Pasco Risk Management vs The Star

Complainant: Pasco Risk Management

Lodged by: Mark Welman

Article: Commission clears land-deal councillors – Probe results disagree with auditing firm’s initial findings

Author of article: Anna Louw

Date: 22 October 2010

Respondent: The Star


Auditing firm Pasco Risk Management complains about a story in The Star, published on July 26, 2010, and headlined Commission clears land-deal councillors – Probe results disagree with auditing firm’s initial findings.
Pasco complains that:
·        it is not true, as the story states, that the Nupen report rejected its findings regarding cllrs Mahomed Akoon, Izak Berg and Leon von Ronge;
·        the reportage on cllr Neil Diamond is not consistent with the Nupen report;
·        the two sentences stating that the Nupen report exonerated all five councillors are inaccurate and misleading;
·        it is incorrect and misleading to paint a picture that Nupen’s findings mostly contradicted those of Pasco; and
·        the headline is misleading.
Note that Pasco, after the submission of its initial complaint (the third and fourth parts of the complaint as listed above), added new aspects to it. The Star did not object to this. The newspaper was given an opportunity to respond to these additions, but chose not to do so.
The argument will flow more logically if the initial complaint is analysed after the adjudication on the Akoon, Berg, von Ronge and Diamond issues.
The story, written by Anna Louw, is about five Ekurhuleni metro councillors who were found guilty of wrong-doing by Pasco, but who were subsequently exonerated by the Charles Nupen Commission. The story says Nupen found Pasco’s allegations with regards to the councillors to be “without substance”. The councillors, including Akoon, Berg, von Ronge and Diamond, were mostly accused by Pasco of conflicts of interest in a controversial Meyersdal land deal. The story is based on the Nupen report, but focuses on the findings regarding some councillors.
We shall now consider the merits of the complaint:
Cllrs Akoon, Berg and von Ronge
Pasco says it is not true, as the story states, that the Nupen report rejected its findings regarding the councillors mentioned above.
A comparison between the story and the Nupen report is therefore now necessary.
With respect to Akoon, Pasco quotes the Nupen report that stated: “The delegation from the Council to the CAPC (Corporate Affairs Portfolio Committee) was unlawful but if responsibility is to be apportioned…then that should be a collective responsibility of Council.”
From this, Pasco makes the following points:
·        It says the reporter completely missed the key point, namely that the delegation of powers was unlawful. This, Pasco says, should have been reported as it is in the public interest to know that something unlawful had indeed occurred; and
·        It says Nupen’s conclusion that it would be unfair to act against Akoon is not because Pasco got it wrong, but because this is a matter of shared responsibility (the entire Council should be charged).
Pasco continues: “In fact, Nupen notes that Akoon himself somewhat conceded wrongdoing but claimed that this had not been intentional and questioned whether he was ‘being made a scapegoat for decisions taken by a collective’.” From this, Pasco concludes that Akoon’s scapegoat claim amounted to an admission that something irregular had occurred.
Let me say in passing that, if the Council’s actions were unlawful, it is indeed strange that Pasco did not recommend legal action against it (assuming that the Nupen report is correct on this matter).
Be that as it may, the following matters need to be considered:
·        It is true that the Nupen report mentioned an illegal activity, but it also went on to say that Akoon with his fellow councillors “may arguably stand accused of a lack of diligent oversight of the information provided by officials and the recommendations made to them, but that does not necessarily constitute a contravention of clause 2 of the Schedule”. (emphasis added)
·        It is not true that Nupen said that Akoon himself had conceded wrongdoing. This was what Nupen had to say about the matter: “He (Akoon) did not believe at the time that he or his fellow Councillors on the CAPC were acting unlawfully or indeed that the delegation by the Council was unlawful.”
·        Pasco’s scapegoat argument is flimsy as it does not necessarily imply an admission of guilt.
A reasonable conclusion will be that the story reported fairly on Akoon, but neglected to report the finding that the Council was acting illegally (Nupen found that its delegation to the CAPC was unlawful).
When taken into account that the focus of the story is on the councillors and not on the Council, it is difficult to see how this (unfortunate) omission can constitute a breach of the Press Code – the newspaper was under no obligation to summarise Nupen’s report.
With reference to Berg, Pasco says that the story:
·        does not reflect the “considerable debate within the Nupen report” regarding whether Berg was obliged to declare certain personal commercial interests as a councilor; and
·        omits Nupen’s conclusion that declaration forms of the Ekurhuleni Metropolitan Municipality (EMM) are “clearly misleading and inviting Councillors not to comply with their legal obligations…”.
