Trial Report: Thirty-Nine

This report covers the period Friday 2 February - Thursday February 8, 2001

Friday, February 2, 2001

Advocate Christopher Barend Marlow took the stand.

Marlow and former Delta G Scientific Managing Director, Dr Philip Mijburgh knew each another, and have been friends, since "before we went to school". Their parents were also lifelong friends. Some time during 1987, while Marlow was employed as a consultant in the pharmaceutical industry, he was contacted by Mijburgh, then managing director of Delta G Scientific. Mijburgh met Marlow for dinner, and invited him to visit Delta G Scientific which he did. Marlow was briefed by Mijburgh about the nature of the company's business, initially indicating that Armscor was involved in Delta G. At a later stage, Marlow learned that it was actually the SA Defence Force which was involved.

Mijburgh asked Marlow to identify potential Delta G clients and investors in the private sector. Marlow was not told at this point of any foreign interest in Delta G through PCM International Inc, Cayman, but at a later stage, he heard this name mentioned. Marlow was paid a one-off fee for his initial work for Delta G. After this, he became more involved with the company as a legal adviser on a monthly retainer of R9 000, soon increased to R10 000 a month and paid by Medchem Consolidated Investments for three-and-a-half years. His task chiefly involved the vetting of contracts and setting up trusts.

One of his first tasks, assigned by Mijburgh, was to study a large volume of documents on chemical and biological warfare, and give Mijburgh an oral opinion on them. Marlow was fed CBW documents by Mijburgh on a regular basis, as he had to "keep abreast" of developments in this field, and submitted various written reports on his research.

He met Basson after his first visit to Delta G, and was told by Mijburgh that he reported to Basson annually. Marlow was aware from the start that Basson was an SADF officer.Later, he also met Dr Wynand Swanepoel, managing director of Roodeplaat Research Laboratories, through Mijburgh, and became aware of Sefmed Information Services, which had offices in the same building as Medchem Consolidated Investments (MCI), and at some point, he also heard that Infladel was involved in the project.

Marlow handled all legal work for the MCI group and in fact, set up MCI for Mijburgh and served as the inaugural director and sole shareholder. MCI was set up to hold Mijburgh's interest in Delta G Scientific after privatisation, and Marlow was aware of this in advance. At the same time, Marlow set up the Philip Mijburgh Family Trust, designed to protect the interests of Mijburgh, his wife and any children they might have. The shares in Delta G held by MCI were placed in the trust, administered by Marlow, Mijburgh's father and Petro Theron, auditor of Project Coast.

As a result of the substantial payments made by the SADF for cancellation of contracts when Delta G was privatised, Marlow knew that Mijburgh would receive a large amount of money. They discussed this on several occasions. Basson's role during the pre-privatisation phase was seen by Marlow as that of SADF representative. Basson and Mijburgh consulted with Marlow, in Stellenbosch, about whether or not cancellation clauses built into the contracts would be enforceable at privatisation, and his opinion was that this was indeed so.

In April 1990, the State sold 75% of the shares in Delta G Scientific to MCI, the remaining 25% being bought by employees of the company. At the same time, Marlow vetted - possibly even drew up - the new research contracts between MCI and D John Truter Financial Consultants. When these contracts were cancelled in August 1991, MCI made a nett gain of R15-m. Approximately one year later, RRL went the same route.

Marlow served as a director of RRL for a while, and liaised with Theron extensively during privatisation. Calculations for cancellation of contracts were based, he says, on standard Armscor research contracts. Marlow says he was not involved in the decision to extend the cancellation period to five years from the usual three.

In 1991, Marlow became sole director, 100% shareholder and chief executive officer of Blowing Rock Controlling Investments, but says he held the shares merely as a nominee. At a later stage, BRCI borrowed enormous amounts of money from MCI, the Mijburgh Family Trust, RRL, Contresida Holdings and Van Zyl & Partners.

When RRL was liquidated, R4,4-m was paid to the Wynand Swanepoel Trust and R2,4-m to Contresida Holdings. Swanepoel was the beneficial owner of both, and each entity held 25% of the RRL shares. When Merton House was sold, BRCI paid R2,9-m to RRL as well as covering MCI's debt to RRL. Marlow confirms that auditor Theron was extremely unhappy about the unsecured loans that had been made between these various companies.

