ON RESUMPTION ON 18 JUNE 1998

ADV POTGIETER: Good morning Ladies and Gentlemen. Welcome to the continued hearing into the Chemical and Biological Warfare programme.

Before we proceed I think it's perhaps appropriate for me to just again put on record the names of the panel presiding, whereafter I will ask the legal representatives to do the same again.

On my right, extreme right, is Dr Wendy Orr. Next to me is Yasmin Sooka. On my left is Dr Fazel Randera. And I am Denzil Potgieter. We are the presiding panel. I am going to ask the legal representatives of the parties to place themselves on record. Perhaps I should start with General Knobel's representative.

MR TOWEEL: Thank you Mr Chairperson. I am C R Toweel from the Pretoria Bar, instructed by D P du Plessis Attorneys, acting on behalf of General Knobel.

ADV POTGIETER: Thank you very much. And Mr du Plessis is assisting you. Advocate Arendse.

MR ARENDSE: Thank you Chair. Norman Arendse, Cape Bar, for the Department of Foreign Affairs.

ADV POTGIETER: Thank you Mr Arendse. And then there is somebody standing in for Mr Currin.

MS REYNOLDS: ...(indistinct)

ADV POTGIETER: Thank you Mrs Reynolds. For the Commission is Mr Vally.

MR VALLY: That's correct Mr Chair. The name is Hanif Vally. I am assisted by Mr Jerome Chaskalson, Miss Chandre Gould and Professor Peter Folb.

ADV POTGIETER: Thank you very much. Those are the respective representatives of the parties.

We have started hearing the testimony of General Knobel at the last session. We will proceed this morning, I assume Mr Vally, to conclude the testimony of General Knobel. Is that what you would like to happen?

MR VALLY: Yes Mr Chair. We want to conclude the testimony of General Knobel.

There are two items that we need to raise. One is General Knobel has indicated that he wants to read a statement into the record.

The second issue is the fact that Brigadier Basson and Dr Mijburgh's legal representatives are not present. They have indicated to us, and there's correspondence exchanged, and I don't want to necessarily go into the correspondence, but the Commission may want to put something on record regarding the issue after they have had a chance of reading all the correspondence. It is correspondence that has recently arrived, and at a suitable time the panel can have an opportunity to peruse the correspondence and respond thereto. But they were aware that the hearings continue today with the evidence of General Knobel.

ADV POTGIETER: And Dr Basson and Dr Mijburgh, what is their position? Are they present or not?

MR VALLY: Neither of them are present and ostensibly it is because their legal representatives are not present. We are also told that Brigadier Basson is going to be engaged in the operating theatre in the next day or two ...(intervention)

ADV POTGIETER: Oh I see, I am sorry Mr Vally does that - does it appear from the correspondence that you referred to?

MR VALLY: Yes that's set out in correspondence as to what is happening in their regard. The panel may wish to put something on record but I believe they should peruse the correspondence first.

ADV POTGIETER: Alright. So shall we then - let's stand down. That issue - and perhaps we can get to General Knobel and get him sorted out.

MR VALLY: That's correct.

ADV POTGIETER: Alright.

MR VALLY: There is an indication, I must put on record also, which you will see from the correspondence Mr Chair, the fact that Dr Mijburgh is willing to give evidence. Thank you Mr Chair.

ADV POTGIETER: Thank you very much Mr Vally.

General before we continue welcome again. I am going to administer the oath to you just to get the formalities out of the way and then we can get into your testimony.

DANIEL PETER KNOBEL: (sworn states)

ADV POTGIETER: Thank you. Please be seated General. Mr Vally I think you were busy dealing with the testimony of General Knobel. It's over to you.

MR VALLY: Yes Mr Chairperson, but General Knobel has indicated that he has prepared a written statement and he would like to read it into the record before we continue with the questioning of him.

ADV POTGIETER: Have you had regard to that?

MR VALLY: I have only had sight of it right now. I haven't read it yet.

ADV POTGIETER: And Mr Arendse?

MR ARENDSE: Chairperson I have read the statement and we've discussed it and there's nothing in the statement itself. He does refer to a number of annexures in respect to which we may have certain problems. But as the statement itself reads there is nothing objectionable from our side.

ADV POTGIETER: Thank you Mr Arendse. Miss Reynolds do you want to say anything? Not. Thank you. And I suppose Mr Toweel you are aware of that?

MR TOWEEL: I am aware of it, thank you Mr Chair.

ADV POTGIETER: Thank you. Alright Mr Vally then it seems as if we can proceed by getting General Knobel to refer to his statement. Right. General then it's over to you.

DR KNOBEL: Thank you Mr Chairman, but may I just point out that within the statement I am referring to a number of documents and the contents of documents that I have given to the TRC most of which was already given to the TRC about ten days ago but there are one or two additional documents that were added this morning, and I would certainly, if it was possible, be able to discuss some of the contents of the documents to substantiate what I say in my statement.

And then I will add that I have tried also from my side to keep out of my statement anything that could be either of a proliferating nature or of a nature which could embarrass our international relations, but I would need some guidance at that point when I get to it and we want to discuss it I certainly would like to discuss it.

Thank you Mr Chairman.

ADV POTGIETER: Yes when we get to that stage I will hear Mr Arendse who is here specifically just to ensure that we don't breach anything on that side.

DR KNOBEL: Right, thank you Sir.

ADV POTGIETER: But please go ahead General.

DR KNOBEL: Thank you.

"In my opening statement in my evidence to the TRC on Thursday the 11th of June 1998 I outlined the role that I played with respect to the TRC investigation; the Office of Serious Economic Offences investigation; the investigation by the Office of the Attorney General; the investigation of the National Intelligence Service and later the National Intelligence Agency which resulted in the production of the document known as Project Cloud I made available to the TRC in 1997. And finally my relationship and responsibilities with respect to the Department of Foreign Affairs and the Non-Proliferation Council within the Department of Trade and Industry.

I also indicated that in the above period I had to brief and advise all the relevant Ministers as well as President de Klerk and President Mandela personally on certain issues and indicated that I had briefed certain Parliamentary committees on the CBW programme.

I then indicated that I would be referring to all the above activities and to documents that had a bearing on the programme including my briefing to the TRC on the 21st of January 1997 and the Project Cloud document of the National Intelligence Agency dated October '97 with the understanding that I could not be held responsible for any information that would lead to proliferation or a threat to the RSA's international relations if it became available to the media through my testimony.

Since that statement I have been questioned on a number of issues on which the answers provided by me may have created the impression that I did not act expeditiously on information that became available to me at the time.

Furthermore it came to my attention that I had erroneously referred to a meeting with the National Intelligence Service as having occurred on the 24th of September '94 instead of the 24th of September '93, which clearly added to the impression that I had allowed a long time to pass before I acted decisively.

I therefore wish to put all the events that took place from '92 onwards, and in which I played a part, into perspective so that -

One, the true position as I experienced it can become visible and,

(b) all the actions that I took can be valued objectively.

With reference to my concern that some of the information in this affidavit may have a proliferation danger or may have a negative effect on the RSA's international relations I have made a copy of it available to the office of the State President so that it's legal representative may advise whether the statement can or should be made in an open hearing or in camera.

