Kevin Wakeford vs New Frame


Wed, Jul 8, 2020

Complaint 7676: Kevin Wakeford vs New Frame

Date of Publication:  9/12/19

Headline: “How Lindela became Bosasa’s meal ticket”

Online: Yes

Author: Jan Bornman

Complaint

Mr Kevin Wakeford, complains that an article in New Frame, under the headline “How Lindela became Bosasa’s meal ticket”,  (reproduced by News24), contravened the following clauses of the Press Code:

1.1 take care to report news truthfully, accurately and fairly;

1.2 present news in context and in a balanced manner, without any intentional or

negligent departure from the facts whether by distortion, exaggeration or

misrepresentation, material omissions, or summarization;

1.3 present only what may reasonably be true as fact; opinions, allegations,

rumours or suppositions shall be presented clearly as such;

Mr Wakeford, who was represented by Mr Jared Watson before the Press Council, argues that the article contained a “number of false allegations deliberately intended to deceive the reader.”

 

  1. The Text

 

1.1 The article, under the headline “How Lindela became Bosasa’s meal ticket” is wide-ranging and deals mainly with the contract held by Bosasa (subsequently African Global Operations) to run the Lindela Repatriation Centre in Krugersdorp.

1.2 The first four paragraphs provide background to the controversy surrounding Bosasa, especially in the wake of testimony by Angelo Agrizzi, its former COO, to the Zondo Commission. It recounts how the company, under the late Gavin Watson, paid monthly bribes to “politicians, officials and journalists” of about R4m-R6m a month, and in return scored government contracts of more than R12 billion but how the “walls came crashing down” after Agrizzi’s “explosive testimony”.

The article goes on to say that the Lindela repatriation centre was the last contract Bosasa had – and even when a new service provider had taken over it was making R1.3 million (it does not say whether this was monthly) by renting out the property to Home Affairs.

1.3 The property on which Lindela stands had been auctioned off in December 2019. The article quotes Home Affairs spokesperson, David Hlabane saying it was currently spending R9.5 million a month on Lindela, “despite it running at about a third of its capacity.” He said Lindela had housed an average of 1 500 occupants a month for the past year, despite having the capacity for 4 000 people. 

It recounts that Lindela was known for cases of abuse and corruption and says “riots, assaults and deaths have been common.”

1.4 It quotes former Bosasa employees as saying that Gavin Watson had viewed Lindela as a “cash cow”.

1.5 It references the testimony of Franz Vorster to the State Capture Commission saying Watson had instructed him “to get the numbers up” and had acquired two trucks and six other vehicles to assist in transporting “illegal immigrants” to the facility. Vorster said this was because they were paid per occupant of Lindela. The police “did not have a problem with this”, as they had insufficient vehicles.

This imperative saw the numbers increase from the 1990s to the 2000s. The article quotes a source saying the “average number of detainees at Lindela reached about 6 800 people a month in 2003, way above capacity. Another source estimated that as many as 7 000 people were detained at Lindela at the height of Watson’s drive to fill it up and cash in.”

The overcrowding sparked disease and reports of assaults, and even deaths.  Various NGOs including Doctors without Borders (MSF) filed reports about conditions there, expressing particular concerns about the spread of disease and overcrowding. The reports also detailed 13 deaths, saying this was high for a population of mainly young men.

1.6 The article also cites research from the Migration and Health project based at Wits University on the effects on migrants of there being a financial incentive in the “deportation industry.”

The writer cites two sources who describe Lindela as “Watson’s meal ticket”,  saying there was an “incentive” to fill it up. So if, for example, “you had 7 000 people in Lindela, you get paid a cheque of R5 million, and that’s good. But if it was empty, you had a problem.”

1.7 The report says in 2008, Bosasa “renegotiated its deal with the department as a result of a close Watson family friend who was working as a consultant to then minister of home affairs Nosiviwe Mapisa-Nqakula. “

1.8 It then references Kevin Wakeford: “In earlier testimony, Agrizzi had implicated former Armscor chief executive Kevin Wakeford for his role in assisting the Watson family and Bosasa. Agrizzi alleged that Wakeford received about R100 000 a month to help Bosasa deal with tax issues. 

Between 2007 and 2009, Wakeford Investment Enterprises made deals with the home affairs department and Wakeford was deployed as a “special project manager” to the minister. 

Two sources claim Wakeford helped negotiate more favourable terms for Bosasa in managing the Lindela facility.”

1.9 It notes Wakeford declined to comment “referring to a ruling made by state capture commission chairperson Judge Raymond Zondo in February 2019. “

1.10 It goes on to say that until this point, the contract with the Department, saw Bosasa’s “profit percentage rise to 55% in 2007 from 8% in 2001. According to one source, in 2007 Bosasa charged the department just short of R100 million for the year to manage Lindela. So Bosasa charged the department R8 263 673 a month for an average of 6 000 people.

Under the new terms negotiated for Bosasa with Wakeford’s influence, Bosasa agreed to lower its bill to R90 720 000 a year, or R7 560 000 a month.

These new terms included an agreement that the department would be paying Lindela a set amount every month, based on an average of 2 500 detainees per month at Lindela – whether that number was slightly below the average number or far below the average, Bosasa would be paid. 

In 2009, Bosasa was still charging the department R7.56 million a month even though the average number of detainees had dropped to 3 653 from just over 6 000 detainees in 2007 and 2008, before the new terms were negotiated. The following year it dropped further to an average of 2 169 detainees. And since then, the average number of detainees in the facility each month only exceeded 3 000 in 2012.

“The effects of this are that Bosasa’s profits increased while their costs reduced drastically. One sourced [sic] explained: “In other words, where the department was paying us R9 million a month, they are now going to be paying us R7 million. But instead of us having 3 200 people, we are only going to have 1 000 people there. So you are reducing the price by 10%, but you are reducing your costs by effectively 300%.”

1.11 After a 2012 visit, Judge Edwin Cameron estimated that the costs of running Bosasa were about R7.5 million a month. In 2013, after the contract was renegotiated, the monthly cost to Home Affairs was increased to about R8.3 million a month with the department paying Bosasa just over R100 million a year.

At this point”, says a source, the number of detainees dropped “further”, resulting in a rise in Bosasa’s profits.