Most of 1989, says Marlow, was spent "getting to know" Basson, Swanepoel and others involved in the project. It was Basson who approached Marlow in January 1991 to set up Blowing Rock Controlling Investments. Basson told Marlow the WPW Group wanted to reorganise and rationalise certain of its South African interests, and showed him a handwritten organogram of how the new structure would look. By that stage, Marlow was aware of the WPW Group, and had drawn up contracts for WPW from time to time. The new company to be set up would be the holding company of the Wisdom Group in SA. Marlow and Basson had numerous discussions over the two-year period before BRCI was set up, and he also consulted with Swanepoel.

Marlow testified in some detail about the financial arrangements of BRCI.

Marlow said that by 1990 he was already aware that Swanepoel, Viljoen and Basson were involved in the farming operations. He was also aware of the travel agency, Partners in Travel, and Aeromed, which fell under Swanepoel, Merton House and Wisdom Finance. Marlow drew up a shareholders agreement in 1990 for Wisdom Holdings, which shows Basson as chairman of the Wisdom Group, with Viljoen and PW de Jager as directors.

Marlow confirmed that he had spent "a long time" in Libya. He said he met Yusuf Murgham at Basson's home in 1993/94. He is of the opinion that by the time he met Murgham, Basson was no longer attached to the SADF full time. Murgham, he said, was a former Libyan public servant, but when Marlow met him, he was living in Zimbabwe and running a wholesale business. Murgham had valuable contacts in Libya, where his parents and brother lived in Tripoli, and was extremely helpful in arranging meetings for business opportunities pursued by Basson and Marlow, and in liaising on their behalf with government departments in regard to transport and hospital proposals.

Marlow said the Libyan railway line project never went beyond the concept stage, and named those involved as Basson, himself, Mijburgh, Murgham and Anton Moolman, chief executive officer of Transnet at the time. Marlow made several trips to Libya, co-ordinated by Basson, in connection with the proposal. All his travel expenses were paid by BRCI, according to the company's books, but Marlow claimed he did not know this.

The company Libgro was set up in 1993/94, with Basson, Marlow and Mijburgh as directors, specifically to handle "the Libyan arm of business". Murgham was supposed to be a director, but this never happened. Between 1994 and 1995 Marlow spent 18 months in Libya in connection with Libgro business. He said he was never told by anyone that Murgham had been connected to Project Coast in any way, or that he was actually a senior Libyan intelligence agent. However, he says it is possible that Murgham could have been a member of the intelligence community, as he had many contacts, and during the 1994 elections, acted as liaison between Nelson Mandela, the ANC and Libya.

Marlow is categoric that in all his dealings with Libya, and his stay there, he had absolutely nothing to do with intelligence matters, and that his involvement at all times was "purely business".

Monday February 5, 2001

Marlow continued testifying. He answered questions about the Aries Trust which was established in favour of Basson's wife, Annette and any children they might have.

Marlow also spoke about the purchase of a lodge at the luxury Fancourt golf estate in George. Marlow, who was a director of Fancourt as a result of his former marriage to the daughter of the erstwhile owners of the lodge, was involved in the deal. Marlow was given a handwritten document by Basson outlining the need to set up a new company to buy the lodge, and so Medchem Sports International was born. Directors were to be Marlow, Mijburgh and Basson, but in the end, Basson was not listed. Marlow was vague about where the funding would come from, but said the purchase was never discussed with Webster. The lodge was purchased for a sum of R1,4 million by the company Medchem Sports International from a loan by Medchem Consolidated Investments (the company which from 1989 owned 75% of Delta G Scientific shares) - the loan was ultimately paid back to Blowing Rock Controlling Investments.

Marlow also testified about a deal involving an investment by WPW in the Five Nations Golf and Country Club at Mean for which a company known as General Golf Investments was established. A $1million investment was made, however the development required on going injections of capital and ultimately was abandoned.

