Kevin Wakeford vs Sunday Times


Tue, Feb 25, 2020

Finding Complaint 4388

Date of article: 28/4/19

Headline: “SARS goes after ANC top brass in Bosasa scandal”

Author: Belinda Pheto

Pages: 1 and 2

Online: Yes

Particulars

This finding is based on a written complaint by Ms Teresa Conradie of Maphalla, Mokate, Conradie, representing Mr Kevin Wakeford, two written responses from the Sunday Times, a document provided by the newspaper, and further written responses to questions.

Complaint

Ms Teresa Conradie, representing Mr Wakeford, complains that an article in the Sunday Times under the headline “Sars goes after top ANC brass in Bosasa scandal” falsely reported that SARS is investigating Mr Wakeford and that he could be liable for a tax payment of R1.68m. She further complains that the article was based on information obtained from SARS in contravention of Chapter 6 of the Tax Administration Act. Further, Mr Wakeford was not given a right of reply, nor did he disclose information about his tax to anyone “of his own accord.” Moreover, she charges the article, particularly the headline, is “intentionally misleading” as Mr Wakeford has never been known “or alleged to be ‘ANC top brass’”.

Ms Conradie’s complaint relates to the following clauses of the Press Code:

The media shall:

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;

1.4 obtain news legally, honestly and fairly, unless public interest dictates otherwise;

1.7 verify the accuracy of doubtful information, if practicable; if not, this shall be stated;

1.8 seek, if practicable, the views of the subject of critical reportage in advance of publication, except when they might be prevented from reporting, or evidence destroyed, or sources intimidated. Such a subject should be afforded reasonable time to respond; if unable to obtain comment, this shall be stated; and

10.1 Headlines, captions to pictures and posters shall not mislead the public and shall give a reasonable reflection of the contents of the report or picture in question; 

  1. The text

1.1The article appeared under the headline: “Sars goes after ANC top brass in Bosasa scandal”, with a subhead: “Taxman makes move after shocking claims at Zondo hearings.”

1.2 The introduction to the story states: “Top ANC politicians, officials and prominent businessmen who benefited from Bosasa’s dodgy dealings are facing tax claims of more than R250m from the South African Revenue Service (Sars).”

1.3 The second paragraph states: “In a first, dramatic move to deal with individuals implicated at the Zondo inquiry into state capture, the tax authority has concluded preliminary investigations that are likely to result in individuals not only being served with hefty bills, but also charged for under-declaration of income, overstated expenses and misrepresentations to Sars. Eighty-three taxpayers are being probed.”

1.4 The article then proceeds to name some of them: they include Nomvula Mokanyane, [former] environmental affairs minister, ANC MP Vincent Smith, former SAA board chair Dudu Myeni, former “prisons boss” Linda Mti, dismissed former National Prosecuting Authority prosecutors Nomgcobo Jiba and Lawrence Mrwebi, and former correctional services commissioner Zack Modise. The article says a report by the unit “dealing with illicit-economy case selection and tactical research analysis…is with Sars group executive for criminal investigations.” It says the aim is “to restore tax morality and ultimately attract more foreign investment.”

1.5 The report also says that “very few” people implicated in state capture have been prosecuted or had their assets attached. It says SARS has set up a team of six investigators and three tax specialists to work on the Bosasa case. It then quotes the report: “The matter is urgent as there is a perception in the country that there are no consequences for looting state resources…Taking action against perpetrators will help change taxpayer’s mindsets, resulting in increased revenue for the state.”

1.6 It then names others being investigated by SARS. These include: former SABC boss Hlaudi Motsoeneng, attorney Christo van Wyk, Armscor CEO Kevin Wakeford, former SARS consultant George Papadakis, and former correctional services CFO Patrick Gillingham.

1.7 A SARS official is quoted as saying it was “not obliged” to inform who it was investigating “at this stage.”

1.8 It then recaps allegations in affidavits presented to the Zondo Commission that Bosasa “siphoned off cash from the business to bribe politicians and government officials to secure lucrative tenders and ..protection from prosecution.” It cites some of the evidence to the commission from Bosasa’s former chief operations officer, Angelo Agrizzi about security installations being provided by Bosasa in the homes of certain government officials and politicians.

1.9 The newspaper reports that Mr Agrizzi “is also on Sars’s list”.

1.10 It recounts some of Mr Agrizzi’s testimony about the amounts paid to certain politicians, officials and prominent people with connections to the ANC, either in cash or in kind, and that about R75 million had been paid annually in bribes.

1.11 The article reports the “initial calculations for tax liabilities”. It mentions several people including Mr Wakeford, who is said to owe SARS R1.68m

1.12 It quotes a “source with intimate knowledge of the investigation” saying he had met with SARS in 2015 and then again “shortly before Agrizzi testified last year” at the Zondo commission. A “whistle-blower” had met with SARS investigators and provided them with documents about how alleged money-laundering occurred and how money was taken out of the country.

1.18 It quotes Sandile Memela, the Sars spokesman, saying the “tax authority is not in a position to divulge specific taxpayers details.”

