Trial Report: Fifty-One

This report covers the period Friday 10 August - Thursday 16 August, 2001

The court was adjourned on Wednesday 8 August and resumed on Monday 13 August 2001.

Monday 13 August

Picking up where he left off last Wednesday, prosecutor Anton Ackermann again put it to Basson that he was signatory to numerous foreign bank accounts used to channel Project Coast funds, about which auditor Petro Theron knew nothing.

Basson claims that when the Office for Serious Economic Offences was assured in a written response to various questions in January 1993 that he had no signing powers on any bank accounts not authorised by the SA Defence Force and/or SAMS, this referred specifically to the South African situation. Ackermann disagreed saying he believes this illustrates Basson intention to deliberately mislead. Ackermann said he believes Basson misled Theron, who would have been furious if he had found out about the bank accounts on which Basson had signing powers.

Basson said he had never misled anyone to their detriment. He denied having misled Theron, OSEO or the SADF Chief about which accounts he had signing powers on.

Ackermann questioned Basson about his involvement in the Wisdom Group of companies, particularly why Basson was listed as chairman of the company in 1991. Basson explained that he had made use of the Wisdom front companies as his cover when travelling abroad. He said he could fill his briefcase with documents pertaining to a company from the group when he made a trip abroad to ensure his cover.

Ackermann listed the dates on which Basson chaired ten meetings of Wisdom Holding, from August 23, 1990 to September 26, 1991. Subsidiaries such as Partners in Travel, Aeromed, Waag-‘n-Bietjie Boerdery, Tygerberg Zoo, Namibia Aerospace (of which he has no recollection) and Lanseria Aerospace were discussed at the meetings, and Basson served as a director of most of them. Ackermann asked why Basson had not disclosed this to Gen Knobel.

Basson's response was that "the people" in the SADF whom he needed to inform, were aware of Wisdom Holdings and Wisdom Investments and Property (WIP). Ackermann asked why, when OSEO questioned Gen Knobel in December 1992 about Basson’s involvement with Intramex, he had not been told that WIP was the sole owner of the company.

Basson explained that Intramex was an SADF front, not a Project Coast front, and it was used by Special Forces, the South African Police and Chief of Staff Intelligence. Basson said that no Coast funds had gone through Intramex, and that Gen Knobel knew that the company was an SADF front, set up to serve the needs of "various" members of the Co-ordinating Management Committee in, for example, the weaponisation of CR for the Army. Ackermann pointed out that Intramex cheques had been used to finance the purchase of Merton House. Basson was unable to explain why these funds had been used.

Asked about the purchase of a small apartment in Pretoria for use by Patricia Leeson, Basson said that the flat had been purchased on behalf of the Principals who, he said, required a safe house. The needs of the Principals and those of Leeson could be accommodated through the acquisition. Ackermann disputed this version of events.

Ackermann asked Basson about the purchase of farming enterprises. Basson said that the farms were needed to allow the Principals access to the agricultural sector, including the chemicals, cultures and conferences available, as well as to diseases endemic to South Africa. Basson said that as it grew, the farming operation was placed under control of Wisdom Holdings, because the farms also served as perfect safe houses for the Principals who spent R2,3-m on the operation, but never actually visited the farms, as far as Basson can recall.

Asked why Gen Knobel and the Office for Serious Economic Offences had been told that the farms had no connection with Project Coast. Basson said that he had no reason to inform Gen Knobel that the farms were part of the front organisation set up for the Principals. He said the people in the SADF who needed to know, knew. Basson claimed that Gen AJ (Kat) Liebenberg used the facilities on two occasions. He said that the benefit to the Principals was that Abdul Razak was able to purchase "huge" supplies of agricultural chemicals and attend numerous agricultural conferences. Basson said that his brother-in-law had purchased one of the farms when he was winding down the business of Project Coast and that he had paid for the farm with money he borrowed.