A copy has also been made available to Mr Mike Kennedy.

After I took over as Surgeon-General on the 1st of March 1988 and up to November 1992 I was satisfied that Project Coast had been managed exactly according to the official mandate as conveyed to me according to the political decisions that had been taken by the Ministers of Defence since 1981, as well as by the State President, Mr de Klerk on the 26th of March 1990, as well as by the special Cabinet committee on Sensitive Projects appointed by Mr de Klerk on the 20th of September 1990, and as confirmed at a mini-defence command council meeting on the 25th of October 1990.

The briefing to President de Klerk and the minutes of the mini-DCC is included in Appendix A."

Now Mr Chairman, at this point I would like to refer to that Appendix and draw your attention to certain things in it. May I proceed with that?

ADV POTGIETER: Yes I accept that.

DR KNOBEL: Thank you.

ADV POTGIETER: If there are any difficulties it will be brought to my attention. Please proceed.

DR KNOBEL: Thank you. If the Commission looks at the briefing to the State President, I am not going to read the entire briefing, you have it available if you wish to do so at your leisure. I want to refer to page 3, paragraph 10, in which a discussion was held with the State President with regards to the nature and the effect of chemical and biological weapons and the explanation that is given here is -that in the Western world there was a change taking place. It reads as follows:

"It was moved away from research and development regarding weapons of destruction and two new approaches were taken:

A. The development of chemical weapons which are not non-destructive that can impair the brain function of the target groups that they cannot function properly and can easily be attacked by conventional weapons".

Then I want to refer you further on, after we discussed with the President the aims and objectives of the project and the way that it has been run up to then, page 4, paragraph 18 under the heading "Threat to the South African Defence Force". I want to draw your attention to the second half of that paragraph which reads -

"We, however, in 1986 found certain bomb shrapnel after a supposed attack on Unita and we tested that for chemical agents, namely with the code name DM. This agent is an incapacitating agent which causes irritation of the eye and throat, disorientation, nausea, vomiting and depression".

A discussion then follows about the developments after that finding, and on page 5 I wish to draw your attention to paragraph 23. This is with reference to the chemical company that had been established and what it was working on -

"This plant concentrates on research in and the production of incapacitating and irritating agents. These agents are built into weapon systems together with Armscor. A new type of teargas was developed which could be used effectively".

Finally if you would allow me with regards to the biological research and development, page 6, paragraph 27 -

"Our biological plant, this is RRL, is responsible to keep up to date with all potential threats, and to do this it is continuously producing new organisms so that the threat can be updated and that preventative and treatment methods can be updated".

In essence that document refers then to what we put in front of President de Klerk and what he approved. His approval was that we could continue with the incapacitating agents and with the irritating agents as had been presented to him; that we should stop all further research on any deadly agents.

The next document, if I can take you back to my statement where I refer to the second document, namely the minutes of a mini-DCC, that's what you have in front of you in that same Appendix, and you will see it's a thick document. You will see that it reads:

"These mini-DCC, Defence Command Council meeting held on the 25th of October".

You will also see, by the way, that General Steyn attended that meeting. And here I want to just very briefly take one or two paragraphs on page 1, paragraph 2:

"The purpose of this meeting was:

1 - to provide background regarding the status of development of chemical weapons in the Project Coast.

2 - the decision regarding the research should be re-established based on the present directive and the State President's instruction regarding the establishment of technology".

Why I am showing you this, Mr Chairman, is to show you that the decision of the State President was carried through to the Defence Command Council and from there obviously to the Co-ordinating Management Committee.

And then on page 2, paragraph 5(B):

"The State President provided authority for research into chemical weapons and not into the production of deadly chemical weapons".

and let me explain what that means. It means incapacitating agents or irritating agents.

I want you then to turn to the appendix to that document which was a document to the same mini-DCC with the proposed new philosophy for chemical and biological warfare. Again you will notice that the person who drew up the document is Brigadier Basson. He will, if I take you to the relevant paragraphs, if you look at page 3, paragraph 10A, that the decision that was given to us or the direction that was given to us through our State President is reflected here:

"The development of chemical weapons which are not deadly but which can impair the brain functions of target groups so that they cannot function in an orderly fashion, and they could be approached easier than with conventional weapon".

It also deals on page 4 with the implications - "the implications of the chemical threat for the South African Defence Force", a discussion of that. I am not going to read it all Mr Chairman.

And then I refer you to page A6, the main conclusions of:

The chemical warfare and the conclusions and what was decided then during this Council. Paragraph 32.

"To avoid this threat the Defence Force has to do the following:

Keep up-to-date about the research regarding the offensive threat;

keep up-to-date regarding research regarding the latest technology to protect against chemical weapons and a system of training of chemical warfare and to maintain that as if the physical threat could be fought against and,

to develop a command structure which can take proper decisions".

On the next page -

"The technology in South Africa establishes and provides protective clothing according to the new standards and to improve this ability and to establish the technology in South Africa, not to produce chemical weapons of mass destruction. And to develop operational activities in which the above five points can be incorporated, rationalisation of functions will take place and central co-ordination is also important".

And further on that same page under the heading "Offensive chemical warfare philosophy".

"It is proposed that the South African Defence Force develop a research capability regarding limited production of non-deadly chemical weapons and maintain that".

And regarding the defensive policy, page A8, paragraph 35,

"It is also recommended that the Defence Force should develop an offensive capability which should entail protection".

Finally if you look at page A12 -

"Establishment of the production technology for non-deadly weapons".

Paragraph 59 deals with the steps that will be followed in achieving that.

And then finally paragraph 60, the first sentence -"In this regard Project Coast has already developed one chemical warfare agent, namely the so-called NGTR, a new generation teargas".

As you will see later on that refers directly to the CR that was developed in the programme. I use these two documents to illustrate to you that the guidance that was given to us by the President were followed through into the Defence Command Council and were applied exactly in that fashion and was carried through into the Co-ordinating Management Committee and into the project.

If I can now take you back to where we were on my statement.

"During December 1992 President de Klerk announced the early retirement/retrenchment and/or dismissal of some 23 military officers after General Pierre Steyn had submitted his report on the alleged activities of the South African Defence Force to the Cabinet on the 18th of December 1992.

Brigadier Doctor Wouter Basson of the South African Medical Service was one of these officers. At the time I was in London on the way back to the Republic of South Africa, having attended the AMSES Congress in the USA and visiting the Boots Pharmaceutical Plant in Nottingham in the United Kingdom.

The Chief of the South African Defence Force, General Liebenberg, phoned me in London to inform me about Mr de Klerk's decision and to enquire whether I would be available to be appointed as Acting Chief of the South African Defence Force over the Xmas holiday period, with the responsibility to deal with the administrative process required to carry out the instruction of President de Klerk. I indicated that I would be available.

On my return to the Republic of South Africa, I immediately enquired as to the circumstances that led up to this decision with specific reference to the position of Doctor Basson and was simply told that it could not be discussed in detail with me but that the President had appointed the Steyn Commission in additional to the Harms 1990, Goldstone 1991 and Hiemstra 1991 Commissions, to conduct and investigation into the Intelligence Services of the South African Defence Force and the South African Police, with special reference to their role in possible third force activities.

