Trial Report: Twenty-Six

This report covers the period Monday 21 August - Friday 25 August, 2000

Monday, 21 August

Belgian citizen, Bernard Zimmer, took the stand as a witness for the prosecution. Zimmer is a management and financial consultant. He was introduced to Basson by Charles Van Remoortrere at the end of 1985 in South Africa. At the time Van Remoortrere had secured an SADF contract and was doing business with Basson. Zimmer was aware that Basson was an SADF officer.

Van Remoortrere had a personal bank account in Luxembourg which was managed by Zimmer. Some time after their first meeting, Basson asked to use the Van Remoortrere account and Zimmer was granted signing powers on it from December 3, 1986. Van Remoortere played no further role in the running of the account and all instructions regarding it were issued to him by Basson. From December 1986 onwards, Zimmer ran the account exclusively on Basson's behalf and would have made no payments from it without his prior authorization/instructions.

At the same time, Basson instructed Zimmer to set up Luft as a holding company registered in Luxembourg. Subsidiary companies followed - Biskara, registered in England as a "trading" company, but according to Zimmer, it did very little business, General Golf Investments, which was to become involved in golf resorts, and Genavco, set up only in December 1993 with the express purpose of buying and running the Jetstar. Much later, in the second half of 1994, Zimmer also set up Investment Global at Basson's request.

Zimmer knew about WPW Inc, knew that David Webster acted as president and that Basson was the only other director. In terms of Luxembourg's legislation, anyone acting for a company must know the identity of the true beneficial owner, guarantees of secrecy notwithstanding. It is incumbent on the consultant to exercise due diligence in this regard and all documents in Zimmer's possession name Basson as the beneficial owner of WPW Inc. He also received instructions regarding all WPW Inc business in which he was involved, exclusively from Basson.

Zimmer testified about details of transactions involving the accounts he managed on Basson's behalf. Zimmer's evidence included a denial that $2.4 million was used in April 1992 to set up a divisible performance bond, as claimed by Basson, in order to pay four Croatian agents for chemicals (methaqualone). Zimmer also testified about the Jetstar deal and a series of deals involving the development of a golf estate in Belgium, in which Basson was the beneficial owner.

Tuesday, 22 August

Zimmer continued testifying about the disbursement of funds he managed on behalf of Basson. Zimmer told the court that during the first few months of 1993, after Basson was forced to take an early retirement from the South African Defence Force, Basson's company, General Golf Investments launched a bid to buy the luxury Fancourt golf resort at George. At the time, Fancourt was on the brink of bankruptcy and although its assets were valued at R130-million, the asking price was only R52-million. Zimmer, David Webster, Basson, Mijburgh and Chris Marlow were all closely involved in the proposed deal. At the time, General Golf Investments did not have sufficient funds to purchase the resort so a proposal was made to raise the needed funds. Basson sent Zimmer one of the Vatican bearer bonds which he had acquired, to use as security on a loan to fund the purchase. These bonds were later found by one of the banks approached for a loan, to have been stolen. Zimmer's evidence in this regard, calls into question the veracity of the claims made by Basson and Knobel in relation to the Croatian deals and Basson's arrest in Switzerland.

By August 12, 1993, the loan arrangement, for the purchase of Fancourt, appeared close to being finalized, and in anticipation, Webster, Marlow, Zimmer and Basson all signed documents giving them signing powers on the account to be set up at Lloyds Bank. The deal however ultimately failed to go through.

Zimmer testified about the deal involving the sale of NBC suits to a company by the name of Tagell. The deal is the subject of charges 11 and 12 against Basson. Zimmer explained the deal as follows. In 1989 Basson and Wilfred Mole introduced Zimmer and Charles van Remoortere a Liberian-registered company, Tagell. Zimmer and Van Remoortrere's company, Blackdale, was to sell NBC suits manufactured by Technotek to Tagell. A series of meetings took place in London with Mohammed Ali Hashemi, managing director of Tagell, and Mohammed Ravi Abdullah, who had a company of his own, Copperdale, operating out of the UK, but in this instance was acting as an agent for Tagell. The estimated value of the sale was $65-million.

During the negotiations, Tagell requested that Blackdale create a performance bond to the value of 5% of the contract - or $3,2 million. Blackdale did not have the money so Zimmer and Van Remoortere approached Basson for a loan. Basson deposited $3,2 million in the Blackdale account, which was used as security for the performance bond. In return, Blackdale asked Tagell to provide a letter of credit. A draft was received, but it was unacceptable to Zimmer and Van Remoortere and they cancelled the performance bond. Tagell wanted to continue with the transaction, and asked Blackdale to issue them with a $1,6-m cheque as security against delivery/breach of contract. Many more meetings followed resulting in David Webster flying to London to check the contracts. Eventually, the Blackdale directors agreed on payment of $325 000 to Tagell and Zimmer himself took the cheque to London and handed it to Hashemi. A week later, Blackdale had still not received Tagell's letter of credit, so Zimmer returned to London. At the Tagell office, he was told by Hashemi that the deal was off, because Blackdale had created too many problems surrounding the creation of the performance bond - but Tagell would keep the $325 000 as compensation for all the trouble caused.

