Trial Report: Twenty-Seven

This report covers the period Monday 28 August - Friday 1 September, 2000

Monday, 28 August

Proceedings began with senior prosecutor Anton Ackerman informing the judge that he would have to withdraw from the trial until such time as he was reimbursed by the Justice Department, with interest and bank charges, for the R12 000 he had to pay from his own pocket on Friday 25 August, to cover the cost of Bernard Zimmer's expenses. Ackerman explained that despite having followed the correct procedures, he had not received a cheque from the Justice Department to cover the expenses of bringing Zimmer to testify in the trial. Judge Willie Hartzenberg said the situation was totally unacceptable and that in his experience no case had ever been compromised because the prosecution had to assume personal responsibility for the costs. If the State was serious about this prosecution, he said, the prosecutors had to be given the necessary financial support. If not, the situation would be untenable. Delays that could result infringed on the accused's right to a speedy trial and in the extreme, could even lead to the State being forced to close its case prematurely and before all the evidence had been placed before court, simply because it did not have the funds to continue.

Ackerman withdrew, leaving forensic auditor, Hennie Bruwer, to continue leading the state's case until the matter is resolved. Bruwer called D. John Truter to the stand.

Truter, has a doctorate in business administration. He joined the Permanent Force in 1973 as an internal auditor at Chief of Staff Finance, and was transferred a few years later to the South African Medical Service (SAMS). In 1983 he was posted to the office of the Inspector-General and promoted to the rank of colonel, which he held until the end of April 1989, when he left the SADF with a voluntary severance package after having been approached by Basson in 1988 with an offer of a job on Project Coast.

The front company, D John Truter Financial Consultants, became operational on May 1, 1989. Truter's task was to channel all funds for Project Coast from the SADF (Military Intelligence) to the other front companies. Although approved by surgeon-general Gen. Niel Knobel and the Chief of Staff Finance (Admirals Bert Bekker and Murray) the budget was drawn up by Basson.

While all transactions were subject to annual audit by Petro Theron - regarded by Truter as the external auditor for the entire project - Truter had only one boss, Basson. He managed three bank accounts at Volkskas for the exclusive use of Coast. On May 7, 1991, Truter opened another account at Volkskas Menlyn, in the name of his closed corporation as a "project account", on which he alone had signing powers. He was instructed by Basson to open this account, specifically at the same branch as all existing D John Truter Financial Services accounts, and told that it was to be an additional "ultra-sensitive" Coast account, but that no one, except Basson and Truter, was to know the account existed - not even Gen. Knobel. Specifically, auditor Theron was not to know. Truter gave evidence about the transfer of large sums of money to and from this account.

Truter told the court that he had kept copies of some of the financial records of his company and had taken them to Canada with him when he immigrated, as insurance

Truter said that in August 1994, he traveled to Switzerland (five months after Coast was officially shut down) to testify at a government inquiry into the affairs of Jurg Jacomet, particularly regarding the Banco Di Napoli (Vatican) bearer bonds. Basson asked Truter to testify. Basson suggested that by having Truter testify in Switzerland rather than in South Africa, details of the Croatian deal would be kept out of the public domain. Truter was accompanied to Switzerland by advocate Chris Marlow, who had been designated by Basson to "provide support and monitor the situation". Prior to departure, discussions were held with Basson and the nature of Truter's evidence was decided on. Truter followed his instructions to the letter, since he "trusted Basson more than I trust my own wife" and had never been given any reason to question his decisions.

Truter produced a document, signed by Basson, authorizing the transfer of $2,3-m from Project Coast to one of the Swiss bank accounts for the purchase of 500 kg of Product M, to be delivered by charter flight. He does not know if the goods were ever received or not.

Truter said Basson was at all times the Project Coast leader. Knobel's role was that of "overseer" but every decision was made by Basson. "Wouter Basson was Project Coast - end of story," said Truter. In fact, Basson once told him that Knobel didn't have a clue what was going on in Project Coast and was not too well informed.