In addition I was informed that all findings would be handed over to Mr d'Oliveira of the Attorney General's office for possible criminal proceedings against individuals found to be involved in such activities.

Not satisfied with what I was told and quite alarmed about the position of Doctor Basson who was playing a critical role in the privatisation of the front of Project Coast, and I'm referring here specifically to DG Scientific and R&L, as well as to recovering some funds and closing accounts which were still in existence in Europe. I tried in vain on two occasions to arrange to see Mr de Klerk personally through the office of the Minister of Defence which was then Mr Louw.

I also had telephonic discussions with General Liebenberg in this regard and was eventually asked by him to visit him at his holiday home near George and to bring Doctor Basson with me. At this meeting I was asked to allow him to speak to Doctor Basson alone and thereafter informed that he had explained to Doctor Basson why it was found necessary to put him on early pension, but that it would be appreciated if he could still be available to the Surgeon General after the 31st of March 1993, in a voluntary capacity in the Citizen Force Reserve, to finalise outstanding issues within the project.

I was again assured that the d'Oliveira investigation would undoubtedly deal with any so-called third force activities. Somewhat reassured I proceeded to deal with the documentation of the 23 officers involved, with the help of the Chief of Staff Personnel of the Defence Headquarters and with a rather serious negative reaction with the Defence Command Council with respect to the role played by General Steyn in what seemed to them to be an unfair dismissal of senior officers in the South African Defence Force, without any visible application of the rules of natural justice including the audi alteram partem principle.

In this regard I had several discussions with General Pierre Steyn, who was clearly also disturbed by the animosity of his fellow members of the Defence Command Council.

Important to note was the fact that General Pierre Steyn indicated at the time that he was not at liberty to disclose what he had reported to President de Klerk and that we should leave the matter in the hands of the d'Oliveira investigation.

In this regard the contents of the so-called Steyn Report was not revealed to me in any way until I received a translated copy of the staff paper used by General Steyn, from Mr Mike Kennedy in February '97"

And you have this document in front of you as Appendix B. This document was as far as I can judge, a translation of the TRC document number 111 in the bundle of documents for this hearing.

On the 7th of January 1993 - I beg your pardon Mr Chairman, if I can just refer to that document. I'm not going to discuss the contents. You will see at the bottom right-hand corner where it was handed over to me by Mr Mike Kennedy on the 25th of February 1997.

"On the 7th of January 1993, the new Minister of Defence, Mr Louw, was briefed about the state of the project and what the implication of the pending signing of the New Chemical Weapons Convention by the Minister of Foreign Affairs, due to take place on the 14th of January '93, would be.

The full briefing plus confirmatory notes of the briefing drawn up on the 8th of January '93 and signed by the Minister are included in Appendix C"

May I please refer you to that document? Again Mr Chairman, I am not going to read the entire document but I'm simply going to point out to you that in this document the entire project as it was mandated and initiated initially by General Malan, with its aims and objectives, with the phases that it went through, is described in some detail. Particularly I want to refer to page 4, paragraph B, Heading:

"Phase 2: The Commercialisation Phase"

where it reads as follows:

"Continuation of research and identification of research objectives for production owing to guidelines given by the State President after briefing given to him in 1994"

And then the next paragraph C:

"Phase 3"

paragraph (iv):

"A submission to the Parliamentary Committee regarding sensitive matters being investigated by the State. This Committee consisted of various Ministers and during this the contents of the project was made clear to them"

The rest of the document deals with, in some detail, with these different phases to bring the Minister totally up to date. I would like to refer you to page 7, paragraph 27:

"Offensive Equipment Obtaining and Research. According to the guidelines by the present State President in 1990, only irritants and incapacitating measures were made which can be used in counter insurgence. These are a CR derivative, an irritant B, which is a BZ variety incapacitating, C, a methaqualone derivative which is incapacitating, D, dimethyl amphetamine which is incapacitating"

We then proceeded to discuss with the Minister what the implications of these substances were with regards to the pending CWC Convention and this is what is reads on page or rather paragraph 28 on page 7:

"The BZ variant leaves us with the least problems. We produced 1000 kilogramís for weapons which would take place in 1993. This substance was on the list: "Prohibited Agents" and we were compelled to announce this or destroy it. The last option will be the preferable one"

And the next paragraph, 29:

"The NGT provides fewer problems"

Now Mr Chairman, I can deal with this in great detail but basically what it says there is that CR as an irritating agent is not prohibited by the New Chemical Weapons Convention. You do have to declare that you have it in your possession but no other requirements are necessary. We therefore indicated to the Minister that we could carry on with the CR although we were going to sign the Convention within a week.

And then on page 9, the confirmation again with regard to the incapacitating agents, sub-paragraph 37:

"Incapacitating agents as previously described, the Defence Force has two incapacitating agents"

Mr Chairman, that refers to the BZ variant that I've already dealt with and the second was the dimethyl "ketoon amfetamien derigaat"(?) ...[no English translation] which will come forward again later on in the hearing. And then finally under recommendations on page 10:

"It should be continued with the defensive projects under Armscor"

What is meant there is the production of masks, filters, clothing, detection apparatus, decontamination. 42:

"That the SADF will not declare that it has this agent and will go ahead with the production of this in the form foam until its been completed. This work should be done covertly to be able to be protective"

Mr Chairman, I would like to explain in this regard. Signing the Convention means that South Africa becomes a State party to that Convention, however the Convention must then be ratified and the number of countries that have to ratify it in this case were 65 and after 65 countries ratified it, then it enters into force 6 months after ratification.

So what we said to the Minister here is: "We can carry on, we don't have to declare it now. When the Convention one day is ratified and enters into force 6 months later, that is when we will have to declare that we are in possession of CR.

And third recommendation 43:

"That all work in connection with other the two incapacitants should be ceased and that all raw materials should be destroyed in the presence of a member of the South African Police so that a certificate of destruction be supplied"

Because I realised that this was an important meeting and these were important decisions taken by the Minister, I had the secretary of this meeting, which was Colonel Steyn, draw up confirmatory notes immediately. That is the second part of this documents. You will see:

"...[no English translation] George on 7 January, the date here is 8 January"

And I only want to refer you to the final decision by the Minister, page 3: Decisions, paragraph 13:

"The Minister accepts all the above three recommendations as described here"

As I read it to you from the original meeting. And 14:

"The Minister gives instructions that all technical and scientific documentation regarding this programme should be put in a safe place so that the programme can reactivated if necessary. The Defence Force should not limit the capability to prevent anarchy and they should not leave these capabilities"

You'll see my note there in my own handwriting, the instruction to Brigadier Basson with regard to recommendations, paragraph 12:

"To have negotiations with SAFCOL"

In other words to go ahead with the process of destruction and obtaining a certificate to this effect from the police. And you can also see right at the bottom in the handwriting of the Minister what he said about: "NGT". I have difficulty in reading it but I'll try:

"Because NGT is not a listed agent regarding the Chemical Weapons Convention and because its regarded to be used in the control of riots. I approve it, but before this agent is used it should first be cleared out with the Minister or the State President"

That deals with this Appendix Mr Chairman. If I can go back to my statement.

