Lucky Leseane vs Saturday Star

Complainant: Merafong City Municipality

Lodged by: Lucky Leseane

Article: Legal action after ‘dodgy’ tender deal – Rival bidder says company is a front, it flouted the rules

Date: 15 September 2011

Respondent: Saturday Star

Complaint

Mr Lucky Leseane complains about two stories in the Saturday Star which were headlined:
• Legal action after ‘dodgy’ tender deal – Rival bidder says company is a front, it flouted the rules (published on June 4, 2011); and
• Municipal manager in R7m tender scandal – DA to push for motion that contracts in Merafong be probed (June 11, 2011).

Regarding the first story, Leseane complains that it falsely states that:
• the tender was awarded for R20 million;
• the tender was awarded against the recommendations of the bid adjudication committee;
• Otto Waste Systems was appointed as a service provider; and
• tender rules were flouted.

He adds that neither he nor the municipality was properly consulted prior to the publication of the story.

Leseane complains that the second story falsely states that:
• he sat in the bid adjudication committee;
• he scored in the bid adjudication committee;
• the tender awarded to Round Strategies Mokhurane involved more than R7 million; and
• the Waste Bins tender was R20 million.

He also complains that:
• the headline is misleading;
• he was not afforded enough time to respond to the journalist’s questions; and
• the journalist did not verify the story.

Analysis

Both stories were written by Thabiso Thakali.

The first story says that Active Blue Trading 219 cc (ABT), a waste management firm, won a R20 million refuse-collection tender in the Merafong municipality, despite the fact that it listed only laptops, printers, two bakkies and a Quantum bus as its resources to execute the job and that it could not show the required experience. The story says that the newspaper can reveal that ABT got the contract to supply 35 000 refuse bins against the recommendations of the bid evaluation committee. Otto Waste Systems (OWS), one of the companies which lost the bid, was reportedly considering legal action against the municipality, alleging corruption in the tender award. The story says that Leseane insisted that the tender had been awarded “fairly” and that it was not riddled with corruption.

The second story says that Leseane “has been drawn into a new tender scandal involving more than R7 million for the area’s urban renewal project”. This project reportedly is meant to improve sustainable human settlements and to create conditions of sustained economic growth. Thakali writes that the tender was awarded to the Round Strategies Mokhurane joint venture last year. The story says that Leseane sat in the bid adjudication committee and implies that he influenced this committee to award the tender to his preferred service provider.

I shall now consider the merits of the complaint:

The first story:

Tender worth R20 million

The story says that ABT won a R20 million refuse-collection tender in the Merofeng municipality.

Leseane denies that the tender was awarded for R20 million.

The Saturday Star counters that in minutes from the bid adjudication committee meeting (bac) it is stated that the financial implication of providing the bins is R20 million.

Note that the “minutes” that the newspaper refers to are rather ascribed to the bid evaluation committee (bec).

The newspaper provided me with a document headlined Merafong City Local Municipality Bid Adjudication Committee Meeting, dated November 18, 2010 to prove its point. The sub-headline reads: The appointment of a service provider for the supply and delivery of 240L bins. This document states that the successful provider must make provision for the amount of R20 million (for the financial year 2010/2011 and 2011/2012).

Unfortunately, the journalist made some vital errors:

• He presented information gained from an unsigned document as the truth – a document that has no status;
• He confused a budget (R20 million) with the actual tender amount (R12 289 200) – meaning that, even if he could have used the document at his disposal, he still erred; and
• Even more seriously, his document contained recommendations only. Under the heading “Recommendation” the following is stated: “The following recommendations are the recommendations from Bid Evaluation Committee to the Bid Adjudication Committee.” Within the space of a few words the term “recommendation” is used three times, yet Thakali still proceeded to present recommendations as if they had already been decided upon.

At the hearing Leseane provided me with a signed official document, dated 2 December 2010, which proves that the tender was awarded for R12 289 200 – and not for R20 million.

I do not believe that Thakali wanted to mislead the public and think that he has merely misread the document. But he should at least have realized that an unsigned document could not be valid and that recommendations are not equal to decisions. He also should have obtained the latest, valid document that contains decisions and not recommendations.

Moreover, the decision to award the tender was already made on 2 December 2010 and this document was readily available.

Tender awarded against recommendations

The sentence in dispute says: “The Saturday Star can reveal that the municipality awarded Active Blue Trading the multi-million-rand contract to supply 35 000 refuse bins against the recommendations of the bid evaluation committee.”

Although the story refers to the bec, Leseane complains that the ABT did not get the contract against the recommendations of the bac.

That is not what the story says.

Leseane has provided me with the official, signed documentation regarding the recommendations of the bec to the bac.

I note that the:
• bec recommends ABT as well as CT;
• bac only recommends ABT – no mention is made of CT or OWS; and
• MM has accepted the bac’s recommendations.

