Ruling by the Press Ombud and a Panel of Adjudicators
4 June 2017
This ruling is based on the written submissions of Mr Asger Gari, on behalf of Ms Koketso Choma, and those of Susan Smuts, legal editor of the Sunday Times newspaper, as well as on a hearing held on June 1 in Johannesburg. Advocate Barry Roux represented Choma and Attorney Willem de Klerk the publication. The members of the Panel of Adjudicators were Tshamano Makhadi (media representative) and Brian Gibson (public representative). Also present were Smuts and Mzilikazi wa Afrika, the journalist.
Complaint
Choma is complaining about a front-page lead in Sunday Times of 26 March 2017, headlined Billion rand babe – Eskom lavishes deals on boss’s 26-year-old stepdaughter, and online, How Eskom lavished its boss’ daughter with R1bn in contracts. The complaint is also about a sidebar, headlined A deluge of contracts.
She complains that the:
· headlines and the introductory sentence to each story (which were identical) were inaccurate, misleading, unfounded and unverified – which created the false impression that she had unduly benefitted from contracts due to a corrupt relationship with Eskom boss Matshela Koko;
· sidebar incorrectly relied on various contracts allegedly awarded by Eskom to Impulse during, and allegedly because of, Choma’s involvement in Impulse; and
· omitted material information (details below).
Note: The correspondence raised some issues which were not included in the news reports mentioned in Choma’s complaint. These fall outside the jurisdiction of this office.
The text
The article, written by Mzilikazi wa Afrika, was about Ms Koketso Choma, the stepdaughter of Eskom boss Matshela Koko, who allegedly raked in contracts worth about R1-billion for her company (Impulse International) from the state utility. Choma, 26, who graduated three years ago, was reportedly appointed as a director at Impulse International in April 2016.
The sidebar listed several deals concluded between Eskom and Impulse between April 2016 and February this year. These were for:
· R79.2-million – a contract on an emergency basis for construction supervision at Kusile power station in August last year;
· R19.8-million – a contract that ran from August last year until the month before publication;
· R300-million – a sub-contract for trunk cabling for Kusile’s Unit 2 from ABB in October 2016;
· R31.1-million – a deal from October 2016 to September 2019;
· R14.2-million – a deal in January 2017 for a six-month contract;
· R198-million – a deal to extend a R79-million contract by ten months, to run until January 2018; and
· R42.3-million – a contract in January 2017, running until December 2019.
In addition Impulse, together with another ABB sub-contractor, Dynamic Instruments, were among the beneficiaries of a R350-million “demobilization claim”, submitted by ABB to Eskom. Of this amount, R72-million has reportedly already been paid out to the beneficiaries.
Documentation prior to the hearing
The complaint in more detail
Headlines, introductory sentence
The headlines in question read, Billion rand babe – Eskom lavishes deals on boss’s 26-year-old stepdaughter, and online, How Eskom lavished its boss’ daughter with R1bn in contracts. The introductory sentences stated, “The stepdaughter of Eskom boss Matshela Koko raked in contracts worth about R1-billion for her company from the state utility”.
Choma says the headlines and the introductory sentence were inaccurate, misleading, unfounded and unverified, creating the impression that she had unduly benefitted and had a corrupt relationship with Koko.
Her attorney argues that many readers form an opinion about the contents of an article premised upon the perception created by the headline – which, in this case, was aggravated by the introductory sentence.
Gari says even those who have read the entire article would have been influenced by the headline “to understand that the full publication is in support of the headline and the introductory paragraph (particularly as the latter was highlighted).”
He argues that the texts created an understanding that Koko’s relationship with Choma has led to the awarding of contracts to Impulse, despite the fact that Sunday Times could not have had any information, reasonably verified, to show that Koko had the power or influence to award contracts to Impulse to benefit Choma, or that her position at Impulse led to the awarding of any of Eskom’s contracts – the latter has had a contractual relationship with Impulse long before Choma became involved.
There is no proof, Gari continues, that Choma has received any money from Eskom contracts, whether directly or indirectly – even the newspaper’s own source denied the allegations upon which the newspaper relied.
He concludes the newspaper relied on payments to a separate entity in which Choma had an involvement, which was unrelated to Eskom and to her interest in Impulse.
Sidebar
Choma complains that the sidebar incorrectly relied on various contracts allegedly awarded by Eskom to Impulse during and because of her involvement in Impulse.
