Trial Report: Fifty

This report covers the period Thursday 2 August - Thursday 9 August, 2001

Thursday 2 August 2001

The cross-examination of Dr Wouter Basson on the fraud-related charges continued. Cross-examination is being conducted by Anton Ackermann SC.

Ackermann asked Basson what he had to say about American attorney, David Webster's contact with the Principals in the light of Webster’s testimony that he had dealt at all times only with Basson in connection with the WPW Group’s business deals, and that as far as he was concerned, Basson was a wealthy international businessman.

Basson said that Webster’s testimony was incorrect, and that Webster knew from the start that sensitive security force matters and money-laundering were at the heart of the front organisation. Basson said the Principals never gave him any indication that they were in direct contact with Webster. If they were, and did not tell him so, it would have been because he was "not in the loop" and did not need to know about such contact, and he would thus not have expected the Principals to keep him informed about their communications. The whole purpose of setting up the front organisation as he had, was to isolate the Principals, and it might even have been risky for them to contact him at times.

Ackermann asked Basson what Webster would have known about his sanctions-busting business deals. Basson said he would not have told Webster the details of any deals, as this would have been a serious security breach. He said that an exception was the purchase of the Jetstar which was a sanctions-busting deal that Webster knew of. Basson said he told Webster nothing about the purchase of equipment for the Speskop laboratory, the CAMs, the proximity fuses, chemicals or the peptide synthesiser system.

Asked whether Webster knew,or knew about, Herr Blucher, Basson said yes, Webster knew about Blucher because at the beginning of the operation, Basson had discussed Blucher with Webster. Wilfred Mole may also have known about Blucher at some point, but Basson has no recollection of discussing Blucher with him. He would probably not have told Webster about the CBW Mafia, or that Blucher could be of help in contravening sanctions. Basson has no idea if there was ever any contact between Webster and Blucher. Basson said that by 1990, he had realised that Abdul Razak was the main player in the front organisation.

Asked about the answers supplied to a list of questions posed to Knobel by the Office for Serious Economic Offences, Basson said he could not remember if he played any role in compiling the answers given to OSEO in 1994 by Niel Knobel about specific individuals. He said he had "probably" made some contribution to the responses, but from 1992, OSEO had asked many questions, and he could not remember who answered them.

OSEO had asked questions about the role of several individuals in Project Coast, such as Blucher, said Ackermann. Knobel’s response was that Blucher had played a specific role in the transfer of technology to the SADF, but that the matter was too sensitive for him to expand on. He could, however, assure OSEO that no contracts had been awarded to any of Blucher’s companies, and that no project funds had been paid to him. Basson said that Knobel's response had been in line with a decision of the SADF’s General Staff.

Asked if one could deduce from Knobel’s response that in fact, he was in possession of more information (about Blucher) but refused to give it to OSEO, Basson said he did not know because he never briefed Knobel about the WPW Group or any related matters, as Knobel’s predecessor should have done so.

[Note: While not a rule, in practice, General Staff appointments tend to have an average duration of three years. From 1986 to 1994, therefore, the Co-ordinating Management Committee of Project Coast must have seen at least three sets of promotions/changes. Three members constituted a CMC quorum which implies that a minimum of nine different SADF officers served on the CMC at some point during the time in question. According to Basson, he did not brief any of these people about the WPW Group or any of its activities, because he assumed that each newcomer had been briefed by his predecessor].

Questioning about some of the companies which appeared on an organogram which provided details of the relationships between companies led Basson to say that many of the documents about the company structures were false.

Friday 3 August 2001

The day began with questions being put to Basson about his relationship with former SADF Chief, Gen AJ (Kat) Liebenberg (now deceased). Basson told the court that Liebenberg had been aware of the WPW group of companies and had given Basson 'private' orders on a number of occasions. Basson said he was not able to tell how much Gen Knobel knew about his activities.

Asked when he had realised that Knobel did not know about the WPW/Wisdom groups and how they were used to the benefit of the SADF, Basson said he had still not come to that realisation, despite remaining in touch with Knobel until 1996. Basson reiterated that he had no duty or obligation to inform anyone, after 1986, about the WPW/Wisdom operations or acquisition of assets, "because it was not the SADF’s money".

He said that assets bought and facilities established in South Africa had been the result of instructions issued to Basson by Abdul Razak, Dieter Dreier and Verobyov. Dreier had ordered the establishment of (Roger Buffham’s company) Contemporary Design Systems and Medchem-Forschungs, Razak had "probably" wanted the cottage at Warfield and the condominium in Orlando, Florida, had been bought at the behest of Razak and Dreier. In answer to questions about the luxury Merton House development, Basson said it had been purchased at the request of Razak and that Webster had assisted in choosing the property. Basson said it was intended as a guest house for use by the Principals.

