Ruling by the Press Ombud
22 September 2016
This ruling is based on the written submissions of Mr Donovan Reddy of Biccari Bollo Mariano Inc. attorneys, and those of Adriaan Basson, editor of News24.
Reddy is acting for South African Security Solutions & Technology, as well as for Integritron Integrated Solutions, Xtreme Intelligence Systems, SA Fence and Gate, Civil-Quip Plant Hire, Tavhara Trading, Etrobex, Mr Geoff Greyling, Mr Moya Nape and Mr Patrick Monyeki.
All of the above are collectively referred to as the Sasstec Group.
Sasstec Group is complaining about a news article and an opinion piece published on News24. The news story, published on 20 May 2016, was headlined EXCLUSIVE: Gordhan orders Masutha to cancel R378m IT tender. The opinion piece was headlined Battleground 2: Gordhan’s R500 billion tender war (26 May 2016).
Complaint
The news story
Sasstec complains that the:
· use of the word “orders” in the headline was false, misleading and defamatory – pointing to a biased motive on the part of the reporter;
· article falsely:
o mentioned an “irregular tender” awarded to Integritron, linked Sasstec to this as an alleged beneficiary of government tenders (implying that this was somehow sinister), and stated that Integritron was “irregularly appointed”, had made a “false declaration”, had “a lack of capacity to execute the contract”, and that it had a “fronting relationship” with its sub-contractor;
o stated as fact that SA Fence and Gate had been awarded government tenders worth “billions”, that the Integritron tender had numerous deficiencies, and that other tenders were not considered at all;
· story failed to state that:
o Treasury (and therefore also Gordhan) had denied instructing or ordering the Department of Correctional Services to cancel the contract;
o Sasstec had questioned the “facts” in the court proceedings, or the basis for such questioning;
o Treasury had conceded that it did not consult the Sasstec Group or grant Integritron the opportunity to be heard before reaching its conclusions;
· text, by depicting allegations or opinions as facts, as well as by naming other members of the Sasstec Group, defamed them and caused damage to their good names and reputations; and
· journalist did not give Sasstec a proper right of reply.
The column
Sasstec complains the column falsely stated or implied that:
· Integritron, the Sasstec Group and its associates were part of the phenomenon by which “millions of these tender rands disappear into the pockets of politicians and civil servants who buy fancy German cars, houses in private estates and have offshore bank accounts”;
· Gordhan’s “tender war” was against the Sasstec Group in particular – but without any reason being given for singling it out; and
· it had somehow benefitted from tenders of R500-billion – while the actual amount is much less than that.
The Group adds that the journalist:
· described the tender, lawfully won by Integritron, as “dodgy”, with no factual basis to do so – and again ignored the specific answers given in court papers by Sasstec and Integritron;
· ignored Treasury’s own version (it says that Gordhan did not order the cancellation of any contract, or the blacklisting of Integritron or any of the companies within the Sasstec Group); and
· did not give it an opportunity to comment.
The texts
The news story was written by Ahmed Areff. He reported that Finance Minister Pravin Gordhan had told Justice and Correctional Services Minister Adv Michael Masutha to cancel a controversial multi-million rand prisons tender, awarded to an ANC benefactor. In a letter to that ministry, Gordhan reportedly “advised” Masutha to restrict Integritron and its associate companies from doing business with government.
The column, written by Basson, said that Gordhan had faced an onslaught from Masutha. He stated, “At the heart of the latest high-stakes war between Gordhan and the government is South Africa’s R500bn tender budget that should be used to deliver basic services by producing goods and services that will create jobs and lift millions of people out of poverty.”
Millions of these tender rands unfortunately disappear into the pockets of politicians and civil servants in various ways, in Basson’s opinion.
After noting how much corruption cost the country every year, and pointing to related matters, Basson inter alia mentioned several tenders awarded to the Sasstec Group, Gordhan’s letter to Masutha, and Sasstec’s application for an urgent interdict against the Minister of Finance.
