01735-18 Chandler v The New European

Decision of the Complaints Committee 01735-18 Chandler v The New European

Summary of complaint

1. Christopher Chandler complained to the Independent Press Standards Organisation that The New European breached Clause 1 (Accuracy) of the Editors’ Code of Practice in an article headlined “Who is hacking Brexit? And why we need our own Robert Mueller inquiry”, published on 25 November 2017.

2. The article was a comment piece in which the columnist, a Labour MP, discussed at length his concern over what he perceived to be alleged Russian influence in UK politics, particularly surrounding the policy decisions behind the UK’s exit of the European Union. In the piece, the columnist asked, “Having intervened in the referendum, are the Russians now pushing the hardest of hard Brexits?” and argued: “We need a judge-led investigation to find out”.

3. In that context, the columnist identified the Legatum Institute as “firmly backing Hard Brexit”. The article said: "So who backs Legatum? It is funded by Christopher Chandler, a New Zealand born billionaire, who lives in Singapore and works in Dubai”.

4. The columnist explained that in the previous week, a fellow Labour MP had suggested that the new Intelligence Select Committee should “make a close study” of the complainant, as it appeared that he had “made much of his fortune in the chaos of Russia”. The columnist alleged that the complainant had “made a great deal of his fortune working with Putin’s associates to re-organise Gazprom, the largest energy company in the world, after Putin’s election as President in 2000, helping to lead a boardroom coup to emplace Alexey Miller, Putin’s deputy from St Petersburg days, as head of Gazprom”. The columnist said that Gazprom subsequently became “very important” to President Putin as he “consolidated his power” in the early 2000s.

5. The article was published in substantially the same form online on 25 November 2017, under the same headline.

6. The complainant said that the article contained significant inaccuracies which created a distorted and misleading impression about his engagement with both Gazprom and President Putin.

7. The complainant denied working, directly or indirectly, with President Putin's associates to re-organise Gazprom.  He said that he had never met Vladimir Putin, nor dealt with him in any capacity. The complainant further denied that he had helped, whether directly or indirectly, to lead a boardroom coup to install Alexey Miller as head of Gazprom.

8. The complainant explained that in 2000, he had owned a minority shareholding in Gazprom through the company Sovereign Global. He said that along with other minority shareholders, he had supported a campaign to elect a single director to the board to represent minority shareholders. This resulted in the election of Boris Fyodorov, who was not an ally of Putin’s and was independent of the Russian government. The complainant said that it was this reconfigured board of directors that voted to replace the then-CEO with Alexey Miller, ten months later in May 2001. The complainant said that he had no power to, and in fact did not, change the CEO of Gazprom in 2001: the change of leadership in Gazprom was led by the Russian government, which was the controlling shareholder in Gazprom.

9. The complainant said that the article contained a number of further inaccuracies. He said that he was not "the funder" of the Legatum Institute Foundation. He said he was one of four partners of the Legatum Group, and it was the Legatum Group, through its philanthropic arm, Legatum Foundation Limited, that was one of over 40 donors to the Legatum Institute Foundation. The complainant further said that he did not live in Singapore; contrary to the claim made in the article, he had never lived there.

10. During the course of IPSO’s investigation, the complainant referred to an article published by the Institutional Investor in March 2006, which stated:

It was not a profitable company, however. Gazprom posted losses of $7 billion in 1998 and $2.8 billion in 1999, while amassing debts of $9 billion. The reason, the Chandlers suspected once again, was transfer pricing. The utility was selling vast quantities of gas at below-market prices to a little-known company called Itera Group that Sovereign and others believed had close ties to Gazprom chief executive Rem Vyakhirev and other company directors, who held five seats on the 11-person board…

To combat the abuses and release the company’s value, the Chandlers backed a campaign by Ryan’s partner, UFG chairman Boris Fyodorov, to gain a seat on Gazprom’s board and oust Vyakhirev. A former Finance minister and one of Russia’s most prominent reformers, Fyodorov asserted that the company was plundering corporate assets for the benefit of third parties…

At the company’s annual general meeting in July 2000, Sovereign and other minority investors succeeded in getting Fyodorov elected to the board over a management candidate. By teaming up with the five government appointees, who were sympathetic to complaints about management abuses following the election of President Vladimir Putin in March 2000, Fyodorov changed the balance of power at Gazprom. In May 2001 the board removed Vyakhirev as chief executive, kicking him upstairs to the largely ceremonial position of chairman, and installed Alexey Miller, then deputy Energy minister, as his replacement. Vyakhirev stepped down a year later, replaced by current chairman Dmitry Medvedev.

With Miller, a confidant of Putin who remains CEO, stopping much of the transfer pricing, Gazprom’s share price rebounded. Sovereign sold off its stake between late 2002 and mid-2003, posting a 12.5 percent total return on its investment over nearly four and a half years. It was not the kind of result that the brothers were used to, but in unseating Vyakhirev they had made a point — and saved the fund from a significant loss. “We finally left after nearly ten years in Russia because we felt we had done as much as we could in corporate governance and in shareholder rights,” Richard explains.”