Marlow said that at one stage there was a plan to buy the entire Fancourt resort. This was at the time when it was in serious financial trouble, and on the market for R40-m. Funding was to be provided by Basson, Philip Mijburgh, Bernard Zimmer and Mike Scholtz, and there was "talk" of using foreign securities. In due course, bonds were acquired - bearing the names of TransAmerican Securities and Banco di Napoli. Marlow said he was aware that these bonds turned out to be forgeries, and that this led to Basson's arrest in Switzerland. [These were the alleged Vatican bearer bonds which Knobel claimed were intercepted by Basson in order to secure the purchase of 500kg of methaqualone from Croatia]. The purchase of Fancourt did not take place.

Marlow admitted that over the 18-month period from 1993-1995 when he was closely involved in various business deals in Libya and made several telephone calls to that country from the Warfield cottage. The were all in connection with potential business opportunities. Marlow says he was paid for his work on the Libyan deals, but cannot remember by whom - however, it was not by any Libyans. Webster was extremely worried about Marlow's calls to Libya, and told him so in no uncertain terms, saying they would simply draw unnecessary attention to the cottage. [This contradicts Webster's testimony - according to his testimony there would have been no reason for him to be worried about the calls made to Libya because he only knew Basson and his associates as businessmen].

Marlow said he twice attended the Monaco Formula 1 Grand Prix. The first time, he was with Basson, Mijburgh and Swanepoel, and they stayed in Nice for about three days. Marlow said it was "pure pleasure" and his costs were covered by BRCI. He says he does not know who paid for his companions. The second Grand Prix he attended alone. He also testified to having stayed at five star hotels whenever he travelled abroad and to have having flown first class on those occasions that the Jetstar was not used.

Marlow confirmed that the proceeds of the R2-m sale of the King Air were paid into a BRCI account at the United Bank, opened after the original account, at Nedbank, became very overdrawn. He also confirmed that he signed a number - definitely more than five - of blank cheques against this account which were given to Basson. Basson was in Tripoli at the time, and Marlow was on his way there. This was in May/June 1995. In court, Marlow identified some of the BRCI cheques: R320 000 in favour of Van der Hoven & Partners, written out by Mijburgh, R40 290 to Basson in his own handwriting on June 15, 1995, R20 000 to Basson in his own handwriting on June 23, 1995, R35 000 to Basson in his own handwriting on May 10, 1995, R27 600 to Profincor on May 8, 1995, in Basson's handwriting. Asked if Basson had free access to BRCI's funds, Marlow said Basson told him there were "a few things" he needed to sort out, hence the need for the blank cheques.

The prosecutor, Adv. Anton Ackerman, questioned Marlow on the details of many deals in which he and the companies in which he had an interest were involved.

Marlow said he remains a director of BRCI and its various subsidiaries. He said the idea of setting up BRCI was that, at some point, the company would at least break even. All the funds pumped into BRCI were used to make loans to other companies, and as far as he can calculate, R10-m was lost. BRCI never transmitted any funds to the WPW Group, and no one has ever asked Marlow on behalf of WPW what happened to the funds. He thought all the loans to BRCI came from WPW. He does, however, not know who the beneficial owner(s) of the WPW Group were, but "can draw certain assumptions" about ownership both inside and outside South Africa. His assumptions do not include the possibility of any East Germans, Russians or Libyans.

Cross-examination began with an attack on Marlow's abuse of the legal profession. Adv. Cilliers claimed, and Marlow admitted that he had lied to the Office for Serious Economic Offenses when answering questions about the companies in which he was involved. Marlow said eventually that he had wanted to protect Basson during the OSEO hearings.

Cilliers said that Marlow knew about Basson's contacts with Libya and that Yusuf Murgham is a high-placed Libyan government official. Marlow said that when he met Murgham, he was a perfume trader in Zimbabwe, and he has never known or been informed that Murgham is a senior intelligence agent. He did however admit that Murgham had personal contact with Colonel Ghaddafi and had been of assistance due to his contacts with Libyan government officials. At this point, Cilliers produced a clipping from the Citizen newspaper and informed the judge that he wanted a ruling from the bench that the photograph he was about to show to the witness, may not be released to the media for publication. Ackerman opposed the application for a gag order and the introduction of the photograph. The photograph was, with the Judge's agreement, shown to Marlow, who said he could identify both people in the picture. Yusuf Murgham was in the background, to the left of President Robert Mugabe. Cilliers' point was that a perfume dealer would not have had reason to be connected to important politicians. Cilliers also said that Murgham was pictured on South African television news on the occasion of Nelson Mandela's visit to Libya to meet the Libyan leader.