It explains that until 2009, deportations rose – but after a new dispensation for Zimbabweans was negotiated, the number dropped.  Until 2008 “this played into the hands of Bosasa”, which charged per detainee per day.

The writer enumerates the number of deportations according to departmental figures, noting they peaked at “312 733 in 2007, just before the terms of the Bosasa deal for Lindela were renegotiated in the two years before the DZP permit was introduced.”

The latest figures from the department for 2018/19 show just over 24 000 deportations.

1.12 The article quotes the Home Affairs spokesman, Hlabane, saying the “average occupancy rate” of Lindela was 1500 people for the past year. It also notes that Bosasa spokesperson, Papa Leshabane, declined to comment.

2. The arguments

Mr Jared Watson for Mr Wakeford

2.1 Mr Watson on behalf of Mr Wakeford complains on several grounds.

2.2 His first complaint is that the writer did not honestly convey Mr Wakeford’s reasons for declining to comment.  In his emailed response to the reporter, Mr Bornman, Mr Wakeford refers to a ruling by Judge Zondo that affidavits and testimonies may not be made public until they are heard before the Commission. As Mr Wakeford is due to give testimony (and respond to some of the allegations made by Mr Agrizzi) early next year, he wrote to Mr Bornman relaying this. He said he would be happy to talk to him afterwards. Watson also met with him “to provide context”

In that meeting he told Mr Bornman that a company, A T Kearney, had been appointed by Home Affairs to “facilitate a turnaround project”, with the company, Leading Prospect Trading, which managed Lindela. Mr Wakeford was not involved in these negotiations at all.

2.3 He produced extracts from the Home Affairs Annual Report to show that as a result of the re-negotiation there was a direct saving to the department of R7.7 million.

Other amendments to the new contract concluded in 2008 were all in favour of Home Affairs (he attached extracts of the AR to show these).

2.4 He says the reference to a “close family friend” of the Watsons, at the time a consultant to Home Affairs minister Nosiviwe Mapisa-Nqakula, was intended to “deceive” the reader that this was Wakeford, in spite of being specifically told that he was not involved in the negotiations. Moreover, the statement that Wakeford “declined to comment referring to a ruling made by [Judge Zondo]” was also misleading. Wakeford had specifically referred to a ruling by Judge Zondo that those who are to give testimony may not put it into the public domain before they have actually testified.

2.5 This section is deliberately misleading, he says: “Between 2007 and 2009, Wakeford Investment Enterprises made deals with the home affairs department and Wakeford was deployed as a “special project manager” to the minister

Two sources claim Wakeford helped negotiate more favourable terms for Bosasa in managing the Lindela facility.”

He says he provided Bornman with the details of the negotiation and the documents he attaches show the outcome was more favourable to the Department resulting in a saving of R7.7 million.

2.6 He also challenges the claim that Bosasa’s profit percentage rose from 8% in 2001 to 55% in 2007.  The writer states that Bosasa charged the department “just short” of R100m a year to run Lindela – or R8.263 a month for “an average” of 6 000 people. Mr Watson attached income statements for Leading Prospect (the company in charge of Lindela) for the financial years 2007 and 2008: it shows that in the 2008 financial year the profit was 23% and in 2007 it was 27%.

2.7 On the statement that “under Wakeford’s influence”, Bosasa agreed to lower its bill to about R7.5m a month – a set amount – but “based on an average of 2 500 detainees a month”. But whatever that average was, Bosasa would be paid.

Although Wakeford was not involved in the negotiations, Bornman “attempts to slander his name” by suggesting this and by reporting that the department would pay Bosasa the same amount even if the number of detainees dipped below 2 500. However, the reporter “did not disclose” that prior to this renegotiation, the minimum monthly payment was based on 3 250 detainees a month (he provides documents on the Lindela negotiations to show this) – that is 750 more.  Moreover the renegotiated contract says: “Should the occupancy rates fluctuate by more than 50% of the 2 500 person threshold over a 36-month period, the Department reserves the right to reduce the variable costs component of the monthly charges”. This is in direct contrast to what the article states.

2.8 He cites this paragraph of the report: “In 2009, Bosasa was still charging the department R7.56m a month even though the average number of detainees had dropped to 3 653 from just over 6 000 detainees in 2007 and 2008, before the new terms were negotiated. The following year it dropped further to an average of 2 169

detainees. And since then, the average number of detainees in the facility each month only exceeded 3 000 in 2012.” He says this is deceptive because it suggests that after the renegotiation of the contract, the numbers at Lindela “substantially dropped off” as a result of the “negotiated minimum occupancy”.

But before the renegotiation, the minimum occupancy figures were 3 250; now they were 2 500, “clearly not favourable to Bosasa”.

He also cites the document “Lindela Negotiations” that shows that the average occupancy per night (before the renegotiation) was 1668 a night, not the “over 6 000”, which Bornman claims.

2.9 In relation to the reference to costs dropping and profit increasing:  - "In other words, where the department was paying us R9m a month, they are now going to be paying us R7m. But instead of us having 3 200 people, we are only going to have 1000 people there. So you are reducing the price by 10%, but you are reducing your costs by effectively 300%” – Mr Watson says before the renegotiation, the occupancy was 1 668. It did not ”decrease” from 3 200 occupants. Also all the additional terms required Leading Prospect to make payments that “increased its costs”.

2.10 He provided the Income Statements from Leading Prospect for the years 2010 and 2011, “the immediate years subsequent to” the finalisation of the new contract. He says these show that operating expenses increased from R48,999,958 from the year end 28 February 2008, to R 70,658,399 in 2010 and to R74,756,615 in 2011.

“The profit also dropped from R19,821,549 in 2008 to R3,716,261 in 2010

and R142,639 in 2011.”

2.11 The figures show that the author used false facts, numbers and dates to “impugn” the name of Kevin Wakeford, and all of these are “directly refutable.”

The reporter also “deceived” the public into believing that “Leading

Prospect/Bosasa procured a predetermined outcome from the Department

regarding the Lindela contract on such terms as are favourable to Leading

Prospect/Bosasa, where this was easily disproven.”

He says this was an attempt by the author to “capitalise” on the “sensational” allegations made at the Zondo Commission and he has thus ”dispensed with any journalistic responsibility” in compiling the article.