1.19 The article then quotes various “corruption busters and political analysts” as “welcoming” the investigations. These include Ralph Mathekga, a political analyst and David Lewis of Corruption Watch, who says “This is exactly what Sars should be going for. It’s the Al Capone story where if you cannot get these people on crimes such as money laundering, you go after them on tax-related crimes.”

1.20 It also quotes Keith Engle, CEO of the SA Institute of Tax Professionals who says SA case law holds that if you receive money as income, regardless of the source – including bribes – it is taxable. Thus all SARS needs to do is to show “money flows then they can claim tax.” He added SARS should be “congratulated for this investigation.”

1.21 The article quotes Bosasa chair, Johannes Gumede saying he knew nothing about the matter. “Go speak to Sars if you want to know more”; as well as Bosasa lawyer Brian Biebuyck who said he had “no knowledge of the issue”. It also notes that Watson failed to respond to messages or calls and that Agrizzi declined to comment.

1.22 It quotes Ms Mokonyane’s spokesperson, Mlimandlela Ndamase saying she was not aware of the SARS investigation and the Minister intends to exercise her rights to either cross-examine or testify “in response to allegations made against her by the commission.

1.23 Mrwebi is also quoted as saying that he was not aware of the investigation and disputes any allegations that he was bribed. It notes that Ms Jiba “failed to respond to questions” and that Mr Motsoeneng was not aware of the investigation and could not comment. It says Bosasa’s tax consultant Peet Venter had told the Zondo commission that he had helped pay Mr Motsoeneng’s legal costs on Mr Watson’s request.

  1. The arguments

Ms Conradie for Mr Wakeford

2.1 Ms Conradie objects to the article on several grounds

2.2 She says that disclosure of taxpayers information is “a blatant contravention of Chapter 6 of the Tax Administration Act (28 of 2011). “Our client has complained to the Commissioner of SARS and is awaiting a response.

2.3 She also says Mr Wakeford was not given an opportunity to respond to the allegation. She also says he did not “disclose any of that information (which is denied) to anyone of his own accord.

The basic principle of the audi alterem partem rule of natural justice has been shockingly disregarded by Ms Pheto.”

2.4 She says although it “is a matter of public knowledge that our client was implicated by Mr Angelo Agrizzi in his evidence before the Zondo Commission…[he] emphatically denies any involvement as alleged by Agrizzi…” In terms of the Commission’s rules, he has “filed a statement  comprehensively dealing with Agrizzi’s allegations [and] applied to cross examine Agrizzi and also to give his own evidence.”

Thus Mr Agrizzi’s allegations against Mr Wakeford are “untested and should be reported on with extreme caution.”

2.5 She argues Mr Wakeford “was not accorded the status of ‘ANC top brass in Bosasa scandal’ in Mr Agrizzi’s evidence before the commission.

2.6 She also quotes from a SARS media release in June 2017 in response to a City Press article, expressingcontinued concern about the persistent media reporting of taxpayer matters.” Referencing Chapter 6 of the Tax Administration Act, the SARS statement adds the right to confidentiality “applies to all taxpayers irrespective of one’s position, rank or status.

“We call on all South Africans including the media to respect the confidentiality clause of Chapter 6 of the TAA 2011 to keep all taxpayers; information private as prescribed by this Act. SARS wishes to reassure all taxpayers that it does not discuss or divulge taxpayer information.” (emphasis Ms Conradie’s)

Ms Susan Smuts for the Sunday Times

2.7 Ms Smuts admitted the paper had not offered Mr Wakeford a right of reply, for which she apologised and promised to rectify.

Context and accuracy

2.8 However, she said the paper defended other parts of the article, and made a detailed submission about the context and accuracy of the report.

2.9 Late in January, 2019, Mr Angelo Agrizzi, former COO of Bosasa, implicated Mr Wakeford in his submissions to the Zondo Commission of Inquiry into State Capture. Business Day then reported that Armscor, of which Mr Wakeford is the CEO, acknowledged this and said he “had been suspended on his own request in order to allow him to prepare evidence for the commission.”[1]

2.10 The EP Herald reported Mr Agrizzi’s allegations: that Mr Wakeford received R100 000 a month from Bosasa to, amongst other things, “help resolve its Sars issues”. He had told the commission that Mr George Papadakis could help resolve these issues “and had arranged with Bosasa’s Gavin Watson to provide cement to a property owned by Papadakis. Agrizzi also claimed that Wakeford was part of discussions with Watson about a payment to a Home Affairs official aimed at facilitating a renegotiation of a contract at the Lindela repatriation facility.” [2]

2.11 Mr Wakeford issued a public statement in response to Mr Agrizzi’s allegations saying they were “malicious, a gross fabrication of lies”. He confirmed his professional relationship with Bosasa “as a retained consultant for approximately eight years”, saying he served in an advisory role in relation to a “range of issues relating to the political economy.”

He also said he would make himself available for cross-examination before the commission.[3]

She argues: “Unsurprisingly, questions were asked about how it was possible for the large amounts of cash allegedly paid to various Bosasa beneficiaries to have remained undetected by institutions such as banks, the Financial Intelligence

Centre, SARS and the National Prosecuting Authority.”