"After this briefing I also privately brought the Minister up to date with the position of Doctor Basson, as outlined above"

Mr Chairman, if I may just explain this. I'd already told you that I'd seen General Liebenberg at his holiday house and discussed the position of Basson and what he had said to me at the time. This is what I have related to the Minister then.

"I also informed the Minister that I had received a letter from the Offices of Serious Economic Offences, the date of it, the 8th of December 1992, informing me that they were conducting an investigation in accordance with Section 5 of the Act on the Investigation of Serious Economic Offences, 117 of 1991 in Armscor, with special reference to Brigadier Basson. This letter and my reply to it dated the 11th of January 1993 is of importance because it contains a lot of information about Project Coast and how it was managed and in particular it mentions the fact that I had experienced some difficulties with the control over Brigadier Basson with respect to operational use of products with the project and how I tried unsuccessfully to rectify it.

A copy of the letter from the Offices of Serious Economic Offences and my reply to it, which was also made available to the Minister of Defence, is included here, Appendix D"

If I may refer to Appendix D and again Mr Chairman, I will not deal with the entire document but only the relevant paragraphs. First of all at the back of the document is the letter that I received, dated the 8th of December, with a whole number of questions. I refer specifically to paragraph 12 which reads as follows:

"Under whose control did he work and who authorised his activities"?

and in my answer, I want to refer you to the answer to that question, page 13, question 12:

"Under whose control did he work and who authorised his activities"?

And I will read that to you.

"Brigadier Basson was after his appointment in the Defence Force, under the control of the Surgeon General and he is responsible for medical and other activities responsible to the Surgeon General. Brigadier Basson was under operational control of the Commanding Officer Special Forces and the Defence Force as from March 1981 and all his military activities were controlled by this instance. Since the 1st of March 1988 I personally controlled him and it was confirmed by his appointment as Director of Research and Development in my headquarters. Regarding the project under discussion, Brigadier Basson was responsible for the Co-ordinating Committee for the management of this project. This includes research, development and production and his activities were authorised by this body. The situation regarding the operational application of the products delivered by this project was different. In this regard Brigadier Basson was tasked by the user or the person who gave the instructions. These people who gave instructions were the Minister of the Defence Force, the Minister of Defence, the Head of the Defence Force, the Commanding Officer Special Forces, the Head of Staff Information, the Commissioner of the South African Police, the Commanding General of the South African Police and the Director General National Intelligence Service. The above state of affairs was not acceptable for me and I objected to this to General Geldenhuys, the Head of the Defence Force. He took note of my objection but the practice continued. In the cases where Brigadier Basson was tasked operationally by the abovementioned people, the Management Committee of Project Coast only knew about that after the operational need had been satisfied"

I would like to explain this. The main product at that stage was the CR that had been produced and we had in our possession and was being utilised by all of these instances that I'm mentioning here. And let me just make it clear Mr Chairman, the Medical Service is not a combat arm of service. The Medical Service cannot apply any of these substances, it can only be done by Combat Services and that is why these individuals that are mentioned here are all in charge of combat or operational forces.

Perhaps I should refer to page 16 where I repeat to the Offices of Serious Economic Offences what I have said to the Mini Defence Command Council in paragraph 63:

"Furthermore I want to indicate that the present State President on the 26th of March 1990 in the presence of Malan, Geldenhuys, Liebenberg and myself was informed by Basson regarding the status and scope of Project Coast. The State President provided approval that the project could be continued regarding the offensive research objectives and that attention should be given to the irritants and incapacitants. This instruction was followed to the letter and in a cabinet meeting regarding sensitive projects consisting of du Plessis, de Villiers, Coetzee and Viljoen, Brigadier Basson on the 20th of September brought these people up to date with the present state of affairs"

Mr Chairman, obviously this letter is to the Office of Serious Economic Offences, they are looking at financial abuses and that is why the answer is directed more towards the financial side in which they had an interest in at the time. I add to this that during this briefing I was not present because of other responsibilities.

Then Mr Chairman, simply to show you that the process that had been followed by myself was one of, in my opinion, responsibility to ensure that the guidelines given by the State President is conveyed to everybody that had to know it and that the circumstances around it was explained in every case.

Now I go to my statement:

"On the 14th of January 1993, Mr Pik Botha signed the New Convention, the Chemical Weapons Convention in Paris. I was part of the delegation that accompanied him as an advisor and in this regard I confirm that I had briefed him before the time about the fact that we had a Defensive Chemical and Biological Warfare Programme but that its mandate was within the provisions of the original Geneva Protocol of 1925 as well as with the Biological Weapons Convention of 1975 and would remain so with respect to the Chemical Weapons Convention, also after ratification and entry into force.

During February 1993, Brigadier Basson reported to General Liebenberg and myself that a transaction that had taken place in Croatia on the 6th of November 1992 had resulted in a loss of project funds because of the arrest of the agent he used to facilitate the transaction.

As it was believed that these funds could be recovered quickly, General Liebenberg approved personally that Brigadier Basson could return to Croatia to attempt to rectify the situation. This ultimately resulted in Brigadier Basson himself being detained in Switzerland together with the agent on charges of fraud in June 1993. These happenings obviously impacted directly on the Office of Serious Economic Offences and Auditor General's investigations.

Along with these events, my and Colonel Ben Steyn's activities were directed to carrying out the instructions of the Minister of Defence as given the briefing of the 7th of January 1993 and reporting the relevant facts to the Co-ordinating Management Committee at its meetings on the 29th of January 1993 and the 31st of March 1993.

In particular the procedure followed to terminate all work on the incapacitating agents and to destroy all ground substances and existing agents and to obtain a certificate to this effect, were confirmed and were documented. All of these and other relevant documents are included in Appendix E"

And please, I write an NB here, these documents should be read with what I dealt with in Appendix C. Mr Chairman, if I can take you through that very quickly. The first document in this bundle is a quotation that was received from Medchem Technologies for a substance called DNA Dimethyl Phenathelimine, code name Baxil and it is dated the 30th of July 1992. And I then sign an order directed to Doctor Philip Mijburgh of Medchem Technologies, dated the 7th of August 1992 and I say, I refer to the substance DNA Dimethyl Phenathelimine, Baxil and I then place an order for the production of 1000 kilogramís of this product. I want to draw your attention to what I add in my letter:

"Regarding your request for protection against prosecution, I want to inform you that it is just within our ability to protect you regarding the provision of raw materials and the production of the products. Any irregularities which occurred during the production and the illegal provision to other people will be the full responsibility of the management"

Mr Chairman, that substance that is ordered there is the second incapacitating agent that I referred to in my briefing to the Minister, that had developed and that had received. In other words on the 7th of January the next year we had received it and that we were ready to weaponise it. However, in view of the State President's decision, he would have to decide whether we could go ahead. That refers to the briefing to the Minister.

The next document in that bundle is dated the 9th of November, it says:

"Confirmation of the receipt of products received from Project Coast injuta"

I want to take you specifically to the last paragraph, paragraph 4:

"At the moment the following agents are available which we would be translated into certain products: 1000 kilogramís product B"

That is the BZ product that I referred to before when I briefed the Minister later on.