Cross-examination was brief, with Adv.Cilliers reducing Truter's role in Project Coast to that of a "clerk" who had no knowledge of operational matters.

Tuesday, 29 August

Senior prosecutor Anton Ackerman returned to court this morning, to inform the judge that following a meeting of all parties involved yesterday, he had been given the assurance that he would be reimbursed.

Forensic auditor Hennie Bruwer was called to present testimony on his supplementary report.

Bruwer's findings are that from April 1, 1983 to February 28, 1992, R418,226 million was allocated to Project Coast. From March 1, 1987 to February 28, 1993, the period covered by the indictment, the project had access to R340,9 million, of which R37 million was misappropriated, according to Bruwer. Bruwer claims the bulk of the funding was spent on the establishment and privatization of Delta G Scientific (R127,4 million) and Roodeplaat Research Laboratories (R98,4 million) while R66 million was spent on NBC suits. Other expenditure was: R10,6 million to Protechnik (March 1988-February 1993), R8 million to Lifestyle Management (March 1989-February 1993), R1,4 million to Data Image (March 1991-February 1993) and R634 383 to Organochem (March 1992-February 1993). In the 1992/93 financial year, R1,9 million was paid to Aeromed for charter flights.

Regarding the defence claim that a second amount of $2,46 million was used as a performance bond for the purchase of BZ, Bruwer found no such foreign transfer from Coast between 1991 and 1993, and concludes that the funds involved in the Croatian deal with Jacomet constitute the only foreign transfer of this size. Both bank officials and Bernard Zimmer state that no divisible performance bond was ever set up as claimed by Basson. The facts do not correspond with the various explanations offered by Basson to external auditor Petro Theron and to the Office for Serious Economic Offences about application of the $2,46 million, and Bruwer is convinced that it was never used nor intended for the purchase of BZ.

In cross-examination, Cilliers put it to Bruwer that his calculations made no provision for the covert purchase of technology and information for Project Coast. Furthermore, the only funds that could have been used to pay for the equipment which the State alleges never existed, as outlined in the indictment, would be the R37 million which Bruwer said was misappropriated, since nowhere else does his report reflect the amounts Basson claims he spent on this equipment. Bruwer had also not taken payments for bribes or information received by Basson into account, nor funds for the purchase of BZ. Bruwer said the only documents he had seen relating to Delta G and the manufacture of chemicals, concerned Project Mosrefcat, under which 1200kg of methaqualone were made and sold at the beginning of 1989 to Medresco - a company about which he knows nothing more.

Wednesday, 30 August

Major-General Pieter Hanekom, who retired in 1994 as the SA Defence Force's Inspector-General, was called by the State. Hanekom was only able to tell the court that he was never aware of any working committee, technical work group, security work group or financial working group attached to Coast.

Colonel Gert Jacobs, who worked for Hanekom, was called next. Having previously been a bank manager, he joined the SADF in 1974 as an internal auditor, with specific responsibility for the Special Defence Account and top secret projects. Jacobs had intimate knowledge of the financial side of many classified projects and was a regular visitor to the Special Forces Headquarters, Speskop, where he audited the affairs of Special Forces.

According to Jacobs, the task of auditing the SADF was so huge that the Inspector General's office was never able to handle more than about 15% of the job, hence the use of external auditors like Petro Theron.

Jacobs knew Corrie Meerholz, commanding officer of 5 Reconnaissance at Phalaborwa. However, he had never heard of Intramex or of a bank account in the name of VABN. If this account existed, as claimed by the defence, to finance two Special Forces shebeens (informal pubs) in Hammanskraal and Kwandebele for the purpose of gathering intelligence, there was no reason why Special Forces would not have disclosed the operation. Indeed, says Jacobs, it would have been incumbent on Special Forces to do so.

