Mangaung Metropolitan Municipality vs. Volksblad

This ruling is based on the written submissions of Phatshoane Henney Inc, for the Mangaung Metropolitan Municipality, and the Volksblad newspaper.

Mangaung Metropolitan Municipality (MMM) complains about a story on the front page of Volksblad, published on September 22, 2011 and headlined Salaris van hoë skok – Mangaung-bestuurder kry meer as Ace Magashule (Salary of high official shocks – Mangaung manager gets more than Ace Magashule).

MMM complains that the story inaccurately states that:

The municipality also complains that it was not contacted for comment.

The story, written by Marietjie Gericke, says that Msibi earned the year before more than R2 million – which is more than Free State Premier Ace Magashule and nearly as much as Deputy President Kgalema Motlanthe. He reportedly was the second best paid municipal manager in the country. Gericke writes that Msibi also received the highest bonus in the country for a municipal manager. A source is quoted as saying that this is “shocking’, given the municipality’s poor financial management and service delivery. The story also mentions bonuses to the MMM’s financial manager and the CFO, and mentions that the city’s top seven officials received bonuses totaling R2 028 174.

I shall now look at the merits of the complaint:

The intro to the story says that Msibi earned the last financial year (ending on 30 June 2010) more than Free State Premier Ace Magashule and nearly as much as Deputy President Kgalema Motlanthe. Gericke also writes that Msibi’s package was more than R2 million for the last financial year and that he had received a bonus of R335 837. The story continues to say that he allegedly was the second best paid municipal manager in the country and that the bonus that he allegedly received was the highest of its sort in South Africa. Gericke adds that Magashule earned R1 704 640 and Motlanthe R2 130, 769 during the same period.

MMM denies all the allegations regarding Msibi’s salary package. It says that Msibi earned a total salary of R1 412 162 during the financial year ending on 30 June 2010 and a total of R 1 627 581 during the year ending on 30 June 2011. The municipality furnished me with a copy of its audit report to prove this (and adds that it can be verified with the Offices of the Auditor General, Free State Province). This document is entitled Mangaung Metropolitan Municipality Consolidated – Annual Financial Statements for the year ended 30 June 2011. Notes to the Annual Financial Statements.

This report states that Msibi’s total remuneration for the financial year ending on 30 June 2010 was R1 412 162, and for the next year it was R1 627 581.

Volksblad replies that it based its story on:

It adds: “The information we printed, were (therefore) from official and reliable sources…”

MMM responds that the document from the NT “merely reflects estimates of expenditure for planning purposes…and not actual expenditure” – the latter is to be found in the audit report.

As this complaint is coming down to the question of how reasonable it was for the newspaper to have based its reportage on certain documents and not on other ones, I have asked for further clarification.

Volksblad maintains that its primary source of information reflects expenses of municipalities, and not budgets.

The newspaper adds that:

I am now going to deal with these documents one by one.

On September 20, DA Shadow Minister of Co-operative Governance and Traditional Affairs James Lorimer released a statement headlined Municipal Managers and CFOs paid bonuses despite negative audit outcomes. This document mentions some general figures before it comes to Mangaung, which it calls “the worst offender”. It says that, although the MMM received a “disclaimer”, Msibi earned a total salary package of R2 015 024 which included a bonus of R335 837.

The story clearly reflects these figures.

I also note that the story does not attribute the amounts to Lorimer or directly to NT’s document, but rather to another source, namely DA Caucus leader Werner Horn (in the Mangaung-metro).

The NT’s report mentions “salaries” (from 2010 to 2011). It is not clear from the document itself that it came from NT (although nobody disputes this) but, more importantly, it is also not immediately clear if the figures contained in the document reflect actual spending or if it is a budget.

I’ll get back to this issue.

The third document mentioned above contains roughly the same figures, but it is clearly a budget (and therefore not reflective of actual spending). The document does say “Final”, though.

There can be no question that the newspaper was within its rights to use this document from NT as its basic source, as it was an official manuscript. The real questions, however, are if it:

Regarding the first question, I asked NT itself – and received an interesting response. NT said that the figures in the document reflect both actual expenditure (as Volksblad says) and budgeted amounts (according to MMM). It added that the amounts were verified with the MMM before publishing them in the review.

Now: The document from NT is headlined Free State: Mangaung(FS172) – Table SA23 Salaries, Allowances and Benefits per Councillor/Manager for the fourth Quarter ended 30 June 2010. This document clearly does not refer to a budget.

The heading prior to the one mentioned above states Summary Information: Revenue and Expenditure outcomes. This time, it seems clear that the document indeed contains expenditure.

(It is not clear from the story what financial year it refers to – the article merely says that Msibi “last year” earned a certain amount. However, Volksblad has pointed me to a NT document that reflects expenditure until 30 June 2010 – so presumably, that is also the financial year that the story refers to. This was later affirmed telephonically by the newspaper.)

Let me now compare this document to the one that Msibi provided me with (the audit report). This is what it boils down to:

Item                             National Treasury        Audit Report                Difference

(NT’s document also mentions a performance bonus of R335 837 – an issue that I shall deal with below.)