From this, I conclude that Thakali’s statement that the municipality awarded ABT the contract “against the recommendations of the bid evaluation committee” is indeed factually correct (as CT was recommended by the bec, but eventually not accepted by the Municipality).

The journalist got this right, even though he had used the wrong document.

However, the “worth” of this statement is in doubt, as the bec is not a final committee – the bec only recommends to the bac, who then in turn make recommendations to the MM.

Otto Waste Systems never appointed

The sentence in dispute reads: “A report from a committee meeting held last year shows that Otto Waste systems and Chiwona Trading were to be appointed as service providers, while Active Blue was to supply and deliver the bins.”

Leseane says that OWS “was never appointed as a service provider by either the Evaluation Committee or the Adjudication Committee…” He adds that no such “report” exists.

Again, Thakali used the same documentation (which does not mention OWS under the heading “Recommendations”, but indeed mentions it under the heading “Conclusion”).

However, the official, signed documentation at my disposal does not mention OWS at all. The journalist has again used a non-valid, recommendation document and dished it up as if it has already been decided upon. Also note that the statement that OWS was to be appointed as a service provider is not attributed, but presented as a fact.

The reference to CT is also faulty, as the final document does not include this company either.

No flouting of tender rules

Mr Rob Lorena, managing director of OWS, reportedly accused the municipality of “flouting tender rules”. The headline reads: Legal action after ‘dodgy’ tender deal – Rival bidder says company is a front, it flouted the rules.

Leseane denies that there was any flouting of the tender rules and says that ABT was amongst those that submitted their bid documents in a proper way. He argues that, as there is a possibility that one or more of the aggrieved tenderers might take legal action, “it will be foolhardy to elaborate on this matter further as there is a possibility that it may come before the courts in future”.

Note that nowhere does the story state it as a fact that rules were flouted – the allegation clearly comes from a source. The source had a right to his opinion and the newspaper was justified in reporting that view.

Likewise, the sub-headline attributes the word “flouting” to a source.

Also, the word “dodgy” in the headline is put in inverted commas, to show that it was quoting a source.

However, the phrase “legal action” in the headline is problematic. The story says that OWS considered legal action, yet the heading states it as a fact that legal action was forthcoming.

No proper consultation

The story says: “At the time of going to print, Leseane had not responded to questions from the Saturday Star.”

Leseane complains that neither the municipality nor he was properly consulted prior to the publication of the story. He says that Thakali sent an email to his office on Thursday June 2, demanding that he responded before the close of business that same day. Leseane says that this email was sent at 13:51, leaving him with little more than two hours to reply. He argues that he had a busy schedule and that he “cannot reasonably be expected to give impromptu responses to such serious matters”. He says that the journalist nevertheless published “without any further verification of the facts”.

The Saturday Star says that the email was sent in good time and that it tried to reach Leseane several times on the same day. “But our belief is that the email alone would have sufficed, as this is time enough for a reply. Our story reflects the same.”

At the hearing the newspaper said that the deadline for the story was at about 19:00 on Friday, June 3. The newspaper argued that, although Thakali did ask for Leseane’s response before the close of business on Thursday, the two had a good working relationship and that the latter should have known that there still was time to respond on the following day (the Friday). Thakali explained that he had his own mini deadlines – a normal practice for journalists.

I then explained to Leseane that it would have been better if he merely responded that he had too little time to properly reply; he could even have asked his secretary or his communications department to inform Thakali of the situation and maybe even have asked him to delay publication until he has had ample time to respond.

Ultimately, I do not think that the email Thakali sent Leseane at 13:51 on the Thursday gave him too little time to respond – even though the four questions would have taken some time to digest. If Leseane was not too busy, he should have had ample time to reply to the four questions that Thakali asked him to respond to.

It also needs to be said that, had Leseane replied, the story would probably not have been so harmful to him (or not harmful at all).

I have a feeling that the hearing facilitated a better understanding between both parties and am confident that a similar problem is not likely to re-occur.

The second story:

Sat in the bid adjudication committee

The story says: “But it has now emerged that Leseane, who sat in the bid adjudication committee that oversaw the tender process and its awarding then as the council’s chief operations officer…”

Leseane denies that he sat in this committee. He says: “I need to state that I do not sit in the bid adjudication committee and any allegations in that regard is unfounded, ridiculous and borders on malice”.

He adds that:
• he was never part of that committee during his tenure as COO; and
• the appointment was made when he was MM.

The Saturday Star admits that it made an error, but says that this was an honest mistake. Still, it apologized for this inaccurate statement.

Scored in the bid adjudication committee

The disputed part reads: “But it has now emerged that Leseane…had hinted that Round Strategies Mokhurane was preferred”.

Leseane complains that he did not influence the committee to award the tender to his preferred service provider.