Ackermann drew on the testimony of Gen Witkop Badenhorst to show that the checks and balances with regard to Project Coast funds had fallen away when Military Intelligence stopped being the issuing authority for the funds. Basson disputed Badenhorst's testimony.

Judge Hartzenberg intervened to ask Basson what had happened to the cocaine which Basson claimed had been imported during Operation Banana. Basson replied that the cocaine which remained after weaponization tests had been dumped in the sea. He also said that he had held a demonstration in the field in front of the Special Forces Headquarters buildings at which four mortars were fired: one each containing BZ, Methaqualone, MDMA and cocaine, which was "in development". Basson also said that when the drugs were dumped in the sea a number of mortars were also dumped.

Tuesday 14 August

Continuing to chip away at Basson’s claims that stringent checks and balance were in place to control expenditure of Project Coast funds, Anton Ackermann confirmed that auditor Petro Theron never once carried out a physical inspection to verify the existence of equipment or chemicals. Basson said in response that Theron was satisfied when conducting each annual audit that the information provided, the documents produced and the cash flow statements which he furnished in support of payments, were a true reflection of transactions. He said that 'the system' did not demand physical verification.

In questioning Basson about items on a list of Project Coast's assets which he prepared for the Chief of Staff Finance, Ackermann asked Basson why the list included 1000kg of Product B (BZ). Basson explained that of the five tons of BZ was bought in April/May 1992, by November, only 1 000kg remained in stock, the rest having been weaponised or used during tests. [Note: this means that, according to Basson, four tons were used in a seven month period for weaponization and testing].

Basson could not explain why this was not mentioned in the letter to the Chief of Staff Finance, and said that the list could not be seen as a full record of the work carried out by Coast over a 12-year period. He said that, for example, no mention, was made in the letter of the 155mm CR projectiles, or the 120mm CR mortars filled and given to Jonas Savimbi as his last line of defence. In addition, no mention was made of any Chemical Agent Monitors, neither the 12 at 7 Medical Battalion nor those given to UNITA.

The letter mentions 30kg of Product C [cocaine] being in stock. The balance of 50kg, said Basson, had been used up during the weaponisation of BZ. It had been found, said Basson, that BZ alone was unreliable – it did not have a calming effect on everyone exposed to it. Some, in fact, became far more aggressive. However, by mixing the BZ with Benzotripane extracted from the cocaine, the calming effect was achieved.

Ackermann then said he was being inundated almost daily with calls from scientists challenging some of the claims made by Basson. Ackermann reminded Basson that he had said cultures which Basson claimed were intended for the purpose of growing peptide were obtained from Tunisia. Basson said he remembered that the "bacterial cultures from which peptides could be built" had actually been obtained from China.

Ackermann then asked Basson about the membership of the CBW Mafia which Basson referred to as his Principals. Basson confirmed that the group had included Libyan, East German and Russian intelligence agents, as well as agents from other unnamed countries as well as arms dealers and smugglers.

Asked what had he meant to indicate when he remarked, last Wednesday afternoon, that he had control over Charles van Remoortere’s wife and children, and that there was thus no chance that Van Remoortere would abscond with any Project Coast funds. Basson said it was just a joke. What he really meant was that if Van Remoortere had ever taken the money and run, he would have been in a position to track him down anywhere in the world because Basson had the full support of the South African government.

Ackermann pointed out that the CBW Mafiosi were also involved in money laundering on a massive scale – amounts of $100-m had been mentioned. And they were the kind of people who had need of safe houses. He asked if Basson would agree that the CBW Mafiosi were professionals, and that one would not like to end up in their bad books. Might some of them, at least, not also have been the target of opposing intelligence agencies? The Libyans, for example – surely they had been constantly under surveillance by Western intelligence agencies? In such circumstances, Ackermann suggests, it would be extremely unlikely that Basson would expose his children, family members and friends – to possible danger by having them accommodate the Libyans.

