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

MR VALLY: Yes, so there are two amounts involved.

MR KNOBEL: Yes, that's correct.

MR VALLY: So we're talking 4 million 600 000 Dollars, US Dollars.  And all this money went through Truter you say, Truter Financial Consultants?

MR KNOBEL: As all other funds of the projects of Delta.

MR VALLY: And this properly audited as far as you know?

MR KNOBEL: Yes, as far as I know, and he's still now part of the investigation of the Office of Serious Economic Offences.

MR VALLY: Now would Truter give that 2 million 300 000 US Dollars directly to Dr Wouter Basson, or would he transfer it - would the company transfer it themselves to Dr Jacomet's account in ...(indistinct)

MR KNOBEL: No, it would be under control of Dr Basson.

MR VALLY: So in some form or the other Dr Wouter Basson, is he given the full 4 million 600 000 US Dollars?

MR KNOBEL: Yes, of course.

MR VALLY: And no documentation, you accept that he would be doing what he said he's doing?

MR KNOBEL: No, there is documentation.  All the documentation with regards to this transaction has been made available - all the existing documentation, let me put it that way, has been available to the ...(indistinct)

MR VALLY: Do you have a deposit slip from the bank in Geneva?

MR KNOBEL: Mr Vally, please,

MR VALLY: Well have you ever seen a deposit slip from the bank in Geneva?

MR KNOBEL: No I haven't, but I assure you the Office of Serious Economic Offences has been investigating this now, along with all other allegations, for almost 6 years.  Please call one of them to give you that answer.  I assure you, whatever was in our possession, whatever was in the offices of D John Truter has been made available to them, totally.

MR VALLY: Alright, paragraph 22, two parties got the money it says amounting to 790 000 US Dollars.

MR KNOBEL: Yes, and consequently the bank guarantees were released and the money was returned to South Africa out of the bank.

MR VALLY: In that sum?

MR KNOBEL: Yes.

MR VALLY: Not the full sum?

MR KNOBEL: No, because you only have those two parties agreeing that they have been paid their amount.

MR VALLY: Fine.  The guarantees were given separately - there were separate letters of guarantee or was it a globular sum?

MR KNOBEL: No, the four parties insisted that they each have a separate letter of guarantee.

MR VALLY: Alright.  Brigadier Basson says at this stage he lost contact with the Croatian parties and also with Captain Jacomet.  He visited Zagreb in January 1993, he couldn't get hold of these individuals.  In February he determined that the third government officials and Captain Jacomet were arrested in connection with some doubtful transactions where Minister Kagfeg was involved, is this the Minister of Energy Affairs of Croatia?

MR KNOBEL: Yes.

CHAIRPERSON: Mr Vally do you have any indication how long you are going to still be on this issue?

MR VALLY: Yes, on this issue ...(intervention)

CHAIRPERSON: I am determined that by lunch time we should have completed taking evidence from everybody and that includes Mr Kennedy and that cross-examination, re-examination, everything should have been done.  We must make our choices now, it's now 12h00 and we have got one hour within which to wrap up everything.

MR VALLY: I'm sure that we will finish by that time, Mr Chair.

CHAIRPERSON: Well I only need more that just the assurance, at the rate at which you are going I don't - but I can't dictate to you how you should conduct, as long as you know by 13h00 everybody else will have done what they have to do, which means that you should have taken Mr Kennedy by 12h30 so that we have at least half an hour for re-examination by other counsel.  I just felt it would be fair for you to be able to know that you have to do some economy of time.

MR VALLY: I not that, Mr Chair.  Let's go on, General Knobel.  General - Brigadier Basson makes a number of trips in this period to Croatia as we know.  Now, there's something strange in paragraph 29, and I'm trying to understand this.  During his visits he's told by someone from Danish Intelligence that him and Brigadier Basson together got hold of barabonds in the some of 40 million US Dollars and these barabonds are allegedly provided by the Vatican to the Croatian Government for the purchase of weapons, and it is intercepted by the said Danish person and the project officer which is Brigadier Basson.  What was this all about?

MR KNOBEL: Mr Vally, you have in front of you the same information that I was given and that the Minister was given.  This is what we were told and this is what he put in writing.

MR VALLY: Did you ever enquire what was happening?

MR KNOBEL: Enquire from whom?

MR VALLY: From Brigadier Basson.

MR KNOBEL: Of course I did.

MR VALLY: And what did he say?

MR KNOBEL: He said this is what had happened.

MR VALLY: That him and a Danish agent intercepted 40 million US Dollars of Vatican barabonds which they were going to use to buy arms in Croatia?

MR KNOBEL: Yes, that the Vatican was being using to buy arms in Croatia.

MR VALLY: That's right.

MR KNOBEL: Yes, that's correct.

MR VALLY: And how did this involve the Methaqualone?

MR KNOBEL: No, no, this had nothing to do with Methaqualone, this was trying ...(intervention)

MR VALLY: I'm trying to understand how it's connected.

MR KNOBEL: This was going to be a method of forcing the Croatian Government to pay out the money that was owed by the Minister of Energy Affairs.

MR VALLY: I see, so what we're saying is that Brigadier Basson was hanging onto these 40 million US Dollars of barabonds from the Vatican to blackmail the Croatian Government to pay back the money that they had of his?

MR KNOBEL: Yes, that is what he is saying, in fact.

MR VALLY: I see.  And so what was Brigadier Basson arrested for in Switzerland?

MR KNOBEL: For presenting these bonds for payment and it was then discovered that he was not entitled to the bonds, by the Swiss Government.

MR VALLY: This 40 million US Dollars of their ...(intervention)

MR KNOBEL: That is how I understood it and that was what he was arrested for, and that is what he had to appear in court for.

MR VALLY: And did he have authorisation to try and cash these Vatican bonds?

MR KNOBEL: I don't know Mr Vally.  What you have in front of you, Mr Vally, if I can try and save time, is this is the chronology of events that he was asked to draw up and this is the document that served in front of the Minister and I myself and the Chief of Defence Force was there as well.
 You see he says in paragraph 32 he had an authorisation letter where he got the ownership of those documents - exactly what that letter is I don't know, I haven't seen it.  And then they tried to exchange it ...(intervention)

MR VALLY: There's a reference to a further 5 million US Dollars in paragraph 32.

MR KNOBEL: Yes.

MR VALLY: Do you know what that is all about?

MR KNOBEL: No, he says that was the face-value of those bonds if I understand it correctly.

MR VALLY: Which bonds are we talking about now, the Vatican bonds?

MR KNOBEL: Yes.

MR VALLY: But I thought that was 40 million US Dollars.

MR KNOBEL: I know, Mr Vally, I read this too, but that is what he says there, the face-value.  He possibly had some of those bonds he had an authorisation letter or he managed to obtain it.  But clearly this is the type of information that only one person can give us and that is Dr Basson himself.

MR VALLY: Well the question for me to you is that this man is dealing with public funds, you know, he's been given 4 million 600 000 US Dollars coming out of our Treasury and absolute control over this money.  He's running to Croatia, he's the sole person who makes the imports, no-one had any other information ...[intervention]