"And 500 kilogramís product M"

That is the Methaqualone on which we briefed the

Minister.

"30 kilogramís product C"

That was a cocaine derivative substance that we also included at that stage.

Now what I want to point out is, this was on November. I believe that Doctor Koekemoer in his evidence here indicated to you that the delivery of the Baxil took place early in January, that is why it is not reflected on this document. However, if you refer back to my briefing to the Minister on the 7th of January, you will see that I say that we have in our possession two incapacitating agents and I indicate 1000 kilogramís of each.

The instruction of the Minister that these products had to be destroyed is contained in the next document, the document dated the 30th of March:

"Certification regarding the destruction of chemical products on the 27th of January 1993"

I refer you to paragraph 2:

"The load consisted of the following: 18 blue plastic drums, weight so and so, product M. 73 metal drums, product BX. C: white metal drums, D: small plastic containers, F: green metal drums"

My copy is a bit unclear, it looks like:

"21 green metal drums, B: four papers drums and two cartons"

Mr Chairman, these products refer to the products which were given to the Minister in his briefing:

"M being Methaqualone, BX being Baxil, C being Cocaine and B being BZ"

ADV POTGIETER: General, I'm sorry, can I just ask you, the people that do the translation have actually got to try to keep up with you and they say it's quite a competition at this stage.

DR KNOBEL: I'm very sorry Mr Chairman.

ADV POTGIETER: Would you bear that in mind?

DR KNOBEL: I'm trying to use as little time as possible.

ADV POTGIETER: I appreciate that.

DR KNOBEL: I'll try to do it a little more slowly, thank you Mr Chairman.

ADV POTGIETER: Thank you.

DR KNOBEL: I apologise for that.

If you then look at the rest of the document you will see that at the time it was decided to take blind samples of four categories of drums that were destroyed and they were destroyed by flying them out into the southern Atlantic ocean, deactivating them and then throwing them into the ocean and we had attached to this document - or rather, before we get to that, a signature of a Commandant de Bruyn which was the representative of the Chief of Staff Intelligence and a declaration by Doctor Basson which says:

"The samples were later handed over to Commander de Bruyn after they were deactivated. The samples were taken on the day of the destruction"

In accordance to what the Minister authorised us to do and in accordance to my instruction to Doctor Basson, this was taken to the forensic laboratory of the police and the next attachment to that same document is the declaration by Brigadier Strauss in which he then certifies what he had received as samples or "monsters", paragraph 3:

"During he proceedings of my duties I received the following sealed samples from Colonel Steyn: A holder marked product B, a holder marked product BX, one marked product C and one with no alphabetical identification.

According to my information it was marked product M, it did not remain clearly visible but in his following paragraph he says:

"During the carrying out of my duties I analysed these samples and identified the contents. Product B was BZ, product BX which I told you was Baxil, product C"

With all respect, I'm not a chemical person. We can ask Professor Folb if he can confirm whether this was the same product that I signed for but I was satisfied that this was Baxil. Product C is the Cocaine Hydrochloride and the fourth is Methaqualone.

He gave us a further statement, it was excluded. Paragraph 3:

"Further to my statement of the 6th of the 9th, I rectify a typing error"

There's another document attached to this document and that was an exercise that had to be performed at a later stage. We had to give information to the Auditor General about the value of the substances that had now been destroyed and there is a document which says: "afskryf waardes", which was drawn up by Doctor Basson.

At a later stage, there's a letter attached here which had to be signed by the Chief of the Defence Force as the Chief Accounting Officer of the Defence Force, that was the letter in January '95 where he repeats the information that Basson gives here and he signs the document to say that that was the value of the substances.

I just want to add one additional point Mr Chairman. If you look at each one of these substances: M, BX, C, P and B and you look at the quantities and where the values were estimated, then you will see that those quantities are in agreement with the amounts that I gave to the Minister and I said they were in the possession of the SADF. I was satisfied that all the products which had to be destroyed were destroyed.

Just to complete the picture I also added the minutes of the meetings, the CMC. The first one you have there is the 29th of January. You will see from the certificate of destruction that it took place in the evening of the 27th. In these minutes which took place on the 29th, in paragraph 5 Brigadier Basson also gives feedback regarding the destruction of all measures and substances which would not be used in future and this includes the incapacitants. I think that that is all that I want to point out in that particular minute.

If you look at the next one dated the 31st of March 1993, paragraph 3:

"Brigadier Basson handed over the destruction certificate, it was given. The samples were still in possession of the Sectional Commander and Brigadier Basson said that these samples were taken and destroyed and after a long discussion it was said that these samples would be analysed at the forensic laboratory and thereafter destroyed and the certificate would be attached to the destruction certificate"

This is to demonstrate to you that the Co-ordinating Management Committee was kept in the picture as to this process as it developed.

Lastly, much later - the document I attached here, because there were questions whether that flight actually took place or not, I have a letter which was written to the Chief of the Airforce by the Office of the Attorney General. It's addressed to General Hechter and it says:

"During the investigation of Doctor Basson it was it was found that allegedly certain substances were, fell into the sea on the 27th of January. All flights were scheduled flights. There was a certain flight, H28 which on the 28th of January was tasked for training via Waterkloof and this flight went over the sea. It is important to note that the flight plan of this flight used by Wouter Basson should be made known. The name of the navigator, the name of the pilot and the list of all the passengers should be provided and also what type aeroplane was used and the route it followed and also the contents of the freight. The declarations are necessary for the legal process"

And the reply to that by the Chief of the Airforce dated the 27th of May 1997, is the next document and he gives the information with regards to the flight, the name of the navigator, the pilot, the passengers:

"Unfortunately no passenger list could be found. The four or five passengers who were there were not known to them"

He tells the type of flight and then he says:

"...[no English translation] because no reports were made for training and it was not available for this specific flight. The co-ordinator cannot be determined. As far as it can be established it was south of the Agulhas plateau about 150 sea miles from the coast. Regarding the contents of the freight, the crew was not aware of the contents of the freight but it was ensured that it was safe for air travel. It contained 20 blue plastic drums. During the flight these bags were filled with some or other substance and when they landed this was taken from the aeroplane"

Mr Chairman, I now come back to my statement, page 5:

"While the above took place I was also fully occupied in supporting the investigation of the Office of Serious Economic Offences and parallel investigations of the Office of the Auditor General into the possible financial abuses of the programme by Brigadier Basson and others. In this regard Brigadier Basson was encouraged to cooperate with both the Office of Serious Economic Offences and the Auditor General in every respect"

If I can interrupt myself I've provided many letters and documentation in this regard. I was a State witness for the Office of OSEO. If it's necessary I can make this available.