According to Jacobs, audits of supplies to Unita were routinely carried out by the Inspector General's office. Proper records of all supplies were kept by the SADF and where clothing or footwear, for example, was involved, invoices from the manufacturers were submitted for audit purposes. On at least one occasion, Jacobs sent a member of his staff to Angola to physically verify the delivery of goods to Unita. Junior prosecutor, Werner Bouwer put it to Jacobs that the court has heard that all aid to Unita was so sensitive that any items issued from SADF stock were immediately written off and expunged from the official records. Jacobs says no records or documents would or could have been destroyed or equipment written off until Unita had acknowledged receipt of goods and the transfer had been fully audited.

In cross-examination, Cilliers put it to Jacobs that if, for example, NBC suits had been supplied to Unita from SADF stock, they would immediately have disappeared from the official records, since there would have been no expectation that Unita would return any of them. Jacobs said that all documentation relating to such a deal would be retained by the Inspector General's office in respect of goods and transport, until the audit had been finalized.

Thursday, 31 August

Dr. Torie Pretorius introduced the first of several witnesses who will testify about the Chemical Agent Monitors and the alleged supply of 12 000 - 15 000 NBC suits to Unita/SADF forces in Angola.

Major-General Leslie Rudman, currently officer commanding Special Forces, which he joined in 1973, spent a great deal of his career deployed in Angola/Operational Area during the 1980s. In 1981 he was a company commander with 32 Battalion and took part in Operation Protea in 1980/81. In 1986, Rudman was seconded to the Directorate Special Tasks at Chief of Staff Intelligence, and assigned to the Unita support team.

Rudman said he became aware in 1986 of Unita claims that its forces had been attacked with chemical weapons. While he never saw any alleged victims himself, he did see photographs produced by Unita showing people who appeared to have suffered chemical burns. In 1986 Rudman was involved in a chemical attack verification exercise, the only one he knew of. Following a report by Unita that a chemical weapon delivered from an aircraft had contaminated a group of its people, Dr Brian Davey was sent to Angola by SAMS and met up with Rudman's team, headed by Unita's General Renato. Prior to flying to the target area, Davey and medics from 7 Medical Battalion who were with him, briefed the Rudman/Renato team and demonstrated how they should don NBC suits - which the 7 Medical Battalion team brought with. The briefing lasted about 90 minutes. This was the first and only time that Rudman saw an NBC suit in the Operational Area or Angola.

The following year, when Operation Modular was launched, intelligence reports identified chemical attack as a possible threat. Two counter-strategies were devised: (1) Make contact with the enemy as soon as possible and keep them engaged in combat, as it was generally assumed that the opposing forces were not equipped to protect their own men from contamination and (2) issue all SADF combat troops with gas masks, raincoats/ponchos and gloves. Shown the top half of an NBC suit in court, Rudman said not a single SADF or Unita troop he encountered in Angola had proper protective clothing like this.

In cross-examination, defence counsel Jaap Cilliers put it to Rudman that since he returned to Pretoria from Rundu at the end of 1988, one would actually have to ask the person in charge of liaison with Unita what equipment had been supplied, Col Schutte. Schutte previously told the defence that he was personally involved in the supply of "tons" of protective clothing to Unita. Cilliers claimed that according to Schutte, Unita asked for the protective clothing via "another" channel, and Unita generals confirmed receipt - Rudman confirmed he was not aware of the issue of NBC suits and detection equipment to Unita, but he could clearly confirm that what Unita asked for, Unita got. One of the problems, said Cilliers, is that the jackets of the suits were extremely popular with troops, who took them home to wear when they rode their motorcycles.

The next witness was Colonel Renier Coetzee, currently commanding officer of 5 Special Forces Regiment at Phalaborwa (formerly 5 Reconnaissance Unit). Coetzee took part in both Modular and Hooper, and in the early phase of Packer. From mid-1987 to mid-1988, he was stationed at divisional headquarters, north-west of Mavinga in Angola.