Source document

2.12 Ms Smuts says late in April 2019, the Sunday Times obtained a document on a SARS letterhead entitled Case Information Report: Illicit Economy Case Selection and Tactical Research Analysis. It bears the signature of a SARS manager, is dated 18 March 2019, and recommends that the report be referred to a SARS investigative unit “to institute both civil and criminal proceedings.”

2.13 The report focuses on alleged “illicit financial flows” at Bosasa and possible “under-declaration and tax evasion”. It includes a list of people who “allegedly received kickbacks from the Bosasa Group”.

Several prominent individuals are listed, including political figures. Wakeford’s name is also included in the list. The report goes on to state that according to Agrizzi’s affidavit, Bosasa incurred expenditure ‘which were not in the production of income but were claimed as operating expenditure’, followed by a list of such expenditure. Wakeford is listed as having received R6 million and that the tax payable thereon, at 28%, would amount to R1.68 million.”

2.14 The report concludes: “The matter is urgent as there is a perception in the country that there are no consequences for looting state resources. Some taxpayers are reluctant to pay their fair share to the fiscus because of looting public funds. Taking action against the perpetrators would have help (sic) change taxpayers’ mind-set, resulting in increased revenue for the state.”

2.15 The Sunday Times article was based largely on this source document. The intro is noted above. The article calls it a “dramatic move” and states that 83 taxpayers are being probed and lists some of the more prominent people on the list.

The article quotes from the report than goes on to refer to “others being investigated” and lists more names including that of Mr Wakeford. He is said to owe R1.68m to SARS.

2.16 Mr Wakeford’s complaint that the article is “false without any factual basis” has “no merit”, argues Ms Smuts. It was based on a “reliable source document”. She adds: “Nowhere does Wakeford explain what exactly is false about the article and no basis for the charge is given.”

Contravention of the Tax Administration Act

2.17 Mr Wakeford also complains that the article was based on a SARS report, “the disclosure of which contravenes Chapter 6 of the provisions of the Tax Administration Act. But most of the prohibitions contained in Chapter 6 of the Act refers to SARS officials or former SARS officials and not the public at large or the media.

“If a SARS official discloses information to the media in contravention of statutory prohibitions, that individual may possibly make him or herself guilty of an offence, but it does not mean that the media is automatically barred from reporting on the information received, provided that it is of public interest.”

2.18 Ms Smuts cites the matter between Manto Tshabalala-Msimang and the Sunday Times where the newspaper obtained the then minister’s medical records.[4] The records, which the newspaper reported on, contained information about her alleged alcohol abuse during her hospitalization, “that her liver transplant was as a result of alcohol abuse and that her conduct contradicts her own public utterances on such matters.

The court noted that even though medical records are “by law private and confidential, the publication was not unlawful.”

Ms Smuts cites part of the court ruling as follows:

“Much of the information that was published was already in the public domain. Here the information although unlawfully obtained, went beyond being simply interesting to the public; there was in fact a pressing need for the public to be informed about the information contained in the medical records of the first applicant. Then, the disclosure made by the Sunday Times did not mislead the public about an issue which the public has a genuine concern. And finally, the publication of the unlawfully obtained controversial information was capable of contributing to a debate in our democratic society relating to a politician in the exercise of her functions.” [5]

Although the judgment contained “some harsh criticism” of the newspaper’s conduct, the main point is this, argues Ms Smuts:

Even in the extremely serious case of medical records, the court refused to interdict the newspaper from further disseminating the information, because public interest in the information trumped privacy.”

2.19 Ms Smuts argues that the facts in this matter are not as serious: “here we do not deal with deeply private matters such as medical records.” It is a “matter of public record that Wakeford received regular payments from Bosasa…that the taxman is looking at possible non-compliance in respect of these payments is hardly a private fact.” There have been calls from the public to SARS to “take action on the apparent illicit flows of undeclared income from Bosasa.

2.20 Ms Smuts argues that the confidentiality clause in the Tax Administration Act is “to encourage taxpayers to make full disclosure” as such a breach may “undermine revenue collection. But none of the information contained in the SARS report or in the article discloses information Wakeford himself has given to SARS. She argues the information in the article is “not private” and even if it were “the Press Code (and law) allows for public interest to trump privacy.”

2.21 Even if the SARS report contained confidential information (which the newspaper denies) “that in itself cannot constitute a bar to reportage.”

Ms Smuts cites the judgment in the matter between the SABC and the Sunday Times to substantiate this.[6] In that matter, the newspaper obtained and reported on a confidential SABC report. The court held:

Confidentiality is certainly no “sacred virtue” and I accept … that confidentiality may, from time to time, have to yield to higher interests. Notwithstanding the fact that confidentiality is not necessarily a paramount interest, my difficulty, in any event, is this: the (media) respondents have not breached a duty of confidentiality owed to the SABC. The respondents owe it none, although SABC’s employees and office-bearers may well have such an obligation. The respondents have not acted wrongfully or unlawfully. The Sunday Times’ possession of a copy of the report is not wrongful or unlawful.” [7]

2.22 Thus she concludes that if the media obtains a confidential report given to it by a source in breach of his/her duty of confidentiality, “the newspaper’s possession of the report and its reportage thereon is not unlawful just by virtue of the fact that the source may have acted unlawfully.

