Nkangala District Municipality vs City Press

Complainant: Nkangala District Municipality

Lodged by: Margaret Skosana

Article: R9m tax bill for an ANC battle

Author of article: Sizwe sama Yende

Date: 21 October 2015

Respondent: Dumisane Lubisi, executive editor of the City Press

Complaint

The NDM is complaining about a story on page 4 in City Press of 29 August 2015, headlined R9m tax bill for an ANC battle.

The municipality complains that the journalist:

·         deliberately ignored its responses to the newspaper;

·         reported inaccurately or unfairly regarding Mr T.C. Makola and the municipality, falsely ascribing his dismissal to his stance against Premier David Mabuza;

·         wrongly stated that the municipality was facing R9-million in costs; and

·         allowed unfounded political considerations to influence or slant his reporting.

The text

The story, written by Sizwe sama Yende, said that ratepayers in the NDM “will have to fork out R9 million to settling a long running dispute between the municipality and a political rival of Mpumalanga Premier David Mabuza’s, whose anti Mabuza stance saw him fired from his job”.

He reported that Mr Charles Makola, a former ANC deputy chairman in Mpumalanga and NDM municipal manager, was having the last laugh after winning a three-year case dealing with his dismissal (he was dismissed in February 2012, a month before his contract was to expire).

Makola was reportedly accused of hiring a blacklisted company to do work for the NDM, of appointing a business that had submitted tender documents after the closing date, and of giving work to another company without a competitive bidding process.

He challenged his dismissal at the CCMA, “which has now ruled that he was unfairly dismissed”.

Sama Yende wrote the CCMA had ordered the NDM to pay Makola R1.5-milion (equal to his annual salary at the time of his dismissal), adding that the municipality was facing another bill of R7.5-million in legal, forensic audit and investigation fees (incurred by the NDM to build a case against Makola). The total figure of R9-million could reportedly increase, should Makola succeed in his court application for the council to pay his legal costs.

Analysis

Ignoring the NDM’s reply

The NDM says sama Yende e-mailed questions to both the Assistant Manager: Public Liaison and the Secretary of the Executive Mayor on 18 August 1015. It states that it responded via e-mail on August 21 – yet the journalist “deliberately ignored” this written reply.

Lubisi admits that the NDM’s answers were not incorporated in the story “as we should have done”. He apologises for this “failure of our internal systems” and the “oversight”, which led to an unbalanced story; he offers the municipality a right of reply.

My considerations

It is always refreshing when an editor does not try to defend the indefensible.

Inaccurate, unfair reporting

Sama Yende wrote that Makola’s anti-Mabuza stance “saw him fired from his job”.

Skosana was not clear in her initial complaint about exactly what she regarded as inaccurate or unfair (save for the instance that she did mention).

The executive editor nevertheless responds in detail to this part of the complaint. Lubisi says that Makola’s recall was decided by the Nkangala Regional Executive Committee (REC) of the ANC as early as 31 August 2011. At the time, he was also the provincial deputy chairman of the ANC in Mpumalanga.

Lubisi provided me with a letter by the REC to substantiate his claim that the ANC asked for Makola’s recall, stating inter alia that Makola did not cooperate with organizational structures, in particular with the REC.

He adds it was a well-known fact that the REC resolved to support Mabuza’s re-election as ANC chairman in Mpumalanga, while Makola was canvassing support for the same position. He was suspended in January 2012, five months after the REC decision to recall him. The provincial elections took place in April 2012, three months after Makola’s suspension. “Clearly, the suspension – read in context of the REC decision to recall Mr Makola – gives a picture of a well orchestrated move to dent Mr Makola’s image ahead of the provincial elections. Mr Mabuza…won the elections and Mr Makola lost out.”

The editor explains that, five months after the REC had decided to recall Makola, the NDM took a decision to suspend him on several charges. “What then followed is an investigation by the municipality of any wrongdoing on the part of the Municipal Manager. The Municipality clearly put the cart before the horse. [It] should not therefore say our reference to the political battle is based on ‘unfounded political considerations’.”

Lubisi concludes it is fair to say that the NDM acted on the cue of the REC. “To do this, the NDM then suspended Mr Makola on charges and instituted an investigation afterwards. A disciplinary process began and Mr Makola was then fired from his job, but he appealed the matter at the CCMA which found in his favour…”

Skosana replies that the NDM never received any instruction from anybody to suspend Makola; it also had no knowledge of the REC’s letter of August 2011 (which was not addressed to the municipality).

“It is therefore unfair and totally groundless to presume that the district acted on the cue of the ANC REC letter whose existence the district only became aware of after you provided us with your copy.”

