Complainant: Lance Rothschild
Lodged by: Lance Rothschild
Article: Time to send a message that abuse of retirement savings must end
Author of article: Cameron
Date: 11 February 2014
Respondent: Personal Finance
Rothschild complains about an article headlined Time to send a message that abuse of retirement savings must end, published in Personal Finance on 11 January 2014.
(He is the PR manager of Mr Simon Nash, executive chairman of the Cadac Pension Fund which Johannesburg High Court Judge Caroline Heaton-Nicholls placed under the curatorship of Mr Tony Mostert on 13 December 2013.)
Rothschild complains that the article:
- contained several inaccurate, biased facts (details below); and
- misrepresented and suppressed important facts (details below).
He also complains that the headline was pejorative, and that Nash was not asked for comment.
LIMITATIONS; BOUNDARIES; UP-FRONT DECISIONS
I need to make several observations before I can start to adjudicate this matter:
As there are court cases pending on the matters addressed in the article, I need to be careful not to interfere in these matters. Section 1.6 of the Complaints Procedures says: “Where at any stage on the proceedings it emerges that proceedings before a court are pending on a matter related to the material complained about…the Ombudsman…shall forthwith stop the proceedings…”
On the other hand, part of the article was about a verdict that the court had handed down (in December 2013) on a specific matter. Clearly, this part of the complaint should be allowed.
I am mindful of the fact that, throughout this ruling, I need to rigorously apply this distinction and mainly concentrate on what Cameron wrote regarding Judge Heaton-Nicholls’s verdict (the rest may easily have a bearing on court cases). If I am going to err in this regard, it will be on the side of caution.
Secondly, Rothschild refers to bias on the journalist’s part in the past. Section 1.3 of the Complaints Procedures states that a complaint should be made not later than 20 working days after the date of publication. (Exceptions to this rule may be made, within reason.) This means that the references to the reporter’s alleged bias fall outside my mandate. Therefore, I shall omit this part of the complaint in my ruling that is to follow.
Likewise, with reference to several “incidents” in the past Personal Finance argues that Rothschild’s complaint is vexatious and malicious, and implores me to reject the complaint on that basis. That I will also not do. It is clear to me that there is a huge amount of animosity between Nash and Mostert, and that animosity has in all probability spilt over to ill-feelings against Cameron – yet this fact does not preclude Rothschild from lodging a complaint against him with this office.
Also, I need to keep in mind that the text is more than mere hard news – it is, in fact, mostly comment (the matter has been reported on before, in Personal Finance).
Hard news should be accurate, truthful and fair, and it requires balance and context. Information should be verified, where necessary, and the journalist should seek the views of the subject of serious critical reportage prior to publication (Section 2 of the Press Code).
On the other hand, Section 7 of the Code is about comment. This reads:
- 7.1: “The press shall be entitled to comment upon or criticise any actions or events of public interest provided such comments are fairly and honestly made”;
- 7.2: “Comment by the press shall be presented in such manner that it appears clearly that it is comment, and shall be made on facts truly stated or fairly indicated and referred to”; and
- 7.3: “Comment by the press shall be an honest expression of opinion, without malice or dishonest motives, and shall take fair account of all available facts which are material to the matter commented upon.”
I am also cognisant of the ruling of the Constitutional Court (Judge Edwin Cameron) in the case of Robert McBride vs. The Citizen, where he said: “Criticism is protected even if extreme, unjust, unbalanced, exaggerated and prejudiced, as long as it expresses an honestly held opinion, without malice, on a matter of public interest on facts that are true.”
I need to constantly distinguish between hard news and comment while adjudicating this complaint.
Lastly, Rothschild does not mention that he complains on behalf of Nash. The article only mentions him once, yet his complaint is largely about Nash. My initial question was if he had the standing to complain on behalf of Nash. As he is Nash’s PR manager, though, I give him the benefit of the doubt on this issue.
I shall now proceed with the necessary caution.
The article, written by Cameron, was about the Johannesburg High Court’s judgment by Judge Heaton-Nicholls that confirmed Mostert as the curator of the Cadac Pension Fund (which was placed under provisional curatorship in December 2010).
Statements in dispute (incorrect and omitted facts)
Rothschild complains about the following sentences:
- “In the process, [Nash] and his camp, which includes his wife, Elena Forno-Nash, have used nearly every tactic available, including, in my view, those that are unlawful, launching one of the most vicious smear campaigns I have witnessed. Nash blatantly, and without foundation, tried to smear the characters of some very honourable people, including Dube Tshidi, chief executive of the Financial Services Board…”
Rothschild complains that Cameron deliberately refrained from publishing defamatory facts about Mostert and Tshidi, notwithstanding that he and Nash have provided the editor with “vast quantities” of documents proving those facts. He adds that Cameron dismissed facts and opinion contrary to his as a smear campaign (his opinion that some of this campaign was unlawful was unjustified and unsubstantiated).
He also argues that Cameron failed to report on a conflict of interest on Mostert’s part (he used his own law firm in curating the Fund), adding that the latter had engaged in lavish litigation which could also have been construed as an abuse of retirement funds.
Cameron denies any knowledge of such “facts” about Mostert and Tshidi, and argues that there is ample evidence to support his comment regarding the smear campaign. He cites several statements on the pensionfundscam website to support his conviction. In addition, he mentions that on 9 September 2011 the National Treasury issued a press statement on an “orchestrated smear campaign against the FSB”, amongst others by Nash. He also refers to an email sent from firstname.lastname@example.org under the pretence that he was the author of this message in which he “stated” that he will forever support his buddies at the FSB.