Misleading headline

2.23 On the complaint that the headline is misleading: Ms Smuts argues that the relevant clause in the Press Code states that a headline must give a “reasonable reflection of the contents of the article”

The article clearly deals mostly with ‘top brass’ in the ANC who are in the sights of SARS.” Mr Wakeford is mentioned only in the seventh paragraph as being “amongst others being investigated”. ..He is only mentioned twice in the entire article.”

2.24 She argues headlines “do not need to reflect the entire content of an article for obvious reasons. The headline in this matter is indeed a reasonable reflection of the content of the article. Wakeford’s mention in the course of this article was not central [to it] and it would have been obvious to readers that he is not among the ‘top brass’ referred to in the headline.”

Right of reply

2.25 On the right of reply: Ms Smuts acknowledges that the Sunday Times did not approach Mr Wakeford for comment before publication. “This was not deliberate; several other individuals mentioned in the article were approached. It was an oversight, and the newspaper acknowledges that with regret.”

The newspaper has already conceded this point and apologised and offered Mr Wakeford a right of reply. It stands by that offer. “All we can say in explaining this oversight is that several individuals featured in the article and Wakeford ..was mentioned only twice. That does not exonerate the newspaper for its oversight, but we can certainly say it was not deliberate.

Further arguments

2.26 In response to the Sunday Times, Ms Conradie, representing Mr Wakeford provided a background “timeline” to the Ombudsman, which explained how Mr Wakeford’s name became part of the public domain as a result of Mr Agrizzi’s evidence to the Zondo Commission.

2.27 Mr Wakeford’s name was first mentioned on social media in January 2019, as a result of Mr Agrizzi’s initial affidavit being leaked to the media before he gave evidence to the Commission. Deputy Chief Justice Zondo reprimanded the media for this at the time.

2.28 Mr Wakeford, who was then CEO of Armscor (but already serving a long notice period according to a media statement he released) [8], approached the Armscor board as well as the Minister of Defence to request “special leave” to prepare his response to Mr Agrizzi’s allegations. It is not true, as Ms Smuts avers, that he was “suspended on his own request.”

2.29 Ms Conradie argues that “in defiance of the direction of DCJ Zondo and the Commission, the EP Herald (also part of the Tiso Blackstar Group) published an article implicating our client.” In retrospect, she says, Mr Wakeford regrets not reporting that transgression at the time to the Public Advocate in the Ombuds office. However, the EP Herald published a correction article and retracted the initial article from their online platform. [9]

2.30 On 28 January, Mr Wakeford also issued a media statement about the issue after the leaked reports.

2.31 In a letter from Mr Wakeford himself sent by his attorney, he strongly denies he is liable for tax, or that he has received such an assessment. The phrasing “initial calculations seem to indicate that…Wakeford [may be] liable for R1.68m” suggests he “has evaded tax in some manner.” But this is “factually false”: Mr Wakeford does not owe SARS anything “nor has he received any assessment for such an amount.”

He also cites the relevant legislation – Chapter 6 of the Tax Administration Act – saying the prohibition on disclosure of confidential tax information extends to others who may be the recipients of tax information. He argues the Act does not limit this prohibition to SARS officials.

2.32 The comparison with the Manto Tshabalala-Msimang case is not valid as Mr Wakeford is not “a politician in the exercise of his duties.”

2.33 In response to the Sunday Times argument that the headline was not misleading because the bulk of the article deals with “ANC top brass”, he says the whole article is misleading. He has never been a member of the “ANC top brass”.

2.34 On the lack of opportunity to comment, Ms Conradie says the Sunday Times claim that it was not ‘deliberate” “inspires little confidence.” “The fact that ‘several other individuals were approached’ if anything only demonstrates a further disregard for Mr Wakeford’s rights.

2.35 Both Mr Agrizzi, and another former Bosasa employee, Mr Frans Vorster, gave evidence before the Zondo Commission in late January “falsely implicating” Mr Wakeford. In terms of the Commission’s rules, Mr Wakeford has submitted a statement under oath to the Commission and has applied to both testify and to cross-examine Mr Agrizzi.

Our client is one of very few who are willing and prepared to go before the Commission to controvert evidence of Mr Agrizzi in order for the...Commission to assess the evidence and to subject themselves and their evidence to testing. It is noteworthy that in not approaching our client for what comment he would and could make, the Sunday Times did not inform itself of relevant and material facts that fell to be reported on for the sake of balanced and responsible journalism. “

2.36 On 29 March, 2019, Mr Agrizzi again gave evidence before the Commission, falsely implicating our client “without explanation as to why he never gave the evidence when he first testified about our client.”

2.37 Mr Agrizzi’s evidence has never been tested under cross-examination “and is presently simply a very one-sided version of a self-confessed criminal of corrupt character, replete with unreliable evidence including hearsay and self-serving allegations.” His motives for giving evidence against Mr Wakeford “have not been properly canvassed”, and it is “extremely irresponsible” for the media to report on it as though it were “proven fact.”

It would be “irregular and inappropriate” for Mr Wakeford to respond fully to the allegations before his statement is dealt with by the Commission, “besides denying same in the strongest terms” and making clear his intention to challenge Mr Agrizzi.