Tuesday, February 6, 2001

The cross-examination of Marlow continued with Cilliers drawing on the evidence of financier Samuel Bosch to show that Basson did not derive any personal benefit from Blowing Rock Consolidated Investments. Cilliers also claimed that forensic auditor, Hennie Bruwer's report, which shows that WPW held a 50% share in Medchem Consolidated Investments, is wrong, since WPW never owned half of MCI.

Marlow did agree that the business deals made by BRCI and all its subsidiaries, as well as BRCI's predecessor, the Wisdom Group, were a total fiasco. Indeed, he said"that's putting it mildly". Not only did none of these companies ever show a profit, said Cilliers, but any prospect of success was stillborn - not because of poor management, but simply because the entire structure was put together in such a way that it could never work. Cilliers said financial reward was never the motivation for establishment of this group of businesses.

Cilliers also addressed the matter of Basson's attendance of the Monaco Grand Prix, and said is was "purely coincidental". Basson was in Europe "on business" at the time, and did not make a special trip in order to attend the race. Marlow's expenses, paid by BRCI, had included a normal commercial flight and Basson simply "happened to join the group" on the day of the race, and left Monte Carlo immediately afterwards, so any suggestion that Project Coast had paid for the trip, was ridiculous. Cilliers also said that this had taken place in 1991, after RRL was privatised and noted that Swanepoel took a companion along, and paid their expenses himself.

In re-examination of the witness Ackerman addressed the issue of Marlow's truthfulness and revisited the trip to Monte Carlo. Marlow said that he, Basson, Mijburgh and Swanepoel had used the occasion to look at luxury apartments which were for sale.

Marlow's testimony was completed.

Ackerman then told the judge that he had revised his stance on the newspaper photograph of Yusuf Murgham, and that the State now wanted it filed as a court exhibit, along with an explanation by the defence about why it had been used at all. The judge agreed to the photograph becoming an exhibit and Cilliers said that the photograph was taken "during the year 2000" at the African Euro summit in Cairo - but said that if he were to file the picture as a court exhibit, he would insist that Murgham should be protected from "being exposed in the headlines of South African newspapers". There was no justification he says, for a foreign intelligence agent to be identified in such manner. The Judge said he would have to consider whether he could prevent media access to the photograph. The Judge ruled that he would hear legal argument on the matter on Wednesday morning.

Ackerman then said he had another matter he wished to bring to the court's attention. Some time ago, the defence had agreed that it would make admissions on a considerable number of bank statements/documents. However, despite the fact that Ackerman had now approached the defence 15 times and had served papers on them to do so, he had not been able to secure the promised admissions. The Judge recalled that this matter was brought up last December, and that the defence undertook at the time to meet with the prosecution to finalise the admissions. Ackerman explained that if the defence does not make the admissions, the prosecution will be obliged to seek an adjournment of one or two months in order to secure the testimony of bank officials.

Ackerman said he also wished to place on record that the prosecution has been and is being threatened by the defence, that the admissions will not be made if the prosecution does or does not do certain things. Cilliers then said that the defence was not prepared to make any admission and that Ackerman should apply for the adjournment.

The judge expressed his regret at this turn of events.

Wednesday February 7, 2001

After a session in chambers with the Judge, defence counsel Jaap Cilliers formally applied to file the photograph showing Yusuf Murgham with Robert Mugabe as a court exhibit, and the Judge rules that the photograph not be released to the media for publication, in order to avoid "any possible international repercussions".

Patricia Leeson was called as the next witness. From January 1983 she worked as Willie Basson's personal assistant at Delta G Scientific. Leeson worked at Delta G for a while before being offered the opportunity of moving to the UK by Basson. She moved to the UK under the cover of being employed by Wilfred Mole at RF Telecommunication, but she served as an administrator and personal assistant to Basson. Lesson later returned to South Africa to work for Systems Research and Development, Intramex and Roodeplaat Breeding Enterprises.