The documents

Mr Watson provides the following documents:

  1. The Home Affairs Annual Report 2007/2008

This shows:

  • New SLA negotiated with Lindela
  • Cost savings of R68m on Lindela as a result
  • As a result of SCOPA hearings that renegotiations concluded in January 2008 have saved R7.7m per anum.

 

  1. An undated letter to Mr Agrizzi from the acting CFO of Home Affairs referring to the contract negotiated between Leading Prospect and Home Affairs confirming that certain facilities will be provided to detainees at no extra cost to the DHA, and that certain alternations will be done. The letter also says that if the occupancy fluctuates within 50% of the 2 500 “threshold” over a 36-month period the Department can reduce the variable costs of the monthly charges’ component.

 

  1. Income statements of Leading Prospect for 2007 and 2008

 

  1. The outcome of an assessment into Lindela by consulting company AT Kearney, intended to relook pricing structures. This shows fluctuations in the average occupancy:
  • A table shows that average occupancy has dropped from 3 250 to 1 668 people but throughput has remained stable.
  • DHA has a contractual obligation to Bosasa for 10 years of R1.5 billion but is paying a lower monthly fee “based on reduced occupancy”.
  • It shows possible cost reduction areas and notes Bosasa is willing to reduce costs
  • Notes the “preliminary savings” negotiated with Bosasa amount to monthly savings of R640K a year.
  • Notes pricing per capita will increase slightly but says this compares favourably with similar institutions

 

  1. Statements of Income from Leading Prospect for the years 2010 and 2011 showing profit and operating expenses. (which shows a drop in profit from R3,7m to R142 000)

Mr Jan Bornman: New Frame

2.12 The reporter outlines the important role journalism has played in uncovering corruption, which has undermined institutions. He says were it not for journalism, the Zondo Commission would never have been established.

Such reporting has been shown to be in the public interest and cannot be characterised as ”sensationalist”.

2.13 He explains the process he took in reporting the article.

The main source he relied on for the key statistics on the average occupancy for each year, the total billing per year, the total billing to the Department of Home Affairs, and the profit percentage, was a whistleblower who had worked in a senior position for Bosasa . He also says he was given access to statistics submitted to the Zondo Commission. He cannot divulge the identity of the source but says he used public information to cross-check the stats. 

These included Parliamentary briefings, information from home affairs, and reports by former Justices Moseneke and Cameron into Lindela to cross-check the information.

2.14 He used a presentation that Bosasa made to the Parliamentary Portfolio Committee on Home Affairs from 11 August 2005 to cross-check the average intake/occupancy numbers. The Bosasa presentation to the portfolio committee and his source estimated an average of 6 261 people detained in 1997, 5 214 in 1998, 5 768 in 1999, 5 483 in 2000, 4 721 in 2001, 6 382 in 2002, 6 860 in 2003, 6 662 in 2004. Only in 2005 do the figures differ. His source  estimated an average of 5 885 people detained in 2005, while Bosasa’s presentation to the portfolio committee “has a much higher average of 6 498.”

2.15 Information for the years after that is harder to cross-check but he cites a report in 2009 by the Consortium for Refugees and Migrants in SA (CoRMSA), which estimates about 50 000 people detained at Lindela in 2007 and 2008. “That gives you about an average of 4 166.”

He relied on his source’s information “because of their personal involvement in the …business”., His  source stated there was an average of 6 024 people detained at Lindela in 2007, and 6 032 in 2008. “Jared Watson’s figures for the average number of detainees are significantly lower than either my source, or the figures quoted in the CoRMSA report.”

2.16 Other public sources he mentions that provide figures are:

  • Sunday Times (2/9/12), in an article titled ‘Lindela guards in “reign of terror”’ , said there were over 2 200 detainees in the facility at the time .
  • Judge Edwin Cameron, in an inspection of Lindela in July, 2012, found there to be approximately 2 000 detainees. “On two separate days within three months there were more than 2 000 detainees being detained at Lindela.”
  • His source’s estimated average was 3 207, higher than either of these reports but he says the reports “only refer to the numbers on those specific days”.
  • A judicial visit to Lindela in April, 2014 by then Deputy Chief Justice Dikgang Moseneke; he stated there were “more than 2 000 detainees” at the time. “My source said there was an average of 2 830 detainees at the centre per month during 2014.”
  • Home Affairs spokesperson, David Hlabane, in response to his query on 29  October 2019, said Lindela had an average of 1 500 people per month for the 12 months prior. “My source estimated the average to be around 1 350 in 2019 and 1756 in 2018, which is covered by Hlabane’s previous 12 months statement.”

2.17 He could not cross-check figures for the years 2006, 2010, 2011, 2013, and 2015-2017, “but I felt comfortable that my source’s estimates of the average intake of detainees per month was correct based on the above information.”

He also relied on complaints about the conditions at Lindela and reports compiled by organisations such as Lawyers for Human Rights, the South African Human Rights Commission, and Doctors Without Borders (MSF), “who through the years have all made reference to the overcrowding at Lindela.”

2.18 “The monthly billing to Home Affairs checked out with figures found in Angelo Agrizzi’s affidavit, the contract with the department of home affairs, parliamentary briefings, figures mentioned in Justice Cameron’s report, and a response from the department of home affairs to one of my queries where they supplied the latest value of the contract.”

He says this made him “comfortable” with his source.

Bosasa spokesman, Papa Leshabane had declined to comment and referred questions to the department of home affairs and the liquidators.

2.19 On some of Mr Watson’s individual points, he responds:

When he met him on 4 December, he (Watson) offered to send documents that would disprove the source’s figure but did not do so.

On the argument that he was accusing Mr Wakeford of being involved in the renegotiation of the Lindela contract: He says the paragraph in question does not mention Wakeford. Where Wakeford is mentioned, it is attributed to Angelo Agrizzi’s testimony before Zondo.

Agrizzi’s testimony that Wakeford was paid R100 000 a month by Bosasa was made before the Zondo Commission.

His reference as to why Mr Wakeford declined to comment “is a paraphrased summary of Wakeford’s message to me.”

2.20 He says although Mr Watson offered to send him documents after their meeting in support of his arguments, he only sent a shorter version of the Home Affairs Annual Report, attached to the complaint.

