WARREN PICKETT AGAINST THE DOMINION POST

Case Number: 2104

Council Meeting: FEBRUARY 2010

Verdict: Upheld in Part with Dissent

Publication: The Dominion Post

Ruling Categories: Accuracy
Unfair Coverage

Warren Pickett complained to the Press Council about two articles “The Pillar of the community who was ripping off a town” and “Friend and a fraudster” published in The Dominion Post on 30 May 2009 after Mr Pickett’s sentencing in the District Court at Napier.
The complaint is upheld in part, with dissent.

Background
On 29 May 2009 Mr Pickett was sentenced to 5 years imprisonment following his convictions for two charges of theft by a person required to account, one charge of theft by a person in a special relationship, three charges of making a false statement and two charges of having breached a provision of the Securities Act.
The story was of particular interest to the community because Mr Pickett had practised as an accountant in Waipawa for about thirty years and had also served his community in civic and sporting roles. The newspaper recorded that he was well liked, respected and trusted in the small Hawke’s Bay town.
However in mid 2008 Mr Pickett handed himself into the Serious Fraud Office (SFO) and admitted to misappropriating funds invested in two companies which he controlled in an attempt to cover losses in other failed business ventures he had embarked upon. He also admitted that some of the misappropriated funds had been applied to his personal benefit and expenditure.
The quantum of these thefts amounted to approximately $3.3m. The thefts had occurred over a period of some 25 years.
Shortly after Mr Pickett handed himself in, the two investment companies from which the funds had been misappropriated were placed into liquidation. The liquidator estimated that together Waipawa Holdings Ltd and Waipawa Finance Company Ltd owed close to $20m to some 220 investors. The expected returns were negligible and at the time of sentencing the liquidator had estimated that investors might receive a return of 19.4 cents per $1.00 from their Waipawa Finance Company Ltd investments and 9.2 cents per $1.00 from their Waipawa Holdings ltd investments.
It was clear that Mr Pickett’s misappropriation of funds from each of these companies was a factor in the resulting failure of the companies.

The Complaint
Mr Pickett initially complained to the newspaper editor under a number of heads. However, when his complaint was made to the Council, he confined his complaint to alleged breaches of Principle 1.
It was his contention that the articles published by the newspaper were inaccurate in the following four respects:-
i) that Mr Pickett stole nearly $20m from the community which had trusted him;
ii) that “he took millions of dollars from the companies to cover losses in failed business ventures but also admitted taking more than $3.2 m to benefit himself and his family”;
iii) that in reporting about the distress caused to community members and the fact that the community views hardened to be mostly averse to Mr Pickett, the newspaper allegedly reported inaccurately that Mr Pickett taken millions for his own use and this, Mr Pickett asserted, was again a claim he had taken millions in addition to the failed investments; and
iv) that the report that he had used funds to ‘purchase’ properties was inaccurate because the funds had been applied to deposits on those properties.
He also complained that these factual errors contributed to the two articles, when viewed together, being unfair and lacking balance.
Mr Pickett advised that the newspaper had a reporter in the Court, and that the reporter could access the SFO summary of facts. The reporter had the opportunity to hear the submissions of counsel and the Judge’s sentencing comments. On these bases he maintained that the reporter should have been able to report the facts accurately and in a fair and balanced way.

The Newspaper’s Response
The newspaper responded that the first statement complained of had been based on information contained in the SFO summary of facts. Specifically, the editor relied on the following paragraph:-
“On 7 August 2008 the finance companies were placed into liquidation. At the time the finance companies owed close to $20m to 220 investors. This total included accumulated interest. The liquidator estimates a return of 19.4 cents per $1 for Waipawa Finance investors and 9.2 cents per $1 for Waipawa Holdings investors.”
In relation to the second statement complained of, the editor relied on the following paragraph from the SFO summary of facts,
“The defendant has stated that he began to take money from the finance companies to cover losses in business ventures that ultimately failed many years ago. He also admitted taking money to fund personal expenditure. An analysis of the defendant’s personal bank accounts (including the Farm Partnership account) records that funds which were dishonestly obtained were used for the benefit of the defendant and his family. Payments included the deposit for the purchase of two properties, home renovations, repayment of loans, purchase of vehicles, life insurance premiums and general living expenses.”
In relation to the own use aspect of the complaint, the editor said that as a sole director of the two finance companies Mr Pickett was able to make decisions about how to use the investors’ money and that he had benefited personally as the schedules of the SFO summary revealed.
The editor said that he had used the money he had stolen to purchase houses but the report did not claim that this was the full cost of either house.
She maintained that the articles were fair and balanced and that the submissions of Mr Pickett’s counsel had been referred to particularly in relation to the assertion that the bulk of the investors’ money had been used to shore-up businesses Mr Pickett had invested in.

Discussion and Decision
The front page article was, in essence, a report about the sentencing of Mr Pickett. The “Friend and a fraudster” article was a feature about Mr Pickett’s life in Waipawa, his fall from grace and the impact of his actions on his investors, the community and his own family.
It is crucial in any report of court proceedings that the report is factually accurate. The sentencing was solely in relation to the theft of $3.3m. While the SFO summary of facts traversed other matters, including the expected losses of the two finance companies, these were essentially ‘background’ matters presumably included to enable the context of the offending to which Mr Pickett had pleaded guilty to be better understood.
The wider losses of the companies were not matters upon which Mr Pickett was being sentenced. It cannot properly be said that he stole nearly $20m. To the extent that the report claims this, it is inaccurate.
The newspaper’s claim that Mr Pickett had taken more than $3.2m to benefit himself and his family might usefully have been set beside the sentencing Judge’s comment that of the approximately $3.3m stolen by Mr Pickett, most was applied to trying to recoup the losses in other business ventures and not in funding an extravagant or sumptuous lifestyle. Arguably if Mr Pickett was successful in any degree to recouping losses in his other business ventures, then there would be benefit to him personally. On the limited information available, there is insufficient to uphold on this head of complaint for inaccuracy.
The third comment complained about by Mr Pickett referred, in fact, to the community having initially fallen into two separate camps with one group feeling seriously aggrieved by the actions of Mr Pickett and the other group trying to maintain that he could not possibly have behaved as alleged. The reference refers to most of these initially two disparate groups ultimately coming to a common sense of having been betrayed by Mr Pickett. There can be no factual argument regarding the loss of millions for the thefts did result in a loss of about $3.3m. The complaint as to inaccuracy is not upheld in relation to this comment.
Nor is the complaint upheld in relation to the purchase of the properties. While care could have been taken to refer only to ‘deposits’ on those purchases, the Council is of the view that common parlance does permit the description used by the reporter and the threshold for inaccuracy is therefore not met.
In relation to Mr Pickett’s complaint about fairness, insofar as one of the alleged inaccuracies has been upheld, the complaint about fairness must also be upheld but only to that limited extent.

Press Council members upholding the complaint were Barry Paterson, Sandy Gill, John Roughan, Pip Bruce Ferguson, Ruth Buddicom, Keith Lees and Stephen Stewart.

Dissent:
Lynn Scott and Penny Harding dissented from the uphold decision noting:
While the court found Mr Pickett guilty of stealing $3.2 million, he did owe nearly $20 million to 220 people and he persisted in gathering investments from his community in order to shore up failing companies. He courted these investments by raising interest rates and assuring investors that all was well when it wasn't. The Dominion Post's article is an attempt to show the impact of his actions on those who have lost their savings. For that reason we would not uphold his complaint.