"With the appointment of Mr Coetzee as Minister of Defence in April '93, I was again instructed to brief the Minister with respect to Project Coast although a full briefing only took place on the 10th of August 1993. The Minister was given a copy of the 7th of January 1993 briefing to Minister Louw, as well as the confirmatory notes dated the 8th of January '93 on the 30th of April '93"

If you look at the next Appendix, I'm not going to read it again, you've seen the document already, it's simply to show you, that is the actual document or a copy thereof of which I handed over to the Minister with my signature there. We were getting so many Ministers following one another that it was becoming very difficult to keep them in the picture Mr Chairman, and all that we had chance to do at that stage was to give him this and say: "Read it, you will get an idea what's been going on. It's a whole description of the programme and it's a description of instructions given by Mr Louw in accordance with the State President's guidelines and at a later stage we will brief you fully about the project". I did at that time discuss with General Liebenberg, the need to bring the Minister up to date with the problems around Basson. I'm coming back to my statement:

"Although I recommended that the position of Doctor Basson, with special reference to the Creation problem as well as the Auditor General and Office of Serious Economic Offences investigation should be discussed in detail with the Minister by the Chief of the South African Defence Force, General Liebenberg indicated that he did not think that this was necessary until after the Minister had been briefed fully on Project Coast.

The Minister did however indicated to the Chief of the Defence Force, that the research on the water soluble, CR, should be reinvestigated and that he wanted to be briefed about that separately"

Mr Chairman, he was referring to what he had read in the briefing that we had given to Mr Louw and the remarks that he made with regard to CR.

"Such a briefing did take place on the 22nd of June 1993 where Mr Coetzee approved that a demonstration model of the CR containing water cannon could be manufactured but that the Foam Project of CR, Foam Project, could be terminated.

After the return of Brigadier Basson from Switzerland on the 2nd of July '93, a briefing was given to him to myself, Colonel Steyn, Mr Pierre Theron and Mr van Heerden of the Office of the Auditor General on the 6th of July '93, which outlined the events in Switzerland, the nature of the problem in Croatia and the fact that no funds had been recovered. At this I insisted that the Minister be informed about all the above events immediately.

At a discussion that followed on the 8th of July and later also on the 15th of July '93, the Minister was fully briefed by the Chief of the South African Defence Force, the Chief of Staff Finance and myself and handed a document drawn up by Brigadier Basson about the events in Croatia. There documents as well as related documents obtained later are contained in Appendix G?

Mr Chairman, I don't propose to spend a lot of time on this document but basically Doctor Basson gives here the whole chronology of what had taken place in Croatia, how the transaction went wrong and how the money was lost, what efforts he did to try and obtain the money and also two documents that I'd received. One by way of a letter from the agent that was involved here. The letter I'd already received in May and secondly, an affidavit by the agent which was drawn up in Bonn in Germany and sent through to my by our Military Attaché and that was the 13th of August, quiet a lot later, the next year.

The point that I want to or the items that I want to draw your attention to is that a lot of what is being said here by Basson confirms the process that had taken place before, it confirms the fact that the Chief of the Defence Force said: "You could go back and try and recover the funds". But the fact that I wanted to bring to the Minister's attention was, here were serious problems with regard to the financial management of the project.

Now, back to my statement on page 6:

"All these events were obviously also brought to the attention of the Office of Serious Economic Offences by myself. I now took the further initiative on insisting that the Minister be briefed fully about the past history and the status of Project Coast by myself and Colonel Ben Steyn as soon as possible and the briefing was finally given on the 10th of August. This document is contained in Appendix H"

Again Mr Chairman, the document you will see looks very much like the document that we presented to Mr Louw, in terms of the background history and the phases and the development and where we stood, but basically I want to draw your attention to paragraph 31 which discusses again with the Minister the whole history about the incapacitating agents. Paragraph 42, which again points out to Minister Coetzee as Minister, what had happened in the process of destruction of all the substances, including the incapacitating agents.

And lastly paragraph 44:

"As soon as the last two projects, the water cannon and the data capture processes were completed, the final closure will be continued with"

If I may use this opportunity, you will see there's an Annexure. The Annexure refers to all the front companies that was in existence and were established with the approval of the Minister and also deals with other companies. And I just want to underline here what I testified last week: Protechnic was not a front company. As far as my knowledge was concerned, it was a private company and that is why it is mentioned like that on page 2, also to this Minister.

If I may go back to my statement:

"After this briefing I privately requested the Minister to allow me to begin direct liaison with the National Intelligence Service, with regard to the Offices of Serious Economic Offences Investigation in general and the situation of Brigadier Basson in particular. This I did because of the fact that I developed the distinct impression that my efforts to deal with the situation solely within the South African Defence Force was not clarifying issues adequately and I had been approached by Mr Mike Kennedy from National Intelligence Service with the request that this should be arranged if possible, as the National Intelligence Service was also busy with an investigation into the CBW programme, with special reference to the role of Doctor Basson emanating from the Steyn Report. I also learnt later that National Intelligence Service had also approached the Minister in this regard"

Mr Chairman, at that time the Minister of Defence was also the Minister responsible for National Intelligence. "With the approval of the Minister of Defence the Chief of Military Counter Intelligence, Major General Nieuwoudt and I briefed the Director General of National Intelligence Service, Mr Mike Louw and the Director of Counter Espionage, Mr Mike Kennedy on the 24th of September 1993. At the briefing which took place in Cape Town I gave the full background on Project Coast and Doctor Basson's role in it and again emphasised the situation with respect to direct control over the operational activities of Doctor Basson.

I also dealt briefly with the fact that there had been a number of Military Counter Intelligence investigations into Doctor Basson's activities to establish where he had abused the project for personal enrichment and indicated what had emerged in the Office of Serious Economic Offences investigation up to date. This document is contained in Appendix I.

You will notice on the front page in my own handwriting on the top:

"Purpose to divide the research into Basson's activities from the objectives of the project. This would give him the opportunity to provide answers himself as requested"

That I think is an important aspect. If you look at the document, the document deals again with the entire background, the phases, the developments, the processes that were followed, the decisions by the State President and the Cabinet Committee, the development of incapacitating agents, the destruction thereof, the development of CR, where we stood with that. And then finally, all of this is really what we said before Mr Chairman, finally, if I take you to page 11, we then spoke about the position of Doctor Basson. I wrote the following:

"Brigadier Basson was appointed in the South African Defence Force on the 2nd of January 1979 as a Medical Officer and he was a Lieutenant. He was used at Military Hospital from the 2nd of January till the 28th of February 1981. During this time he followed various medical services and became a first specialist in internal medicine. He had this rank since 1980. His military rank was a substantive Commander. As from March 1981, he served as a specialist advisor at headquarters and as Project Officer for the Special Projects for the Surgeon General and was added to the Special Forces headquarters under the operational command of the Commanding Officer Special Forces of the Defence Force. As from the 1st of January 1985, he had the rank of Colonel and he became head of a new division, the 7th Medical Battalion. It provided medical support to Special Forces and the paratroopers and the South African Police and the NIS. In this capacity he undergoes various courses and became a Brigadier in 1988 and became the head of Medical Staff Operations. In this post he remained for nine months till I appointed him as the Director General responsible for Research and Development in the South African Medical Services. Based on an instruction by the State President in December '92, he was placed on compulsory leave and he was placed on pension as from the 31st of March 1993"

And then a little lower down, in terms of his involvement with the project:

"49, the CMC was the controlling body of Project Coast. Decisions regarding the type of activities and products was taken by the CMC"

Pointing out again that at that level it was a broad guideline, the detailed research development was done at the level of the technical work group of which Basson was the chairperson.