Sasstec’s arguments
The news story
Sasstec argues that the use of the word “orders” in the headline was misleading as it was contrary to:
· the meaning of Gordhan’s letter, adding that the document was meant for consideration and, if necessary, for taking steps; and
· an affidavit by Mr Solly Tshitangano, Chief Director: Governance, Monitoring and Compliance in the Office of the Chief Procurement Officer (OCPO), who said in his answering affidavit that the letter “advises” Sasstec to “consider” cancelling the service level agreement.
“In short, the defence of the Treasury (and of Mr Gordhan) to the Urgent Application, was … not being an instruction at all, let alone an ‘order’, as the headline describes it.”
Reddy adds that the article failed to state, as it should have, that Treasury (and therefore also Gordhan) had denied instructing or ordering the Department of Correctional Services to cancel the contract.
“Clearly, to state the above facts truthfully and in a balanced manner…would have led to an entirely different headline, perhaps resulting in no article at all being published. The failure to report on the Court proceedings and the competing contentions accurately, reveals a biased motive on the part of the reporter.”
Sasstec adds that the content of the story did nothing to improve upon the misleading nature of the headline. By depicting allegations or opinions as facts, as well as by naming other members of the Sasstec Group, in fact defamed them and caused damage to their good names and reputations.
Moreover, the story failed to report either that Sasstec had questioned the “facts” in the court proceedings, or the basis for such questioning, and omitted Treasury’s concession that it did not consult the Sasstec Group or grant Integritron the opportunity to be heard before reaching its conclusions.
Also, the article mentioned an “irregular tender” awarded to Integritron, linked Sasstec to this as an alleged beneficiary of government tenders (implying that this was somehow sinister), stated that Integritron was “irregularly appointed”, had made a “false declaration”, had “a lack of capacity to execute the contract”, and had a “fronting relationship” with its sub-contractor.
The story also omitted to report Sasstec’s responses to those allegations (as contained in court papers).
Reddy argues that, if Sasstec was given a proper opportunity to respond to or comment on these allegations, it would have revealed that:
· the appointment was not irregular, having been effected by means of a “two envelope process” already endorsed by Treasury;
· Integritron and its sub-contractor (Xtreme) made full disclosures at the date of tendering and made no false representations;
· no “fronting” occurred, as can be seen in the tender and if the status of Xtreme is considered as an Exempt Micro Enterprise; and
· there can be no issue of any “lack of capacity or ability” when Integritron was the only tenderer which passed the technical evaluation phase successfully in the first place and after stringent practical demonstrations, with Treasury’s participation. The awarding of the tender has not been challenged by any other tenderer, and the contract has been fully and properly performed for six months with no complaint from the other contracting party (namely the Department of Correctional Services).
The article stated as fact that SA Fence and Gate had been awarded government tenders worth “billions”, that the Integritron tender had numerous deficiencies, and that other tenderers were not considered at all. None of these statements was true.
In quoting the attorney for the Sasstec Group, the reporter omitted to state that he asked Bollo only whether the Urgent Application had been struck off the roll – he did not ask or say anything further, affording Bollo (or Sasstec) no chance to comment on the allegations in the news report.
The column
In general, Sasstec complains this text implied that it was part of the phenomenon by which “millions of these tender rands disappear into the pockets of politicians and civil servants who buy fancy German cars, houses in private estates and have offshore bank accounts”.
Reddy argues it falsely implied that:
· Gordhan’s “tender war” was against the Sasstec Group in particular – but without any reason being given for singling it out;
· the Group had somehow benefitted from tenders of R500-billion – while the actual amount is much less than that. On the contrary, companies within the Sasstec Group have been unsuccessful in tenders worth several billions – while its competitors (who went unnamed in the story) had benefitted.
He submits the column described the tender, lawfully won by Integritron, as “dodgy” while it had no factual basis to do so – and again ignored the specific answers given in court papers by Sasstec and Integritron.
The attorney says that Treasury’s own version (that Gordhan allegedly did not order the cancellation of any contract, or the blacklisting of Integritron or any of the companies within the Sasstec Group) was also not mentioned – and argues that, in fact, the opposite was rather implied.
