reporter inadequately used information given to him about court records and other issues (when he did refer to them, he was either selective or buried such references deep in the story, to the extent that they could be regarded as irrelevant) because it did not suit his agenda; and
· reference to the “loss of income” in the introductory sentence sowed the first seed of doubt as to whether she had been entitled to compensation – while, in fact, she had been “unlawfully investigated” and her innocence had subsequently been established.
She concludes that the texts have defamed her because she was portrayed as a corrupt person who had received a huge gratuitous pay-off from the public purse as “silence money”, and who presided over the NHBRC during a period of fraud and corruption.
The second story:
Seape complains that the journalist:
· raised questions about the settlement and how it was calculated, but overlooked core facts as set out in court papers and in the appeal court judgment;
· incorrectly stated that the so-called botched Special Investigating Unit (SIU) investigation into her affairs had been re-opened and sanctioned by the Department of Justice (while that department in fact denied any extension);
· misleadingly stated that the Department of Housing could not explain how the R20-million payback had been calculated, suggesting that she was due to be paid only R1.5-million – yet in his first story he noted that the settlement was based on a loss of income;
· maliciously cast doubt on the settlement, while it had been negotiated by the respected attorney Mr Peter Harris (to whom the journalist had spoken and who had been appointed by Minister Lindiwe Sisulu);
· inaccurately reported that she had sued the then Minister of Human Settlements for instituting an unlawful investigation against her, while she went to court about the validity of the investigation (a challenge that was decided in her favour);
· reported the SIU still planned to continue with the investigation against those accused of wrongdoing at the NHBRC during her tenure – implying that she would commit tender-fraud and by default was a corrupt and fraudulent person and professional; and
· inaccurately stated that her company had been awarded repeated multimillion-rand contracts with the NHBRC since the “scandal” had begun – “My company was awarded a forensic assessment last year, which concludes this October”.
The editorial.
Seape complains that the editorial:
· lumped her together with others who had been implicated in fraud and paid by the state to disappear quietly and silently;
· stated that she had been paid R20-million by Human Settlements Minister Lindiwe Sisulu even though she had been investigated for conflict of interest, while it was a “fact” that the SIU had not been mandated to investigate her, and that it had cleared her of all wrong-doing.
She argues, “I was a victim of a miscarriage of justice and a pawn in a political battle in which I had no interest or played no part. As a result of this, my business suffered tremendously and I was awarded a settlement in relation to lost income.”
In conclusion, she demands that the newspaper acknowledges all the inaccuracies, that it apologises for the implication that she had been corrupt or involved in wrong-doing, and that it withdraws the reference to her payment as “silence money” paid by the government. She asks for the same prominence as that afforded the three texts.
The texts
The first article, written by Samuel Mungadze, reported that Sisulu had agreed to pay a multimillion-rand “loss of income” settlement to Seape.
The journalist wrote that Seape had been investigated for a possible conflict of interest. “A company she owned, Ahanang Hardware and Construction, had won contracts said to be worth about R72m to do inspections of subsidy homes. She resigned when the probe started.
A “well-placed source” reportedly said the department would pay Seape approximately R20-million. The latter had reportedly been fired in 2011 when her appointment had been found to be “grossly irregular”.
The (follow-up) second story, also authored by Mungadze, stated that a multimillion-rand settlement had been concluded with Seape – “even though an investigation botched by the [SIU] may still be reinstated”.
The editorial commented on Mr Mxolisi Nxasana, a former national director of Public Prosecutions, who had vacated his post “by mutual agreement” with Pres Jacob Zuma. It then stated, “The government is not transparent about the details of the settlement, nor the amount paid. This was not the first such deal and it will not be the last. We have reported how Moira Granny Seape…was given R20m by…Sisulu even though she was investigated for conflict of interest and the investigation may still be reinstated because the [SIU’s] initial probe was invalid on a technicality.”