 

  1. He says Mr Watson provides no evidence to dispute the claim from his sources that Wakeford had influenced the renegotiations with the Department.  Agrizzi’s evidence before the Zondo Commission confirms the “favourable terms”, as well as testimony that Wakeford, a family friend, was assisting in the renegotiation, citing point 44 of his affidavit, here: https://sastatecapture.org.za/site/files/documents/40/Angelo_Agrizzi_Statement_Part_1.pdf)

“The outcome was that the contract was extended for a further five years without the need for further tender processes and Treasury approval. The price was reduced by R860,000.00 per month. However more favourable contract terms were included in the contract. The annual gross value to Bosasa was in the region of R93 600 000.00.”

2.22 Agrizzi’s affidavit elaborates more on the favourable terms in point 44.6:

“Kevin Wakeford explained the benefits of the extended contract to Bosasa to me. An important benefit was that opposition to the contract on the part of opposition political parties and SCOPA had been mitigated.”

2.23 Mr Bornman says Agrizzi and other Bosasa managers testified at the commission that company statements and documents had been forged and destroyed towards the end. His two sources claimed that profits increased from the re-negotiated contract, and one showed him a spreadsheet to back this up.

2.24 On Mr Watson’s complaint that he had tried to “deliberately deceive the reader” by suggesting the renegotiated terms had an impact on the occupancy number, Mr Bornman says he ignores the context provided in his story. This relates to the effects of the special dispensation provided to Zimbabweans, leading to a sharp decline in the number of deportations.

2.25 One of his sources went through “detailed income statements and operating expenses of Leading Prospect Trading (Lindela) which had a breakdown for all the costs charged. “ He explained how costs were inflated, while other charges were internal costs charged to other Bosasa entities in an effort to hide the profit. He decided to use the profit percentages, rather than the detailed costs the source provided. He also refers to former Bosasa auditor Peet Venter’s affidavit  (at the Zondo Commission), where he claims that Gavin Watson built two homes for his children and had the costs unlawfully recorded as purchases related to the renovation of Lindela and other Bosasa properties. This backed up Agrizzi’s claim that “Bosasa had an intricate system used to launder money through fictitious companies, cash cheques and fake invoices.”

2.26 The reporter says he followed “due diligence” in reporting the story. He afforded Wakeford and Bosasa director and spokesperson Papa Leshabane an opportunity to respond to the allegations, and he used many public sources to cross-check against his sources’ allegations. Neither Wakeford nor Leshabane had indicated that Watson would speak on their behalf, and in fact Watson had suggested he speak to Leshabane, the official Bosasa spokesperson.

 

 

  1. Hearing

3.1 On June 26, the Press Council convened a hearing (on Zoom) on the matter between the two parties.

On the adjudication panel were Peter Mann and Wandile Fana from the Press Council’s Panel of Adjudicators, as well as Professor Vimal Ranchhod from the UCT School of Economics as an advisor.

It was chaired by the Ombudsman, Pippa Green.

Mr Jared Watson represented the complainant, Kevin Wakeford, who was also present.

On behalf of New Frame were Monica Laganparsad, News editor and acting editor-in-chief and Jan Bornman, the reporter.

3.2 The key arguments at the hearing were over three issues:

  1. The involvement of Kevin Wakeford in the renegotiation of the contract between Bosasa and the Department of Home Affairs and whether he had effectively orchestrated a “corrupt” event.
  2. Whether the new contract negotiated between Bosasa and Home Affairs allowing the former to run the Lindela Repatriation Centre was engineered to be beneficial to Bosasa.
  3. Whether the reporter had fairly reflected Mr Wakeford’s reasons for declining to comment.

3.3 Much of the argument relied on the presentation and interpretation of numbers including the average occupancy of Lindela at specific points in time, as well as the calculation of costs and profit margins of the operation.

Arguments

3.4. The hearing did not touch on the any of the alleged human rights violations but focused on the latter question. Was it indeed a “meal ticket” for Bosasa especially after the renegotiation of the original ten-year contract in 2008 and 2009.

Jared Watson for Kevin Wakeford

3.5 Mr Watson for Kevin Wakeford presented arguments on two main points in the article: one on the allegation that Kevin Wakeford was involved in the renegotiation of the contract and that it was a “corrupt event”.

The second was on whether the terms of the renegotiation were more favourable to Bosasa.

The two arguments are closely linked because the message in the article was that the renegotiation of the contract in 2007 was corrupt and that Mr Wakeford had effectively enabled this.

3.6 On the first, he said Mr Wakeford had been appointed as a consultant to the Minister of Home Affairs two years after the original contract had been signed in 2005.

It is quite clear… the article its slanderous of Kevin Wakeford through and through.”

He said that the reporter’s response was that he did not mention Mr Wakeford’s name when he referred to “a family friend” who was involved in the renegotiation of contract (and worked as an advisor to the Minister). But in all the subsequent  paragraphs he refers to Mr Wakeford specifically. He called on him to say who the “family friend” was.

Mr Wakeford himself was bound by a ruling made by Judge Zondo, but it is well known that he has disputed Mr Agrizzi’s evidence and has applied to cross-examine him.

Mr Wakeford was not involved in the renegotiation of the contract; moreover, there were 55 contracts being re-negotiated at the time in terms of a turnaround project being run by consulting firms AT Kearney and Fever Tree.

3.7 On the second allegation that the terms of the renegotiated contract were more favourable to Bosasa, Mr Watson presented two documents: the first was Addendum A and Addendum B of the contract dated 31/10/2005 and signed by then DG of Home Affairs Mavuso Msimang and COO of Bosasa Angelo Agrizzi. This was the original contract that showed that Bosasa (or Leading Prospect) could charge R13.77 per detainee if the numbers were between 2 500 and 3 250, and R11.48 of the numbers were above 3 250. The second was a table of Occupancy figures of Lindela compiled by the Department of Home Affairs. These showed figures that differed from those used in the article.

3.8 Mr Watson said that in terms of the original contract of 2005, Bosasa was entitled to charge the department per detainee per day. There were times when the occupancy could be as high as 4 000. There was an administrative fee based on a costing of 3 250 detainees a day.

However, after the renegotiated contract, the fee was negotiated down from 3 250 detainees a day to 2 500. In other words, Bosasa lost the ability to charge for 750 extra people a day.