11. The newspaper did not accept a breach of the Code and said that it had taken care to report on matters which were of significant public interest. The newspaper explained that it had taken the decision not to contact the complainant for comment, prior to publication, because the fact of his extensive shareholding in Gazprom and, accordingly, his links to the Russian Federation were a matter of public record and had been the subject of numerous media reports.

12. The newspaper said that the article did not allege that the complainant had met President Putin, or dealt with him in any capacity, directly or indirectly. The newspaper said that it was accurate to state that the complainant had worked with Putin’s associates to re-organise Gazprom, and to state that he had led a boardroom coup to emplace Alexey Miller as head of Gazprom.

13. The newspaper referred to a press release published by Gazprom. The press release explained that Sovereign Global is the largest portfolio investor in Gazprom, and has been investing in Russia and Gazprom for almost ten years. It also contained the following statement from Mr Miller: "Sovereign's unwavering support as a long-term shareholder has played a major role in the course of development and introduction in Gazprom of high corporate governance standards."  The press release also set out a number of assurances given by Mr Miller to representatives of Sovereign including an assurance that “the Management of Gazprom will remain committed to further increasing the transparency of the Company and will continue to work to improve the level of corporate governance”.

14. The newspaper said that the meaning of the claims made about the complainant in the article under complaint, was that he had a substantial financial interest in a Russian business, in which the Federation held a controlling interest and which was important to Vladimir Putin. It noted that this had not been disputed by the complainant.

15. While the newspaper did not accept a breach of the Code, the newspaper offered to publish the following wording in an attempt to resolve the complaint and with no admission of liability:

"An article we published on 25 November 2017 last year made claims that the Legatum Institute think tank was funded by Mr Christopher Chandler, a New Zealand billionaire, who lives in Singapore and works in Dubai. We did not intend to suggest that Mr Chandler was a direct, or sole, funder of the Legatum Institute: neither of which is the case. We are also happy to clarify that Mr Chandler does not (and has not) lived in Singapore and apologise to Mr Chandler for that error. Mr Chandler has also asked us to clarify that he strenuously denies any allegation that he worked in any way (whether with Mr Putin's associates or otherwise) to reorganise GazProm and emplace Alexey Miller as head of GazProm. We are happy to do so and to provide this clarification on Mr Chandler's part."

16. The newspaper accepted that the complainant did not live in Singapore, nor had he ever lived there. It explained that the error had occurred as a result of a misunderstanding, caused by the fact that the complainant’s brother was understood to live, or to have lived, in Singapore. The newspaper did not accept that the error amounted to a significant or serious inaccuracy. It said that the central point was that the complainant was not a British citizen or a full time resident of the UK.

17. The newspaper said that the article did not assert that Mr Chandler was the sole, or direct, funder of the Legatum Institute Foundation. It said that the article did not claim that the complainant was "the funder", as suggested by the complainant. Rather, it noted that the article had reported that the “[Legatum Institute] is funded by Christopher Chandler”.

18. The newspaper noted that the Legatum Partnership LLP (LLLP), a partnership of which the complainant is a partner with three others, is the principal donor to the Legatum Institute Foundation (through Legatum Foundation Limited (LFL), LLLP's philanthropic arm). This had been accepted by the complainant. It said that the most recently filed Legatum Institute Annual Report established that in the relevant period, the Legatum Institute Foundation had a total income of £4,398,000, of which £3,935,000 (89%) came from LIF/LLLP. The newspaper said that on that basis, it was not a significant inaccuracy to have stated that the Legatum Institute Foundation was "funded" by Mr Chandler, albeit not entirely and not by means of direct payments.

19. It was a matter of public record, and had not been disputed by the complainant, that Mr Fyodorov, along with the five government appointees on Gazprom’s 11 seat board, had constituted a majority, which voted to place Mr Miller as CEO of Gazprom in 2001.

Relevant Code Provisions 

20. Clause 1 (Accuracy)

i) The Press must take care not to publish inaccurate, misleading or distorted information or images, including headlines not supported by the text.

ii) A significant inaccuracy, misleading statement or distortion must be corrected, promptly and with due prominence, and — where appropriate — an apology published. In cases involving IPSO, due prominence should be as required by the regulator.

iii) A fair opportunity to reply to significant inaccuracies should be given, when reasonably called for.

iv) The Press, while free to editorialise and campaign, must distinguish clearly between comment, conjecture and fact.

Findings of the Committee

21. The columnist had claimed that the complainant had “made a great deal of his fortune working with Putin’s associates to re-organise Gazprom”, and had credited the complainant with “helping to lead a boardroom coup to emplace Alexey Miller” as head of Gazprom”.

