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Trial Report: Fifty-Three

This report covers the period Friday 24 August 2001 - Wednesday 30 August 2001

Friday 24 August 2001

The cross-examination of Wouter Basson continued. Basson testified that the company Contemporary Systems Design, run by Roger Buffham, was established on behalf of the Principals. He said the company was closed down in April 1990 but the services of Buffham continued to be used by Project Coast and the Special Forces Unit of the SADF until well into 1992. Basson said these services included research and certification of documents used to obtain false passports using the name and date of birth of someone who died as a child or baby.

Regarding Basson's relationship with Swiss pharmacologist, David Chu, Basson said they were introduced to one another by East German intelligence agent, Dieter Dreier. He said that Chu was involved in Basson’s first transaction on behalf of the Principals, the laundering of $250-m into the Western banking system.

Basson said the OPALS and Project Contresida proposal (regarding the treatment of AIDS in Africa), was devised as a cover story for laundering the $250-m. Basson claimed that the South African government (and the SADF’s Chief of Staff Finance, Admiral Bert Bekker) was aware of, and approved the scheme. He said the Reserve Bank was "only too happy" at the prospect of a foreign investment of this magnitude lying in its vaults for "five or ten years", and an official even supplied the name of a commercial bank (unnamed in court) through which the funds could be channelled. Basson said that in 1988 AIDS was already a controversial subject, which offered the ideal cover story for a covert operation. Basson said that both Chu and Jurg Jacomet knew the true nature of the transaction. He said that the $250-m originated from the East German intelligence agency although he did not know how the money came to Dreier’s, but suggested it might well have been stolen from the agency’s covert operations budget since the money was available in cash. Basson said that the funds would be moved into South Africa by the Lichtenstein bank (unnamed in court) in smaller amounts, ostensibly as payment for false invoices to be issued. The funds would then be transferred to the Reserve Bank.

Basson testified that OPALS was a genuine organisation, which at the time had French First Lady Danielle Mitterand as its patron. He said the organisation was infiltrated by Military Intelligence "to find out what they were up to". He also said that Madame Mitterand wrote a letter to the Lichtenstein bank approving the proposal to develop anti-AIDS drugs in Africa to fight African AIDS. He said that mention in the document of plans to establish pharmaceutical laboratories, diagnostic facilities and outlets for medication, was all part of the cover story and there was never any intention to draw Delta G Scientific or Roodeplaat Research Laboratories into the scheme.

Prosecutor, Adv Anton Ackermann, put it to Basson that it was unlikely that East German communists would want to launder $250-m in South Africa, and leave it lying in the Reserve Bank vaults for five years, or that they would ever use Basson for this purpose. Ackermann said the scheme had been designed so that PCM International Inc could gain control of Delta G Scientific, and Contresida was to be used as a cover for Basson bringing funds into South Africa for his personal use. Basson denied this saying that OPALS was a cover story for the money-laundering all along, and in the process, he had succeeded in gaining Madame Mitterand’s approval of the scheme. Basson said it had been a source of "great delight" that he had been able to involve her in a cover story to this extent, and he had no fear whatsoever that his deception would be uncovered by the French intelligence service.

Ackermann pointed out that the OPALS proposal contained a number of references which were remarkably similar to the structures outlined in the Background to the WPW Group document. Furthermore, in the handwritten organogram which Basson gave to Webster, Contresida Inc, Caymans, was listed as one of his offshore companies. And in January 1989, Basson had asked Webster to find out what rate of interest could be expected on a $100-m investment in the Cayman Islands for five years. The request, said Basson, was merely so that he could compare the interest rate offered by the Reserve Bank with an international one.

Basson was questioned further about his relationship with David Chu and about the substances which he alleges Chu assisted him in procuring. According to Basson these substances included carcinogens which had been requested by RRL Managing Director, Wynand Swanepoel; and Prostaglandin E.

Monday 27 August 2001

Basson testified that the first feasibility study on the marketing of Roodeplaat Research Laboratories abroad, was carried out by Dr David Chu prior to Medchem-Forschungs being set up in January 1990. Chu was paid 150 000 Swiss francs for the task – and 230 000 Swiss francs for his second study, conducted after privatisation of RRL. Basson said that American attorney, David Webster, was never told that Medchem-Forschungs would be a front for the Principals, but during the initial talks in Florida between him, Basson, Chu and Dieter Dreier, Webster was "bright enough" to realise that this would be the case.

Basson was questioned about the ownership of the company Medchem Forschungs. He claimed that the documents indicating that shares were held in his name were false. Ackermann asked Basson why he had instructed Chu to pledge the Medchem-Forschungs shares as security to raise the money to bail him out after his arrest in Switzerland in December 1993, if Chu was 100% owner of the company. Basson said that was part of his ploy to persuade the Swiss authorities that he knew a number of important people in Switzerland and would not be a flight risk. He said Chu managed to raise only 26 000 Swiss francs, which was handed to Chris Marlow, but repaid to Chu when the South Africa government paid Basson’s bail in full.