Now page 13:

"Particulars regarding control over Brigadier Basson. Brigadier Basson, since his appointment in the South African Defence Force, was under the functional control of the Surgeon General and had to report to the Surgeon General, but as I've indicated previously he was under the operational control of the Commanding Officer Special Forces and all his military activities were controlled by this instance. Since the 1st of March 1988 I had personal control over Brigadier Basson and confirmed this with his appointment as the Director for Research and Development at headquarters on the 1st of October 1988. Regarding this project, Brigadier Basson was responsible to the CMC for the operation and management of this project and his activities were authorised by this body. The situation regarding the operational application of the product delivered by this project was different and his activities were authorised by the person who gave the instructions. These people were the Minister of Defence, the Head of the South African Defence Force, the Commanding Officer Special Tasks, the Head of Staff Intelligence, the Commissioner of the South African Police, the Commanding General of the South African Police and the Director General National Intelligence Services"

In other words Mr Chairman, I have repeated here to National Intelligence, exactly what I had said earlier on to the Office of Serious Economic Offences. I say again:

"The abovementioned state of affairs was not acceptable for me and I lodged my complaint to General Geldenhuys. They took cognisance of this but it continued, this practice. In the cases were Brigadier Basson was tasked operationally by the abovementioned people, they took notice of Project Coast. The last was then regarded by CMC as part of the total programme and it was approved"

Then I have a short paragraph on:

"Research into Basson's activities: During the past two years, because of various allegations and questions and Counter Intelligence reports, the investigations were conducted into Basson. It usually had to do with suspicions that Basson enriched himself to the detriment of the State. In-depth investigations by the staff of various of senior people, in conjunction with the Auditor General was done without any proof being found. During December '92 an investigation concerning Section 5 of Act into Serious Economic Offences was undertaken by OSEO. On the 8th of December I was asked to comment on certain questions regarding the person of Doctor Basson and written answers were given to OSEO"

This is the document that I referred to earlier in one of my Appendices where you saw the answer that I gave to OSEO. And then under final comments, if you will allow me, at page 15, paragraph 59:

"I want to indicate once again that the present State President said on the 26th of March ...[indistinct] in the presence of General Malan, Geldenhuys, Liebenberg and myself ...[indistinct]"

I'm not going to read it all, you've heard it before Mr Chairman. I repeat exactly what I said before, not only to the Defence Command Council but also to the Minister, I have now repeated to National Intelligence. And finally I say in 62:

"I propose that Brigadier Basson in the future must be given the opportunity to answer any questions regarding his person to personally answer to NIS. If possible or where necessary I will assist him in that regard"

And I also add the same Appendix with the front companies and the other companies. That brings me to page 7:

"Because I believed that it would help me to finalise the Office of Serious Economic Offences investigation and moreover give Doctor Basson the opportunity to clarify his position in terms of the decision of the State President, that he should be put on early pension, I recommended that Doctor Basson be given the opportunity to cooperate fully with National Intelligence Service"

And then I say in brackets:

"(it must be borne in mind that he had consistently indicated to me that he was not guilty of any misconduct, either within the project or in any other capacity. He further said that he was being confused with other persons also known as W Basson.

At this stage I had no concrete reason to doubt his word). Mr Mike Kennedy then indicated to me that National Intelligence Service was in fact investigating issues far beyond the scope of the Office of Serious Economic Offences investigation and that they also believed that Doctor Basson would able to clarify some of the outstanding issued in their investigation. After the briefing"

...[intervention] May I interrupt myself Mr Chairman? You must understand that at this stage Doctor Basson is on the Citizen Force Reserve, he's in a voluntary position helping us to conclude issues around the project and I had to deal with him fairly delicately at the time.

"After the briefing I persuaded Doctor Basson to cooperate fully with Mr Mike Kennedy personally as I believed that this would finally give him the opportunity to clear his name"

It took quite a bit of time to persuade him to cooperate but he did.

"To the best of my knowledge a number of discussions did take place between Doctor Basson and Mr Mike Kennedy, the results of which only became known to me in February '94"

I will came back to that point just now.

"It was at about this time that I was requested by Mr Meyer to see Doctor Jan Lourens in connection with some concerns that he had had in relation to the project. As he testified to the Commission, he did to the best of my recollection, mention the fact that he had been requested by Doctor Basson to manufacture various instruments or gadgets during the time that he was working at SRD, later to become Protechnic. It is further true that I indicated that I had not known about this and did in fact not want to know about this as I believed that it had nothing to do with Project Coast"

And if I may just explain Mr Chairman. SRD was founded early in the '80's when I wasn't even the Surgeon General and I was really not aware whether it had gone on there and I was convinced that these activities were outside the project. However, I didn't leave it there. May I just read what I said further?

"It is further true that I indicated that I had not known about this and did not"

Sorry, I've read that already:

"He then indicated to me that he had in fact been confronted at a social function of the special forces of the South African Defence Force by General Liebenberg with a remark to the effect that he, Lourens should look after his, Liebenberg's toys carefully"

I believe he testified that as well last week.

"I then advised him to bring this to the attention of the authorities that were investigating such allegations and to give the facts as he knew it"

What I meant by that is that he should go to the d'Oliveira Commission and give them the information.

"I informed General Liebenberg"

As I testified last week.

"I informed General Liebenberg about the incident without disclosing to him that Doctor Lourens had in fact referred to him directly, to which he gave what was now his standard answer, namely that the d'Oliveira investigation had dealt with these types of allegations and had up to date not acted against any person on the basis of information contained in the Steyn Report"

This was in the middle of October to the best of my recollection.

"General Liebenberg retired as Chief of South African Defence Force on the 31st of October 1993 and was succeeded by General Meiring as Chief of the Army. From 28th of February 1990 up to the 31st of October '93, General Meiring was a member of the Co-ordinating Management Committee and familiar with the major developments in the project. Certainly I did not have to brief him extensively about the programme and the process of privatisation and commercialisation as approved by the relevant Ministers and the State President before and in any case he had available the Chief of Staff Finance, Vice Admiral Murray and later Lieutenant General Raubenheimer, Chief of Staff Intelligence, Lieutenant General van der Westhuizen, later Lieutenant General Verbeuk and Chief of Staff Logistics, Vice Admiral Malherbe, to bring him up to date in details in this regard"

You must remember Mr Chairman, the Chief of the Defence Force is the Chief Accounting Officer and is accountable to Parliament with regard to all funds, also funds that are coming out of the special defence account and this is why I mention this specifically, that he as the new Chief of the Defence Force appointed in November, would have to prepare himself to appear in front of the Parliamentary Committee in February of the following year.

"Furthermore, his main role in the Co-ordinating Management Committee was to help me finalise a number of issues before the final termination of a project. These issues are clearly documented in the last four Co-ordinating Management Committee meetings which he chaired on the 24th of January 1994, 29th of March '94, 2nd December '94 and the 9th of January '95. These documents and other relevant documents are contained in Appendix J"

Mr Chairman, I'm almost through but they are important. In this document I use not only the minutes of the Co-ordinating Management Committee but also two other documents which have relevance and which appear in the minutes as well. You will see that on the 22nd of March 1994, this is quite a bit later, I received a letter from Viljoen, French and Couter on behalf of Mr Brand from Organochem, with regard to the fact that this client of theirs had not been paid for the support he'd given the Defence Force with regard to the Baxil Project. There's details about the sum of money that he was supposed to have been paid for it.

