Special Hearings — Chemical And Biological Warfare Hearings — 1998-06-18

DANIEL PETER KNOBEL: Mr Vally I cannot comment on what you say at the moment because I didn't originate this report. I would suggest that we should get General van der Westhuizen to come and explain how the Intelligence community functioned. A counter-intelligence report within a single department of the Defence Force or with a single compartment of the Defence Force, namely the Intelligence compartment works separately from the operational compartment. And I think the CSI front that we are talking about here Pastlos Flights would have been utilised within the CSI operations possibly even without the knowledge of the counter-intelligence side. The explanation of this is the best that I cab give you. I think that you should maybe consult with other Intelligence Services like National Intelligence. They have the same sort of situation there.

MR VALLY: Let us go on. All I am proposing to you is that Chief of Staff Intelligence was in the inside in relation to Project Jotta.

DANIEL PETER KNOBEL: Absolutely.

MR VALLY: And information that they would put out or he would put out is based on insider's knowledge. Based on what it says expressly in the letter.

DANIEL PETER KNOBEL: I hear what you say. I can assure you that this sort of report which is sent exclusively to the Chief of Defence Force and to myself would be discussed at a CMC and we would oppose it if we didn't agree with it.

MR VALLY: Do you have anything in writing to show us this?

DANIEL PETER KNOBEL: Unfortunately not at that time. I explained to you that I kept every CMC meeting since the pensioning of Dr Basson. Every meeting that was kept by Colonel Ben Steyn I kept and you have them in your possession at the moment. But the meetings prior to that and certainly when this happened is not available.

MR VALLY: Well let's go on. Paragraph (A) I am looking at TRC 28 now. You have that with you?

DANIEL PETER KNOBEL: Yes I do have it.

MR VALLY: We have got 12 000 dollars being paid to the security head of the airport in Njamina. I assume that is in Chad. Do you see that?

DANIEL PETER KNOBEL: Yes I see that. I don't know whether it is in Chad or not.

MR VALLY: Any receipts, any proof whatsoever that this happened?

DANIEL PETER KNOBEL: Just repeat your question?

MR VALLY: Do you have any proof that this in fact happened? That the security head at Njamina airport in December 1991 was paid 12 000 dollars?

DANIEL PETER KNOBEL: Mr Vally there are 14 trunks of financial documents and statements within the possession of National Intelligence which has been made available to the Office of Serious Economic Offences investigation in order to determine exactly what you are asking me now.

MR VALLY: General Knobel let's put it in context. We have an utmost secret, highly secret letter it says only copy, it is addressed to you by Brigadier Basson. I have pointed out he calls himself Project Leader Project Jotta and you say that is incorrect.

DANIEL PETER KNOBEL: Yes that is incorrect.

MR VALLY: Fine. He addresses you as Project Manager.

DANIEL PETER KNOBEL: Which is true.

MR VALLY: You tell us that this is an explanation of certain monies which were given to him which were queried. I have asked you a simple question. If this is his explanation as to how the money was spent did you find this acceptable?

DANIEL PETER KNOBEL: No I did not. I took this information in my co-operation with the Office of Serious Economic Offences to them and I said: "This is what he tells me, this is how he explains it." And they followed it up in an investigation along with the Chief of Staff Finance into all the documents that we had in our possession with regard to all financial transactions.

MR VALLY: Fine okay we will quickly go through some of the items. Unfortunately not all of them have dates. (B) 5000 dollars is paid to customs officials at Duala - I am not sure where that is, to prevent a search of the aeroplane. Can you confirm that, that ever happened?

DANIEL PETER KNOBEL: I personally cannot confirm it but I see it here as a report from him.

MR VALLY: Right.

DANIEL PETER KNOBEL: I confirm that I saw it as (...indistinct)

MR VALLY: He was accountable to you of course?

DANIEL PETER KNOBEL: Yes he was.

MR VALLY: (C) 10 000 dollars are paid to Croatian border guards and he says again; "To allow the project officer," and I assume he is referring to himself, "in September 1993 to enter Croatia." Do you see that?

DANIEL PETER KNOBEL: Yes I see it.

MR VALLY: Under (D) another 10 000 dollars is allegedly paid to officials of the Croatian army to arrange appointments for the project officer.

DANIEL PETER KNOBEL: Yes that is correct.

MR VALLY: Again he is calling himself, right through he is calling himself the project officer and he is making allegations of certain sums of money.

DANIEL PETER KNOBEL: Yes Sir.

MR VALLY: Under (E) 36 000 dollars on the 26th of March 1994.

DANIEL PETER KNOBEL: Yes.

MR VALLY: He has paid for the costs of a Dr D Choo.

DANIEL PETER KNOBEL: That is correct.

MR VALLY: During the arrest of the project officer in Switzerland in December 1993?

DANIEL PETER KNOBEL: Yes.

MR VALLY: And then he breaks down how the 36 000 dollars is made up. Do you see that?

DANIEL PETER KNOBEL: Yes Sir.

MR VALLY: Now in February 1994 you were absolutely certain that something is very seriously wrong regarding Dr Basson's activities?

DANIEL PETER KNOBEL: That is correct around the financial aspects.

MR VALLY: Oh no, no, no.

DANIEL PETER KNOBEL: Just say again?

MR VALLY: 1991 you were concerned and in December 1992 you got a letter from OSEO by this stage in February 1994.

DANIEL PETER KNOBEL: Yes I am sorry you are quite right. I was then very concerned.

MR VALLY: You talked about abuses of the project?

DANIEL PETER KNOBEL: Yes.

MR VALLY: How is it that Dr or Brigadier Basson in March 1994 is able to have at his disposal the sum of 36 000 US dollars to pay this Dr Choo?

DANIEL PETER KNOBEL: Mr Vally if you would refer to documents that I have given you this morning namely the minutes of the CMC that took place in and around that time. That is in Appendix J you will see that we have two meetings after that date; the 2nd of December of 1994 and we have the next meeting held on the 9th of January 1995. I will refer to that just now.
 In March 1993, rather in February 1993 when Dr Basson brought to our attention the problem that had arisen in Croatia. I indicated to you this morning in my testimony that General Liebenberg approved that he be allowed to deal with that situation. At the same time also with other monies and other accounts that were still in existence within Europe which had to be cancelled and funds of which had to be returned to South Africa. That part of the project nobody else, not Colonel Steyn nor I myself had any knowledge of how those accounts had been established, what monies were in it and how it should be returned to South Africa. General Liebenberg approved that Dr Basson could be utilised in his citizen force capacity to deal with that. 
 The fact that he now says he is acting as the project officer is certainly misleading because Colonel Steyn was the project officer from the 1st of March.

MR VALLY: Let me hear you correctly.

DANIEL PETER KNOBEL: Let me just finish please?

MR VALLY: Alright fine.