Following a series of questions about the SADF and OSEO probes into the purchase of Merton House, Ackermann concluded from Basson's answers that in 1992 Knobel was completely unaware of how Merton House fitted into the picture and knew nothing about Razak, any "hijacked" front organisations or any Libyans. Basson reiterated that he did not know what Knobel knew.

Most of the questioning for the rest of the day focussed on the answers supplied to the OSEO in response to a number of questions posed to Knobel. The state argued that Basson was the author of the answers supplied to OSEO about companies which the state argued Basson had a beneficial interest in. Basson did not concede to having answered the OSEO questions but did say that he had been consulted by Knobel during the process.

Monday 6 August 2001

Basson was asked to explain an affidavit that he had prepared, apparently to support David Webster's refusal to assist the Office for Serious Economic Offences in their investigations. Basson said that he was unable to remember having made the affidavit. In the affidavit Basson denies having "at any time had unexplained wealth".

The affidavit states: "I [Basson] am at present a highly qualified cardiologist and a highly valued member of the SANDF. Since qualifying as a medical practitioner and entering the SADF at the age of 26, my remuneration has been far above the average for my peers. This was due to the specialised nature of my qualifications and work. For most of the time I was earning more than the Surgeon General. It must also be noted that I had (with permission) a lucrative private practice and consultation business in which I developed and marketed certain products."

Asked in court to explain these claims, Basson said he had "probably earned more than the SADF Chief since the age of 25". He said he "lived well" and earned a "great deal" from his private practice, set up in 1990. He could not, however, identify which of his several bank accounts was used for the "good pocket money" of between R6 000 and R7 000 a month which he earned in his private practice. He also said that he had acted as a consultant to one or more pharmaceutical companies, he was however unsure as to whether these consultations had taken place prior to, or after 1993. The companies he can remember working for in this capacity are Bristol Myers and Mead-Johnson, but, he said, there were other companies too.

In the affidavit, Basson admitted that he did benefit financially from "certain payments" from the Wisdom Group. In court, he said this could only have been included in the affidavit in order to explain payments made to him from the Regent International Trading Services account. In the affidavit he also admitted having served as a director of Wisdom Investments & Properties "in the early stages" and said his former Commanding Officer, Gen Nicol Nieuwoudt, was aware of this.

Questions to Basson about some of the companies in the Wisdom and WPW groups led Basson to inform the court that he had not received any financial compensation from the Principals in exchange for the assistance he provided them.

Detailed questions about some of the front companies and their relationship with Basson and others associated with Project Coast were asked. In answering these questions Basson indicated that WPW held 50% of Protechnik (the company responsible for defensive CBW research) which was one of the companies which was established with funds from the Principals. The other companies financed by the Principals were Systems Research and Design and Lifestyle Management, said Basson. He said that the Principal's shares in Protechnik were later bought by Medchem.

Tuesday 7 August 2001

Basson again denied that he was involved in compiling a document headed "Background to the WPW Group" which was retrieved from Florida attorney David Webster’s files.

Anton Ackermann then turned to the attempt to purchase the Fancourt golf estate near George. Basson said he had nothing to do with the deal, which was put together by Philip Mijburgh and Mike Scholtz in the wake of the Masterbond debacle. Basson said he was aware of their plans, and discussed various ways of financing the deal with them, but his involvement was purely peripheral. At some point, he became more directly involved, negotiating the use of TransAmerican Securities (TSI) bonds as security for a foreign bank loan. Basson said Bernard Zimmer became involved when he asked Zimmer to look into the possibility of a foreign bank loan, and Basson cannot remember what role Webster played, but said it might have been in connection with the TSI bonds.

Basson said the purchase of a single lodge at Fancourt was a separate deal, and had nothing to do with the bid to acquire the entire estate. The lodge was bought by the Wisdom Group for Basson’s "financial principals". Basson said the lodge was to be a safe house and investment for the Principals.

Christopher Marlow had testified, said Ackermann, that he and Philip Mijburgh spoke to the Fancourt liquidators in Cape Town, and were set to buy the estate for R40-m, even though it was valued at R150-m. Despite the low price, funding was a problem, but according to Marlow, financing was to be found by Mijburgh, Bernard Zimmer, Basson and Scholtz. Basson said that one of his British banking contacts had given him a referral to TSI. The Libyans, he said, could not buy the entire estate, as a large development such as Fancourt was not suitable as a front since one could not control who lived there.