Sasstec also complains that Basson did not give it an opportunity to comment.
Basson’s response
Introduction, background
Basson notes it is undisputed that National Treasury had investigated the awarding of a tender, had found it to be in breach of legislation and regulations, and ordered the Department of Correctional Services to cancel the awarding of the tender.
“The dispute between Sasstec and National treasury is of high public interest and News24 will continue to cover legal proceedings and other processes related to the matter,” he states.
The news story
Regarding the use of the word “orders” in the headline, Basson says that Gordhan’s letter to Masutha speaks for itself. He says this letter followed unsuccessful attempts by the OCPO to convince the Department of Correctional Services to cancel the tender in dispute. “At the heart of this lies a turf-war in over the power to award and cancel tenders. Sasstec and Minister Masutha believe they cannot be ordered to cancel the awarding of a tender by National Treasury and the OCPO. Minister Gordhan and the OCPO dispute this.”
He emphasizes that it is not for him or for this office to decide who is right and who is wrong in this matter. “The simple question before you is: was it fair and accurate to describe Gordhan’s letter as an ‘order’? We say yes.”
The editor explains that News24, at the time of publication, was not aware of the fact that Sasstec and others have brought an urgent court application against Gordhan, Masutha and others (on 10 May 2016) – to the best of his knowledge this court case was not reported in any other media. Also, none of the people concerned has notified News24 of this application. By the time the publication heard of the matter, Justice Mabuse had already struck the application off the role.
Basson also mentions Tshitangano’s report (which was at News 24’s disposal when the story was written) where it states, “The Accounting Officer must apply steps prescribed … to cancel the contract”; and, “Any fruitless and wasteful expenditure that may be incurred when cancelling this contract should be recovered from the Accounting Officer” (Basson’s emphases).
Gordhan’s letter states, “Therefore you are accordingly advised to ensure that … the contract is cancelled.” (Basson’s emphases.)
The editor adds that:
· Gordhan’s letter in Sasstec’s Notice of Motion is called “The Instruction Letter”; and
· Sasstec’s CEO, Geoffrey Greyling, twice stated under oath that Gordhan’s letter was not a “suggestion” or “advice”;
· Sasstec’s executive members and shareholders were named in the article because they undisputedly were important role players;
· at least eight paragraphs were dedicated to (accurately) presenting Greyling’s views (in his previous response to News24) – and it was stated that the CEO had declined to provide further detail on the tender due to “confidentiality limitations”;
· the word “irregular” was used by Tshitangano in his report – which is why the story used that word “in quotation marks”;
· the complaint about the use of the phrases “irregularly appointed”, made a “false declaration”, “a lack of capacity to execute the contract”, and had a “fronting relationship” with its sub-contractor is an attack on the findings of OCPO, and not on News24’s reportage;
· the use of the word “billions” came from Tshitangano; and
· the purpose of the journalist’s call to Bollo was to establish whether the matter had indeed been struck off the urgent court roll and to enquire what this would mean; also, it was not journalistic practice to provide attorneys or subjects with draft versions of an article.
The column
As a general comment, Basson stresses that this text was a column, and that it was presented as such. “There would be no doubt in the minds of readers that these were the views of one person and [that it was] not a news report.”
He emphasizes that Sections 6 and 7 of the Code of Ethics and Conduct allow strong opinions to be expressed fairly on matters of public interest. Although he denies misrepresenting or distorting facts in his column, he argues that the complaint against his text should be dismissed on the strength of the protection afforded by Section 7.2 alone – “I expressed an honestly-held opinion of great public interest without malice and reflected all material facts that [were] substantially true…”
In particular, he:
· denies implicating Sasstec in bribing politicians and civil servants – “We don’t yet have proof that this company paid bribes and would definitely not reveal such information in a column”. He says this comment was a general one, an observation about corruption in tender systems;
· submits that the Sasstec investigation was the first prominent one by the OCPO, which justified him in highlighting this tender and investigation;
· denies the column suggested that the “tender war” was only aimed at Sasstec – “the R500 billion is clearly identified as South Africa’s ‘tender budget’ and by no means [refers] to Sasstec… [It] is only mentioned way down in the column”;
· he did not have to source Sasstec’s views on the matter because it is a column; and
· the use of the word “dodgy” was justified by National Treasury’s findings (Tshitangano wrote that the tender was “irregular” and that it should be cancelled).