2.38 Ms Conradie also argues, in response to Ms Smuts, that Mr Wakeford was not suspended. “She clearly want to create a climate for justifying and perpetuating the Sunday Times poor journalism..”

2.39 She also said it was “strange” that the Tiso Blackstar attorney, Mr Willem de Klerk did not alert the Sunday Times to the fact that Mr Wakeford had already complained about the EP Herald article for the “unfounded allegations.”

2.40 Ms Conradie also queries why, if the Sunday Times had noted Mr Wakeford’s public statement dismissing Mr Agrizzi’s evidence as “a gross fabrication of lies”, it did not follow up and ask Mr Wakeford whether he had submitted a statement to the Commission.

2.41 Commenting on the Sunday Times “source document”, Ms Conradie notes it was intended for internal use by SARS – all of the information “falls squarely within the protection provided for by Chapter 6 of the Tax Administration Act.” She also charges that the Sunday Times did not investigate the content of the report (“which on the face of it is only a directive to another SARS department to investigate”) with the Commissioner of SARS, and falsely used the words “according to SARS” to attribute its “untested content.”

2.42 Mr Wakeford “deals comprehensively in his statement to the Commission with Mr Agrizzi’s allegations regarding any amounts paid to the Close Corporation of which he is the member.” Ms Conradie says it would be inappropriate for him to respond to these allegations before giving evidence at the Commission. However, he can state that his statement discloses all details of payment to the Close Corporation ‘as a consultant to Bosasa”; he received no payments personally; “all amounts received were properly invoiced for and the required taxes paid over to SARS.”

Neither he nor the Close Corporation “received any amounts in cash from Bosasa. “The amateurish and reckless calculation by the Sunday Times of the tax allegedly payable by our client is unbecoming of any professional accountant, journalist or publication – calculating tax is most certainly a far too complex an exercise for anyone than a qualified and tax knowledgeable person to do on a calculator!”

The quote from the SARS document (if it is authentic) “is clearly part of a communication between departments of SARS and not intended for publication or disclosure to third parties.”

2.43 Mr Wakeford has “grave concern” about the “source document” which the Sunday Timeshas used so recklessly to write as if based on fact and outcome” Mr Wakeford says “to the best of his knowledge, all his tax affairs, including those of the Close Corporation, are in order and that he is not being investigated by SARS.”

Mr Wakeford has complained to the SARS Commissioner and is awaiting a response. “Given the information furnished by the Sunday Times regarding the leaking of the SARS report, we will request the Commissioner to extend his enquiry to determine how this report was leaked.”

2.44 The outcome of the court case between the Sunday Times and the late Manto Tshabala-Msimang “does not justify the publication of the unfounded allegations” against Mr Wakeford.

If, as the Sunday Times says, its source document is an internal report “it can barely be argued that it contains anything other than information protected by Chapter 6 of the Tax Administration Act.”

2.45 On the headline, his representative says it was “intended to be sensational and our client takes exception to it.”.

2.46 On the failure to contact him for comment, Mr Wakeford “does not accept” the newspaper’s explanation; “it is inexcusable of a publication of its stature. It is no mitigation that his name was ‘mentioned only twice’ on the front page of a major Sunday newspaper with a large circulation! On the contrary it is egregious.” But in light of the fact that his statement has not yet been dealt with by the Zondo Commission, he “he may not use the offer to reply as it would be irregular if not unlawful.” In any case “it would not repair the damage the Sunday Times has done” to his reputation.

2.47 In conclusion, Ms Conradie says the newspaper has not “acquitted itself of its obligations in law and responsibilities to society in relation to our client and it now seeks to justify its unlawful and damaging conduct. Its attitude towards our client in its journalism and its submissions is repugnant.”

  1. Analysis

Background

3.1 This story has its origins in testimony before the Zondo Commission of Inquiry into State Capture in early 2019.

3.2 On the 28 January, 2019, Angelo Agrizzi, a former executive of Bosasa, gave evidence to the Zondo Commission about a number of highly placed government officials and politicians who had allegedly received payments in cash and kind from Bosasa in return for favourable consideration. There were also attempts to sway people who may have influence in such bodies as the NPA or SARS.

3.3 Mr Agrizzi did not name Mr Wakeford as someone who received the allegedly illicit payments, but he identified him as a  “longstanding friend of the Watsons.” [10]

Mr Wakeford was paid a “retainer” from Bosasa of R100 000 a month.

In testimony delivered on 29 March, he described Mr Wakeford as “a strategist of the Watsons.” [11]

3.4 Among his “duties”, Mr Agrizzi alleged, was to help the company in relation to SARS audits. He arranged to talk to one Mr George Papadakis, apparently a consultant at SARS, to see whether he could “assist” the company

3.5 Because Mr Agrizzi’s affidavit was “leaked” to certain newspapers before he testified, this led to an article been published in at least one newspaper, the EP Herald ran an article on 25 January, 2019 under the headline “R100 000 a month paid to Wakeford.[12]

Judge Zondo admonished the media at the time about publishing leaked information before people had testified, saying this was against the Commission’s rules and unlawful.