The Saturday Star refers me to a document headlined Minutes of an urgent Exco meeting held at the municipal manager’s office on 12 October 2009. In this document, Leseane’s name is listed as the COO, one of the attendees. The newspaper quotes from this document: “The COO further advised that he had already obtained possible service providers who will facilitate the session and that…a name of Jimmy was provided to him by the Executive Mayor.”

The newspaper says that it believes that “Jimmy” refers to Jimmy Chaba, a director of Round Strategies JV Mokhurane, which eventually won the Urban Renewal tender.

Again, this document is not signed.

Thakali’s argument does not make any sense. The documentation that the journalist referred me to, does not say the Leseane used his influence to award the tender to Chaba at all. Instead, it says that Leseane told the meeting that “a name of Jimmy was provided to him by the Executive Mayor”. (own emphasis)

So, if this document would not do as a basis for the sentence in dispute, I asked the newspaper what else it could base its reportage on. “On two sources”, the answer came.

In which case the sentence in dispute should have been attributed.

Round Strategies Mokhurane tender ‘more than R7 million’

The story says that this tender was awarded for “more than R7 million”.

Leseane complains that tender’s value was R2,3 million.

The newspaper argues that the financial implications are noted in minutes of a bid adjudication committee meeting of July 14, 2010. It says that three amounts are mentioned: R2.5 million, R2.7 million and again R2.7 million. “If you add that up, it comes to more than R7-million.”

The relevant documentation is headlined Merafong City Local Municipality Bid Adjudication Committee Meeting, 14 July 2010.

At the hearing Leseane explained that the sum total of R7 million again referred to the budget.

This is indeed evident from the document.

The Saturday Star said at the hearing that it was possible that it got the “more than R7 million” wrong, but added that it had relied on its (two) sources.

But then again, it should have been attributed and not have been presented as a fact.

I have to note that there is a vast difference between “more than R7 million” and R2.3 million.

Waste Bins tender being R20 million

The story refers to the first one that Leseane complains about and says that that story reported that ABT had controversially won a waste tender despite failing to show that it had the required experience. The article states: “The latest revelations of alleged tender irregularities in Merafong come on the back of another controversy involving a R20m refuse-collection tender”.

Leseane complains that the newspaper repeated the same mistake “alleging that the Waste Bins Tender was R20 million”.

I have already dealt with this issue – the R7.8 million mistake was indeed repeated.

Misleading headline

The headline reads: Municipal manager in R7m tender scandal – DA to push for motion that contracts in Merafong be probed.

Leseane complains that the headline is misleading as it implies that the tender for the Urban Renewal Programme is more than R7 million.

If a story is incorrect and the headline reflects the inaccuracy, the headline would also be false. The R7 million tender “scandal” is presented as a fact, which it in all probability is not. The headline is therefore also problematic.

Not enough time to respond

Leseane complains that Thakali sent him an email with seven questions just after 10:00 the day before publication. He says that in his busy schedule he “cannot reasonably be expected to give impromptu responses to such serious matters”. He adds that the journalist nevertheless published “without any further verification of the facts”.

The Saturday Star says that, in addition to the emailed questions mentioned above, it also sent Leseane an sms and it called him at the office. The newspaper says: “His secretary…confirmed to us that she had received the questions, printed them out and given them to Mr Leseane.”

I feel that the newspaper gave Leseane enough time to respond – and if he was too busy, he could have informed the newspaper accordingly. And again, had he replied, the story would probably have been less harmful to him (or not harmful at all).

No verification

Leseane complains that the journalist did not verify the story with those people who were implicated in his article.

I told Leseane at the hearing that the newspaper says it used two sources and that I am therefore going to dismiss this part of the complaint.

Finding

Tender worth R20 million

The statement that a tender was worth R20 million (instead of the real amount, namely R12 289 200) could not be based either on the invalid document that the journalist used or on the one that he should have used. The amount of R20 million is inaccurate and therefore in breach of Art. 1.1 of the Press Code that states: “The press shall be obliged to report news…accurately…”

The fact that the journalist used an unsigned document that contained recommendations only and neglected to use the final document that contained the decisions is in breach of Art. 1.2 of the Code that says: “News shall be presented in context and in a balanced manner, without any intentional or negligent departure from the facts whether by…material omissions…” (emphasis added)

Tender awarded against recommendations

This part of the complaint is dismissed.

Otto Waste Systems never appointed

The incorrect statement that Otto Waste Systems and Chiwona Trading were to be appointed as service providers is not attributed, but presented as a fact.

This is in breach of:
• Art. 1.1; and
• Art. 1.3 that states: “Where a report is not based on facts or is founded on opinions, allegation, rumours or supposition, it shall be presented in such manner as to indicate this clearly.”

No flouting of tender rules

The complaint regarding the use of the word “flouting” in the story is dismissed.

