Limpopo Office of the Premier vs Sunday Independent

Complainant: Limpopo Office of the Premier
Lodged by: Mr P Mosomane
Article:  Golden handshakes for those who stood against corruption
Date: 31 May 2012
Respondent: Sunday Independent
COMPLAINT

The Premier’s office complains about the following stories on the front page and also inside the Sunday Independent on 22 January 2012, headlined:

·         Inside Limpopo Rot;

·         Golden handshakes for those who stood against corruption;

·         Timeline of Limpopo’s financial and government ‘collapse’; and

·         How tenders corrupted public officials.

Mr Phuti Mosomane complains that the stories inaccurately state that:

·         Limpopo government changed payment schedules against National Treasury regulations (first story);

·         Mr Rob Tooley was removed “despite the clean audits that he received” (second and third stories);

·         several senior civil servants received a golden handshake (to leave their posts) because they were deemed disloyal to premier Cassel Mathale (second story);

·         Mathale met the Forum of Limpopo Entrepreneurs (Fole; third story);

·         the Limpopo government failed to pay civil servants in September (third story); and

·         tenders were awarded without advertising them (fourth story).

ANALYSIS

The stories relate to certain conduct and practices of Limpopo provincial government officials described as corrupt.

Against regulations

The sentence in dispute reads: “Payment schedules were also changed from 30 days to twice a week, which is against National Treasury regulations, in order to fast-track cash-flow to certain companies.” (emphasis added)

Mosomane quotes National Treasury Regulation 8.2.3 that states: “Unless determined otherwise in a contract or other agreement, all payments due to creditors must be settled within 30 days from receipt of an invoice or in the case of civil claims, from the date of settlement or court judgment.”

He says that payment may be made as many times as necessary at any time within 30 days if genuine and correct invoices are submitted and approved. Non-compliance can only occur if payment is made after 30 days. The regulations do not in any way prescribe the minimum or maximum payment schedules that a provincial treasury can make in any period. “It therefore follows that the report is incorrect and does not give a true interpretation of the National Treasury Regulations.”

The Sunday Independent refers to a summary report of the intervention team of the Finance Minister, which states: “Limpopo paid certain service providers eight times a month. This frequency did not allow proper verification nor did it permit proper management of cash. The practice will not continue as it leads to bad business practice.”

Mosomane replies that the treasury regulations do not stipulate what the newspaper claims, and there was therefore “no basis for the paper to quote non-existent regulations”.

The newspaper’s reference to the intervention team’s report does not assist – this report referred to the frequency of payment which was considered a “bad practice”. No mention was made of the province being in breach of any regulation. The Sunday Independent has not provided any information which shows that the province has breached the National Treasury regulations by making frequent payments.

I therefore have no reason to conclude that the statement in dispute is accurate.

Tooley removed despite clean audits

The story says that former Provincial Treasury head Rob Tooley was put on ice before being replaced “despite his department receiving clean audit reports for two consecutive years”.

Mosomane complains that it is factually incorrect to say that Tooley received clean audits – he never did. He adds in later correspondence that “clean audit” and an “unqualified audit report” are two different outcomes of auditing which cannot be used interchangeably.

The Sunday Independent says that the provincial treasury had received a qualified report in the 2007/2008 financial year. Subsequent to Tooley’s appointment, however, the finances had improved and the department received unqualified reports for two consecutive years.

The newspaper accepts there is a difference between “unqualified” and “clean” audits, but says that this is merely academic.

I have asked three experts in the field as to what the differences are between a clean audit and an unqualified report. They all agreed that the two are in fact synonymous.

A fourth expert, however, said that a clean audit is financially unqualified with no findings on reporting on predetermined objectives and compliance with laws and regulations; an unqualified audit is an opinion which shows internal control shortcomings, related to reporting on predetermined objectives and/or compliance with laws and regulations.

So I asked for more clarification from both newspaper and Mosomane.

The latter explained that a clean audit outcome is when the financial statements are free from material errors or omissions (financially unqualified audit opinion) and there are no material findings on performance objectives or compliance with laws and regulations; a financially unqualified audit opinion is when the financial statements contain no material misstatements. “Unless a clean audit outcome, findings have been raised on predetermined objectives and/or compliance with laws and regulations.”