Zimmer attempted to sue Tagell but was unsuccessful. He was advised after some time to find other companies who may have been defrauded in the same way. Zimmer launched an investigation and found companies in Poland, France and Indonesia which had also been allegedly defrauded by Hashemi . Hashemi was finally charged after having defrauded Siemens and a prominent American company. He was convicted and sentenced to three years in a British prison.

Previously, Basson's defence team told the court that Hashemi was a senior member of Libyan Intelligence who assisted Project Coast during the first attempt to purchase a peptide synthesizer.

Zimmer testified in detail about other transactions made by Basson through the Luxembourg accounts.

Wednesday, 23 August

Bernard Zimmer's evidence in chief concluded with details of several large deposits made to Charles van Remoortrere's Barcelona account (used from 1986 exclusively by Basson) by Chu-PM Trading or electronically from David Chu's Swiss bank, Arze.

The cross-examination of Zimmer began with an attempt by defence counsel, Adv. Jaap Cilliers to discredit Zimmer by claiming that he had been involved in illegal drug deals by moving money for Basson, in the falsification of documents to hide the true nature of deals conducted by Basson and that he was fully aware of Basson's involvement with Project Coast. Zimmer denies these accusations.

Cilliers cited the R12-m agreement signed by Zimmer and Chu between Blackdale and Medchem-Forschungs as an example of false documentation. Zimmer denies knowing it was a false document, reiterating that he signed it at Basson's request and to return the earlier "favour" when Basson advanced funds to Blackdale during the deal with Copperdale/Tagell.

Zimmer denied knowing about Project Coast, saying he knew only that Basson was an SADF customer of Van Remoortrere's companies. Zimmer said the transfer of funds in Europe on behalf of Basson had nothing to do with any SADF project, as far as he was aware. Had he known he had unwittingly been drawn into the chemical and biological warfare project, he would have withdrawn from all further dealings with Basson.

Cilliers said Zimmer was lying when he said he knew nothing of Project Coast or that Basson's deals were cover-ups for illegal transactions in contravention of the arms embargo. He said that at the end of August, 1986, Zimmer had been fully informed during a meeting in Europe with Basson, Van Remoortere and General Lothar Neethling that both the SADF and the South African Police needed structures through which funds could be laundered. Zimmer denied these allegations, including a claim by the defence that he had introduced Basson and Neethling to Aubin Heyndrickx. Cilliers also claimed that Basson had discussed the proposed laundering of funds with the Surgeon General who had approved the plan.

Zimmer denied knowledge of the alleged purchase of mandrax (methaqualone) from Croatia. He said he was unaware that D John Truter was a front company for the SADF or Project Coast, and had transferred funds to D John Truter that account because he was told to do so by his client, Basson.

There was a great deal of confusion which surrounded the repayment of the loan made by Basson to Blackdale to support the Tagell deal and court was adjourned until Friday for the defence and the witness to consider the documentation. The defence made it clear that they would not be able to conclude cross examination before the witness was due to return to Belgium on Saturday and that he would have to be re-called at a later stage in the proceedings.

Friday, 25 August

Cross examination of Zimmer continued. Cilliers challenged Zimmer's claim that he believed the transactions conducted through Van Remoortrere's account were legitimate business transactions. Cilliers also said Zimmer facilitated funding for Civil Cooperation Bureau agents operating in Europe. Zimmer denied this but admitted that he handed over substantial amounts of cash to individuals from time to time, at Basson's request or on his instructions. However, he had no idea who these people were or what the money would be used for.

The Croatian deal came under discussion once again with Zimmer claiming to have had no knowledge that Basson was involved in the purchase of drugs. Cilliers later told the court that his client's explanation for the Blackdale, Tagell deal was that the $3,2 million performance bond was not part of a normal transaction, but rather, was set aside to pay for a peptide synthesizer which the SADF "bought" through the Iranians.

Judge Willie Hartzenberg asked the witness if he had not thought Basson was rather a wealthy soldier? Zimmer said no, since Basson had made it clear to him from the start that he was also a cardiologist, and assumed that even though he was in the defence force, Basson also had a lucrative private medical practice. Cilliers then informed Zimmer that he had moved money for the SADF and had also handed "reasonably large" sums of cash to NATO officials to buy technology and information for the SADF. According to Cilliers, the people Zimmer handed cash to in Belgium were actually NATO officials, who were receiving bribes. Cilliers went on to claim that the NATO officials were selling information about the CBW programmes in their own countries.

Cilliers informed the court that he was unable to take cross-examination any further at that point and that further questioning of the witness would have to take place at a later stage. Zimmer agreed to return to South Africa at the court's convenience.

This report has been prepared by Chandr� Gould and Marlene Burger. Chandr� Gould is a research associate at the Centre for Conflict Resolution working on the Chemical and Biological Warfare Research Project. Marlene Burger is monitoring the trial as part of the CCR Chemical and Biological Warfare Research Project. The Chemical and Biological Warfare Research Project is funded by the Ford Foundation, the Friedrich Ebert Stiftung and the Norwegian Government.

Centre for Conflict Resolution, UCT, Private Bag, Rondebosch, 7701, South Africa Tel: (27) 21-4222512 Fax: (27) 21-4222622 Email: [email protected]