Gari says that, in dealing with the contracts in the sidebar, Sunday Times made no attempt to distinguish between contracts awarded to Impulse during and outside of Choma’s involvement in that company, or to contracts awarded by Eskom to other companies (such as ABB) – in which case it should have been clear to the newspaper that the amounts mentioned could not have been to the sole benefit of Impulse (which was “merely a subcontractor in a limited amount”).
The attorney says the sidebar was structured in such a way that all the contracts, including the subcontracts (e.g. R300-million for Trunk Cabling and another amount of R350-million) would have been understood in the context of the headline and the introductory paragraph to justify the R1-billion which had been “raked in” by Choma.
Besides, some of the contracts were awarded before Choma got involved, he adds.
Omitting material information
Choma complains that Sunday Times omitted material information, such as that:
· Koko had no say or influence in the awarding of any contracts to Impulse;
· the contractual relationship between Impulse and Eskom had existed long before she arrived on the scene;
· she played no role in the Impulse tender processes involving any Eskom-Impulse contract; and
· she did not directly or indirectly receive any financial benefits pertaining to the Eskom contracts.
Sunday Times responds
Headlines, introductory sentence
Smuts says both headlines were substantiated by the story.
She refers to Judge Kathree-Setiloane (in Cele vs. Avusa Media), who stated that “ordinary reasonable readers of newspapers understand that headlines, by their very nature, draw attention to an article by paraphrasing and highlighting its contents through the use of a few well-chosen words or phrases. The headline does not, and is not meant to, reflect the full content or context of the article.”
Therefore, Smuts argues, there is no reason to enable a reader to divorce his/her mind from the influence of the headline and the introductory paragraph. “Indeed the article that followed substantiated the headline and introduction. There is no reason why they should be separated,” she argues.
Sidebar
Smuts replies that every one of the deals listed in the story were concluded between April last year (when Choma started working at Impulse) and February this year. “The starting month of each deal was included in the story. The deals that were subcontracts were labelled as such. We point out that although Ms Choma was a nonexecutive director at Impulse International between April and October last year, she was a beneficiary and trustee of Mokoni Trust until Mr Koko urged her to resign as trustee in February. The Mokoni Trust has an interest in Impulse International,” the legal editor argues.
Regarding sub-contracts, Smuts says the newspaper did not assume that the figure for the primary contract was the amount of Impulse’s benefit. “However, we have been informed that the lion’s share of the subcontracting went to Impulse,” she submits.
The legal editor says she finds Choma’s submissions about the R1-billion of contracts (mentioned in the main story) and the sidebar “puzzling”, as the latter clearly stated that the deals included the ones that were listed – the list was not intended to be complete. “There is no reason why readers should calculate whether the amounts of the listed contracts added up to R1-billion when it was clear that those contracts were among those awarded and were not presented as a comprehensive list,” she argues.
Smuts adds:
· Choma was Koko’s (Eskom’s group executive for generation at the time) stepdaughter, which pointed to a clear conflict of interest (in Eskom awarding contracts to Choma’s company). “Our stories certainly presented the facts underlying the conflict of interest. There is no reason why we should not have done so, and every reason why we should bring such facts to light. Since Eskom is a state-owned enterprise, any financial misconduct or appearance thereof is a matter of obvious public interest”;
· It is false to state that Koko had no power or influence over the awarding of contracts. He was in an influential position, and would have been able to exert pressure on his subordinates;
· It is unclear whether Choma has the standing to raise this complaint – neither Koko nor Eskom has complained about the story;
· It is apparent from Koko’s responses to the reporter’s questions that he was aware of the conflict of interest. He first claimed that he only discovered in February that Choma – with whom he shares a home – worked for Impulse. He also claimed there was no legal need for him to declare the conflict of interest after she had resigned (which indicates that a conflict of interest existed when she was there). Furthermore, both Koko and Impulse International CEO Pragasen Pather initially denied knowing each other, but changed their stories after they were confronted with evidence of 52 telephone calls to each other between April and November last year. “This conduct does not inspire confidence in the integrity of the deals, or indeed in the integrity of the information they have shared with our reporter”;
· The fact that Impulse and Eskom had a previous relationship does not erase the conflict of interest that arose when Choma joined Impulse;
· The reportage did not allege corruption – it made reference to a conflict of interest; and
· It is telling that Choma, who would have been in a position to state in her complaint which contracts were awarded during her tenure and their values, has not done so – instead she has attempted to undermine the story with generalisations and unsupported inferences.