In the UK Lesson lived in the Warfield cottage. Leeson said that whenever Basson was in England during her stay there, they would go shopping together for "appliances" - television sets, VCRs and hi-fi equipment, all bought from ordinary appliance stores, then taken back to the cottage, where she would repack the equipment before taking it to Heathrow Airport for shipping. She cannot remember who or where the TVs, VCRs and hi-fi sets were shipped to, but all payments were made with Medchem Consolidated Investments cheques from an account at the Royal Bank of Scotland, on which Basson had signing powers. However, the invoices, to ABC Import/Export, Luxembourg, list the contents of the boxes Leeson shipped as hi-tech electronic equipment. The information for the invoices was given to her by Basson.

Five invoices filed with the court - for a total of £145 661,10 - list the items as: 2500 MHz Sweeper with programmer; crystal-controlled Marmonic marker; 20 MHz pulse generation voltage controlled unit with pulse delay double pulse and synchronised pulse output; 1 to 5 MHz Main Generator with sine square and sawtooth output; waveform stabiliser with time symmetry function; sweep ramp generator; ultrasonic flaw detector model KB3130: ferrous metals only; probes; fracture toughness analyser with JIC and J integral capability; biaxial stress analyser to match fracture toughness analyser and rack adaptor.

Leeson said she knows Roger Buffham, having had to once meet him at Heathrow Airport. On Basson's instructions she had to personally deliver £50 000 in cash to him. For this operation, she used her codename - Vanessa - and wore, as instructed by Basson, a "red dress with a distinctive brooch" so that Buffham would be able to identify her. The money had earlier been withdrawn by Basson from Barclays Bank, Ascot, and he and Leeson had then painstakingly removed all the bank wrappers from the bundles of cash. Basson did not want Buffham to be able to identify which bank the money had been obtained from, or trace the origin of the funds back to Ascot, says Leeson.

On one occasion on returning to the UK from a trip Leeson was questioned for hours by officials at Heathrow airport. Thereafter she immediately returned to South Africa. Leeson spent the next few weeks in South Africa while an official false passport was prepared for her in the name of Alexandra Hattingh. When she went back to England, Basson went with her, both of them flying first-class.

While living at the cottage, Leeson played host to many visitors - Jan and Antoinette Lourens, Zimmer, David Webster, Johnny Koortzen, Bart Hettema, members of her family and, of course, Basson himself. However, she never accommodated any Russians, East Germans or Libyans.

In cross-examination, Cilliers leaned on Leeson's testimony to lay the foundation of Basson's defence. She confirmed that when she went to work in England, she knew that she was working for the SADF as a civilian, and acting undercover for Basson, who in turn was a representative of the SADF. The Alexandra Hattingh passport was an official false passport, duly issued by the State, thus reinforcing Leeson's role as an undercover SADF representative in the UK. Mole had helped her create her cover. The handing over of £50 000 in cash to Buffham was arranged in a covert manner, complete with designated clothing items to serve as identification. She knew that Basson was involved in clandestine work for the SADF. Her understanding was that all companies of which she had knowledge, were official fronts. She was never to reveal her SADF links.

Cilliers referred to earlier testimony about the sale of Leeson's Pretoria flat to Basson. He said that one of the reasons Leeson wanted to sell the flat was because an electronic bug had been found on the premises. Leeson said the bug was found by a post office technician, and she reported the matter to Mijburgh, her boss at the time at Delta G Scientific. The technician had retained the bug, but Mijburgh said he would handle the matter. However, Leeson felt she had to also inform Basson, as she was involved in the CBW project, and they met for this purpose. At the time, she was dating someone called Tony Targie. [NOTE: this is a phonetic spelling. Leeson did not spell out the name.] He had told Leeson he was divorced, but when Basson made inquiries, he discovered that Targie was, in fact, still married, and that his wife was living in Port Elizabeth. But actually, said Cilliers, he was found to be an MI5 employee. Leeson said she was not told this by Basson.

Regarding the use of her flat after it was sold, Cilliers confirmed that Leeson was "aware at all stages" that it was to be used to house people who came to South Africa - "like David Webster and others who helped Dr Basson with the CBW project".

The court adjourned until Friday to give the advocates time to consult with each other about whether the defence will make admissions about financial documents or whether the state will be forced to call bank managers from abroad to testify to their veracity.

This report has been prepared by Chandré Gould and Marlene Burger. Chandré  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]