Ackermann said that according to Marlow, both TSI and Banco di Napoli bonds had been used in the bid to obtain a bank loan for Fancourt. Yes, said Basson, around the time he acquired the Banco di Napoli bonds, it was useful for his cover to be able to include certain golf developments among his interests. He said only the TSI bonds were to be used for the Fancourt deal. While looking into how he could use the Banco di Napoli bonds as a means of recouping the SADF’s lost funds in the Croatia deal, he used the golf developments as a front. Zimmer also used them when dealing with the foreign banks, and Marlow could have been aware of this. Basson had been advised that when presenting security to banks in Luxembourg, it was advisable to offer as wide a portfolio as possible, but he never told Zimmer to use both sets of bonds in order to seek a loan for the Fancourt purchase. He doubts that Webster knew anything about the Banco di Napoli bonds.

Ackermann put it to the witness that Marlow had testified that while staying with Basson at the cottage in England, Basson had left to attend a meeting at the Meridian Hotel with one Thomsen, in connection with the bonds to be used for the Fancourt investment. Basson disputed this, he doubts that Thomsen would ever have been in London. Basson described Thomsen as a 'shady Danish secret agent who worked in Jurg Jacomet’s office and was probably involved in the Swiss intelligence service’s bid to obtain nuclear material as part of the Croatian deal'.

Asked about the house bought in the up-market suburb of Lynwood Ridge in Pretoria which Antoinette Lourens lived in, Basson said that it was another case when the needs of the Principals had coincided with his needs. The Principals, he said required a safe house and at the same time Lourens had been seeking accommodation. He said the gifts he gave Lourens, including a gold chain, Cartier wristwatch and designer suit were "nothing unusual" and that he was single at the time.

Basson said there anything exceptional about the first-class flight to London taken by himself and Antoinette Lourens. He claimed it was "standard practice" for Lourens to travel first-class when she accompanied Basson on work-related trips. Her duties included sending instructions to Roger Buffham from a hotel in Switzerland for certain fund transfers. Regarding the first-class ticket for Lourens’s younger sister, who was staying with her when Basson needed to travel to Europe, he said her presence could only add to his credibility. Basson testified that the purpose of the trip was for him to test-fly a Beechcraft in which The Principals were interested, and by taking along Lourens as his "very personal" assistant, and her sister, he was able to create a "family" image in keeping with "the people who move in those circles". Basson said the Principals paid all the travel costs, including the sister’s airfare, and the three travelled like VIPs, being swept through customs at each stop, which allowed Basson to move a pile of sensitive documents. Basson said when they took off in the UK for Europe, it was from the same airfield used by the royal family.

Ackermann said he was puzzled by a few things. Why had Webster not asked Zimmer to service the Medchem Inc account in Switzerland through which, according to Basson, the money of the East German principals was to be channelled? And why did the Principals not use Dr David Chu to launder their money? He was already working for them, after all, and was apparently something of an expert in the field. Why had The Principals sought out Basson – a complete novice at the game - to launder their money? Basson said he suspected it was "because I was a good source of stories – and you need good stories to launder funds". He said the Principals knew he was a South African, but he claimed that even though South Africa was a pariah state at the time, he had considerably more freedom of movement than the Principals.

Wednesday 8 August 2001

The prosecution focussed on the Blackdale-Copperdale-Tagell deal which allegedly involved the sale of NBC suits. Basson said he did not know if Zimmer and Charles van Remoortere needed $3,2-m in order to close the Blackdale-Copperdale-Tagell NBC suits deal. He said he needed that amount for the peptide synthesiser, and instructed David Webster to draw up a contract in such a way that this acquisition would be hidden in the deal. Basson said Webster was aware that this was a sanctions-busting exercise, though not that a peptide synthesiser was involved.

Shown the minutes of a Blackdale meeting in May 1989, Basson asked Anton Ackermann to indicate where this meeting had taken place, as "several" meetings in connection with the deal had been held in Thailand. This particular meeting, said Ackermann, took place in Luxembourg.

Basson explained that the original amount of $3,2-m was eventually reduced to $325 000 because that was the price of the RNA/DNA probes. He said he does not know why Zimmer reported the theft of this amount to the British police, but acknowledged that Zimmer told him at the time that he intended doing so. Basson said he had "no problem" with Zimmer’s action, as he would "never again have used the Hashemi channel". In retrospect, said Basson, he made the right decision, because nothing happened to Hashemi as a result. Basson said Hashemi was only arrested for fraud seven years later, in 1995, after Basson informed MI6 who was involved in Tagell.

Details of various transactions were the subject of further questions by the prosecution. Ackermann said that bank records show that in April 1992, $2,46-m of the Roodeplaat Research Laboratories cancelled contract fees was paid into the WPW Geneva account by Blackdale, which had received the amount on February 24. Basson explained that this was used to pay for the BZ acquired through the Principals.