Analysis
The news story
The headline
News24 bases its justification for the word “orders” in the headline on Gordhan’s letter to Masutha (dated 11 April 2016). The relevant part of that letter inter alia reads as follows:
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The National Treasury has concluded the review of the bid process to verify whether the Department of Correctional Services complied with the Supply Chain management (SCM) legal framework during the bidding process. The review revealed that Integritron Integrated Solutions (Pty) Ltd was irregularly appointed on the following grounds:
In view of the above, the Accounting Officer and members of the Bid Committee failed to comply with certain provisions of the Public Finance Management Act, Treasury Regulations, instruction notes and preferential procurement regulations, 2011. Therefore, you are accordingly advised to ensure that: · The contract is cancelled; · Integritron Integrated Solutions (Pty) Ltd and its associates are restricted from conducting business with government; and · Investigate disciplinary charges against members of the Bid Committees and the Accounting Officer. |
The parties, interestingly enough, use the same text to justify their arguments. For example, Sasstec underlines the word “advised” (“to ensure”), while Basson stresses (“advised to”) “ensure”.
The editor raises some other interesting points, for example that Sasstec’s CEO also called Gordhan’s document an “instruction” (which is true).
Be that as it may, as Basson rightly states, it is not for this office to determine whether or not Gordhan has the right to order the cancellation of a tender – my sole task is a journalistic one, namely to determine whether News24 was justified in stating in its headline that Gordhan has “ordered” Masutha to cancel the contract.
To come to a reasonable decision in this regard, I need to consider the letter as a whole, and not only individual words such as “advised” or “to ensure”. These words, to be sure, were used in a very specific context.
To be specific, Gordhan mentioned four issues in pointing out to Masutha that the Department of Correctional Services had failed to comply with certain provisions of the Public Finance Management Act and other regulations.
Then came the words in dispute: “Therefore, you are accordingly advised to ensure that…”
Initially, I interpreted these words as a polite way to in fact make sure that the contract was cancelled – in other words, that Treasury did order the Department of Correctional Services to act in a certain way, even though this order was covered in politeness.
The only nagging issue was Reddy’s assertion that Treasury / Gordhan had denied that an “order” was given. I therefore asked Sasstec for proof to this effect.
Reddy pointed me to the following documents / statements:
· In Tshitangano’s answering affidavit, par. 23, and referring to Gordhan’s letter to Masutha, he wrote that the former had “[advised Masutha] to consider…cancelling the contract [Integritron] and its associates and further to investigate disciplinary charges against the members of the Bid Adjudication Committee”;
· In par. 31 of the same document, Tshitangano said, “Furthermore, the letter advises [Masutha] to consider cancelling the service level agreement”;
· In his supplementary answering affidavit, Tshitangano stated, “[I] have already stated before that the letter was an advice to [Masutha] to consider the options referred to therein and it was up to him if he agreed or not”;
· Adv Tukuta, who appeared in court on 10 May 2016 on behalf of Gordhan in the matter between SA Security Solutions & Technology & Others against the Minister of Finance & Others, confirmed that National Treasury did not have the authority to cancel the contract or to blacklist the company (page 46 of the transcript);
· On page 51 of the same document, Tukuta stated that National Treasury had never threatened to cancel any contract; and
· On the next page, Tukuta reiterated that there had been no threat to blacklist any company.
Reddy concludes, “In light of the above, it is clear that not only has the National Treasury denied having instructed and/or ordering the Department of Correctional Services to cancel the contract but the National Treasury (also) denied any authority to do so.”
These statements made this matter even more interesting, and complicated – on the one hand, Sasstec’s CEO (Geoffrey Greyling) twice stated under oath that Gordhan’s letter was not a “suggestion” or “advice”; on the other hand, both Tshitangano and Tukuta testified the opposite.