3.9 In contrast to Mr Bornman’s article, which said that Lindela had held as many as 7 000 people at one stage, the occupancy figures – provided by Home Affairs and compiled as a submission to the Zondo commission – showed that in 2007 the average (per month) occupancy was 1 524, in 2008 it was 1 745, and in 2009 (the years during and after the renegotiation) it was 1 233. In fact, the only time average occupancy exceeded 3 000 was in 2003.

Mr Bornman had confused “intake” with “occupancy”: there was a difference in terms of how many people Bosasa could charge for.

3.10 Moreover, the financial statements of Leading Prospect Trading, the Bosasa subsidiary that ran Lindela,  also bore this out, showing a drop in profit between the financial years of 2007 and 2008 of about R3 million.

New Frame

3.11 Mr Bornman, In response, said the allegation about a “family friend” was made by Mr Angelo Agrizzi at the Zondo Commission.  He said these allegations about Mr Wakeford had been reported by other media “and backed by sources.”

3.12 Regarding the occupancy figures and profit percentage increases he reported, Mr Bornman said he “sat down with a source who had intimate knowledge of dealings of Bosasa for years who took me through income statements and explained to me how money was hidden and expenses hidden provided me with documents that had profit percentages” He said only two profit percentages – the 55% in 2007 and the 8% in 2001 were quoted in the story – “because it was so vague we decided to keep it vague”.

3.13 The average occupancy rates were also provided to him by this source. “In an effort to corroborate these figures, I relied on presentations that Bosasa had made available to parliament,  I relied on academic reports and reports by former justices Cameron and Moseneke, who did site visits to Bosasa.”

3.14 He also pointed out that he had approached Mr Wakeford for comment: he had declined, citing the ruling by Judge Zondo. He had also approached Bosasa spokesperson Papa Leshabane, who had also declined. Mr Watson had then contacted him and offered to meet with him and also offered to send him documents. However, the only document he got was an extract from the Department of Home Affairs Annual Report for 2007/2008 showing the decline in costs to Lindela (payment from Home Affairs) from R7.89m to R7.2m per anum.

This document also showed a letter from the acting chief financial officer of Home Affairs to Mr Agrizzi,  referring to the terms of the new contract between itself and Leading Prospect Trading.

3.15 Among these terms were that medical facilities to detainees would be provided by Bosasa, that the review period of the contract would be extended from two years to five – ending in 2013 – and that the Department reserved the right to reduce the variable costs component of the monthly costs should the occupancy rate fluctuate by 50% from the threshold of 2 500 over a 36-month period.

The letter is dated 10/12/2008.

3.16  Mr Bornman said he did not get further information from Mr Watson and “I didn’t feel obligation was with me to chase (it) up” as Mr Watson was not directly mentioned in the story.

Questions from panelists

3.17 In response to a question from Mr Mann, Mr Watson made it clear that he was representing Mr Wakeford, the complainant, in the case. He was a chartered accountant by training.

3.18 Mr Mann also commented that Mr Wakeford was not central to the article but the implication was that, as he had been an advisor to the Minister of Home Affairs as well as to Bosasa at the time of the renegotiation of the contract, that he had “enabled” the new contract but perhaps was not instrumental in it. Mr Mann also pointed out that some serious allegations – such as the late Mr Gavin Watson organizing to get a “fleet” of vehicles to help police transport deportees to Lindela were made but he (Mr Watson) was not upset about these, only about the mention of Mr Wakeford.

3.19 Mr Watson disagreed saying the article implied Mr Wakeford was “instrumental” in the renegotiation. He also said that his uncle, Gavin Watson, was not alive for him to defend, and that many of the allegations against him were matter of opinion “which is the realm the press likes to operate in.” However, in the case of Mr Wakeford, he was able to defend him and he could counter the allegations with fact.

3.20 When asked about the Turnaround Project, run by AT Kearney and Fever Tree, Mr Watson said they were responsible for renegotiating 55 Home Affairs contracts. They were employed to look at the financial aspects of each one.

Mr Wakeford had recused himself from the renegotiation of the contracts involving Bosasa.

3.21 In response to questions raised by Mr Agizzi’s evidence that Mr Wakeford was paid R100 000 as a consultant for Bosasa, and in addition the letter apparently seen by the reporter from AT Kearney, thanking him for his services, Mr Watson said Mr Wakeford had worked as consultant to Home Affairs and Bosasa at the same time but had recused himself from these contracts.

3.22 Mr Mann also put to him the argument in the article that after the dispensation granted to Zimbabweans, the numbers of detainees at Lindela were bound to drop. Thus, this deal was not such a loss as it was made out, particularly as one of its terms obviated the need for Home Affairs or Bosasa to go before Scopa before the next renewal.

3.23 Mr Watson said the Zimbabwean issue was “ irrelevant”. This was because the original 10-year agreement allowed Bosasa to bill each year for a minimum of 3 250 people. Two years before this renegotiation, the numbers had already gone down to 1 150 then 1 500. Moreover, he said, 92% of the costs of the contract were fixed. He cited the “500 guards” it was necessary to have as an illustration, saying it did not matter “if there’s one person there or 500 people there.” To move the minimum figure down from 3 250 to 2 500 “cannot be said to be more beneficial to Bosasa.”

Subsequent to the renegotiation, the figures actually went up: they did not fall substantially, which was the assumption made in the article.

Also, the extension of the contract was at the sole discretion of the department.

3.24 Mr Fana also queried the fact that Mr Wakeford had been a consultant for the Department and Bosasa at the same time, and asked why, if the new contract had been so unfavourable to Bosasa, had Mr Gavin Watson stuck with it.

Mr Watson repeated the argument about timelines: the original contract was forged in 2005 for ten years. Mr Wakeford had not been involved in that – it was before he was a consultant to the department and there was no insinuation in the article that he was involved.

He said the article had argued that after the renegotiation there was a “dramatic drop” in numbers to the facility. The article had quoted a figure of 6 000 in 2007. However, the occupancy figures provided to the panel showed that the number was actually 1 100 in that year.

He agreed with Mr Fana that Bosasa was a business “not a charity”: his argument was simply that the renegotiated contract was on terms less favourable to Bosasa than the original contract. This should also quell suspicion that Mr Wakeford had been involved in a “corrupt event.”

Questions to New Frame

3.25 Questions to Mr Bornman focused on three issues: his quote from his anonymous source about the percentage by which costs declined so increasing the profit percentage; his source for the occupancy numbers; and the implication that Mr Wakeford was involved in (corruptly) renegotiating the new contract.