He saw no particular danger, said Basson, since he believed he enjoyed the full protection of the South African government, though there were times when troops were stationed at his home for security. But what protection could the SADF possibly provide to his daughter Naomi at a Swiss finishing school, asked Ackermann. Basson said she had no need of protection, despite the fact that she was acting as chaperone to a Libyan child, daughter of one of Razak’s colleagues. Basson said that the girl’s father was one of Razak’s friends, and he has no idea what the man did or even who he was.

Basson was then asked about the cottage in Warfield, England. He said that the cottage had been used by Special Forces operators as well as his colleagues and members of his family. He also said that Dieter Dreier (one of the Principals) had also stayed in the house. Ackermann said he was astonished that the British Intelligence services had not been suspicious of all the traffic through the house.

Basson was asked about the condominium purchased in Orlando through David Webster. Basson explained that this too was a safe house for the Principals. Ackermann put it to Basson that the condominium in Orlando was his, and his alone, and that no Principals or Libyans were ever involved.

It seemed that 1992 had been a good year for the Principals, said Ackermann, with several assets being acquired. On the other hand, 1993, when Project Coast was no longer a client, had seen a dramatic decline in funds available to the WPW group and serious cash flow problems in all the companies. The Principals were unable to even come up with the monthly levy payments on the condominium, until eventually it had to be sold. Basson said the group was "frequently" beset by cash flow problems, and in the nature of front organisations, when the funds dry up completely, you simply shut them down.

Asked by the judge for his prognosis on the end of his cross-examination, Ackermann said he hoped to finish before 1 September but that even so, he might have to cross-examine on the NBC suits charges a week later. Alternatively, the prosecution would be grateful to adjourn for that week, thus allowing Dr Pretorius to do the final preparation for his cross-examination.

Wednesday 15 August

Former Defence Minister, Gen (ret) Magnus Malan, appeared as an observer in court today, he was accompanied by Major-General Dirk Marais, who was deputy chief of the army until 1993/94.

The subject at hand was the financing of Merton House, bought in May 1988. Basson said earlier in 1988, he had instructed Tjaart Viljoen to find the best and least bureaucratic way of bringing foreign investments into South Africa, and he had come up with the moratorium loan system, offered by the Reserve Bank as a way of circumventing sanctions.

In March 1988, Wisdom Investments & Properties was set up as the WPW group’s holding company in South Africa, to be used both to acquire assets and channel WPW funds. Since being confronted with the Intramex cheques used by Viljoen to pay the deposit on Merton House, Basson remembered that the funds – R847 000 - were replaced by WPW in 1989.

Viljoen had been fully aware that Intramex was an SADF front, fully funded by the military. Surely, said Ackermann, Viljoen would not have used SADF funds for a WPW transaction without Basson’s knowledge or authorisation? Apparently he did, said Basson, since this was never discussed with him.

Viljoen had testified that he was alerted by Basson to expect funds from Wisdom Finance, and told they were to be utilised as loans to various Wisdom Group companies, as specified by Basson, and to specific individuals. These details also appear in a handwritten document from Basson to Viljoen, in which funding of R10-m is anticipated. The two moratorium loans gave Wisdom a total of R8,5-m – R5,6-m in August 1988 and R2,9-m in 1991. Basson is not able to put a figure to the full amount of money pumped into South Africa by the Principals, but conceded that it must have been well in excess of R10-m. The Merton House development alone cost close on R12-m, R2,3-m was poured into the farming operation and Partners in Travel ran up a loss of more than R1-m. The state estimates the amount at around R27 million. Basson said he did not know if funds from the first moratorium loan were used to replenish the Intramex coffers. He had thought that a commercial rather than Finrand deal was used to do so, but the only commercial rand deal involving an amount of R847 000 which the State has been able to find, involved the transfer of 4 000 shares in Wisdom Investments & Properties to WPW Inc in 1989. Basson thus cannot identify which WPW funds were used to repay Intramex.