Firstly, it would not be reasonable to ask a newspaper to reflect the “considerable debate” within the confines of the space that the newspaper had at its disposal – and especially in light of Nupen’s findings with regards to Berg. These findings are:
·        “There is no evidence to suggest that he gained an improper advantage over others by virtue of his position as a councilor… I consequently conclude that there is no substance to this allegation against cllr Berg.”
·        “…cllr Berg was under no obligation to disclose his interest in the Meyersdal Nature Area (MNA) property until he had taken transfer and therefore ownership. As it happens he did file a declaration…disclosing his interest in the properties for which he and his wife had concluded an offer to purchase in the MNA but which they had not yet taken transfer of.”
Secondly, Nupen’s finding regarding the EMM’s declaration form, which is “clearly misleading” (in that it was “inviting councillors not to comply with their legal obligations”), had no direct bearing on the five councillors mentioned in the newspaper’s story or on Pasco’s findings. The declaration form is EMM’s and not the councillors’. Again, the story’s focus is not on the Council. The omission of this aspect can at most be called unfortunate.
Pasco says regarding von Ronge: The story does not reflect Nupen’s statement that he would have required more information to make a finding on this matter. Besides, Pasco adds, Nupen said comments made by von Ronge (regarding the possible suspension of officials) were “intemperate” and in need of “further explanation as to intent and impact”. (Pasco interprets von Ronge’s comments as a call to officials not to co-operate with Pasco and the Meyersdal investigation.) It concludes: “Again, this is hardly a complete vindication of von Ronge.”
However, Nupen’s finding was that “there is no substance” to the allegations levelled against von Ronge and that there is therefore no basis to proceed against him.
Von Ronge’s comments may have been intemperate, but a careful reading of the text reveals that his statements were not an attempt to influence officials not to co-operate with Pasco (as Pasco clearly believes). Even though von Ronge was critical of Pasco, he also said:
·        “So please give support, focus on your job.”
·        “…but the bottom line is that we do give support (to Pasco’s investigation).”
Von Ronge denied that these comments were a call to officials not to co-operate with Pasco and the Meyerdal investigation. (The Nupen report said that von Ronge had been particularly aggrieved that Pasco did not reflect his side of the story in its report.)
Judged within the context of all the accusations leveled against him that he was exonerated from, it was reasonable for the newspaper to completely vindicate him.
It has to be noted that, as far as all three of the above-mentioned councillors were concerned, Nupen stated: “I exonerated the councillors cited above…”
My overall conclusion is that the story did justice to the report regarding these three councillors.
However, Pasco is correct in that the public should have been informed about Nupen finding that Council was involved in an illegal activity, as well as his finding with regards to EMM’s declaration form.
Reportage on Diamond inconsistent with Nupen report
Pasco complains that the story wrongly quotes the Nupen report when it states that “…Diamond had been instructed to amend a Council item…and was bound by the ANC caucus decision, and he would have been subjected to caucus discipline if he had failed to comply…” Pasco says its problem lies with the part of the sentence that states that Diamond was bound by the ANC caucus.
However, the report stated that Diamond himself had explained to Nupen that he was under the instruction of the ANC chief whip.” To be “bound by the ANC caucus decision” as the story says and to be “under the instruction of the ANC chief whip” is materially the same thing. Also note that the sentence in dispute is not a direct quote from the Nupen report.
This makes the newspaper’s reportage on this matter reasonable.
Pasco also says that the newspaper should have reported the following sentences in Nupen’s report regarding Diamond:
·        “Cllr Diamond failed to comply and he should accordingly be charged with a contravention of clause…”
·        “Cllr Diamond…used his position as a councilor for private gain…and should be charged as such.”
The story says that Diamond was a member of the committee that decided to alienate property; he was also a 20% shareholder in the company that owned and developed land in Meyersdal.
The question now is whether or not the reportage was reasonable, accurate and fair by omitting the fact that Nupen agreed with two of Pasco’s findings regarding these matters.
Nupen agreed with Pasco with regards to the following: that Diamond should have withdrawn from proceedings of Council (which he did not do), but instead proposed an item to ratify land alienation which included Meyersdal land; and that Diamond used his position as councilor to further his own business interests.
Let’s take a look at what the story says, and at what it does not say.
It says that:
·        the report “exonerates him against allegations made against Diamond by Pasco, as the overwhelming allegations made by Pasco against Diamond are without substance.”