She adds it was also wrong for City Press to allege that the NDM only started investigating any wrongdoing on Makola’s part after the REC’s decision to recall him – instead, he was suspended “[after]the Auditor General’s report brought to light a number of serious irregularities and improper conduct with regard to Supply Chain Management policies which amounted to possible financial misconduct which must be investigated in terms of Section 171 (4) (a) of the MFMA and taken to the level of a disciplinary hearing if the investigation warrants such a step…”

Skosana concludes the newspaper’s assertion that Makola was dismissed for his anti-Mabuza stance was (therefore) without substance and groundless.

“[The] office of the Auditor General and the district municipality has got nothing to do with any employee’s political…affiliation…and we still maintain that [the newspaper’s]reference is based on unfounded political considerations.”

She drew my attention to the findings of the forensic audit and charges against Makola “[which]were also obviously not influenced by any of [the newspaper’s]alleged political considerations including the findings of the disciplinary hearing which were made in terms of applicable legislation and treasury guidelines for disciplinary actions against senior managers”.

My considerations

Firstly, I cannot agree with Lubisi that the NDM put the cart before the horse in that it first suspended Makola and then investigated the matter. It is indeed normal practice to do so. I can cite numerous examples to this effect.

Likewise, Skosana’s argument that the NDM did not receive any “instruction” is irrelevant – the story did not say or even imply that the municipality had been instructed to dismiss Makola, even though Lubisi argues that the NDM acted on the cue of the REC. Also, Skosana herself says that the ANC’s letter was not addressed to the NDM.

The gist of this part of the complaint is that the ANC supposedly had an influence in Makola’s suspension and eventual dismissal.

This takes me to (a summary of) the NDM response to sama Yende’s questions.

Question 1: Is the NDM going to oppose the CCMA award and elevate the matter to the Labour Court for review?

Response: The NDM has received and noted the CMMA award and are still studying the matter, and will decide on the way forward after proper consultation and due consideration.

Question 2: We understand that the NDM has suspended Makola before commissioning a forensic audit – which found nothing to implicate him in corruption, hence he has won the CCMA case.

Response: The CCMA determination was based purely on the ascertainment of procedural fairness. Therefore, it is improper to suggest that there was no substantive reasons for Makola’s suspension and subsequent dismissal. The forensic audit mentioned nine instances where Makola had erred.

Question 3: Was Makola dismissed for political or administrative reasons?

Response: He was dismissed for gross misconduct after he had been found guilty on seven charges, all of which related to administrative issues.

Question 4: How much did the NDM spend for the forensic investigation, on the forensic company’s employees to testify at the CCMA hearing, and on the payment to lawyers and advocates at the hearing?

Response: R489 446, excluding VAT; R53 499.86; and R4 044 059.86 respectively. The NDM budgeted a total amount of R7 220 710.00 for legal fees since 1012 to 2015.

Question 5: Why did the NDM opt to dismiss Makola a month before his contract expired, being willing to spend an amount in excess of R8-million – instead of bringing criminal charges against him if found to be implicated in corruption?

Response: The NDM had a responsibility to take disciplinary measures against Makola even at that late stage, as prescribed by its regulations – this is an accepted and practices principle matter within all spheres of government. Also, the amount did not exceed R8-million.

Question 6: Does the NDM feel that the case with total expenditure in excess of R10-million when Makola is paid as well as his legal fees was value for money?

Response: The amount of R10-million is a distortion. Misconduct is a serious offence and it is therefore unreasonable to question whether the legal fees paid were value for money. Legislation prescribes action against financial misconduct and therefore it had to act accordingly. The NDM is not responsible for payment of Makola’s legal fees as per the CCMA award “which did not make an order as to costs”.

From the NDM’s response it is clear that Makola’s suspension and dismissal could indeed, albeit partly, be based on administrative reasons. The forensic audit produced some concrete findings, upon which the NDM acted.

Also, it is one thing to admit that the NDM’s responses were not incorporated in the article – but a different, more serious matter when the content of these responses is taken into account.

Having said that, I also take into account that sama Yende must have had the CCMA award, dated 6 August 2015, at his disposal before writing the story.

Commissioner John Slavhe outlined his task as having had to decide whether or not Makola’s dismissal was fair, both procedurally and substantively (contrary to what Skosana says – see below). After citing several examples of inappropriate behaviour by the NDM, Slavhe concluded that the dismissal had been unfair – both procedurally and substantively.

It is important to note some of Slavhe’s findings:

·         Makola was dismissed without being given the opportunity to present his case against the charges that led to his dismissal, or even in mitigation. The commissioner found this was  unfair;

·         It was unfair for the NDM to charge Makola with failure to check the data base of the National Treasury before awarding a tender during the bid evaluation stage, as there had been no data base at the time; and

·         The NDM failed to prove that Makola transgressed the law as charged regarding the Suma Construction / Sebenzani Trading matter.

Despite the NDM’s arguments, Slavhe concluded that the municipality had “failed to discharge its onus, to prove on the balance of probabilities that it dismissed…Makola for a fair reason and in accordance with fair procedures; [his]dismissal is both procedurally and substantively unfair.”

