NEW PLYMOUTH AND DISTRICTS RETURNED SERVICES ASSOCIATION AGAINST TARANAKI DAILY NEWS

Case Number: 2142

Council Meeting: OCTOBER 2010

Verdict: Not Upheld

Publication: Taranaki Daily News

Ruling Categories: Balance, Lack Of
Bias
Accuracy

Mr Reginald Trowern, an executive member of the New Plymouth and Districts Returned Services Association, accuses the Taranaki Daily News of bias and inaccuracies in its coverage of his club's financial difficulties.

Mr Trowern attended the Press Council meeting, accompanied by Tony House. The editor was also invited but declined the invitation.

The complaint is not upheld.

Background
In 2008 the RSA club in New Plymouth, which had been losing money for several years, entered a financial arrangement with brothers David and Steve Crow whose late father had been the club's president.

Steve Crow is well known in New Zealand for sex industry promotions and it was his role in the RSA's difficulties that made it newsworthy, especially when the arrangement exploded in acrimony in 2009.

The Crow brothers had bought the club's building and land for $1.9 million, almost all of which of which was a mortgage to them from the club. The remainder, $375,000, which the Crows raised as a first mortgage with a finance company, went to the club.

The club was renovated with a $736,000 loan from the RSA's trust that administers its fund for veterans' welfare. Under the arrangement with the Crows the club was to buy back part of the property in five years by cancelling most of its mortgage to them. In the meantime, the club would pay rent to the Crows.

The new owners sought to make operational changes at the club that were resisted by some members.

Unable to make the changes they thought necessary, the Crows eventually ceased making payments on their mortgage and club members voted to buy back the title so as to sell the property and clear the club's debts.

At the time this complaint was lodged the property was being offered at auction and Mr Trowern believed the RSA stood to lose $1,525,000 partly as a result of adverse comment in the Daily News. (In the event the premises sold for $1.675 million, from which the RSA recovered $1.2 million.)

The Complaint
Mr Trowern told the Council the New Plymouth RSA valued its privacy and had maintained a policy of no comment as the problem played out. However the Daily News continually sought comment from the Crows and printed their side of the story whether it was true or not, he said. He accused the newspaper of glorifying the Crows and believed it was intimidated by them.

In an oral submission to the Council's meeting Mr Trowern said the club's financial agreement with the Crows contained a confidentiality clause, included at the Crow’s request, which prevented club officials giving information to their own members, let alone the public. He said the officials kept to the confidentiality agreement even when it was evident the Crows were speaking freely to the Daily News.

When the newspaper was given a confidential briefing on the loan from the welfare fund it published a report that quoted former president Tony House though the briefing was supposed to be off the record. Mr House accompanied the complainant and endorsed his oral submission to the council.

Mr Trowern's written complaint stated that Daily News articles and editorials on the club's use of its welfare fund caused donations to dry up and Air Cadets would not help on poppy day because they were led to believe the money would be misappropriated.

He alleged bias and inaccuracies in no less than 24 articles published from November 2009 to August 2010. He did not submit them in detailed form to the newspaper as he had learned his complaint would be handled by a deputy editor whom he believed had written the editorials included in his complaint.

Mr Trowern therefore asked that the case go directly to the Press Council and the newspaper agreed, making its response in turn directly to the Council.

The Response
The deputy editor noted that most of the specific complaints are out of time under the Council's procedure and he confined his detailed response to those arising from the last three articles cited.

The first of those, headlined 'Veterans' welfare on the line', reported the fears of a former chairman of the trust administering the RSA's welfare fund that veterans' welfare would suffer if the club was unable to repay the trust's loan.

Mr Trowern complained that the story quoted a veteran unknown to the RSA and the newspaper did not approach a club spokesperson. The deputy editor replied that the veteran quoted was an RSA member and the Daily News reporter had made several attempts to contact the club's designated spokesman but calls were not returned.

The second article was a published letter from the Crows explaining why they had defaulted on the mortgage they had taken out for the purchase of the RSA's clubrooms. Mr Trowern complained that the newspaper had said no more letters on the subject would be published. The deputy editor replied that no such rule had been made. The paper ran practically every letter received on this issue unless they repeated points already made.

The third item was a front page report of the meeting at which RSA members voted to raise a loan to buy the Crows' defaulted mortgage. The story was illustrated with a picture of the Crows at the meeting. Mr Trowern believed it "glorified" them.

He also complained that the newspaper had carried comment from Steve Crow despite the chairman's ruling that Mr Crow could not address the meeting as he had recently been banned from directing companies for four years. The deputy editor denied the story glorified the Crows and pointed out there was no legal bar to quoting Steve Crow. Any reporter covering the meeting would have sought his view.

The Decision
While these three specific complaints may be the only ones filed in time, the Council has read and considered all 24 articles cited by Mr Trowern. It does not agree with him that they show a bias towards the Crows and it finds much of what Mr Trowern called inaccuracy to be contestable.

Only one item, a profile of Steve Crow, could be said to be sympathetic but it hardly "glorified" him. News items mostly carried his comments uncritically but the reporters had been refused balancing comment from the RSA.

The one serious error occurred in an editorial that suggested money lent to the club by the RSA's veterans welfare trust had been raised from poppy sales. The money for the loan came from the sale of flats for war veterans. The newspaper published a correction the next day.

The Council is not inclined to uphold a complaint of this nature when the complainant's organisation has adhered to a policy of no comment.

If the paper breached confidentiality in quoting Mr House (a complaint it has had no opportunity to answer) it did the RSA no harm.

It seems to the Council highly unwise of the club to have agreed to a confidentiality clause that prevented it communicating with its members and with the community from which it raises money.

The newspaper gave proper attention to a subject of considerable local interest, concerning the stewardship of the RSA's property and trust funds. Overall, the Council finds the coverage to have been careful and fair. The reporters have worked hard to overcome the difficulties placed in their way by the RSA's unfortunate confidentiality agreement and they have largely succeeded.

The complaint is not upheld.

Press Council members considering this complaint were Barry Paterson (Chairman), Pip Bruce Ferguson, Kate Coughlan, Chris Darlow, Sandy Gill, Penny Harding, Keith Lees, John Roughan, and Stephen Stewart.

Clive Lind took no part in the consideration of this complaint.