Omitting material information
Regarding this part of the complaint, Smuts says:
· Koko, by virtue of the position he held in Eskom at the time, was in a position to influence the awarding of contracts (as stated in the story); also, sources quoted or referred to claimed that Koko had been active in seeking to influence the process, and Koko’s response thereto was recorded;
· The contractual relationship between Eskom and Impulse that existed prior to Choma joining the latter does not negate the conflict of interest that arose when she did join it (which is underscored by Koko’s comments as noted above);
· The story did not say that Choma played a role in the tender process – it was enough for a conflict of interest to arise that her firm stood to benefit from Eskom deals, and that she was related to Koko;
· It is not clear to which “entity” Choma refers. The story made no allegations about payments to “another entity” in which she had been involved. If she is referring to Mokoni Trust, though: It was Koko who mentioned that he later became aware that she “is now a beneficiary and trustee of Mokoni Trust, which has an interest in Impulse International”. “We did make reference to payments made to the complainant in subsequent reporting on the matter. We ask that she clarify her complaint. We ask for an opportunity to make further submissions once she has done so”;
· The story did not refer to payments to Choma. “It is possible she is referring to a subsequent story. We ask her to clarify, and for an opportunity to address the complaint once the clarification is received”;
· She asks Choma to clarify which source denied the allegations. “We are not able to address this complaint without further information as we do not know to whom she refers”;
· Sunday Times did not seek to create an atmosphere of a corrupt relationship between Koko and Choma – it was all about a conflict of interest. Publications cannot be held accountable in terms of the Code of Ethics and Conduct for the inferences that readers might draw (as the Appeals Panel has said on some occasions) – the only relevant factor is whether the underlying facts are correct; and
· The fact that the story did not list every single contract did not mean that they did not amount to R1-billion. “Through primary and subcontracts the deals amount to more than R1-billion.”
In conclusion, Smuts adds, “We deny that we did not make it clear that some contracts were awarded before Ms Choma joined Impulse. We stated in the main story that Impulse had been ‘awarded close to R1.8-billion in tenders from Eskom since 2014. Of those deals, contracts of R1-billion were awarded while Choma was a director of the company’.”
Choma replies
In general
Choma’s attorney points out that the story was not only about a conflict of interest – it said that she had been “lavished” with contracts and that she had “raked in” contracts worth approximately R1-billion. The innuendo created was that there was no merit involved, that due processes were not followed, and that Choma had participated in the raking in of contracts (as part of a corrupt relationship with Koko).
The facts presented did not support the figure of R1-billion. Gari calls this an “abuse … designed to escalate the prominence of the alleged transactions to entice the reader to buy the newspaper”. He adds that the additional references to “lavished with” and to “rake in R1-billion” were provocative “and seemingly designed to entice and to evoke a skewed opinion”.
Headlines, introductory sentence
Gari argues that the story itself was not about a corrupt relationship, but that the headlines and the introductory sentence introduced that notion – and therefore they did not reasonably reflect the content of the story (and in the process constituted a distortion, exaggeration and a misrepresentation of the facts). He adds that Smuts’ reply amounts to an argument that headlines are immaterial.
The attorney also says that the headlines and the sentence in question implied, without any substantiation, that the only reason for Impulse receiving the contract was Choma’s involvement as a director.
He provided this office with extracts of comments to show that average readers are not able to divorce themselves from the headlines.
Sidebar
Gari says “the tenor of the reports” was that the contracts had not been awarded as a result of a fair and transparent procurement process to a company of which [Choma] was a non-executive director for a limited time, but that they were awarded because of a corrupt relationship”.
He notes that Sunday Times knew that some of the contracts were in fact sub-contracts – and yet, it used the full amounts “to support the skewed picture that they have created”.
Moreover, he says, the newspaper did not attempt to establish the facts regarding any alleged benefits received by Choma, adding that the Mokoni Trust did not receive any benefits either.
The attorney points out that the story did not report that Impulse had received “the lion’s share” of the sub-contracting – it was published as if the sum of the contract amounts went to Impulse by virtue of Choma’s involvement in that company. “This in itself is a serious misrepresentation,” he asserts. The story, he argues, should have stated that the list was not comprehensive.
Apart from the dispute whether Koko could have influenced the awarding of contracts, Gari says Sunday Times deliberately ignored the fact that:
· Impulse had a longstanding relationship with Eskom prior to Choma’s involvement;
· there is no evidence that Impulse did not provide a proper service to Eskom following the contracts;
· Choma did not act in any capacity relevant to Eskom and did not receive any remuneration from Impulse in whatever capacity;
· while neither Eskom nor Koko has complained, this did not absolve the newspaper from having to be fair and accurate in its reporting; and
· it is unfair to blame Choma for responses by other parties (such as the CEO of Impulse).