Apart from the rather baffling situation where the amounts mentioned above are not identical, I also note that NT’s document that ends in June 2010, and the audit report that ends in June 2011 are nearly identical (except for the bonus).

Back to the discrepancy:

I therefore conclude that the newspaper was justified in using the figures contained in NT’s document as reflecting real expenditure.

But, there is a big “however”: This does not mean that I am saying that NT’s figures are correct  – the audit report cannot be wished away, and it does put some serious question marks behind the accuracy of the amounts used in NT’s report, or, at the very least, behind the interpretation of the document.

I’ll come back to this when dealing with the bonus issue.

Now, the matter of verification: Volksblad has quite correctly pointed out in earlier correspondence that NT’s document was official – and that the newspaper could therefore not have been expected to verify the information contained in them. This would indeed have placed an unreasonable and undue burden on the newspaper, and it would have set a precedent that all publications would have had to adhere to.

I nevertheless have asked Volksblad if it had the 2011 audit report at its disposal, to which it told me “no” – I can only wonder how it would have affected the story if the reporter did compare the audit report to NT’s document.

The story says that the MMM paid Msibi a bonus of R335 837, and the CFO a bonus of R277 418, presumably during the same period. Gericke adds that the City’s top seven officials received bonuses of a total amount of R2 028 174 – an average of R289 739 per official.

Msibi repeatedly denies these allegations and says that no bonuses were paid during the financial years 1 July 2009 to 30 June 2010, and 1 July 2010 to 30 June 2011. He again refers me to the audit report, which indeed does not mention the payment of any bonuses. He adds that this information can be verified with the Auditor General (Free State Province).

Volksblad argues that it had no reason not to trust its sources and that it is more than willing to publish information by the Auditor General or other proof regarding the payment of bonuses.

Again, I am confronted with two documents that contain contradicting information. And again, whilst the newspaper was justified in using the information from the NT, there is a distinct possibility that no bonuses were paid out as these are not reflected in the audit report – a report that I indeed have to take seriously.

But there is more: Let’s assume for a moment that no bonuses were paid out. In that case, the following statements in the story would be incorrect, namely that:

So again: Even though Volksblad was justified in reporting that bonuses were paid out, the audit report puts this information, or the interpretation of the information, into serious doubt.

MMM complains that the newspaper did not offer it, or individuals referred to in the story, any opportunity to comment prior to publication. The municipality adds that this has led to inaccurate reporting.

Volksblad responds that:

MMM replies that, had Volksblad asked for its comment, the documents that it furnished this office with would have been made available to the newspaper, “which would have prevented the sensationalism caused by Volksblad”.

The mistake the newspaper made was to assume that all readers of the first story will also read the follow-ups. Moreover, the Press Code is clear on this issue – it certainly does not make provision for “breaking the news” without asking comment from the subject of its reportage.

The decision that the newspaper took (to only later ask for comment) was indeed a poor one.

In this case, I suspect the damage that this neglect has done to the MMM in general and to Msibi in particular (especially regarding the alleged payment of bonuses) may have been avoided.

But there is more: This lack of asking for comment is aggravated by the fact that literally the whole story, with the exception of one reference to a report by NT, is devoted to comment from the DA.

This one-sidedness is glaring and inexcusable.

Lastly, it does not matter that Msibi refused to comment the day after the publication of the story in dispute. He, or any other suitable person, should have been contacted regarding the story in question.

I need to make the following remarks:

Volksblad was justified in using an official document from NT, without having to verify the relevant information. This part of the complaint is dismissed.

However, the information contained in the audit report is such that this begs for some form of redress.

The newspaper was justified in using the information from the NT, without having to verify its content. This part of the complaint is dismissed.

However, the lack of “bonuses paid” in the audit report also needs to be addressed. The reportage may therefore have led to some other false and damaging allegations, such as that Msibi has earned more than Magashule and nearly as much as Motlanthe, and that his bonus was the highest in the country for municipal managers.

Volksblad did not ask the subject of its reportage for comment, which is in breach of Art. 1.5 of the Press Code that states: ‘A publication should usually seek the views of the subject of serious critical reportage in advance of publication…” The fact that the newspaper has decided to first “break the story” and afterwards get comment, does not minimize this breach; the fact that nearly the whole story is made up of comment by the DA, aggravates the newspaper’s poor decision not to ask the MMM for comment.

The story quotes a source who reportedly said that Msibi earned more than Magashule. However, the headline misleadingly states it as a fact, instead of indicating that this information is merely the opinion of a source. This is in breach of Art. 5.1 of the Press Code (the old one was valid at the time of publication) that states: “Headlines…shall give a reasonable reflection of the contents of the report…in question.”

Volksblad is:

The newspaper is directed to publish a follow-up story in which it asks the MMM for its comment (if it wishes to do so).

This story should:

The newspaper should furnish our office with the text prior to publication. I shall, within reason, ask the MMM to approve the text.

Please note that our Complaints Procedures lay down that within seven days of receipt of this decision, anyone of the parties may apply for leave to appeal to the Chairperson of the SA Press Appeals Panel, Judge Ralph Zulman, fully setting out the grounds of appeal. He can be contacted at [email protected].

Johan Retief

Deputy Press Ombudsman