3.26 In response, Mr Bornman said the renegotiated contract did not only involve money but more favorable terms. These included the duration of the contract and not having to go before SCOPA and face opposition parties for that period.

3.27 He was closely questioned about the quote attributed to his anonymous source: “In other words, where the department was paying us R9 million a month, they are now going to be paying us R7 million. But instead of us having 3 200 people, we are only going to have 1 000 people there. So you are reducing the price by 10%, but you are reducing your costs by effectively 300%.” It was pointed out to him that it was impossible for anything to “drop by 300%”,

3.28 In response he said the figure “shouldn’t be taken as fact, that’s an example the source tried to make to get their point across…he was speaking figuratively about reduction in costs and the price.”

3.29 He said he was provided with a spreadsheet by his source and corroborated the figures with information with numbers in the public domain.

The increase in profit margins he argued in his article is connected to the occupancy figures.

3.30 He had not had sight of the table of occupancy figures presented by Mr Watson to the hearing but said that he doubted they were as low as those described.

He also said that the new contract put fees to Bosasa at a minimum of 2 500 but that they would be paid more than this if the numbers went above a certain figure. He said this was explained in the article.

3.31 He had requested occupancy figures from Home Affairs but was told “they don’t keep figures for longer than a year”. But he believed he corroborated his figures with other sources, cited in the article, such as those provided by the judicial visits and the MSF report, which described the overcrowded conditions. He also argued that the figures were not as low as Mr Watson indicated in 2008/09 as “that was the height of SA deporting people out of SA. “ He said at the stage about 300 000 people were being deported a year. “So, if Lindela was the main deportation facility, it’s highly unlikely for that to be possible.

3.32 On Mr Wakeford’s involvement, he cited the evidence given before the Zondo Commission, as well as the letter of thanks he had seen from AT Kearney to Mr Wakeford.

Unfortunately, he did not have the letter – he had only had sight of it. However, he was “certain” that it was not only a letter of thanks but a progress update as well.

The letter thanked Mr Wakeford for “the opportunity” to work with him on the turnaround project.

He could not recall if it specified which project it had referred to.

3.33 In his testimony before the commission, Mr Agrizzi described how Mr Wakeford had explained the benefits of the new contract to him, even though the minimum threshold had been reduced.

Kevin Wakeford

3.34 Mr Wakeford, the complainant, was present in meeting with Mr Watson.

He was invited by the panel to put his views.

3.35 As he is still to testify before the Zondo Commission as well as to cross-examine Mr Agrizzi, he was constrained by the judge’s ruling in what he could say.

3.36 However, he did confirm that he had been an advisor to the Minister of Home Affairs during this period but said he had no official powers. During this time AT Kearney and Fever Tree, consultants with international experience in turnaround projects, had been employed to provide advice on 55 Home Affairs projects.

These included advice on the ID book and passport processes and the issue of immigration.

3.37 He referred to, seemingly, the same letter as Mr Bornman had, saying it had come “right at the beginning of the project”, after the then DG Mavuso Msimang, had signed off on the contract with At Kearney and Fever Tree.

The letter was really saying thank you for the negotiations – we now in a position to execute. It wasn’t a letter congratulating me on negotiating a Lindela contract.” He re-iterated that he had recused himself from “the entire process” of the negotiations over Lindela and “disclosed everything up front to the Minister and to her team.

He also said the AT Kearney/Fever Tree contract was overseen by the State Attorney’s office and was an “immaculate process.”

3.38 He mentioned his relationship with Mr Agrizzi, too, but as he is still to cross-examine him, and mindful of Judge Zondo’s injunction, we will not detail what was said here.

3.39 The editor of New Frame, Monica Laganparsad, objected to Mr Wakeford being allowed to “give his version of the story.”

She argued it was unfair as the reporter had gone to him for comment but had been told that he could not speak because of his pending evidence before the Zondo Commission.

Mr Bornman also said that he intended to cover Mr Wakeford’s evidence before the commission when it was delivered in order to tell both sides of the story.

The publication also queried the involvement of Mr Watson in the hearing.

3.40 Mr Mann drew attention to the Press Council’s Complaints Procedure which stipulates that anyone may act on behalf of a complainant who is unable to act on their own behalf. We will deal with this late in the analysis section.

3.41 In summing up, Mr Watson said that it may be that the new contract was beneficial in that Bosasa and Home Affairs did not have to go before SCOPA for a period, but that was not what the article said. “The article says all the benefits were profit -based, the heading of the chapter  (the sub-head) actually says ‘Increased profits’”

3.42 The benefits, in terms of cost and occupancy, were to the Department and not to Bosasa, as shown by the financial statement and occupancy figures.

He queried his figure of 6 000 in 2007, from his confidential source, saying that it would not make sense as Bosasa only billed the Department for 1 100. Why would it bill the department for fewer people if more were actually held there?

3.43 He also said he provided Mr Bornman with the extract from the Home Affairs Annual Report and the letter of contract and on 6 December asked him in an email if there were other documents he required.

He did not contact him again for further documents. “He now says it’s not his duty to seek the truth; it’s my duty to provide him with the truth.”

He says he contacted him in the first place because Mr Wakeford was bound by the terms of the Commission.

On the letter from AT Kearney – he said it was  a “letter of courtesy” thanking him for helping appoint them as consultants.

3.44 In his summation, Mr Bornman said he had tried to cross-check his occupancy figures for 2008 and 2009. He has used the research report of the Consortium for Refugees and Migrants; his sources’ were “slightly higher but I felt comfortable that those were the figures that I could trust. It wasn’t significantly as low as Mr Watson’s figures would suggest.”

3.45 Regarding the follow-up with Mr Watson, he said when the two had met they had discussed the three issues in dispute in this case: the role of Mr Wakeford in the re-negotiation of the contract; whether profits had increased significantly after the renegotiation; and occupancy figures of Lindela.

He had waited for the documentation that Mr Watson had said he would send and “at the end of the day” he got sent the excerpt from the Annual Report of Home Affairs.

I took that as misdirection, and I don’t think there was any need to follow up on that, because I’d already approached the people I think I needed to approach for the story, and that’s Mr Wakeford and Mr Leshabane.”