The attorney concludes, “The above is a serious misrepresentation and exposes the absence of any reasonable steps to publish allegations in a responsible manner in their proper context. The publication was clearly designed to evoke emotion to promote sales and to brand [Choma] as a person who participated in corrupt activities.”
Omitting material information
All of Gari’s responses under this section have already been dealt with.
At the hearing
From the outset, Roux simplified matters by not arguing amounts of money that allegedly changed hands. It was immaterial, he rightly argued, if the total amount was R800-million or R1-billion – conflict of interest remained conflict of interest, and the perception of corruption remained just that, irrespective of the amount.
The complaint was therefore confined to the headline, sub-headline and introductory sentence, with the sidebar giving stimulus to the “atmosphere” created of a “corrupt relationship” between Choma and her step-father. That, indeed, was the crux of Roux’s argument as well.
De Klerk countered by pointing out that, in the year before Choma got involved in Impulse International, that company was awarded two Eskom contracts, to a total value of R200-million. During the eight months she was a (non-executive) director and the 11 months she was a shareholder (through the Mokoni Trust), that total climbed to approximately R1-billion – hence the “deluge of contracts” “lavished” on Choma by Eskom.
Based on the above, the attorney defended the newspaper’s reportage by arguing that:
· Choma was key to the “deluge” of contracts and her presence in the company was “somehow a catalyst for several deals going the company’s way”;
· if suspicions were raised, it came as a result of the facts, and not because of the newspaper’s headline; and
· if an impression of corruption was created, it was rather aimed at Koko, and not at Choma.
De Klerk also argued, as quite some length, that a headline may express an opinion (of the publication) if it is based on facts, and that it should not be interpreted in isolation from the story.
Be that as it may, the panel’s guidelines were twofold, based on the following sections of the SA Code of Ethics and Conduct:
· 1.1: “The media shall take care to report news … fairly” – with the intention of trying to establish whether the headlines and the introductory sentence were fair to Choma or not; and
· 10.1: “Headlines … shall give a reasonable reflection of the contents of the report … in question” – with the understanding that a headline can hardly portray the full message of a story, hence the use of the words “reasonable reflection”.
Central to the panel’s deliberations was the question if the headlines and the introductory sentence conveyed the message of possible corruption between father and daughter. All parties conceded in the hearing that the facts pointed to an apparent conflict of interest in the awarding of the contracts. But did the headline, sub-headline and introductory sentence unfairly state that Choma was party to a corrupt (and therefore criminal) relationship?
Conflict of interest, said Roux was undesirable, but it was not a criminal act.
Towards the end of the hearing events took an interesting turn, as Gibson explored the possibility of a settlement between the parties. Roux indicated that he would be satisfied if the newspaper published a denial that it intended to imply that there was a corrupt relationship between father and daughter. He pointed to a statement in Smuts’ reply to the complaint where she stated, “We again deny we sought to create an atmosphere of a corrupt relationship between Mr Koko and Ms Choma. We raised a matter of conflict of interest.”
The newspaper rejected any settlement, stating again that the headline, sub headline and introductory paragraph were a fair reflection of the facts and “any whiff of corruption” contained in the story.
The panel did not buy the argument that any inference of corruption was aimed at Koko only. If there was indeed corruption, then Choma and the company of which she was a director, would obviously also be party to a corrupt relationship.
The jury is still out on the question of possible corruption. A law firm appointed by Eskom is investigating the matter.
Mindful of Roux’s introductory statements, when he indicated that Choma would not have complained had the headline and sub-headline indicated that the money went to her company, and not to her in person, the panel decided to focus on whether the headings were a reasonable reflection of the now uncontested article, and whether they were fair to Choma.
The panel decided that the:
· main headline was fair and constituted creative comment/opinion;
· somewhat colourful heading in the online story (and sub-heading in the print edition) focussed on Choma alone, but were saved by the close proximity of the words “for her company” in the introductory sentence. This provided the necessary context and clarity as to the intention of the headline and sub-headings, namely that the “contract millions” were not for Choma personally, but for her company. The newspaper’s intentions were also clear from the heading to the continuation of the article on Page 2 of the print edition: “Stepdaughter’s firm showered with Eskom deals” (emphasis added).
Finding
The complaint is dismissed.
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.
Tshamano Makhadi, media representative
Brian Gibson, public representative
Johan Retief, Press Ombud