Basson said a "sub-group" of the international CBW Mafia which made up the Principals, ultimately decided how much money would be needed to establish the facilities they wanted in South Africa. He said his relationship with them was formed over time, and involved the recruitment of agents, the identification of mutual needs and getting to know and trust one another.

Basson confirmed that the Principals – and specifically Dieter Dreier - had facilitated the acquisition of Chemical Agent Monitors. Payments for the equipment were made in April and May 1988, the funds being channelled through ABC Import/Export and Roger Buffham to WPW. Basson said the company, WPW, was "the washing-machine". He said the Principals were the suppliers to Project Coast, and the Libyans and East Germans, were sole shareholders in the company. Basson said the Principals needed certain facilities both in South Africa and abroad, and his role was to establish them and then "hijack" them for the SADF’s benefit.

Ackermann said he could not understand the need for laundering the money used to pay for the Chemical Agent Monitors. Ackermann said that simply put, the SADF needed CAMs. The Principals were in a position to supply them. Funds used to pay for them were to be invested in South Africa. So why could the SADF not simply pay the SA company, Wisdom Investments & Properties, directly, through its front, Infladel? Basson said that would have been a security breach.

Ackermann asked Basson about the sale of Merton House saying that the sole reason for Merton House being sold was to cover the massive debts of Blowing Rock Consolidated Investments to Roodeplaat Research Laboratories and Medchem Consolidated Investments. In the process, said Ackermann, Basson and Philip Mijburgh had come up with a novel way of settling Mijburgh’s own loans from RRL, Waterson Properties and Profincor by shifting the burden between companies. However, said Ackermann, Viljoen had testified that a R1,1-m loan to Mijburgh by RRL eventually had to be written off.

Basson disputed this, claiming that Mijburgh repaid the Principals in full. Basson said, had Mijburgh not done so, "he could not have lived in Libya for three or four years afterwards".

According to Viljoen, said Ackermann, Mijburgh had undertaken to clear Data Image’s debt to Profincor as soon as the Fancourt lodge – owned by Medchem Sports International – was sold. Basson says Mijburgh would have had no right to tell Viljoen that. Fancourt belonged to the Principals, and Mijburgh could have had no claim on the proceeds of the sale.

By November 1994, the Five Nations Gold and Country Club was also in dire financial straits. Bernard Zimmer was desperately trying to solve cash flow problems and the entire project was on the verge of collapse. Why was this, asked Ackermann.

Basson said it was because the Principals had lost interest in the development. The SADF would have made use of the facilities, though the Principals never knew this. But, in January 1993, Basson was ordered to shut down Project Coast and all its international links, a process which took two years to finalise. When he pulled the plug on the Five Nations development, the Principals lost between $1-m and $1,5-m – but this was not his problem, said Basson – "it wasn’t my money".

Ackermann said that in May 1994, Armscor bought Protechnic for R960 000, and the amount was paid to Charburn. In August, Charburn paid 2,5-m Belgian francs to WPW’s Luxembourg account which, according to Zimmer, represented Basson/WPW’s one-third share of the spoils. Was it correct, asked Ackermann, that at this moment, an amount of $550 000 is still lying in a Swiss bank account to which only Basson and Webster are the signatories? He also asked whose money this is.

Basson said the money belongs to the Principals.

Ackermann pointed out that the Principals cannot gain access to the funds, which were included in the assets which the State sought to seize in its August 1999 application. He asked how come these funds were simply lying in a dormant Swiss bank account.

Basson said that at some point he had parted ways with the Principals, "I probably became an embarrassment to them" and they simply walked away. Not a single Principal – not Murgham, nor Razak, Dreier or anyone else – had ever issued Basson with any instructions on what to do with these funds – or the Tubmaster investment. Ackermann asked if the Principals know about the money in the Swiss bank account.

Basson said he is certain that he would have told them in the process of shutting down the front organisations. But again, "it’s not my money".

The court adjourned until Friday 17 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]