He had never received the addendums that Mr Watson put before the hearing showing payment terms for the original contract but maintained the new contract’s term about not having to go before SCOPA or Treasury was favourable towards Bosasa.

 

 

  1. Analysis

Background

4.1 The original contract between Bosasa and Home Affairs was signed in 2005.

However, the repatriation centre, just west of Krugersdorp, has been run since 1996 by businesses associated with Gavin Watson, first by Dyambu, a consortium consisting of senior members of the ANC Women’s League of which Watson was CEO.[1]  Four years later, the company changed its name to Bosasa. The ANC also withdrew its shareholding from the company. 

4.2 Bosasa, later known as African Global Operations, ran the detention facility from then until the company went into liquidation last year.

4.3 Lindela has been the subject of criticism from various human rights groups, including MSF and the Human Rights Commission. Among the allegations have been prolonged periods of detention, inadequate medical care, and detention of minors.

4.4 On the financial front, previous Bosasa employees have testified before the Commission into State Capture that it was a “cash cow” for Bosasa.

The points in dispute

4.5 There are three key points in dispute. One is the role of Mr Wakeford in the renegotiation of the contract; the second is whether the renegotiation of the contract was actually beneficial to Bosasa or not; related to this point is the dispute over the occupancy figures. Thirdly, Mr Wakeford also complained that his inability to comment because of the strictures imposed by the ruling of Judge Zondo were not adequately conveyed.

Kevin Wakeford’s role

4.6 It is instructive to turn briefly to the evidence before the Zondo Commission, where Mr Wakeford’s role was mentioned.

4.7 Mr Angelo Agrizzi mentioned Mr Wakeford in relation to Lindela at the Zondo Commission. Mr Frans Vorster, who worked at Lindela, mentioned some of the pressure on the company to get the numbers up.

Among the points made by Mr Agrizzi relevant to the article were the following:

  • Mr Wakeford was a “longstanding” family friend of the Watsons. He was employed apparently to smooth things over with SARS, as there were continual problems with tax returns. For this he was paid around R100 000 a month.
  • When the contract between Leading Prospect Trading (the Bosasa subsidiary that ran Lindela) and Home Affairs was up for review, the consulting company Fever Tree was appointed to examine the contract.
  • The then minister Nosiviwe Mapisa-Nqakula wanted to raise terms of the new contract as it was always a “hot potato” in Parliament; the perception was that it cost the taxpayer too much money: “she wanted the price reduced”.
  • Lindela used to be paid on occupancy rates – per person per day. But he (Agrizzi) negotiated a fixed-fee rate in the early 2000s because “it is like a bus of school kids, you either have a full bus or an empty bus, but you still have to pay for the bus.”
  • Home Affairs wanted this reduced because whereas it could accommodate up to three or four thousand a day, it was only accommodating around 1 000.  If there was a fixed fee, the Department would pay a rate for 3 500 people per day.
  • Agrizzi then entered into discussions with Aneel Rahadkrishna, a consultant from Fever Tree, “because Gavin and Kevin Wakeford felt we could work with him.
  • The cost was reduced by about R862 000 a month. Rahadkrishna approached Agrizzi and told him that “he, Kevin Wakeford and Gavin Watson had come up with a deal…. I was then informed  (by Mr Rahadkrishna) that there is a deal, but I was not involved with it. I was then informed that he was expecting a payment of R7--million.”
  • Kevin Wakeford had explained to him the benefits of the new deal: “he explained that what they had done was extended the term of the contract, but also made it more feasible in terms of increases as well.”

4.8 Although Mr Agrizzi puts Mr Wakeford centre-stage in defending the “new deal” inside the company, he does not say he was instrumental in renegotiating it.

4.9 The paragraph in the article that first refers to the new contract reads thus: “Two years later, in 2008, Bosasa would renegotiate its deal with the department as a result of a close Watson family friend who was working as a consultant to then minister of home affairs Nosiviwe Mapisa-Nqakula”

It does not mention Mr Wakeford by name in this paragraph but goes onto mention him in the following three, referring to Agrizzi’s testimony about his role in sorting out tax issues in Bosasa, as well as quoting two anonymous sources saying he had “helped negotiate more favourable terms for Bosasa in managing the Lindela facility.

 

4.10 The reporter had approached Mr Wakeford for comment, and been told that because of the strictures he was under due to the Zondo ruling he could not.  He also approached Bosasa spokesman, Papa Leshabane who declined to comment. Mr Watson approached Mr Bornman on behalf of Mr Wakeford. Among other things, he had sent him the extract of the Home Affairs annual report and letter confirming the new contract to show that it was not “more favourable” to Bosasa.

4.11 The fact that Mr Wakeford worked for both the Minister of Home Affairs and Bosasa as a consultant at the same time was grounds for suspicion and further inquiry.[2]

But it is not proof in and of itself.

4.12 The journalist behaved correctly insofar as he approached Mr Wakeford for comment, even if he (Wakeford) was unable to.  He also approached Papa Leshabane. His reference to the Zondo Commission was quite adequate for any reasonable reader. He also attributed the allegation to “two sources” (whom he did not name to the panel).

4.13 The problematic paragraph is the one cited above, which states as a fact that the contract was renegotiated “as a result of a close Watson family friend who was working as a consultant to then minister of Home Affairs..”

That he refers to Wakeford in the following paragraphs makes it clear that this is the “close family friend” he is referring to. Moreover, Mr Agrizzi whose evidence is being reported, had described him as a “longstanding friend” of the Watsons: any reasonable reader would infer that it is Mr Wakeford being referred to in the above paragraph.

The Press Code, clause 1.3, states that “only what may be reasonably true, having regard to the sources of the news, may be presented as fact, and such facts shall be published fairly…”

4.14 In the hearing, Mr Wakeford confirmed he had worked for both at the same time but said there were 55 contracts being renegotiated and that he had recused himself from this particular one, disclosing to the Minister a conflict of interests.

4.15 Although Ms Laganparsad objected to him being allowed to speak, it is important to point out that he was actually the complainant in this matter.

It was also legitimate for Mr Watson to represent him, in terms of the Complaints Procedure, and in fact Mr Wakeford had signed a letter to the Press Council giving Mr Watson the authority to represent him.

As the complainant, he was entitled to speak when invited to at the hearing, albeit it the panel had to recognize his constraints in terms of the Zondo ruling.