Asked about his marriage to Charles van Remoortere's sister, Claudine, Basson said it was merely a marriage of convenience to enable him to obtain a Belgian passport. He said Claudine’s benefits included that she received a place to live, a monthly income and the use of a car. The two Belgian apartments were bought by WPW but, said Basson, Claudine’s monthly payments were made by Military Intelligence’s Directorate Covert Collection (DCC). Basson said Claudine had entered the picture in 1987 as the result of an arrangement by Lothar Neethling and himself. He said the Co-ordinating Management Committee had then arranged with DCC that she be paid as an informer. All WPW did was buy the apartment in which she lived, and pay the maintenance costs. Basson said the only people in the SADF who had known about the arrangements were the SADF Chief [in 1987 this was Gen Jannie Geldenhuys] and DCC head Brig. "Tolletjie" Botha (now deceased).

Ackermann produced a letter from Basson to Zimmer instructing him, as a matter of urgency, as soon as the proceeds of the apartment sale became available, to pay 6 000 Swiss francs to Mont Fleury, and to specify that this was payment for Naomi Basson, his daughter. Mont Fleury was a finishing school which she attended for six or 12 months. Basson said the fees were paid by the Principals. He said his daughter went to Mont Fleury as a "chaperone" for the daughter of one of Razak’s colleagues, and spent the entire year "washing the Arab girl’s clothes". "Those people", said Basson, "can do absolutely nothing for themselves."

But in June 1994, Ackermann pointed out, WPW was in serious financial difficulty. Perhaps so, said Basson, "but they still had to meet their obligations" and he was still involved with winding down Project Coast. Basson claimed to have been paid until "late 1995" to do so, as it takes a long time to debrief agents and dismantle a front organisation.

Ackermann asked Basson about "Operation Banana". Basson claimed that Operation Banana was an official sub-project of Coast, and had been fully audited as such, to the satisfaction of Petro Theron. He said it entailed the smuggling of Cocaine hidden among bananas from South America. Ackermann asked if David Chu had known that the $120 000 he lost on what he thought was a legitimate banana export deal, was sacrificed as part of a cocaine smuggling operation for the SADF. Basson said yes, it was Chu who arranged the transport. He added that Wally van Heerden of the Auditor-General’s office had been present at a CMC meeting where the plan was laid out. Basson claimed the 80kg of cocaine were destroyed along with Project Coast’s other drugs in January 1993 [Note: the documents detailing the destruction of agents only lists 30kg of Cocaine as having been destroyed]. Basson said the Cocaine had been bought in Peru, and he had orchestrated the deal from a base in El Paso, Texas. He said the plan to ship the cocaine with a consignment of bananas had been Chu’s idea. Chu arranged that the ship dock in either Rotterdam or Antwerp, where the drugs were removed. Later, the cocaine was transported to South Africa in the Jetstar, flying from Ostend.

Basson said the cocaine was to be used to develop a piperidine derivative as an incapacitant, but the idea was never pursued. All costs involved were paid through Chu, although the Principals were not involved at all.

Ackermann asked who was involved in the cocaine deal. Following an objection to the question by Basson's defence attorney the Judge said Ackermann was demanding names, despite the fact that the accused’s life was already in danger, and the lives of others could be endangered as well. He asked why Ackermann would want that information. Ackermann said he believed this was 'another of Basson’s flights of fancy'. Ackermann said the court seemed to believe that Operation Banana (Piesang) was a clandestine deal to bring cocaine into South Africa under the guise of a banana deal. But Chu had testified that there was nothing more sinister involved than the bananas themselves. But what would the State argue on this point, asked the judge who said, after all, "we know what Chu was".

Ackermann said he was surprised that the court could ask him such a question at this juncture. He asked why nothing about cocaine had been put to either Chu or Wally van Heerden under cross-examination. Ackermann said if anyone was worried about possible repercussions of these details being disclosed, the court could order that the testimony be heard in camera. The judge concluded that he would not allow Ackermann to elicit the names of anyone or any contacts involved in Operation Banana (Piesang).

Ackermann moved on to charge 18. Basson confirmed that the Chu-PM Trading account was used by the Principals to launder funds. When R17,5-m was moved to Van Remoortere’s account in Basel, said Basson, the BZ had already been acquired. Asked by Ackermann if Basson had taken into account the possibility that Van Remoortere might expropriate the funds in his account. Basson replied that "I had control over Van Remoortere’s wife and children, which means I had total control over him. I had no fear that he would take money he was not entitled to." Asked what he meant, Basson said it had been a senseless joke he made.

Ackermann requested, and was granted an adjournment until Monday 13 August.

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]