After due consideration, I am convinced that the testimonies of the latter two should carry more weight (not because they were two against one, but because of their respective positions) – which leads me to believe that it was wrong for News24 to state as fact that Gordhan had “ordered” Masutha to cancel the contract.
However, I hasten to add that I do not blame News24 for this mistake, given the fact that Gordhan’s letter could have been interpreted in more ways than one, in addition to Greyling’s assertion to the effect that the letter was not merely “advice”.
While this issue needs to be corrected, my sympathy for the publication will be reflected in the sanction which is to follow.
I also need to point out that the journalist who wrote the story did not write the headline. Therefore, the complaint that Areff had a “biased motive” with regards to the headline cannot even be considered.
‘Irregular tender’ awarded to Integritron, etc
The words in dispute are an “irregular tender”, “irregularly appointed”, made a “false declaration”, that there was “a lack of capacity to execute the contract” at Integritron, and that it had a “fronting relationship” with its sub-contractor.
As the editor correctly points out, the words in question were used in OCTO’s report as well as in Gordhan’s letter. Moreover, those words were properly attributed, and not stated as fact.
Tenders worth ‘billions’, etc
The relevant sentences read:
· “Another Sasstec company, SA Fence and Gate, has been awarded government tenders worth billions by Eskom, DCS, and the Passenger Rail Agency of SA…” and
· “Despite numerous deficiencies with its tender, ISS’s bid was the only one considered by the department when it awarded the lucrative contract…”
Even though Basson argues the information that SA Fence and Gate was awarded government tenders worth billions came from OCPO, the story stated this, as well as the other allegations mentioned above, as fact. These statements should have been properly attributed as well.
Omitting relevant information:
Gordhan denied ‘order’
The complaint is that the story failed to state that Treasury (and therefore also Gordhan) had denied instructing or ordering the Department of Correctional Services to cancel the contract.
I have already dealt with this issue above.
Sasstec questioning ‘facts’
Sasstec complains News24 had failed to mention that it had questioned the “facts” in the court proceedings, or the basis for such questioning.
The story was not a court report; neither did it attempt to reflect all aspects of the dispute(s) – the focus of the story was Gordhan’s order.
Treasury ‘conceded’
Sasstec complains the article omitted Treasury’s concession that it did not consult the Sasstec Group or grant Integritron the opportunity to be heard before reaching its conclusions.
The same argument as above is valid here.
Reputational damage
Given all of the above, it can be argued that the story has caused some unnecessary harm to Sasstec’s reputation – even though I do not believe for one moment that News24 has caused this harm intentionally.
No proper right of reply
This part of the complaint has no leg to stand on – Sasstec’s CEO was given a proper right of reply, and his response was duly published.
The column
Millions disappear
The complaint is that the text insinuated that Integritron, the Sasstec Group and its associates were part of the phenomenon by which “millions of these tender rands disappear into the pockets of politicians and civil servants who buy fancy German cars, houses in private estates and have offshore bank accounts”.
The third and fourth sentences of the column read:
“At the heart of the latest high-stakes war between Gordhan and the government is South Africa's R500bn tender budget that should be used to deliver basic services by procuring goods and services that will create jobs and lift millions of people out of poverty. Unfortunately, millions of these tender rands disappear into the pockets of politicians and civil servants who buy fancy German cars, houses in private estates and have offshore bank accounts.”
This was a general statement about tender corruption, involving the whole of South Africa – which is why the very next sentence stated, “Willie Hofmeyr, the former head of the Special Investigating Unit (SIU), told Parliament in 2011 that corruption cost the country about R25bn per year (the value of 250 000 low-cost houses).”
Only much later did Basson mention Sasstec.
I also need to take the editor’s submission seriously that the Sasstec investigation was the first prominent one by the OCPO, which justified him in highlighting this tender and investigation – as well as Gordhan’s statements in his letter to Masutha.
Therefore, I do not believe that the statement in question was in breach of the Code of Ethics and Conduct in any way.
