PETER HAUSMANN AGAINST HAWKE'S BAY TODAY

Case Number: 2045

Council Meeting: AUGUST 2008

Verdict: Upheld

Publication: Hawkes Bay Today

Ruling Categories: Errors, Apology and Correction Sought
Advocacy
Balance, Lack Of
Accuracy

Peter Hausmann, Managing Director of Healthcare of New Zealand (HCNZ) and a former member of the Hawke’s Bay District Health Board, complained to the New Zealand Press Council that an editorial, two articles and a correction published in Hawke’s Bay Today in February and March 2008 were inaccurate and, together, represented unbalanced and unfair reporting.
The complaints against all four items are upheld.

Background
The Press Council notes the complaints were made against a background of what all parties agree was a significant and highly-charged matter of public interest involving the governance and management of the district health board, the board’s effectiveness, Mr Hausmann’s appointment as a member of the board (from June 2005), his company’s involvement with the board and claims of a conflict of interest, and other issues, including official inquiries, and the decision of the Minister of Health to replace the entire board with a commissioner on February 27, 2008.
Not unnaturally, strong views were held and expressed by those affected on a matter of intense local interest. Hawke’s Bay Today, as the local newspaper, could be expected to be in the thick of the considerable debate that flowed from an issue that vitally affected the region. All parties agreed the newspaper should play such a role.
The Press Council acknowledges the debate covered a vast number of aspects relating to the district health board and its activities, but the Council will confine itself to the specific complaints.

The Complaints
Mr Hausmann complained that an editorial of February 21, 2008, headed DHB Letter Just Political Posturing, was inaccurate. The editorial was largely criticism of an ultimatum from Health Minister David Cunliffe to the board but, among other things, it said: “The most likely explanation for the standoff is, as one board member has pointed out, to publicly deflect the blame away from former Health Minister Annette King, who, against ministry advice and the board chairman’s concerns, appointed Peter Hausmann to the HBDHB. A report is still awaited concerning allegations about a $50 million health contract won by Mr Hausmann’s company.”
Mr Hausmann said the statement implied his appointment was improper. His appointment was, in fact, made by the Minister following advice from officials that correct protocols had been followed. The information was easily obtainable by the editor via an Official Information Act request, something he had done himself.
Further, HCNZ had not won a $50 million health contract. HCNZ had been identified through a Request For Proposal (RFP) process as the preferred provider for the development of a community services initiative, and the district health board and HCNZ were to develop the proposal further. But the district health board terminated discussions formally in a letter dated May 26, 2006, and there was no contract.
Mr Hausmann also complained of an article dated February 26, 2008, headed DHB Goes to Court. It largely reported how the board was taking the director-general of health to court along with a review panel “looking into its conflict-of-interest situation.” The article reported: “The board became the subject of a governance review last year after it was discovered board member Peter Hausmann, a government appointee, had a hand in defining the terms of reference for a $50 million contract with his company, Healthcare of New Zealand. The contract process was terminated but another contract worth $1.1 million with Wellcare, a subsidiary of Healthcare of New Zealand, had already been signed by the board’s CEO Chris Clarke without the board’s knowledge.”
The first sentence implied he acted unethically when in fact there was no contract. That had been explained to the editor in a letter dated February 22, well before the article was printed.
The Wellcare contract was signed between the company, the board and the Ministry of Social Development in early March 2006. By stating the contract was signed without the board’s knowledge, the report left readers with the impression it was inappropriate or deceitful. In fact, the board’s chief executive had the financial authority to sign because it was below a certain threshold and he was not required to put it before the board.
Mr Hausmann also said that if the reporter had undertaken proper research, the newspaper would have discovered key board members were aware of the Wellcare contract in February 2006 before it was signed.
A second article headed HB Health Managers Slammed published on March 3, 2008, reported criticism from Audit New Zealand and said: “Fellow board members believe Mr Hausmann was having discussions with management about the contract before attending his first board meeting. Sacked by Health Minister David Cunliffe last Wednesday, they were unaware there was a contract until one month after it had been signed. . . . Mr [Board chairman Kevin] Atkinson said . . . he was unsure how the board could be responsible for management’s action around the contract when they were unaware it was happening until a month after it had been signed.”
Mr Hausmann said some board members were aware of the contract, and this information was obtainable under the Official Information Act.
The newspaper’s coverage in these and other articles had been based on sustained inaccurate and unbalanced reporting and had led readers to believe he had acted in an unethical and deceitful manner. The newspaper did not make a reasonable effort to check its facts before publication.
Initially, he had refused to make any public comment relating to the inquiry until after it was finished but this did not mean the newspaper could continue its inaccurate and unbalanced reporting. The facts were also available from other public sources.
Mr Hausmann said when he first complained via his lawyers on February 22, 2008, about the editorial, Hawke’s Bay Today offered to publish a correction. The paper’s lawyers offered a version, Mr Hausmann’s lawyers offered a revision but suggested changes were ignored and the correction was published on March 8.
Headed Correction, it read: “It has been drawn to our attention that an editorial in Hawke’s Bay Today published on Thursday, February 21, and an article published on February 26, 2008, stated that a Hawke’s Bay District Health Board contract was awarded to a company owned by board member and Government appointee Peter Hausmann, when in fact the contract process was terminated by the board before a tender was accepted because the board feared the process had been compromised. The editorial also reported that Mr Hausmann was appointed against ministry advice when in fact what the ministry did was express concerns. Neither of those matters affect the opinions expressed in the editorial. In stories published on February 26 and March 3, 2008, we reported that the Hawke’s Bay District Health Board had been unaware of a contract with Wellcare Education, and in the latter article we quoted statements made by the former Chairman of the Board to that effect. We note that Mr Hausmann and Healthcare New Zealand Limited dispute this.”
Mr Hausmann said the correction was still incorrect and misleading because there never was a contract process and the use of the word tender was inappropriate because it implied there was a contract. In its letter to the newspaper, the company forwarded a number of attachments including emails showing board members discussing the Wellcare contract before it was signed. Notwithstanding that evidence, the newspaper simply reported the company “disputed” what others had said and did not publish all the facts available.
The failure to report accurately breached Principle 1 relating to accuracy: “Publications (newspapers and magazines) should be guided at all times by accuracy, fairness and balance, and should not deliberately mislead or misinform readers by commission, or omission.”
The failure to correct breached Principle 2 relating to corrections: “Where it is established that there has been published information that is materially incorrect then the publication should promptly correct the error giving the correction fair prominence. In some circumstances it will be appropriate to offer an apology and a right of reply to an affected person or persons.”
Mr Hausmann also complained that the correction appeared on page 6 which was the same page as the editorial but it also involved articles and should have been given more prominence, on page 1 or 2.

