Sadly, that is not true ...
I was kinda dissapointed when i confronted Kagha with evidence ... then i rejected Rath, supported Kagha with her coup, and even offered my help to Shadowdruids.
Yet Kagha and Shadowdruids attacked me ...
And when fight was over, Rath thanked me for the help, give me the staff and the title. :-/
Meaning, as far as i know, the only way to avoid this reward is simply killing everyone and dont investigate Kagha at all. :-/
Such a shame. -_-