·        The story mentions that Diamond’s circumstances “were different from those of the other councillors” in that he stood to gain as an estate agent from the land transactions.
It does not say that:
·        Nupen found Diamond to be guilty of two allegations levelled against him; and
·        Nupen recommended that Diamond should be charged on account of both these allegations.
The only reasonable conclusion to come to is that the story does not reflect Nupen’s findings regarding Diamond truthfully, accurately and fairly.
Two inaccurate, misleading sentences
Pasco complains that the following sentences in the story are inaccurate and misleading:
  • Five Ekurhuleni metro councillors investigated for allegations of wrong-doing…have been cleared by an independent commission.” (emphasis added)
  • “Nupen found there was no evidence against any of the five councillors to support a report by auditing firm Pasco…” (emphasis added)
The Star admits that the first sentence (which is also the intro to the story) “may have been misleading or caused confusion”, as Nupen indeed “cleared all councillors but also found that there were irregularities as far as…Neil Diamond…was concerned”. The newspaper however hastens to add that the substance of the story makes up for this when the article is read in its entirety.
The first sentence borders on the truth – but when read in context with the second sentence (one sentence later), it becomes untruthful.
The second sentence is clearly inaccurate.
This time, these omissions form part of the focus of the story. There is no conceivable reason why these sentences should not have been written with more circumspect.
It has to be said that the mentioning of Diamond’s “different circumstances” later on in the story does bring some balance to the article – yet that does change the fact that the sentences in dispute are inaccurate.
Contradictory to Pasco’s findings
Pasco says that a reading of Nupen’s report “clearly indicates that in many respects he supports Pasco’s findings” – particulary with respect to Diamond.
This is not true. On the contrary. Nupen’s report contradicted Pasco’s findings with regards most issues. This included his findings on Akoon, Berg and von Ronge. The story says there were nine allegations against Diamond – Nupen agreed with Pasco on only two of these.
Pasco says the headline is misleading.
The headline, however, does not say that all he accused councillors were cleared, it says: Commission clears land-deal councillors. That is what the story also says. And it is true.
The same goes for the subheading (Probe results disagree with auditing firm’s initial findings).
Cllrs Akoon, Berg and von Ronge
Nupen’s ultimate conclusion was that he had exonerated cllr Akoon, Berg and von Ronge. Besides, the story is about councillors and not about Council. This part of the complaint is therefore dismissed.
The omissions with regards to Council’s alleged illegal activity and EMM’s declaration form are unfortunate, but not in breach of the Press Code (as the focus of the story is on the councillors and the purpose of the story is not to summarise Nupen’s report).
Reportage on Diamond inconsistent with Nupen report
The complaint that it was wrongly reported that Diamond was instructed by the ANC caucus to amend a Council item is dismissed (as Diamond himself explained that he was under the instruction of the ANC whip).
The newspaper should have reported that Nupen found Diamond to be guilty of two accusations and not only one, and that he should have been charged on account of both these allegations. These are material omissions and are in breach of Art. 1.2 of the Press Code that states: “News shall be presented in context and in a balanced manner, without any intentional or negligent departure from the facts whether by…material omissions…”
Two inaccurate, misleading sentences
The two sentences in dispute are not accurate and, in this case, also not fair to Pasco. This is in breach of Art. 1.1 of the Press Code that states: “The press shall be obliged to report news truthfully, accurately and fairly.”
Contradictory to Pasco’s findings
This part of the complaint is dismissed.
The headline
This part of the complaint has no basis and is therefore dismissed.
The newspaper is directed to publish the fact that Nupen agreed with Pasco on two of its findings regarding Diamond (the content of these findings should also be mentioned) and that Nupen also said that Diamond should have been charged on account of both these allegations.
The newspaper is directed to publish a correction to the effect that not all councillors were cleared by the Nupen report.
The newspaper is reprimanded for the above-mentioned breaches of the Press Code.
The newspaper is directed to publish a summary of the finding and the sanction. The text should be published prominently on page 3. Our office should be furnished with the text prior to publication.

Please add the following sentence at the end of the text: “Visit (rulings, 2010) for the full finding.


Please note that our Complaints Procedures lay down that within seven days of receipt of this decision, anyone of the parties may apply for leave to appeal to the Chairperson of the SA Press Appeals Panel, Judge Ralph Zulman, fully setting out the grounds of appeal. He can be reached at
Johan Retief
Deputy Press Ombudsman