Others who were due to testify, or whom had been named in affidavits, felt they were unfairly disadvantaged by these leaks either for security reasons or because they were tarnished before being informed by the Commission that they had been named.[13]

In the case of the EP Herald article, Mr Wakeford’s representatives objected and it was withdrawn from the website; subsequently a story carrying his denial was published on 29 January, 2019.

3.6 Mr Frans Vorster, who had worked for Bosasa, testified before the Zondo Commission that Mr Wakeford had been introduced to him by Mr Gavin Watson in mid-2008.[14]

After that, on occasion, Mr Wakeford would call him and tell him to order “wet and dry cement”, which was then delivered to a house in Meyerton. He had understood that the cement was for a house owned by Mr George Papadakis, who was ‘assisting” Bosasa in its relationship with SARS. [15]

3.7 This is some of the evidence concerning Mr Wakeford and that sparked  the interest of the media.

It should be noted that the evidence is untested in the sense that there has been no cross-examination. Mr Wakeford has not only denied the testimony but applied to cross-examine Mr Agrizzi.

I will deal with some of the key points below:

Accuracy

3.8 The Sunday Times followed up on an angle that emanated from Mr Agrizzi’s evidence before the Zondo Commission, which by that stage was squarely in the public domain. The story centred around “tax claims” by SARS of those who benefited from Bosasa.

3.9 Mr Wakeford released a statement (28/1/19) saying he had been notified by the Commission that his name appeared in “papers submitted to the Commission”. He confirmed his friendship with the Watsons “dating back to the 1980s, where he witnessed their huge sacrifices for the achievements of a non-racial and democratic South Africa. They resourced hundreds of cadres ..fleeing the country into exile at that time and remain stanchly committed to non-racialism to this day.” They had also lost all their possessions at this time “due to ongoing harassment from the state.”

3.10 He also confirmed his “professional relationship as a retained consultant to BOSASA spanning a period of eight years.” He said this relationship was always disclosed in all other organisations he was a consultant to in order to avoid conflict of interests.

He confirmed he had asked Armscor, of which he was then CEO (but serving a notice period) ”to place him on special leave to allow him time to prepare his responses and…clear his name.”

 Ms Conradie told me in an email that Mr Wakeford had filed an affidavit with the Zondo Commission in February last year.  However, the “commission only publishes affidavits once the deponents have appeared” before it. “The Commission granted Mr Wakeford the opportunity to: (a) cross examine Mr Agrizzi and (b) present his own evidence before the Commission. The parties have been exchanging papers and meeting with the legal team and investigators of the Commission and we are still awaiting final directions from the Chairperson in respect of the date and process to be followed at the hearing.”

It is important in the interests of fairness to note Mr Wakeford’s denial of Mr Agrizzi’s evidence and his successful application to cross-examine him. [16]

3.11 Mr Wakeford has also denied that he has any outstanding tax liabilities.

Mr Wakeford has always paid all taxes on all incomes received, including income from his consultancy with Bosasa in the past. He has not at any stage been informed of any investigation into his tax affairs as represented in the article nor was any subsequent assessment raised thereon.”

Ms Conradie says the newspaper has not provided the report to them or to the Ombudsman (in fact, they did provide it to me; see below). She adds that providing the report would not have revealed the identity of the source.

 

3.12 The evidence before the Zondo commission, and Mr Wakeford’s own acknowledgement, shows a close relationship between himself and the Watson brothers.

3.13 Mr Agrizzi’s evidence was explosive because it implicated senior politicians and officials in corruption, mainly through accepting bribes to “fix” contracts or relations with government agencies. The evidence, and its ramifications, were intrinsically newsworthy.

3.14 But there are two points to be aware of: one is that the evidence, as incriminating as it may have been, was largely untested at that point (and in fact still is).

Some of those implicated denied wrongdoing. In terms of the Commission rules they are forewarned and may apply to cross-examine the witness. This is why the “leaking” of the affidavit before the deponent appears before the Commission, and the intital article in the EP Herald, can be seen as unfair to those implicated in any affidavit.

3.15 The strong denial by Mr Wakeford that he owed payments to SARS (as well as those whom the Sunday Times spoke to) indicates the newspaper should have been less categorical in its introduction: “Top ANC politicians, officials and prominent businessmen who benefited from Bosasa’s dodgy dealings are facing tax claims of more than R250 million from the SA Revenue Service (Sars)”

3.16 Its second paragraph, which refers to the tax authorities “preliminary investigations that are likely to result in individuals not only being served with hefty bills, but also charged for under-representation of income, overstated expenses and misrepresentations” is closer to the evidence the newspaper had.

I understand the pressure of deadlines that any newspaper, particularly a busy weekly, faces. Still, the intro to the story, which states without any qualification that “top ANC politicians, officials and prominent businessmen…are facing tax claims of more than R250m”, is not borne out by the evidence in its possession.

3.17 The newspaper was, though, quite reasonably following up on an angle that emanated from evidence before the Zondo Commission. A major debate in the public domain has been the element of consequence and accountability for many of the wrongdoings laid bare at the Commission. One of these consequences relates to tax payments.

Once the newspaper had got hold of the preliminary SARS report, it behaved reasonably in checking out the information with two exceptions: the introduction to the article did not include an element of doubt about either the SARS investigation nor Mr Agrizzi’s evidence; and secondly it had not contacted everyone mentioned in the report, including not Mr Wakeford.