Sunday Independent argued that the story was saying that the word “clean” was used in the context of the Auditor General being satisfied with the adherence to the rules of financial reporting. “This was the intention of our sentence, and cannot be confined to the technical distinction – which is an accounting parlance – between clean and unqualified.” The newspaper said the gist of the complaint is that the story had inaccurately stated that there was no problem with the bookkeeping under Tooley. “We are saying the opposite” – it is not about the distinction between clean and unqualified, but between good and bad bookkeeping.

Even if I accept that there is a difference between a clean audit and an unqualified report, Mosomane’s definitions above are so close to each other that they may at the very least be regarded as nearly synonymous.

I also take into account that “shortcomings” (which are in unqualified reports, but are absent in clean audits) have to be within an acceptable margin of error in order to qualify for an “unqualified report” – which (again) makes the two concepts nearly synonymous.

My question now is if the ordinary reader understands the distinction between the two concepts. I do not think so. I also accept that the story’s intention was to portray the fact that the Auditor General was satisfied with the bookkeeping and that Tooley was put on ice despite that fact.

Given these considerations, I do not believe that the story breached the Code on this issue, even though the use of the word “clean” may technically be inaccurate.

Golden handshake, disloyal

The intro to the story says that several senior civil servants received millions of rand to leave their positions because they were deemed disloyal to Premier Cassel Mathale.

Mosomane complains that this statement is untrue with regards to the following people who were mentioned in the story:

·         Mr Joe Mathebula;

·         Mr Ronny Shingange; and

·         Ms Mabel Makibelo.

He says that Mathebula was not forced out of office, but that he resigned voluntarily to pursue his interests; Shingange also resigned willingly; Makibelo left after her contract had expired.

Mosomane also says that the reference to being disloyal to premier Mathale cannot be true as the latter was not premier of Limpopo at the time of Mathebula’s resignation.

The Sunday Independent says: “Nowhere in the story did we say or suggest that Mathebula received any payments. We did not impute that he was disloyal to Mathale in his capacity as premier.” The newspaper also denies that the story says that Shingange received a golden handshake.

It adds that it said that Mathebula was forced out of his position “after supporting Mathale’s rivals…” – a reasonable reader would have understood this sentence to denote to partisan infighting within the ANC, which is not in dispute.

However, it does not directly respond to the part that says that they were paid money to leave their posts. I keep in mind, though, that the phrase “golden handshake” implies the leaving of positions.

Three aspects are at stake:

·         The receipt of money;

·         The receipt of money to leave positions; and

·         The leaving of positions because of being disloyal to Mathale.

Firstly, I find it strange that the newspaper denies that it said or suggested that Mathebula and Shingange received any payments – the intro to the story says that he (and the other two people mentioned above) were among ten officials who received huge pay-outs.

The newspaper denies its own report, which leads me to believe that the statement is inaccurate.

Secondly, if the statement about three officials having received money is inaccurate, it follows that the allegation that they received money to leave their positions is also false.

Lastly, I accept the newspaper’s argument about Mathale being disloyal to premier Mathale – the story does not say that he was disloyal to Mathale in his capacity as premier, and it was merely using Mathale’s present title (as it should have). However, the sentence must be read in its totality, which means that even if these officials were disloyal to Mathale, this could not have led to them having received a golden handshake because they were disloyal. If the statement that they received money to leave their posts is inaccurate, the reason given for this alleged happenings can also not be accurate.

Having decided that, it follows that the statement in dispute not only is inaccurate, but also unfair to the Limpopo government.

But there is more. The headline (Golden handshakes for those who stood against corruption) goes even further, directly linking the “golden handshakes” to “corruption”. Because the “golden handshakes” is inaccurate, the reference to “corruption” is also inaccurate and unfair.

Mathale, Fole

The story says that Mathale met Fole on 24 August 2010.

Mosomane denies that this meeting took place to discuss “any controversial tender”.

The Sunday Independent says that Fole’s secretary and the organisation’s chairperson confirmed they and Fole met the premier twice in his office and in his house, and says that it is willing to provide an affidavit from one of the persons to prove the meeting took place.

Mosomane draws my attention to the affidavit which had been submitted to my office in another matter – which states the contrary.

I now potentially have two opposing affidavits.

As no further information was provided to show that the statement is incorrect, I cannot come to a reasonable finding on this part of the complaint.

 

Failing to pay civil servants

The story says that the Limpopo government failed to pay civil servants in September.

Mosomane complains that this assertion is untrue.

The Sunday Independent requests clarity as it denies that it said in its news reports that the government failed to pay civil servants in September.