22. It was not in dispute that Mr Fyodorov’s platform in standing for election to the Board of Directors was the reform of Gazprom, which, in this context meant voting with the government appointees on the Board of Directors, against the company’s executive leadership, namely its then Chief Executive. It was also accepted that the complainant’s company, a shareholder in Gazprom, had supported Mr Fyodorov’s candidacy specifically on the basis that he was seeking to reform Gazprom, and that Mr Fyodorov had gone on to vote with the government appointees to install Alexey Miller as CEO. It was apparent from this chain of events that the complainant’s company had taken an active and prominent role in the changes in corporate governance at Gazprom between 2000 and 2001.

23. The columnist had credited the complainant as having “helped” to “lead a boardroom coup to emplace Alexey Miller, Putin’s deputy from St Petersburg days, as head of Gazprom”. This gave the impression that the complainant had acted directly to emplace Miller as CEO in 2001; further, it had suggested that complainant’s involvement in the change in corporate governance at Gazprom in 2000, was specifically in order to place Miller onto the Board of Gazprom as the company’s Chief Executive. This went further than setting out the complainant’s association with the chain of events which had subsequently led to Alexey Miller being voted onto the Board of Gazprom as CEO. The newspaper had not provided, in the article or in its response to the complaint, any basis to support this claim. This was a failure to take care over the accuracy of the article, in breach of Clause 1(i). The suggestion that the complainant had acted with an intention to place an ally of Putin onto the Board of Gazprom had been made in the context of the columnist’s concern over alleged Russian influence in UK politics, and as such, represented a significant inaccuracy which required correction.

24. The Committee welcomed the newspaper’s offer to publish a clarification, which set out the complainant’s denial that he had worked to emplace Alexei Miller as head of Gazprom. However, it had failed to acknowledge the inaccurate impression given, that the complainant had acted with an intention to place Miller as CEO of Gazprom.  In circumstances where the newspaper had provide no basis to demonstrate the accuracy of this claim, on balance, there was a breach of Clause 1(ii).

25. The Committee noted the complainant’s denial of working, directly or indirectly, with President Putin's associates to re-organise Gazprom. It was not in dispute that Mr Miller was a close associate of Putin and that the complainant was credited by Mr Miller as being instrumental in the re-organisation of Gazprom in the early 2000s. The Gazprom press release had acknowledged that the complainant’s company had played a “major role in the course of development and introduction in Gazprom of high corporate governance standards” and contained an assurance by Mr Miller to the complainant’s company that “the Management of Gazprom will remain committed to further increasing the transparency of the Company and will continue to work to improve the level of corporate governance”. Notwithstanding the complainant’s position that he had never met Mr Miller prior to his appointment, the complainant accepted that the two had met, following Mr Miller’s appointment and that, at the meeting, the complainant had urged him to adopt certain corporate governance standards at Gazprom. It was, therefore, clear that the complainant and Mr Miller shared a common purpose to effect change within Gazprom. In these circumstances, there was no failure to take care over the accuracy of the article in those circumstances, and it was not a significant inaccuracy to claim that the complainant had worked with Putin’s associates to “reorganise” Gazprom. There was no breach of Clause 1 on this point.

26. It was clearly inaccurate to report that the complainant was a resident of Singapore. The newspaper had not demonstrated that care was taken over this claim, which had occurred as a result of a misunderstanding between the residency of the complainant and his brother, in breach of Clause 1(i). In the context of an article assigning significance to the legal jurisdictions in which individuals operated, misreporting the jurisdiction to which the complainant had moved was a significant inaccuracy. The newspaper had offered to publish a correction on this point, which addressed the inaccuracy and made clear the correct position. There was no further breach of Clause 1(ii).

27. The article had not claimed that the complainant was the sole, or direct funder to the Legatum Institute Foundation. It had stated the Institute “is funded” by the complainant: this claim was accurate given that the complainant, through the Legatum Partnership, was the principal donor to the Legatum Institute Foundation. The newspaper had taken care not to publish misleading information, and no correction was required under the terms of Clause 1 (ii).

Conclusion

28. The complaint was upheld.

Remedial Action Required

29. Having upheld the complaint, the Committee considered what remedial action should be required.

30. In circumstances where the Committee establishes a breach of the Editors’ Code, it can require the publication of a correction and/or adjudication, the nature, extent and placement of which is determined by IPSO.

31. In this case, the newspaper had taken steps to address the concerns raised by the complainant, and had offered a clarification, which had set out the complainant’s denial on the points of complaint. The offer of clarification mitigated the seriousness of the breach of Clause 1 (ii). However, it had failed to make clear that the newspaper had failed to provide any basis to show that the complainant had acted with an intention to place Miller onto the Board of Gazprom, as its CEO. The Committee therefore considered that the appropriate remedy was the publication of a further correction. This correction should appear on page two of the newspaper, and at the top of the article as it appears online. The wording should be agreed with IPSO in advance. The Committee did not require that the correction should correct information which was not found to be in breach of the Code.

Date complaint received: 09/03/2018

Date decision issued: 26/10/2018