Basson insisted that the deal to supply five million units of penicillin to Iraq, for which Chu says he was paid �80 000 commission, was all a sham – merely another way for Dreier to launder money through Medchem-Forschungs. Basson said Chu knew this, but had not been prepared to admit as much in court. According to Basson, the supply of insulin to Iraq was another cover story used to launder funds for the Principals.

Turning to the purchase of the peptide synthesiser, Ackermann asked where the AIDS research with the Thymus peptide was done. Basson said that research on the Thymus peptide production and its effect on the immune system in vitro was done at the Special Forces Headquarters (Speskop) laboratory, and that human trials were conducted in Swaziland. He said research on growth hormones and two or three brain peptides was also done at Speskop.

Basson said that two or three new peptides – growth hormone variants – were also made at Speskop. He said the problem of penetrating the brain blood barrier was overcome by having (Swazi) subjects sniff the peptides, which were then absorbed through the mucus membranes. He said the Thymu-Vocal peptides, of calf origin, were administered orally, and even though gastric juices destroyed most of the substance, three to five percent absorption through the gastric canal proved sufficient for research purposes.

Basson said that he had more knowledge than Delta G and RRL scientists about the effect of peptides and due to the assistance of "the Bulgarian", he was able to manufacture a molecule himself. Basson later named the Bulgarian as "Gorgev".

Asked who Sergei Estinev was, Basson said he was a Russian translator, contracted – like Gorgev and Cadwell – through the MAIS Corporation in Zurich. Basson said Estinev worked with Gorgev at Speskop, and accompanied Basson on his "several" visits to the Academy of Sciences in Moscow to act as translator, but that no Russian scientists worked at Speskop. He said his trips to Moscow were for the purpose of discussing and solving problems that were experienced with the peptide production.

Basson said the remuneration of both Gorgev and Cadwell was included in the package deal for the peptide synthesiser – Gorgev for 18 months, Cadwell for a year. Basson last had contact with Cadwell in 1993 or 1994. Basson said the peptide synthesis deal had been part of the NBC suit deal and involved the Iranian, Hashemi. He claimed that he had been instrumental in assisting the British authorities in arresting Hashemi for fraud, having given them information about Hashemi in 1996.

Ackermann said the state would argue that no peptide synthesis was ever carried out at the Speskop laboratory.

Tuesday 28 August

Basson testified that details of the contracts signed in 1990 between Medchem-Forschungs and Roodeplaat Research Laboratories, designed to facilitate the roundtripping of the R12-m paid to the company for cancellation of South African Defence Force contracts, were known to surgeon-general Gen Niel Knobel, members of the Co-ordinating Management Committee and project auditor Petro Theron, though Basson could not say with certainty that any of them actually saw the documents.

He said, however, that the contract for the Blackdale-Copperdale-Tagell deal (involving the sale of NBC suits and the alleged purchase of the peptide synthesiser) was seen by no one as it was an operational matter and there was no need to burden CMC members with a cover story.

Regarding the establishment of the company Medchem-Forschungs, Basson said it was set up in January 1990. Basson said that at that time he already had a "broad" idea of how the company could be hijacked and used to supply chemicals, provide access to European data bases and act as a front for Roodeplaat Research Laboratories. However, when the roundtripping contracts were signed, use of RRL by Medchem-Forschungs for contract research was only a cover story. At some later point, probably around March 1990, the cover story became an economic necessity, because RRL needed to generate income.

Ackermann asked who was being referred to in a document dated November 28, 1989, outlining various aspects of RRL’s privatisation, which makes mention of an office having been set up in Europe to market the services of not only RRL, but Delta G Scientific as well. Medchem-Forschungs did not yet exist, and by Basson’s own account, Chu did not have any connection with Delta G. At that time, said Basson, the marketing would have been in the hands of "the university in Austria" where Professor Schlaag worked. There was also an agency "somewhere near Cannes" which was handled by Wynand Swanepoel which marketed RRL. Basson said before Medchem-Forschungs existed, Chu did some of the marketing, through Chu-PM Trading. Ackermann disputed this version of events, saying that payments to Chu before January 1990 were in his personal capacity.

Basson testified that the first talks about acquiring the Jetstar aircraft took place during 1988/89. He said the Principals had identified the need for an aircraft capable of intercontinental flight. He said that just about the same time, the SADF and Project Coast realised that they, too, had need of such an aircraft, and Basson proceeded to do the bidding of the Principals in handling the acquisition.

Basson said the Jetstar was an obvious choice since it features a huge cargo hold which is large enough to smuggle all kinds of contraband, but is not immediately visible from the outside. He said the reason the Principals entrusted the purchase to him, was because he and they had been involved in aviation since 1987 and, having flown all over the world since 1981, Basson knew about aircraft. Basson said he determined that a budget of $4-m was needed for the Jetstar, and the Principals undertook to provide the funds – he neither knew nor cared where they would come from.