He first became aware of CAMs during a 1987 staff course during which he was introduced to CBW, but until shown a photograph of a Chemical Agent Monitor (CAM) when testifying to the Office for Serious Economic Offences, had never seen one. Shown photographs in court today, he confirmed that this was the closest he had ever come to a CAM. At no time during Operations Modular, Hooper or Packer was such equipment issued to the SADF or Unita as far as he is aware, and no training in the use of chemical detection sets was ever given. He confirmed that intelligence reports warned of the possibility of chemical attack during Modular and Hooper, and that troops were instructed to carry with them the standard SADF raincoats or use their groundsheets as ponchos. Coetzee knows of no other protective apparel issued to SADF or Unita troops. Coetzee was in constant direct contact with Unita troops in Angola but never saw any such garments or CAMs with them. If 12 000 to 15 000 NBC suits had been issued during Modular and Packer, he says, he was there long enough and with enough troops to have come across them.

Friday, 1 September

Senior Prosecutor, Anton Ackerman returned to court having received his reimbursement. He called Brigadier-General Chris Briers (retired 1991) who was Hercules Orffer's senior officer at Chief of Staff Intelligence, responsible for the transfer of funds from the Special Defence Account to foreign destinations. Briers told the court from February 2, 1991, in terms of a letter signed by Lieutenant-General (Witkop) Badenhorst, acting Chief of the Defence Force, Truter and Basson were given authority to order foreign fund transfers themselves. According to Briers, this was done because his staff at Chief of Staff Intelligence were nothing more than a rubberstamp regarding Project Coast, and had no idea what the project was spending foreign funds on. Since SAMS and not Military Intelligence was ultimately responsible for control of Coast's budget, accountability for expenditure was thus the onus of D John Truter Financial Consultants from February 1991 onwards.

The next witness was Gert Coertzen, previously a major-general with Chief of Staff Finance but since 1998, attached to the Defence Secretariat as a civilian and chief accountant. Coertzen would not confirm that Project Coast was the most sensitive project handled by the SADF. He classifies it as one of the 10 most sensitive projects, and said the degree of sensitivity had no influence on the SADF's record-keeping. The clandestine acquisition of all and any equipment - even chemical substances - would have to be reflected somewhere in the SADF records. Ultra-sensitive items would be protected by the need-to-know principle in that they would not appear in classified stock registers, but they would be recorded somewhere. The nuclear project, for example, was properly documented at all times.

Prior to the mid-1992 investigation by Military Intelligence into Basson's involvement with Merton House, Coertzen was the author of a letter, signed by Chief of Staff Finance Admiral Murray on July 2, requiring Basson to provide full details of procedures and controls in respect of Coast's finances, and a monthly cash flow. Basson explained in detail what mechanisms were used in respect of foreign transfers and why certain procedures were applied. Basson gave him a list of outstanding contractual obligations, including those for the purchase of NBC suits, and amounts earmarked for expenditure, such as R600 000 for "cover stories" in Europe and the USA.

In mid-1992 Coertzen was summoned to a meeting with Basson, who expressed his unhappiness with new procedures, in terms of which funds would be supplied to Truter based on monthly cash flow requirements. The new regulations required Truter to inform the Chief of Staff Finance in advance of how much he would need each month, and the practice of making balloon payments was stopped.

Coertzen said he found Basson's explanation that Coast had a cash flow problem in April as this is the first month of the fiscal year, when annual funds had just been allocated. He said that it would not have been normal procedure for Basson, as project officer, to have purchased an aircraft as part of a barter deal involving a peptide synthesiser, for example, if the deal was not first referred to higher authority for authorization.

In cross-examination, Coertzen acknowledged that at no time was he involved in the operational aspects of Coast, and did not know what was bought, who the suppliers were, how much it cost or what it was used for. Nor could he provide any information about the role played in Coast by Knobel and Liebenberg, the Co-ordinating Management Committee or the administration of the project. Asked how the SADF's rigid record-keeping system would, for example, have accommodated large amounts of money paid as bribes, Coertzen said it would be recorded as expenditure, certified by the project officer. Such records would not be freely accessible, but someone would have to know about the expenditure. Cilliers stated that the Co-ordinating Management Committee did not want to know these details.

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]