However, the story clearly says: “The Limpopo government admits that it has exhausted the lion’s share of R43 billion budget, three months into the 2011/2012 financial year. It then imposes austerity measures, fails to pay civil servants…” (own emphasis)

The newspaper denies its own report. I therefore have no reason to believe that the statement in dispute is accurate.

Tenders not advertised

The story states that “most” of the lucrative tenders since the 2010/2011 financial year were awarded “without being advertised”.

Mosomane denies this, saying that the tenders were advertised twice in the Department of Treasury’s Tender Bulletin, and were then re-advertised in January 2011 after they could not appoint contractors following the first advertisement.

The Sunday Independent says that its information was confirmed by sources in the department, as well as by investigators and treasury sources.

I asked Mosomane for proof of these advertisements, which he duly sent me.

However, this only leaves me with proof that some tenders were advertised. The story does not say that no tenders were advertised, only that “most” tenders were not advertised. In order for me to decide if this is accurate, I’ll have to get a list of all tenders that were awarded and compare it to all the advertisements that were placed.

As I am not in a position to do this, I am unable to come to a responsible finding on this matter.

 

General remark

I have found some statements in the stories to be inaccurate and unfair. I base these decisions on the newspaper’s inability to prove its case and especially on its denial of some statements in its own reports. Note that this is not a decision that there is no corruption in the Limpopo government (there may or may not be).

If the newspaper has evidence to the contrary, it should have provided me with that information. In that case, it has only itself to blame for the decisions taken against it.

 
 
FINDING
 

Payment schedules changed

 

The statement that payment schedules were changed against National Treasury regulations is inaccurate and in breach of Art. 1.1 of the Press Code that states: “The press shall be obliged to report news…accurately…”

Tooley removed despite clean audits

This part of the complaint is dismissed.

Golden handshake, disloyal

The newspaper denies its own report, which leads me to believe that the statement that several senior civil servants received millions of rand to leave their positions because they were disloyal to Premier Cassel Mathale is inaccurate and unfair. It is therefore in breach of Art. 1.1 of the Code that states: “The press shall be obliged to report news…accurately and fairly”.

Although the headline is a reasonable reflection of the content of the story, as required by the Press Code, it is inaccurate and unfair as it perpetuates inaccurate an unfair statements. This is in breach of Art. 1.1 of the Code.

Mathale, Fole

No finding can be made.

Failing to pay civil servants

The newspaper denies its own report, which leads me to believe that the statement is inaccurate. This is in breach of Art. 1.1 of the Press Code that states: “The press shall be obliged to report news…accurately…”

 

Tenders not advertised

No finding can be made.

 
SANCTION

Sunday Independent is directed to apologise to the Limpopo government for inaccurately and unfairly:

·         stating that several senior officials were paid millions of rand to leave their positions because they were deemed to be disloyal to premier Cassel Mathale; and

·         linking the above with corruption in its headline, perpetuating the above-mentioned false and unfair statement.

The newspaper is also directed to apologise for inaccurately stating that payment schedules were changed against National Treasury regulations.

The newspaper is directed to publish the following text on its front page:

Sunday Independent apologises to the Limpopo provincial government for inaccurately and unfairly stating that several senior officials were paid millions of rand to leave their positions because they were deemed to be disloyal to premier Cassel Mathale.

We also apologise for linking the above with corruption in our headline, perpetuating the above-mentioned false and unfair statement.

This comes after the Limpopo government lodged a complaint with the Press Ombudsman about four stories that we published on 22 January 2012 that related to corruption in that government.

Deputy Press Ombudsman Johan Retief directed us to apologise, and also reprimanded us for inaccurately stating that payment schedules were changed against National Treasury regulations.

He said: “I have found some statements in the stories to be inaccurate and unfair. I base these decisions on the newspaper’s inability to prove its case and especially on its denial of some statements in its own reports. Note that this is not a decision that there is no corruption in the Limpopo government (there may or may not be).”

Retief dismissed the complaint about the statement that former Provincial Treasury head Rob Tooley was put on ice before being replaced “despite his department receiving clean audit reports for two consecutive years”.

He made no finding on two other parts of the complaint.

Visit www.presscouncil.org.za (rulings, 2012) for the full finding.

End of text.
APPEAL

The Complaints Procedure permits a party to apply for leave to appeal against a decision of the Press Ombudsman. An application for leave to appeal, fully setting out the grounds, may be made to the Chairperson of the South African Press Appeals Panel, Judge Ralph Zulman. He may be contacted at Khanyim@ombudsman.org.za.

 
Johan Retief
Deputy Press Ombudsman