‘Tender war’
Sasstec complains that the column depicted Gordhan’s “tender war” as being against the Sasstec Group in particular – but without any reason being given for singling it out.
The text in question, though, mentioned South Africa’s “tender budget” of R500-billion – which is all-inclusive language, involving the whole country. I submit that Sasstec reads too much into this aspect of the text.
Benefitting from tenders of R500-billion
The same argument is valid here.
‘Dodgy’ tender
Given the fact that Tshitangano wrote that the tender was “irregular”, I believe that News24 was justified in using the word “dodgy” – especially in the context of a column, where the commentator enjoys much freedom (given Section 7 of the Code).
Ignoring Treasury’s version
By the time Basson wrote his column, Tshitangano’s and Tutuka’s testimonies were in the public domain – which meant that he should have taken this into account (which he did not do). Section 7.2.4 of the Code of Ethics and Conduct clearly states that comment is protected “as long as it … has taken fair account of all material facts that are substantially true”.
Please note that the editor did not have to agree with the veracity of those testimonies – all he should have done, was to refer to them.
No opportunity to comment
Given the fact that the text was a column, Basson was not obliged to ask Sasstec for comment.
Conclusion
In conclusion, I need to quote Section 7 of the Code of Ethics and Conduct in full:
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7. Protected Comment 7.1. The media shall be entitled to comment upon or criticise any actions or events of public interest. 7.2. Comment or criticism is protected even if extreme, unjust, unbalanced, exaggerated and prejudiced, as long as it: 7.2.1. expresses an honestly-held opinion, 7.2.2. is without malice, 7.2.3. is on a matter of public interest; 7.2.4. has taken fair account of all material facts that are substantially true; and 7.2.5. is presented in such manner that it appears clearly to be comment. |
Basson argues that his column is protected by this section. While a column is (of course) not automatically protected just because it contains someone’s views, I agree with the editor that he adhered to the Code, with one exception – he had not taken fair account of the fact that both Tshitangano and Tukuta had denied that Gordhan’s letter to Masutha was an “order”.
Finding
The news story
News24 wrongly stated as fact that Gordhan had “ordered” Masutha to cancel a contract. This is in breach of Section 1.1 of the Code of Ethics and Conduct which says, “The media shall take care to report news truthfully, accurately and fairly”.
The following sentences were portrayed as fact, while in fact they should have been ascribed to a (credible) source:
· “Another Sasstec company, SA Fence and Gate, has been awarded government tenders worth billions by Eskom, DCS, and the Passenger Rail Agency of SA…” and
· “Despite numerous deficiencies with its tender, ISS’s bid was the only one considered by the department when it awarded the lucrative contract…”
This was in breach of Section 1.1 of the Code of Ethics and Conduct.
The rest of the complaint is dismissed.
The column
Basson should have mentioned that National Treasury, through Tshitangano and Tukuta, had in fact denied that Gordhan’s letter to Masutha constituted an order (without necessarily having to agree with their interpretation). This omission was in breach of Section 7.2.4 of the Code (as quoted above).
The remainder of this part of the complaint is dismissed.
Seriousness of breaches
Under the headline Hierarchy of sanctions, Section 8 of the Complaints Procedures distinguishes between minor breaches (Tier 1), serious breaches (Tier 2) and serious misconduct (Tier 3).
The breaches of the Code of Ethics and Conduct as indicated above are Tier 2 offences.
Sanction
News24 is:
· reprimanded for:
o omitting to state, both in the story and in the column, that National Treasury (through Tshitangano and Tukuta) had denied giving the Department of Correctional Services an order of any kind;
o stating the allegations as fact that SA Fence and Gate had been awarded government tenders worth millions by Eskom, DCS, and the Passenger Rail Agency of SA, and that despite numerous deficiencies with its tender, ISS’s bid was the only one considered by the department when it awarded the contract; and
· directed to publish a suitable correction to the first issue and to clarify the second matter.
The text should:
The headline should reflect the content of the text. A heading such as Matter of Fact, or something similar, is not acceptable.
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 Ombud