The source document

3.18 The Sunday Times sent me the document on which the story is based. It appears to be an internal document and is headed: “Illicit Economy Case Selection &Tactical research Analysis: Case Information report.”

It is signed by “Manager”, Nareen Belebesi.

3.19 Both Ms Belebesi’s Facebook and LinkedIn profiles identify her as a “Manager, Criminal case section” at SARS. She is also a forensic and fraud expert and an admitted attorney.

3.20 The document identifies the project as “Bosasa” and says it emanates from the allegations made at the Zondo Commission. It identifies a number of entities within the Bosasa operation or linked to Bosasa, including trusts.

It also lists a number of individuals who allegedly received “kickbacks” from the Bosasa group.

The document says: “Analysis of the affidavits presented at the Zondo Commission reveal that African Global (previously Bosasa) siphoned off cash from the business to bribe politicians and government officials.” It then lists the ways in which this was allegedly done.

3.21 Drawing from Mr Agrizzi’s evidence, it lists a number of “expenses, which were not in the production of income, but claimed as operating expenses.” Next to the total amount is another column estimating the tax on those “benefits”.

It is a long list that includes two items relevant to this article: “Wet and dry cement for Papadakis” and “Kevin Wakeford’s payments.” The former is estimated at R600 000 with a tax liability of R168 000, the latter at R6 million with a tax liability of R1,68 million.

3.22 The amount of the payments in the SARS document appear to be the same figures provided to the Commission by Mr Agrizzi and Mr Vorster, indicating that it is indeed a preliminary report based on the allegations. The tax allegedly owed is calculated at 28% of the benefit or payment – in the document, not by the Sunday Times. This is the corporate tax rate.

3.23 Was the Sunday Times justified in using it as a main source document?

The newspaper says it verified the authenticity of the document.

I also sent it to someone who had worked at SARS for several years to see whether it was likely that it was authentic. The source, who no longer works there but whose identity I undertook to protect, confirmed it was in the same format as internal SARS documents.

From this, and because the signatory appears to be genuine, I am satisfied that the Sunday Times had reasonable grounds to believe the report is authentic.

3.24 Yet it could have been treated with more circumspection. For one thing, it is not clear why the tax rate for “payments” made to Mr Wakeford is calculated at a corporate tax rate unless it was payment to his close corporation, which he says he has.

For another the figures are identical to those disclosed by Mr Agrizzi in his evidence before the Zondo Commission. This indicates that SARS may not have, at this stage, undertaken its own independent investigations but was relying on Mr Agrizzi’s evidence.

3.25 Much of the article comprises information from the document which lists those implicated in the taking of “favours” or bribes from Bosasa. This information is clearly attributed.

It also approached various people who are named as being liable for tax in the document for comment. It did not, unfortunately, approach Mr Wakeford.

Confidentiality and the public interest

3.26 It is true that taxpayer’s information is confidential in terms of Chapter 6 of the Tax Administration Act. It is also true, as Mr Wakeford’s lawyers argue that this confidentiality behoves not only SARS officials but those to whom the information is passed:

“In the event of the disclosure of SARS confidential information or taxpayer

information contrary to this Chapter, the person to whom it was so disclosed may not in

Act No. 28 of 2011 Tax Administration Act, 2011

any manner disclose, publish or make it known to any other person who is not a SARS

official.

(4) A person who receives information under section 68, 69, 70 or 71, must preserve

the secrecy of the information and may only disclose the information to another person

if the disclosure is necessary to perform the functions specified in those sections.” [17]

3.27 However, there is an argument to be made about public interest.

3.28 The Zondo Commission – and alleged impropriety among high-placed officials and politicians – has been at the centre of public debate in South Africa for at least the past two years.

It is also a well-known fact that revenue collection has suffered. These two trends are not necessarily linked but there has been, as the SARS internal report says, some reluctance among taxpayers “to pay their fair share because of the looting of public funds.”

3.29 The Sunday Times has used the case between itself and the late minister Manto Tshabalala-Msimang to argue that that the laws of privacy or confidentiality, in some cases, may be breached when the public interest is sufficiently strong. It also held that much of the information published was already in the public domain.

Mr Wakeford and his attorneys have argued this case is not equivalent as he was “not a politician in exercise of his duties”, as was the case in the Tshabalala-Msimang matter. They argue that the purpose of the confidentiality clause in the Tax Administration Act “is to encourage taxpayers to make full disclosure to SARS and that a breach of confidentiality may undermine revenue collection.”

3.30 The question though here is more to determine whether the editorial judgment used in the publication of this piece was sound and justified in terms of the Press Code.

Clause 11 of the Press Code deals with confidential sources of information urging care to corroborate anonymous sources and to avoid them if possible. Clause 11.3 offers: “The media shall not publish information that constitutes a breach of confidence, unless the public interest dictates otherwise.”

3.31 This is a critical clause in this case. The bulk of the story dealt with prominent politicians and public officials such as (then) environmental affairs minister Nomvula Mokonyane and former SAA board chair Dudu Myeni. They were all mentioned in Mr Agrizzi’s testimony. They are also mentioned in the SARS internal document.