The Newspaper’s Response
In his response, the newspaper’s editor, Louis Pierard, said Mr Hausmann’s appointment to the board, the management of his potential conflicts of interest and the dispute that arose with the Minister were matters of considerable public interest and, as the region’s daily newspaper, Hawke’s Bay Today was obliged to report on it.
Ideally, reports would have contained comment from all sides of the dispute and the newspaper sought comment from Mr Hausmann on a number of occasions. Mr Hausmann refused to comment until a review was released, which was his choice, but the newspaper could not allow this to prevent it from airing an issue of great public interest. The editor provided three examples between July 2007 and March 2008 where efforts were made to contact him for comment on stories involving him.
Occasionally, Mr Hausmann had issued press statements but on one occasion, it was not sent to Hawke’s Bay Today. If Mr Hausmann wanted to ensure the newspaper’s reporting contained input from him, then he should have ensured statements were sent to Hawke’s Bay Today.
After calling Healthcare of New Zealand and leaving messages, the reporter received a call from Rory Newsam who said he was handling Mr Hausmann’s publicity. Mr Newsam had said Mr Hausmann was reluctant to comment because of the inquiry but he would try to explain to him it was all right to do so without any legal ramifications.
The Editor said that Mr Hausmann had said the newspaper could have obtained the information through Official Information Act requests. Because he refused to comment, the newspaper was unaware he claimed to have such proof and could not have been expected to guess where such information might be located. The newspaper would have needed some guidance from Mr Hausmann.
Hawke’s Bay Today’s reports did not deliberately mislead or misinform readers, and the newspaper was entitled to adopt a position under the Press Council’s Principle 7 on advocacy: “A publication is entitled to adopt a forthright stance and advocate a position on any issue.”
The editor said: “Mr Hausmann’s complaints about the fine details of the tendering process became increasingly petty. If he had responded to our questions, it might have ensured the arcane process of tendering might have been better understood. Certainly there was no intention to misrepresent his situation.”
Dealing with the complaint about his editorial of February 21, 2008, Mr Pierard said the reference to Mr Hausmann being appointed against ministry advice came from a report in another newspaper of February 21, 2008, which quoted a board member and former clinician making the claim. He also referred to a Ministry of Health document obtained under the Official Information Act relating to Mr Hausmann’s appointment to the board and potential conflicts of interest and best practice in such circumstances dated August 23, 2005.
The reference to the $50 million contract came from the same newspaper report, and Mr Pierard said it was “plainly incorrect. I raise the point not as absolution but to illustrate the fact that none is immune to error and that despite the best of intentions, errors can be perpetuated.”
The editor said, in relation to the articles of February 26 and March 3, that no imputation of wrongdoing by using the phrase “had a hand in” was intended or warranted.
While Mr Hausmann insisted the board was kept in the picture about his involvement with the Wellcare contractual process, the emails provided were not communication to and from the board and mainly referred to the difficulty one board member was having in obtaining information from the chief executive.
Dealing with the correction, Mr Pierard said that rather than return calls or provide the newspaper with comment, Mr Hausmann chose to engage lawyers to threaten legal action and demand terms. This action ensured the process became protracted.
“In effect, Mr Hausmann succeeded in turning a straightforward matter into a complicated and expensive legal wrangle that has lasted for weeks. One could be forgiven for believing the intention was less a wish to set the record straight than to discourage this newspaper from publishing anything that might be critical of him and Healthcare of New Zealand Limited.
“Hawke’s Bay Today does not resile from the obligation to set the record straight whenever we have erred. Without wishing to minimise our own errors – for which we stand accountable and which through out all of this we have had no reluctance to correct – we contend that Mr Hausmann’s methods were singularly responsible for bringing about the impasse and any delay in resolution.”
The newspaper considered the correction appropriate. It was not the function of a correction to go into the disputed issue in the sort of detail Mr Hausmann suggested.
When it became apparent Mr Hausmann was not happy with the form of correction, he was invited to write an alternative form of correction which would be published as a letter to the editor, but he had not taken up the opportunity. Principle 2 of the Press Council’s Statement of Principles had therefore been met.