Business Day’s response
In her reply to the complaint, Chetty says:
· the texts did not portray Seape as a “corrupt individual”, or as the receiver of a bribe, or that she had presided over a period of fraud and corruption at the NHBRC – the stories dealt with an investigation into a possible conflict of interest;
· the reporter asked Seape for comment, but the latter referred him to Sisulu – whose legal representative commented, as published;
· it was necessary to use quotation marks for the words “loss of income”, as no one had explained how Seape had suffered a loss of income when her company continued to do business with the NHBRC;
· the matter was in the public interest;
· the story did say that there had been lengthy litigation and that Harris had been quoted as saying that Seape had been exonerated;
· the newspaper was unaware of the SIU’s offer to settle with Seape;
· neither Seape nor Sisulu explained that the former had alerted the latter to a potential conflict of interest;
· the stories were about payouts from the public purse “years after an inconclusive investigation”;
· at the time of publication, the SIU said it was awaiting an amendment and extension of the proclamation to investigate the NHBRC – that left no doubt that the investigation had not been finalised;
· that neither Seape nor the department offered an explanation as to how the R20-million had been calculated – “The difference between what board members were due to receive (up to half a million rand per year) and the R20m payout was indeed stark”;
· the word “sued” was used by Seape’s attorney;
· during Seape’s tenure as chairman she was investigated for conflict of interest – “that fact is not in dispute”;
· the current CEO of the NHBRC gave the newspaper information, on the record, on the contracts won by Seape’s company;
· Seape’s payout came at a time when there had been numerous settlements with other senior public officials – “It stood to reason that the matter would be the subject of an editorial. Reporting of Ms Seape’s settlement coincided with that of numerous other public officials and could not be ignored”; and
· the stories never questioned whether or not Seape had won her case in court.
Seape’s reply to the newspaper’s response
Seape says she spent more than four years in the courts clearing her name – which eventually transpired. “However now Business Day has uttered mistrusts about me and this case into the public record. Unchallenged they remain there and embedded on the Internet for life. This is my reason for turning to the Ombudsman.”
She admits that the newspaper did not use the term “corrupt individual”, but argues a reasonable person would have read exactly that between the lines (in all three texts).
Seape also takes issue with the newspaper’s statement that she had refused to cooperate with them, as the agreement with the Department was confidential – yet “[t]hey then take the liberty to twist that same confidentiality clause to suit their own aims. [T]o abuse [the public interest] is detrimental not only to the public but to the very trade of journalism”.
She says the texts falsely conveyed that her innocence was won only on a technicality. She says, yes, she had successfully challenged the legality of the SIU’s investigation. “But the facts remain (which the journalist overlooked) that the SIU found no evidence of wrongdoing of any description against me. The issue of technicality is tangential to this… The judgment and court papers were highlighted to the journalist, who did not deem it proper to access or read them. Had he done so, he would have realised he was on a very wrong track.”
Seape adds there is a final High Court ruling (February 2015), which is in the public domain, and which has put a halt to this matter – yet the newspaper reported that the probe would recommence once Zuma has signed an amendment to the proclamation. “This is patently untrue.”
She explains that she was compensated for a sum over and above her board fees. “The fact remains that the settlement reached was not about the loss of board fees but about the accumulated losses accrued by my company due to my inability to work for the bulk of the period the unlawful investigation into me was underway.”
Seape also takes issue with the newspaper’s explanation that the editorial merely made general points, “[w]hen in fact they were making strong statements in black and white about individuals whose cases have no bearing on my own, and who are alleged to have been paid off by the state, in large sums of ‘silence money’.”
My considerations
My core questions are:
· What would the reasonable person have understood about Seape after reading the texts; and
· Would those impressions have been fair to her?
First article
Seape complains that this story portrayed her as a corrupt person.
Is that true?
It is clear from her complaint that she is unhappy not so much about what Mungadze wrote, but rather about what he omitted (specifically, information contained in court records).
I take into account that the story was about payouts which have settled disputes, inter alia between Seale and the Department of Human Settlements – it was not in the first place about Seale’s innocence or guilt. This, coupled with the reporting of her attorney’s statement that she had been “completely exonerated”, means that the omission of information from court documents is not serious enough to be in breach of the Press Code.
I agree with Chetty that the story did not describe Seape as a “corrupt individual” (not even between the lines), or as the receiver of a bribe, or that she had presided over a period of fraud and corruption at the NHBRC – the stories dealt with an investigation into a possible conflict of interest.
Seape’s complaint about the use of inverted commas with the words “loss of income” also has no leg to stand on. The newspaper justifiably said it had to do so as no one had explained how she had suffered a loss of income when her company continued to do business with the NHBRC. Also, in later documentation Seape herself explains that the settlement was about “loss of income”.
Moreover, I do not believe that the use of the words in question has necessarily sown the first seed of doubt as to whether she had been entitled to compensation, or that the story portrayed her as a corrupt person who had received a huge gratuitous pay-off from the public purse as “silence money”, or that she presided over the NHBRC during a period of fraud and corruption.
Unlike Seape, I am not going to accuse the journalist of having made up his mind even before he started working on the story, as I have no reason to do so.
Second article
The journalist was justified to raise questions about the settlement and how it was calculated – even though it had been negotiated by the respected attorney Harris. The deal was kept confidential, and the media have every right to report on that. She was paid with taxpayers’ money, and the matter was therefore in the public interest.