My questions are: Why would the NDM, while priding itself in its following of the law to the letter, be so unfair to Makola? Why was his dismissal not only procedurally, but also substantively unfair?

Even though the newspaper did not ask these questions, I do so now – because it does lend some credibility to Lubisi’s argument that the ANC had some form on influence on Makola’s dismissal.

Please note that I am not saying there definitely was an outside influence, whether directly or indirectly. All I am saying is that, based on the CCMA’s findings, it is a possibility. This should serve as a mitigating factor in my adjudication.

In conclusion, I need to say that sama Yende should have been more circumspect in choosing his words. If he stated that there was such a possibility, I would have given him the benefit of the doubt. However, he unjustifiably stated his conjecture as fact on more than one occasion. This, together with the omission of the NDM’s response, have resulted in an unbalanced story that was unfair to the municipality.

R9-million

Skosana says the article wrongly stated that the district was facing a R9-million bill, being a payment of R1.5-million plus another R7.5-million in legal, forensic audit and investigation fees – “even though the CCMA did not make any order as to costs”. In later correspondence she says that the CCMA hearing was not about whether Makola had been guilty or not, “but [it]was based purely on the ascertainment of procedural fairness”.

Lubisi states that after the CCMA ruled that NDM should pay Makola R1.5-million, the newspaper asked him how much he had spent on legal costs. His estimate amounted to approximately R4-million. “We multiplied his own estimated legal costs by two (to include that of the municipality) plus the payout due to Mr Makola as ordered by the CCMA. This gave us the figure of over R9-million which the municipality would spend should Mr Makola win the battle to recoup the costs.”

My considerations

The newspaper, by its own admission, has “estimated” the legal and other costs. However, the story stated as fact that the district was facing a R9-million bill. This was unjustified, especially since the NDM explicitly told sama Yende that the total cost would not exceed R8-million.

It is true, as Skosana says, that the CCMA did not issue any cost order. It did, however, rule that the municipality should refund Makola to the amount of R1.56-million.

In general

Lubisi concludes that the story was fair and accurate, save for the fact that the NDM’s response was not captured in the report. He offers the district a right of reply of 400 words, plus an apology for not having included its response in the story. “We will also amend the online version of the story to include such response from NDM.”

My considerations

Based on all of the above, I cannot agree with Lubisi that the story was essentially fair and accurate – because sama Yende presented his opinions as fact.

Finding

Ignoring the NDM’s reply

The failure to report the NDM’s response to the journalist’s enquiries is in breach of Section 2.5 of the Press Code that states, “A publication shall seek the view of the subject of critical reportage in advance of publication…” I note that, while City Press did indeed obtain the NDM’s response, surely the intention and spirit of the Code is not merely to obtain a response, but also to publish it.

Inaccurate, unfair reporting

The newspaper’s failure to report the NDM’s response have led to an unbalanced and unfair story. This is in breach of Section 2.1 of the Code: “The press shall take care to report news…fairly.

The statement of fact that Makola’s anti-Mabuza stance “saw him fired from his job” was merely an opinion and should have been stated as such. This is in breach of Section 2.3: “[Where] a report is not based on facts or is founded on opinion…or supposition, it shall be presented in such manner as to indicate this clearly.”

It resulted in a potentially unbalanced and therefore unfair story, which is in breach of Section 2.1 of the Code as cited above.

R9-million

The statement of fact that the Makola matter was costing the NDM R9-million was not presented as conjecture and it was contrary to the municipality’s response (that costs did not exceed R8-million). This is in breach of Sections 2.1 and 2.3 of the Code, as cited above.

Seriousness of breaches

Under the headline Hierarchy of sanctions, Section 8 of our Complaints Procedures distinguishes between minor breaches (Tier 1), serious breaches (Tier 2) and serious misconduct (Tier 3).

The breaches of the Press Code as described above are all Tier 2 offences.

may

Sanction

City Press is directed to apologise on page 4 to the NDM for:

·         failing to report its response to the journalist’s questions;

·         stating as fact the opinion that Makola’s anti-Mabuza stance “saw him fired from his job”;

·         stating as fact that the NDM would have to fork out R9-million to settle the dispute; and

·         a potentially unbalanced and unfair article as a result of the above.

The text, which should be approved by me, should contain the gist of the NDM’s response to sama Yende; it may also briefly include the arguments what led the newspaper to believe that Makola had been fired because of his anti-Mabuza stance and the reference to R9-million (without justifying the reportage on these issues). It should end with the sentence, “Visit www.presscouncil.org.za for the full finding”.

The headline should reflect the content of this finding. A heading such as Matter of Fact, or something similar, is not acceptable.

If the text appeared on the newspaper’s website, the same apology should go there as well.

Appeal

Our 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.

Johan Retief

Press Ombudsman