Ackermann put it to Basson that in fact, his international Principals were in a position to buy assets only when Project Coast provided the funds. Basson denied this and referred to the huge amounts of cash laundered on their behalf which had nothing to do with Coast. Ackermann put it to Basson that Delta G produced large quantities of drugs which were not destroyed as claimed. Ackermann said that to this day there are drums of Mandrax in police custody. Basson denies that any Mandrax was found on the Delta G premises after the company was sold – what was found were precursors, he said. Asked why these substances were not been destroyed, as certified by Philip Mijburgh, Basson said that Mijburgh had forgotten.

With regard to the peptide synthesiser, Basson said that he, Dieter Dreier, David Chu and Abdul Razak met some eight to ten times to discuss the peptide synthesiser deal, though Chu may have been present on only six occasions. He said talks with the (unnamed) Russian scientist were set up by Dreier. Basson alleged that Chu acted as liaison with Med-Alfa throughout the deal, obtaining scientific data from them. He said about six meetings with the Russian took place in hotels over a period of four to five months.

Wednesday 29 August

It was obvious, began Anton Ackermann, that despite claims by Basson that the Principals had access to many millions of dollars, every time creditors demanded payment, assets had to be disposed of, at a loss. In the middle of 1992 already, he pointed out, David Webster was recommending the sale of the Jetstar. Basson said Webster was always conscious of security considerations when the WPW group owed money anywhere. He explained that one of the main reasons why front organisations do not use external sources of funding, is to avoid running into a situation where legal action taken by unpaid creditors can expose covert operations. Basson said that in mid-1992, Webster was looking at various ways in which the Jetstar could generate income. One such scheme investigated by Webster was the acquisition of an air taxi licence, which would allow the Jetstar to be used in the US to carry paying passengers. However, the idea was abandoned, and the Principals rejected Webster’s advice to sell the Jetstar.

Basson said the Jetstar – carrying 500kg of methaqualone from Croatia - returned to South Africa from Europe on December 23, 1992 – the day on which Basson received notice of his dismissal from the SADF. He said that he did not inform the Principals that he had been fired. He said it was only when he was "forced" to reveal his background in 1995 that they learned the truth.

On March 24, 1990, Charlie Stearns – an American aircraft broker based in Long Island – wrote to Basson that it would be possible to realise $3,6-m from the sale of the Jetstar. Basson said this was not an indication that the Principals were in financial difficulty, but that he was looking into the possible replacement of the Jetstar with a Falcon 50EX, and he and Bernard Zimmer arranged flight demonstrations of this aircraft with the French Air Force.

Basson said the Principals had decided the Falcon would be a better proposition, as ANC leader Nelson Mandela was going to be using their aircraft extensively during 1993, flying all over Africa, and the Falcon had a longer range than the Jetstar. Basson claimed that Mandela used the Jetstar so often during 1993 that it became known throughout Africa as "Mandela’s aircraft". He said the ANC contacted "us" and Mandela flew wherever he wanted, free of charge.

Ackermann put it to Basson that Abdul Razak would not have had $20-m to spend on a new aircraft for use by Mandela. Basson disputed this.

Ackermann put it to Basson that there was no-one by the name of Abdul Razak and that no such person existed as a principal or member of the Libyan intelligence service. Basson again disputed this saying that Razak had a British passport.

Basson said the Jetstar was finally sold in December 1995, though it had not used by any of the Principals since January 1994. Basson claimed that when the sale went through, he told the Principals that Webster recommended investing the proceeds in Tubmaster – owned by Jane Webster’s family – and the Principals decided this was a good idea. He said he discussed this investment telephonically with Razak, who was in Europe. He claimed that one of the advantages seen by the Principals was the prospect of an American green card being issued due to the Tubmaster investment. He said that a green card had in fact been issued to "one of Razak’s colleagues" whose name he cannot recall.

But was it not true, asked Ackermann, that Basson had sought a green card for his wife Annette? Basson said yes, that was to "test the system" to make sure that it worked before the Tubmaster candidate tried it out. Furthermore, Annette was granted an American work permit, without difficulty, early in 1996.

Ackermann sought an adjournment which was granted until Monday, when Dr Torie Pretorius will start cross-examination on the human rights violations charges. Ackermann’s cross-examination – which he estimates will take another two weeks – will resume when he returns from Australia, where he is to receive the international prosecutor of the decade award next week. He shares the honour with the Scottish prosecutors who acted in the Lockerbie bombing case.

Meanwhile, journalist Andrew P Jones, who in 1999 filmed an exclusive interview with Basson, failed to turn over the video to the prosecutors, after having been requested to do so. On Thursday 30 August the State brought a Section 205 application forcing him to hand over the material which, according to the subpoena served on Jones on Tuesday night, "is likely to encapsulate previous inconsistent statements" and contain information relevant to charges 32-35, 41-44, 53 and 56 against Basson. Jones will oppose the application. At the time of writing Jones had appeared in the Pretoria magistrate court and was granted a month long postponement to seek legal counsel.

 

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]

 
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