4.16 We are aware that the Zondo ruling may put the reporter at a disadvantage: the reporter approached him for comment, correctly, but did not hear his version that he had recused himself from this particular contract. Also the reporter was entitled to raise the  pertinent question about a conflict of interests, given that he was a consultant to both parties and Mr Agrizzi’s evidence.

Nonetheless the reporter should have been more circumspect in the paragraph cited above and noted that this was an allegation, not a fact.

The rest of the passage is attributed to “sources”, albeit anonymous, and passes the test of the Press Code.

The renegotiated contract

4.17 On whether the new contract was more or less favourable to Bosasa, the reporter relies almost entirely on his anonymous sources for this point. The argument pivots on the supposition that although the minimum threshold has decreased to 2 500 from 3 250 in terms of payment, the costs had also decreased.

4.18 Mr Watson provided excerpts from the Home Affairs annual report of 2007/8, as well as an official letter to Mr Agrizzi stating the terms of the new contract. These documents were also made available to the reporter.

He also provided the panel with a table of occupancy figures at Lindela from 2000 to 2011, which he said were official Home Affairs figures and that he intended to submit to the Zondo Commission. This document was not made available to the reporter.

4.19 It was not clear to the panel how Mr Bornman arrived at the figures he did, stating that profit percentage had risen from 8% in 2001 to 55% in 2007. He attributes to an anonymous source the claim that Bosasa had cost the department R8 263 673 a month for an average of 6 000 people under the old contract, but that under the new terms negotiated “with Wakeford’s influence, Bosasa agreed to lower its bill to R90 720 000 a year, or R7 560 000 a month.”

4.20 The new terms meant that Bosasa would be paid for a minimum average of 2 500 people a month, whether “that number was slightly below the average number or far below the average.” Mr Bornman puts the average number of occupants at 2 169 in 2009, down from 6 000 in the year before the new contract was negotiated.

4.21 Although he persuasively argues that the number of deportees dropped sharply because of a special dispensation to Zimbabwean citizens in 2009, these occupancy figures do not accord with those presented by Mr Watson at the hearing, which are 1 153 in 2006 and 1 524 in 2007.

4.22 Mr Watson’s table had no figures for 2012 but the Human Rights Commission, which visited Lindela in September 2014, estimated there were 1 360 detainees there.[3]

4.23 The reporter was not provided with Mr Watson’s document on occupancy, but says he cross-checked figures with other sources such as the judicial visits by Justices Cameron and Moseneke in 2012 and 2014 respectively, who both put the number of detainees at around 2 000.

4.24 The occupancy figures though are central to the argument that the renegotiated contract boosted Bosasa’s profit margins. This was because costs went down as there were fewer detainees. His anonymous source spells this: “.. where the department was paying us R9 million a month, they are now going to be paying us R7 million. But instead of us having 3 200 people, we are only going to have 1 000 people there. So you are reducing the price by 10%, but you are reducing your costs by effectively 300%.”

4.25 The problem here is that it is impossible for costs to drop by 300% - that is to below zero. When this was pointed out to Mr Bornman, he said the figure was probably “metaphorical” – used to illustrate the sharp decrease in costs. However, this not only begs the question about what other figures in the quote may be “metaphorical”, it also points to the trustworthiness of his source. He referred to spreadsheets he had seen, which he could not share with the panel. Nor did he share the name of the source with the panel. For these reasons, the quote must be regarded with extreme circumspection.

4.26 That said, there were other aspects of the contract which were favourable to Bosasa, such as not having to go before SCOPA or Treasury for an extended period. Moreover, it did not have to go out to tender again for an extended period. However, this was mentioned in arguments at the hearing and not in the article. Had he done so in the article, his case would have been stronger.

4.27 Thus, although the contract between Bosasa and Home Affairs is questionable, it is hard to find substantiation in the article for one of his main contentions that the effects of the new contract “are that Bosasa’s profits increased while their costs reduced drastically.”

Conclusion

The panel was impressed by the thoroughness of Mr Bornman’s citing of other research documents on conditions at Lindela and the plight of illegal immigrants.

The notion that a deportation centre should be run by a private company for profit is incongruous in a democratic society governed by the rule of law.

The reporter approached Mr Wakeford and Mr Leshabane for comment, as well as the Home Affairs spokesperson.

However, in respect of two critical points: Mr Wakeford’s involvement in the new contract and the rise in profit due to the reduction of costs, the article states as fact points that should have been mentioned as allegations.

However, the panel notes that Mr Bornman said he would return to the Zondo Commission when Mr Wakeford gives evidence and cross-examines Mr Agrizzi in the interests of fairness and balance.

 

Finding

New Frame is in breach of sections 1.1 and 1.3  of the Press Code: “The media shall:

1.1 take care to report news truthfully, accurately and fairly;

1.3 present only what may reasonably be true as fact; opinions, allegations, rumours or suppositions shall be presented clearly as such

These breaches are in relation to the reporting of Mr Wakeford’s involvement in renegotiating the news contract between Bosasa and Home Affairs as a fact and not as an allegation, and that as a result of this renegotiation costs dropped dramatically as the number of detainees declined, so increasing profits.

These are Tier 2 offences.

The part of the complaint about not citing in sufficient detail the reasons that Mr Wakeford was unable to comment is dismissed.

New Frame is ordered to apologise to Mr Wakeford for reporting as fact rather than allegation that he was involved in the renegotiation of the contract between Home Affairs and Lindela in such a way as to increase profits by decreasing costs.

Appeal

The 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.

Adjudication Panel

Pippa Green (Ombudsman), Peter Mann (Panel of Adjudicators, public representative), Wandile Fana (Panel of Adjudicators, media representative) with Prof Vimal Ranchhod, UCT School of Economics as advisor

July 6, 2020

 

 

 

 

 

 

 

 

 

 

 



[1] [1] https://www.dailymaverick.co.za/article/2019-11-19-what-is-going-on-at-the-bosasa-run-lindela-repatriation-centre/#gsc.tab=0. Interestingly, the minister of Home Affairs, Nosiviwe Mapisa-Nqakula at the time of the renegotiation was reportedly part of Dyambu

 

[2] He was apparently not the first: a former journalist also worked for both Bosasa and the Minister of Home Affairs at the same time as spokesperson https://www.iol.co.za/news/politics/lindela-contract-awarded-on-merit-359084