The complaint regarding the use of the words “dodgy” (tender deal) and “flouting” (the rules) in the headline is dismissed.

The use of the phrase “legal action” in the headline is in breach of Art. 5.1 of the Press Code that states: “Headlines…shall give a reasonable reflection of the contents of the report…in question.”

No proper consultation

This part of the complaint is dismissed.

The second story:

Sat in the bid adjudication committee

The statement that Leseane sat in the bid adjudication committee is inaccurate. This is in breach of Art. 1.1 of the Code.

Scored in the bid adjudication committee

The statement that Leseane used his influence to get Round Strategies Mokhurane awarded a tender cannot be based on any documentation that the newspaper furnished me with. Also, it is stated as a fact and not attributed to a source.

This is in breach of:
• Art. 1.1 that states that the press is obliged to report news fairly; and
• Art. 1.3.

Round Strategies Mokhurane tender more than R7 million

The statement that a tender was awarded for “more than R7 million” is inaccurate and is therefore in breach of Art. 1.1 of the Code.

The newspaper’s argument at the hearing that it based this information on two sources means that it should have attributed the “more than R7 million” – which it has not done. This is in breach of Art. 1.3 of the Code.

Waste Bins tender being R20 million

This part of the complaint has already been dealt with.

Misleading headline

The headline reflects what the story says, but because the story is wrong, the headline is also faulty. This is in breach of Art. 1.1 of the Code.

Not enough time to respond

This part of the complaint is dismissed.

No verification

This part of the complaint is dismissed.

General comment

The stories contain several inaccuracies about Leseane (who was the MM and therefore responsible for the decisions that the Municipality took). The message that emerges is one of a corrupt official. Based on the information at my disposal, this amounts to fundamentally unfair reporting which clearly – unnecessarily – caused him a great deal of harm. Hopefully the action taken by this office will undo some of the harm and ensure that his career is not unnecessarily endangered.

Sanction

Although neither story was published on the front page, the extent of the harm done to Leseane is such that a kicker on the front page is warranted.

The text below should be published not deeper in the newspaper than page 5 and be published at least partly above the fold:

Merafong City Municipality Municipal Manager Lucky Leseane lodged a complaint with the Press Ombudsman about two stories in the Saturday Star which were headlined Legal action after ‘dodgy’ tender deal – Rival bidder says company is a front, it flouted the rules (published on June 4, 2011), and Municipal manager in R7m tender scandal – DA to push for motion that contracts in Merafong be probed (June 11, 2011).

Both stories were written by Thabiso Thakali.

The first story said that Active Blue Trading 219 cc, a waste management firm, won a R20 million refuse-collection tender in the Merafong municipality, despite the fact that it could not show the required experience. We wrote that Leseane insisted that the tender had been awarded “fairly” and that it was not riddled with corruption.

The second story reported that Leseane “has been drawn into a new tender scandal involving more than R7 million for the area’s urban renewal project”. We said that he influenced a committee to award the tender to his preferred service provider.

Deputy Press Ombudsman Johan Retief found that the stories contained several inaccuracies regarding Leseane. He said: “…the message that emerges (from the stories) is one of a corrupt official. Based on the information at my disposal, this amounts to fundamentally unfair reporting which clearly – unnecessarily – caused him a great deal of harm. Hopefully the action taken by this office will undo some of the harm and ensure that his career is not unnecessarily endangered.”

We hereby apologise to him for the:
• incorrect statement in both stories that a tender was awarded for R20 million, instead of approximately R12.2 million;
• fact that our journalist used an unsigned, invalid document that contained recommendations only, but which we dished up as final decisions;
• fact that our journalist neglected to obtain the proper document that contained these decisions;
• incorrect statement that Otto Waste systems and Chiwona Trading were to be appointed as service providers;
• incorrect statement that Leseane sat in the bid adjudication committee;
• unfair statement of fact, without attribution, that Leseane used his influence to award a tender to a certain company;
• incorrect statement of fact, without attribution, that a tender was awarded for “more than R7 million” instead of R2.3 million;
• inaccurate statement in one headline that legal action was going to be taken against the municipality; and
• inaccurate statement in another headline that Leseane was involved in a R7 million tender scandal.

We especially apologise to Leseane for creating the impression that he was corrupt – without any evidence to this effect.

Retief dismissed the complaint that we did not give Leseane enough time to respond. He added that, had he replied, the stories would probably not have been so harmful to him (and perhaps not harmful at all).

He also dismissed the parts of the complaint that we did not do enough to verify the story (we had two sources), regarding some words in the headings, and regarding the statement that a tender was awarded against the recommendations of the bid adjudication committee.

Visit www.presscouncil.org.za (rulings, 2011) for the full finding.

Appeal

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 khanyim@ombudsman.org.za.

Johan Retief
Deputy Press Ombudsman