The public interest in the wake of endemic corruption and the widespread collapse of public institutions, it could be argued, is overwhelming.

Thus, the exception in clause 11.3 of the Press Code, of “public interest dictating otherwise” appears to be met.

3.32 However, that said, there is still the argument that Mr Wakeford himself is not a “prominent politician”. Even though he may be a public figure, having been involved in public discourse for many years, it makes the neglect in contacting him to offer him a right of reply, more egregious. This is dealt with below.

Right of reply

3.33 All of those approached for comment by the Sunday Times said they had not been made aware of any tax liability by SARS, and Nomvula Mokonyane’s spokesperson indicated she intended to either cross-examine Mr Agrizzi or call witnesses in response to his allegations.

The newspaper did not apparently approach everyone named in the report including ANC MP, Vincent Smith, former SAA board chair, Dudu Myeni and former “prisons boss” Linda Mti.

It also did not, by its own admission, approach Mr Wakeford.

3.34 The article concerned serious allegations, and everyone named by the newspaper should have been entitled to a right of reply. They also should have been asked whether they contested the allegations of wrongdoing spelled out by Mr Agrizzi.

Mr Wakeford, for his part, says he has never contested that he was a consultant for Bosasa and always declared this interest on other boards or businesses that he engaged with, including his erstwhile employer, Armscor.

Neither the SARS report, which seems only preliminary, nor the evidence of Mr Agrizzi, can be taken as uncontested truth at this stage.  

The Sunday Times has said Mr Wakeford was “only mentioned twice” and relatively far down in the story: this makes little difference. His name was mentioned in connection with alleged wrongdoing and tax evasion and he deserved a right of reply and explanation, as the Sunday Times itself admits.

Misleading headline

3.35 On the headline (or “article” as was later argued) being misleading: the headline refers to “ANC top brass” and its third paragraph mentions the names of some prominent people, Ms Mokonyane, Mr Smith, Ms Myeni, and Mr Mti among them.

Mr Wakeford’s name (along with Mr Motsoeneng’s and former SARS consultant George Papadakis) are mentioned in the seventh paragraph. There is a transition to that paragraph from the first part of the article that reads: “Others being investigated...” This cannot be read to imply that those mentioned under the category “others”, such as Mr Papadakis and attorney Christo van Wyk, were part of the “ANC top brass”.

The headline fairly reflected the main angle of the story.

Finding

I find that the newspaper has transgressed clauses:

 1.3 of the Press Code: “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 and with reasonable regard to context and importance...” In this case, the newspaper did not have unassailable evidence that its intro was true, given the potential challenges to Mr Agrizzi’s evidence and the fact that the SARS report was an internal “preliminary” report.

And 1.8: “The media shall seek the views of the subject of critical reportage in advance of publication.” In this case, by its own admission, the newspaper failed to contact Mr Wakeford and took as uncontested both Mr Agrizzi’s allegations against him as well as a preliminary report from SARS.

 

These are Tier 2 offences:

 

The newspaper should apologise to its readers for reporting as fact in its first paragraph that that “top ANC politicians, officials and prominent businessmen” are “facing tax claims of more than R250m” without indicating that this is based on a preliminary, untested report.

It should also apologise to Mr Wakeford for reporting that he owed R1,68m in tax without giving him the right of reply and without specifically mentioning that he has given notice to the Zondo Commission to challenge Mr Agrizzi’s allegations. It should also offer him a right of reply to the allegations.

The apology should be published on the same page as the original print story in the newspaper, with a link to its online story, and be approved by the Ombudsman.

The Press Council logo and a link to this finding should also be published.

The rest of the complaint is dismissed.

Appeal

The Complaints Procedures lay down that within seven (7) 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.

Pippa Green

Press Ombudsman

March 15, 2020



[1]  Armscor CEO Kevin Wakeford on special leave after Bosasa claims, Business Day, 21/1/19; cited by Ms Smuts

[2] R100 000 a month to Wakeford, EP Herald, 25/1/19

[3] Armscor CEO Wakeford slams Agrizzi’s allegations as ‘malicious’; IOL, 28/1/19; cited by Ms Smuts

[4] Manto Tshabalala-Msimang and another vs M Makhanya and others, Johannesburg High Court, 2007; http://www.saflii.org/za/cases/ZAGPHC/2007/161.html

[5] Ibid, par 46

[6] SABC vs Avusa Ltd and another, Johannesburg High Court, October 2009 http://www.saflii.org/za/cases/ZAGPJHC/2009/80.html

 

[7] Ibid, par 18

[8] Mr Wakeford tendered his resignation from Armscor on 20/10/18 with a six-month notice period; Armscor Media Statement issued 15/2/19

[9]Angelo Agrizzi’s claims the fabric of lies, insists Kevin Wakeford”, EP Herald 29/1/19

[10] Angelo Agrizzi, evidence before the Zondo Commission, 28/1/19

[11] Ibid

[12] EP Herald, op cit

[14] Frans Vorster, evidence before the Zondo Commission, 30/1/19

[15] Ibid

[16] To date this has not yet happened.

[17] Tax Administration Act, 28 0f 2011