The Healthcare Response
In response to the editor, Mr Hausmann said the editor’s response did not clarify when the newspaper tried to contact him in February and March and it appeared Hawke’s Bay Today proceeded with publication on the assumption he would not comment, “leaving it at that because it was more convenient for the angle of the proposed articles.”
While he had refused to comment on the early stages of an inquiry into the Hawke’s Bay District Health Board in July 2007 due to confidentiality undertakings to the inquiry, he believed he was entitled to know in each circumstance more about what Hawke’s Bay Today was planning to publish so he could choose whether the confidentiality undertakings still applied.
He had stated he had not been contacted by the newspaper in February or March and the editor’s response did not dispute that. An article published on March 5 had stated he was not available but he had no recollection of being contacted.
It appeared the reporter had contacted his PR representative, Rory Newsam, of Senate Communications, about a press release sent out the night before. The statement had been sent to national networks and they knew Hawke’s Bay Today would pick it up via the New Zealand Press Association, as was standard practice for regional newspapers.
The editor’s comments about his refusing to comment were out of context because if the newspaper had contacted on the dates at issue in February and March 2008, and had presented him with written questions that he was in a position to answer without breaching his confidentiality clauses, he would have made comments or provided relevant information.
He accepted the editor was entitled to publish his editorial opinion but he took issue when it appears a reporter has not done enough (or any) research on a story and was simply relying on hearsay.
The emails relating to the Wellcare contract showed clearly that some board members were aware of the contract. Information did not need to be presented to board members at the board table to count as information presented.
The correction as published could hardly be seen as fair and balanced compared with the significance given the article of February 28 when published. Further, it claimed the matter of whether board members knew of the Wellcare contract was disputed. The company had provided facts to the newspaper and they should have been presented so readers could make up their own minds.
The editor’s “disparaging” remark that he (Mr Hausmann) was less interested in setting the record straight than discouraging the newspaper was “insulting.” He had to engage his lawyers to speak to the newspaper because there were significant legal issues involved, including the confidentiality undertakings given to the inquiry review panel.
The offer to write a letter was not received until April 17, long after the correction publication date of March 8. If the newspaper had listened to his concerns earlier, a more informed correction could have been printed to both parties’ satisfaction. He did not believe the newspaper went to adequate lengths to ensure Principle 2 was complied with.