“I can provide numerous other examples of the ongoing smear campaign, but will do so if it becomes necessary.” He concludes that describing the smear campaign as unlawful was completely justified.
Lastly, Cameron admits that he did not report on the court’s judgment as such, but (as usual) merely commented on retirement fund abuse. He says he regarded the court’s displeasure with Mostert being curator and also being a partner in AL Mostert Inc attorneys “as unnecessary in the context of my article”.
I take into account that the text was an article, an opinion piece, much more that it was hard news. This implies that the text may have had one single point of focus, rather than trying to cover the whole verdict of Judge Heaton-Nicholls.
The failure to mention conflict of interest on Mostert’s part should be understood in this context. Also, I note that Cameron already reported on this specific matter.
Given all the examples that Cameron supplied me with, I submit that he was justified in using the term “smear campaign”. This is not to say that I am finding that there in fact is such a campaign going on – I merely say that, given his experiences, it was reasonable for him to have used this phrase.
- “What makes the smear campaign worse is that it was a deliberate tactic on the part of Nash to distract the public. This fact is revealed in email evidence that was provided to Johannesburg High Court Judge Caroline Heaton-Nicholls, who confirmed Mostert’s appointment as curator in December”
Rothschild complains that the use of the phrase “smear campaign” was pejorative, and that the statement that this campaign was a deliberate ploy to distract the public was unjustified. Again, the editor disregarded information provided to him. He adds that the statement about a “smear campaign” by Nash to distract the public was an opinion not based on any facts.
Cameron says that Judge Heaton-Nicholls, in paragraph 69 of her judgment, refers to a “counter strategy”; the government used the phrase “smear campaign” as far back as 2011. “The extent of the smear campaign was such that criminal charges were considered and that legal action is still in the pipeline. It is certainly deliberate on the part of Nash and his associates.”
I have already commented on the use of the phrase “smear campaign”. Insofar as legal action regarding this matter may be in the pipeline, I am not going to add anything to what I have already stated.
- “In terms of her judgment, punitive damages were awarded against Nash, Forno-Nash and a number of others in the camp”
Rothschild complains that this reportage was unbalanced because Cameron failed to refer to the cost order against Mostert (including a ruling about Mostert’s use of his own law firm to litigate).
Cameron replies that no punitive order was made against Mostert, but in one application his costs were disallowed. This related to only a portion of the case, which was not germane to the theme of his article. He says that he reported on the order against Mostert not to use his law firm on 14 December 2013.
Again, I have already said that it is in the nature of an opinion piece to focus on one, main issue. It follows that I am not going to decide that the text was unbalanced in this regard either.
- “The sad thing about this is that Nash and his equally unpleasant spin-doctor, Lance Rothschild, did manage to mislead a number of high-profile journalists, who, in my view, did not do their homework. But a number of other journalists did, much to the chagrin of Nash, with the result that some of them were also smeared”
Rothschild complains that this comment was unsubstantiated.
Cameron says that not only he, but also National Treasury spoke out against journalists “who fell for the Nash spin”. He also refers to a financial columnist who claimed that the stripping of surpluses was legal at the time – which was found not to be the case in a number of criminal conviction judgments as well as in the judgment of Judge Heaton-Nicholls.
This was Cameron’s opinion, to which he certainly was entitled – rightly or wrongly.
- “Personal Finance has followed and reported on the surplus-stripping saga that involved seven retirement funds in the 1990s. For this, we have had our integrity attacked. Six people have been convicted of fraud and other offences; others are facing criminal charges”
This falls outside the scope of my mandate as it has no direct bearing on the verdict by Judge Heaton-Nicholls.
- “The good news is that Mostert has recovered almost R1 billion, with R760 million earmarked for distribution, of which some R600 million is being paid to former members of the funds that were hit by the surplus-stripping”
This falls outside the scope of my mandate, for the same reason mentioned above.
- “The problem is that attacks on the savings of retirement fund members are continuing. Some of these attacks involve illegal activities, but others skirt within the law. For example, uncontrolled conflicts of interest, which create additional but hidden costs, will dramatically reduce members’ retirement benefits”
This also falls outside the scope of my mandate.
Rothschild complains that the headline was pejorative and misleading, as the largest “abuse of retirement funds” were being perpetrated by Mostert himself.
Cameron replies that the headline accurately reflected what was contained in the article, and that the abuse of retirement funds has been confirmed by the judgment of Judge Heaton-Nicholls.
The editor is correct – the headline merely reflected what the article said. As I have already ruled that the content of the text was within the boundaries of the Press Code, it follows that I shall do the same with regards to the heading.
Not asked for comment
Rothschild complains that Cameron did not ask Nash for comment.
The editor replies that, notwithstanding Nash’s repeated statements that he would not respond to questions from him, he in fact did send him a list of questions on 14 December 2013 regarding the judge’s verdict.
It is not normal journalistic practice to ask for comment in an opinion piece. However, nothing prevents a journalist from doing so. The fact that Cameron did try to elicit comment from Nash was commendable, but not necessary.
The newspaper has done nothing wrong, and accordingly the complaint is dismissed.
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 Adjudication Panel, Judge Bernard Ngoepe, fully setting out the grounds of appeal. He can be contacted at Khanyim@ombudsman.org.za.