Special Hearings — Chemical And Biological Warfare Hearings — 1998-07-08

DR KNOBEL: Mr Vally, but at this stage there was no reason to doubt that he was able to deal with that.  He had been doing it for the previous 10 years, all the funds of the project.

MR VALLY: Well, you know OSEO was asking questions about this issue since 1991.

DR KNOBEL: No, Sir, I'm sorry, you are not correct.

MR VALLY: Alright.

DR KNOBEL: The OSEO's letter to me was addressed to me on the 8th of December 1992 and I received it in January '93.

MR VALLY: Fair enough.

DR KNOBEL: Well it is not only fair enough, it's incorrect what you were saying, it was not from '91.

MR VALLY: Alright.

DR KNOBEL: It was from the end of '92.  It makes a difference.

MR VALLY: Well you know, I don't want to go back especially since I'm under time pressure but we're talking about trips that he was making in 1993 to Croatia, to Switzerland ...[intervention]

DR KNOBEL: No, I beg your pardon, to try and recover the funds that had been lost during this process.

MR VALLY: But he's arrested for having other bearer bonds, at least 5 million US dollars, maybe 40 million US dollars and this happens in that period?

DR KNOBEL: That's correct.

MR VALLY: Were you just approved R250 000 at the Co-ordinating Committee for his travel?

DR KNOBEL: No, we haven't just approved it, it was long before.

MR VALLY: Oh, we approved it subsequently but it was paid for?

DR KNOBEL: Yes, but the money was still owing to the agent who gave us the methaqualone.  But Mr Vally, really quite honestly, don't you think that if we have an investigation of the Office of Serious Economic Offences who is going into all the details, who has got all the documents for D John Truter, who's had access to all the bank accounts and has been overseas now for two years investigating this, it would be better for us to leave it with them to unravel this?  I certainly cannot give you anymore information than what was written on this document and that was presented by him in my presence and General Meiring's presence to the Minister of Defence.

CHAIRPERSON: I never felt myself more in agreement with General Knobel than with what he has stated.  Certainly if it is for our benefit as the panel, I don't think we are going to come anywhere near understanding this thing any fuller than we have understood.  I have understood from the very beginning that Basson was flying around the continent of the world with large sums of money for projects that had nothing to do with the project that he was supposed officially to be doing.  And I think that point does not get enhanced by anymore detail about whether the money was from the Vatican or from bearer bonds or from anything else.  It is here, it has been canvassed, and I think with great respect, we should move on.  Sensationally yes, it makes all the difference that the Pope and everybody else was part of this whole insidious thing but I don't think we are making any point further Mr Vally.

MR VALLY: Mr Chairman, let me make my point there?

CHAIRPERSON: Please do Mr Vally.

MR VALLY: Thank you Mr Chairman.
 I refer you to the affidavit of Mr Jacomet, it's G3.

DR KNOBEL: Yes.

MR VALLY: According to Jacomet, and I'm talking about paragraph 1, 2, 3, 4
"I have never entered into any agreement either verbally or in writing with Doctor Basson to receive any fiscal compensation for my services rendered in this transaction"
I refer to going to up to paragraph 2:
"I did not enter into any agreement whatsoever with Doctor Basson or any other party either verbally or in writing with regard to delivery of the said substances"
Now we're talking about a man who has been given cash US dollars of 2.3 million US dollars, no documents, nothing in writing, cash is given to Doctor Basson, allegedly Doctor Jacomet receives this cash.  
 I refer you to the bottom of that same page of the affidavit:
"The money was transferred to my bank account.  I received a telephone call from Doctor Basson, just a telephone call.  He instructed me to payments in cash of 450 000 US dollars each to two certain individuals in Zagreb"
And then he says some individuals would approach him, they'd give him certain codes and he'd give them the cash.  He gave the money to individuals whose names were not known to him.  Now was this the standard procedure, that as far as you know, I mean he's been operating like this for 10 years?

DR KNOBEL: No, certainly this was not the standard procedure but this was an exceptional case.  But Mr Vally, I'm trying also to gain some time, this deposition was made in August '94 in Bonn.  At this stage Jacomet is searched by the Swiss authorities, nobody can trace him at the moment, why he made this statement and how truthful the statement is, I honestly don't know and how reliable it is.  I'm giving it to you in this document simply to show you about the chronology of events and how it effected my position with regards to Basson.  I don't know whether this has any value, all of the has been made available to OSEO and they are investigating it and I would really say let's leave them to solve this problem.

MR VALLY: Alright.  The final point I want to make is that money, according to his affidavit, money is put in his account and part of the problem is he mixes it with his private funds and that's why the money isn't(?) cashed according to him.

DR KNOBEL: Yes.

MR VALLY: He gives out cash to individuals after a telephone call from Doctor Basson saying payout people who come with certain codes.

DR KNOBEL: The two remaining agents or the remaining parties.

MR VALLY: Whoever they may be.

DR KNOBEL: Yes.

MR VALLY: People arrive there, give him the codes, he pays them, he doesn't know who they are ...[intervention]

DR KNOBEL: He says he doesn't know it ...[intervention]

MR VALLY: He says so, yes.

DR KNOBEL: He says so but I'm not sure if that is true or not.

MR VALLY: Again, it's State funds.  This is how Brigadier Basson is operating.  What worries me is the Co-ordinating Committee, and I assume up to ministerial level, are finally satisfied with these explanations, from the documents we've been through.

DR KNOBEL: No, I'm afraid that's not quite true.  The result of this is that all of this has been handed over to the Offices of Serious Economic Offences.  Efforts have been made through our Foreign Affairs Office to recover some of the funds.  You know what the situation is Croatia like, there's no ways that you can make any progress along those lines, we've tried.  And we have not closed the book on this yet.

MR VALLY: OSEO may be busy with it but the Co-ordinating Committee minutes clearly indicate that it's agreed the money is lost, we're writing it off.

DR KNOBEL: No, Mr Vally, I indicated to them that: "I'm afraid it seems to me the money is lost", but we haven't given up that case, at least it wasn't given up after the project had been closed down.

MR VALLY: Alright.  Let's just conclude with me putting the following issue to you General Knobel, you were aware of the mandrax and ecstasy programmes to be ...[intervention]

DR KNOBEL: Mr Vally, I corrected you earlier on, I was not aware of a mandrax or an ecstasy programme.

MR VALLY: Alright.

DR KNOBEL: I had only approved, along with the Co-ordinating Management Committee, the study and the research and the development of certain incapacitating agents which were analogues or derivatives of methaqualone and of that other formula which we discussed yesterday, which you say was ecstasy and which ...[intervention]

MR VALLY: Well, let me help you, you were perfectly aware that General Neethling had given 200 000 mandrax tables for the purposes ...[intervention]

DR KNOBEL: I was not perfectly aware of that, that was long before I became Surgeon General.  I heard his testimony and I was informed by my predecessor that they had received some of those substances from the police.

MR VALLY: Absolutely, you had heard that.

DR KNOBEL: Yes.