Whereas the parties to the settlement had every right to keep it confidential, they should not expect the media to keep quiet about it.
How Seape comes to conclusion that Mungadze “maliciously” cast doubt on the settlement is beyond me.
The same goes for Seape’s complaint that the reporter inaccurately stated that she had sued the then Minister of Human Settlements for instituting an unlawful investigation against her, while she went to court about the validity of the investigation. Surely, this is materially the same thing?
The conclusion that the story implied that Seape was by default corrupt and fraudulent is hers, not mine – and, I believe, it would also not be that of the reasonable reader.
As I have argued above, the story was not in the first place about Seape’s innocence or guilt. The omission of information from court documents is not serious enough to be in breach of the Press Code.
I am not concerned about the statement that the SIU still planned to continue with the investigation against those accused of wrongdoing at the NHBRC during Seape’s tenure – she does not have the standing to complain about this specific issue (the people who may be investigated have the right to complain).
However, she may complain about the statement that the SIU “may reopen its probe into the unexplained payout to…Seape”.
As I was confronted with two opposing persuasions, I have asked the SIU the following question:
|
I am adjudicating a complaint by…Seape…against Business Day and I need clarification on one issue. The story in dispute said that the SIU ‘may reopen its probe into the unexplained payout to [Seape]’ even though a settlement has been reached (between her and the Department of Human Settlements). Seape denies that the SIU may reinstate its investigation into her payout. I need to know which of the two parties I should believe. |
Ayanda Maki, SIU Communications Manager, responded as follows:
|
The SIU motivated for an amendment and extension of the existing national housing proclamation to include investigation of certain affairs of the NHBRC. Such affairs did not include a probe of an unexplained payment to Seape. The application was submitted to the Presidency via the Department of Justice. The SIU subsequently re-considered its position and withdrew the motivation. |
This means that the newspaper was not justified in its reportage on this issue, and that it was neither accurate nor fair – which certainly had the potential to cause Seape unnecessary harm.
Editorial
The editorial was about the lack of transparency at state institutions, and not about fraud. The text mentioned Seape in that regard, and stated that she had been investigated for conflict of interest (not fraud). The settlement was not transparent, as both parties agreed to keep it confidential, and the newspaper was therefore entitled to ask questions about the lack of transparency.
Even though Seape was “lumped together” with others who had been implicated in fraud, this does not mean that she needed to put those shoes on her feet.
Finding
First article
This part of the complaint is dismissed.
Second article
This part of the complaint is dismissed, save for the unjustified statement that the SIU “may reopen its probe” into the unexplained payout to Seape. This statement was in breach of Section 2.1 of the Press Code that says, “The press shall take care to report news truthfully, accurately and fairly.”
Editorial
This part of the complaint is dismissed.
Seriousness of breaches
Under the headline Hierarchy of sanctions, Section 8 of our Complaints Procedures distinguishes between minor breaches (Tier 1), serious breaches (Tier 2) and serious misconduct (Tier 3).
The breach as described above is a Tier 2 offence.
Sanction
Business Day is directed to retract the statement that the SIU may reopen its probe into the payout to Seape, and to apologise to her for the unnecessary harm that this must have caused her.
The text should be:
· written by the newspaper and be approved by me prior to publication;
· ended with the words, “Visit www.presscouncil.org.za for the full finding”;
· published prominently on the same page that carried the most prominent of the reports; and
· published on the newspaper’s website as well, if indeed the pieces appear there.
The headline should reflect the content of the text. A heading such as “Matter of Fact”, or something similar, is not acceptable.
The aftermath
After I have sent out this finding, Business Day published the following apology (without presenting the text to me for approval):
* This article was edited after Moria Granny Seape lodged a complaint with the Press Ombudsman. In an earlier version of this article, it was erroneously stated that the SIU may reopen its probe into the unexplained payout to Ms Seape.
That statement is incorrect. Business Day retracts it and apologises to Ms Seape for any harm that may have been caused. Visit www.presscouncil.org.za for the full finding.
I am satisfied that this apology is sufficient, and therefore am not asking the newspaper to apologise again.
The only requirement left is that this apology should appear both in the print and in the online versions of the newspaper.
Appeal
Our Complaints Procedures lay down that within seven working days of receipt of this decision, either party may apply for leave to appeal to the Chairperson of the SA Press Appeals Panel, Judge Bernard Ngoepe, fully setting out the grounds of appeal. He can be contacted at Khanyim@ombudsman.org.za.
Johan Retief
Press Ombudsman