The Newspaper’s Reply
In his response, the editor said he had little to add “other than to stress that the usual exigencies of daily newspaper production – combined with the need for accuracy and fairness – are not helped by obstructive, combative responses and an attitude that artfully presumes that if we are not omniscient, then we should be.”
The reporter did not have records of when she tried to contact Mr Hausmann but she was emphatic that she tried making contact whenever the newspaper had a story that brought up new allegations around his behaviour regarding the potential contract and the one that went ahead.
Almost every report she wrote recapped what had happened in the saga and part of that would always include Mr Hausmann's involvement, which she did not contact him to verify each time. If there was an error after the first time she wrote the recap, she would have expected him to make contact. Because he did not, and continued not to, until he started issuing legal threats, she had nothing to indicate otherwise.
It was absurd to suggest the reporter went straight to Rory Newsam from Senate Communications on March 5. She was unaware Mr Hausmann had a PR firm working for him. She spoke to Mr Hausmann's PA who told her Mr Hausmann would call back. Instead, she received a call from Mr Newsam who introduced himself and said he would send the press release.
The editor said the fact that the press release was not sent to her when Mr Hausmann knew she was the reporter working on the DHB stories for the newspaper in the area in which the story was unfolding “is but one example of the obstruction to which I refer earlier. In his response Mr Newsam says the release was sent to metropolitan papers. Why, then, was it not sent to Hawke's Bay Today when we were closest to the story? Assuming we would pick it up off the wire is just not good enough. In fact, our news editor, who goes through the NZPA stories didn't pick it up. The fact that the reporter made the effort to hunt out the press release when she learned of its existence shows the lengths to which we went to ensure Mr Hausmann put his side of the story.”

Discussion
The Press Council has always defended the right of newspapers to take a strong stand on issues (Principle 7) and to express strong opinions in editorials and comment pieces.
But the editorial must be based on fact. The editor has not been able to rebut the errors contained in the editorial relating to the ministry advice on Mr Hausmann’s appointment to the district health board – the Press Council notes the ministry says Mr Hausmann himself raised his potential conflict of interest - or the editorial’s claim that a $50 million contract had been awarded to Mr Hausmann’s company.
The article of February 26 repeated both claims, notwithstanding that the day after the editorial was published, Mr Hausmann’s lawyers had written to the newspaper claiming no such contract had been entered into. On the day of publication (February 26), the newspaper’s lawyers sent a letter to Mr Hausmann saying it was prepared to publish a correction on the issue. It seems inexplicable that the newspaper would wish to compound its error by running a similar report that very day.
The article of March 3 relating mainly to the report of the auditor-general contained reported statements of belief about the Wellcare contract from the board chairman. This article called for a concerted effort by the newspaper to get comment from Mr Hausmann and to record his response, even if it was no comment. The article makes no such reference, and the editor has not provided evidence that such an attempt was made.
Normally, a correction, given appropriate emphasis, would be the end of the matter. But it is clear in this instance the parties failed to agree on the appropriate wording and the correction as published failed to satisfy Mr Hausmann.
It does not seem reasonable that a newspaper, having erred, should have to print word for word what another party demands. But it would seem wise for a newspaper in such circumstances to take every care that all important, disputed issues are corrected, as much to the aggrieved party’s wishes as possible. This did not happen in this instance.
The points of error in the correction raised by Mr Hausmann are small but they are valid. The editor does not help himself when he describes Mr Hausmann’s comments on the complexities of tendering and contracts as “petty.” In fact, they are quite straightforward.
The fact that the newspaper, belatedly, was prepared to offer another correction in the form of a letter to the editor is an acknowledgement that the first correction was inadequate.
In his dealings with Hawke’s Bay Today, Mr Hausmann did not help himself. He was difficult to get comment from and that does not make the task of a reporter easy, particularly on such charged issues as the newspaper was reporting.
Mr Hausmann says he had his reasons for doing so, although he also wanted to be kept informed of what the newspaper was reporting. The Press Council can understand a newspaper being irked by such an approach but principles of accuracy, fairness and balance always apply and therefore reporters are obliged to strive for the other side, no matter what difficulties exist.
Further, there were other sources of information, according to information provided to the Press Council. The editor says the reporter wrote her first story on the contracting issues in July 7, 2007. According to the same information, the issues of the social services initiative and the Wellcare contract were determined in 2006. Regardless of the time the newspaper found out about the issues, there was plenty of time for Official Information Act requests or other inquiries so that readers could have been given accurate and independent sources of information on which they could draw conclusions, and the editor would have had other sources to rely on for his editorial, other than a report from another newspaper that was inaccurate.
On the question of the emails relating to Wellcare before the contract was signed, the Press Council does not wish to dwell except to say it seems clear some board members were aware of the contract and therefore unequivocal statements that they did not know, needed to be treated with care.

Conclusions
The complaints about the editorial of February 21, the article of February 26 and the “Correction” of March 3, 2008, are upheld on the grounds of inaccuracy. The complaint about the article of March 3, 2008, is upheld on the grounds of a lack of balance and fairness.

Press Council members considering this complaint were Barry Paterson (Chairman), Ruth Buddicom, Kate Coughlan, John Gardner, Penny Harding, Keith Lees, Clive Lind, Denis McLean, Alan Samson and Lynn Scott.
Aroha Beck took no part in the consideration of this complaint