If we now go to the minutes of the Management Committees that was cheered by General Meiring, the first one on the 29th of March and we just scan it Mr Chairman. It indicates that the destruction was completed, that the data process was going on, the water cannon process was going on. It is really confirmation of everything that I said before. It ...[indistinct] a section where I'd recommended that Protechnic as the private company should be taken over by Armscor and where we stand with that and there's nothing really much to be concerned of.

If you look the next one over, on the 2nd of December 1994 under:

"Outstanding claims"

Paragraph 2:

"G Brand, Brigadier Basson gives the background of this claim regarding R350 000. It's decided that this claim should be paid but that R250 000 would be a reasonable amount"

What had happened there Mr Chairman is that Brigadier Basson was called to this specific meeting to come and explain why we have now received a letter from an attorney about a claim that should have been paid more than two years before.

If we then go to the next meeting on the 24th of January '94 - no, I beg your pardon, I've got them in the wrong order now, I've read that one. On the 9th of January '95, again a short description of what had happened. If you look at page 2, paragraph 10:

"Brand gives a motivation why he thinks the full claim should be paid and it should be paid according to standards, all his costs and R60 per hour seeing that it was an accepted formula. Brigadier Basson should calculate all these"

Now I want to refer you to the other document which is also a document in the possession of the TRC.

"At the discussion of the previous meeting when it was suggested that he should be paid only R250 000 although the agreement was R350 000, I questioned it and the discussion led us to ask Brigadier Basson to obtain for us a detailed description of what Brand had in fact given the Defence Force, what formula did he give us, was it of any value"

The document that you have in front of you is dated the 24th of November '94:

"Claim by Mr Branch for Technical Aid"

There is a description of the dealings with Mr Brand, what he had given to us, what the agreed sum of money was that we would have to pay him and added to it is a document signed by Doctor Koekemoer who testified here last week, and he then does an analysis of the scientific synthetic process that was followed. And this certainly I will not be able to read as clearly to you as Professor Folb would, but again to help the Co-ordinating Management Committee to decide whether this was really in fact a valuable contribution made by Mr Brand. And you will see if you look at the first document dated 24 November, Doctor Basson writes the following in paragraph 4:

"According to Doctor Koekemoer's calculations, the raw materials costs for the "safrool" part was R1,927.00 against the R326.34 for "die glediese ester part", a savings of R1.600.00 per kilogram was achieved. It should be taken into consideration that there was an amount of 1000 kilogramís end product delivered, the total savings in raw material for the clycerium provided by Mr Brand is 1.6 million rand"

This was then presented at this meeting of the CMC on the 9th of January and it was then decided to pay him according to what is recorded here in the minutes. But it also confirms the production process that was followed with Baxil, as testified to by Doctor Koekemoer and as delivered according to his testimony, early in January '93.

Now I want to come back to my statement. I had just been telling you what General Meiring's role was and how he chaired the meetings and the decisions he had to take there and how he had to help me with the privatisation and commercialisation and final termination of the project. What I now say is the following:

"What is important however is that I shared my alarm about the position of Doctor Basson with him and brought him fully into the picture with regard to my co-operation with Mr Mike Kennedy of the National Intelligence Service. In this regard I arranged for a number of meetings between myself or rather between himself, myself and Mr Mike Kennedy during the following year to ensure that he would be fully informed of any new developments with respect to Doctor Basson"

This brings us towards the end of 1993.

"Towards the end of 1993, the National Intelligence Service received information that the United States of America and the United Kingdom Governments were preparing to challenge South Africa's confidence building declaration, so-called CBM declaration, in terms of the Biological Weapons Convention at the United Nations and that the USA and UK ambassadors were being prepared by their respective governments to deliver a joint demarche to State President de Klerk.

At the time the Department of Foreign Affairs who dealt with the CBM declaration at the United Nations on behalf of the SADF and the South African Government, indicated that they were going to submit a similar declaration to the 1993 declaration. In essence the 1993 declaration referred to a defensive biological weapons programme which according to USA/UK submission to Mr de Klerk, was incorrect or incomplete.

During February '94, the State President was briefed by Mr Louw, Doctor Scholtz and Mr Kennedy of the National Intelligence Service, on South Africa's CBW Programme and alleged abuses, with particular reference to the so-called: "unofficial programme".

This is their terminology.

"A week later the briefing was repeated to the Minister of Defence and myself. I again confirmed that I was totally unaware of any so-called: "unofficial programme" or alleged third force abuses. I further indicated that if there had in fact been abuse of the programme in the form of third force activities by Brigadier Basson and/or members of 7th Medical Battalion group, it was either on their own initiative or through a second channel of command and control"

Now if I may interrupt myself Mr Chairman, I think with the wisdom of hindsight, at this point I was finally convinced that there was a serious problem, not only on the financial abusive side but certainly also on other activities.

"The process that followed hereafter is described in great detail in the Project Cloud Report of the National Intelligence Agency and will not be outlined here"

Mr Chairman, I am prepared to take you through 211 pages of this report, however I don't think we have the time and I think the members of the Commission have read it and I would seriously ask them to read it very carefully to see exactly what the process was and the chronology.

MR VALLY: We appreciate that General.

"Suffice to say, that after the briefing given to the Minister of Defence and myself by Mr Louw, Doctor Scholtz and Mr Mike Kennedy during February '94, it was abundantly clear to both the Minister and myself that there were definite indications that Doctor Basson had acted outside the mandate of the project and had probably abused capabilities that had been researched and developed in the project.

This impression was further strengthened by the detailed document of the United States and the UK Governments, dated the 11th of April as contained in the Cloud Report and of which I was given a copy on the 12th of April '94 to prepare comments for the State President. My full comment is also contained in the Cloud Report dated the 15th of April.

And that is my Appendix K which is now the Cloud Report, but this is a document which I believe to be one of the documents in the bundle of the TRC and again if you study that document, if this document is studied by the TRC, it will reveal exactly what my knowledge and impressions were at the time.

"Furthermore, at that point my views were shared with the Chief of the National Defence Force, the Minister of Defence and the State President, as well as with Doctor Scholtz and Mr Mike Kennedy. After a discussion of my comment as well as inputs given by the Minister and the National Intelligence Agency, it was my impression that the main priority at stake was to deal with demarche with the USA and the UK primarily from the point of view of what would be in the best interest of the Republic of South Africa and to deal with the issue of abuses and possible criminal activities internally, through the already established Commissions of Inquiry and Investigations. This is also clearly visible in the follow-up process as contained in the Project Cloud Report"

And I see: see Appendix K, pages 45 to 103.

"My own personal role and further activities from then on are clearly and accurately reflected in the Cloud Report and I am prepared to discuss any aspect thereof if so required"

That is from page 103 to page 211.

"Finally I would like to confirm again, that at no time prior to the events that led up to the day marsh with the USA and the UK in '93, did I have any knowledge of so-called third force activities carried out by members of the South African Medical Service under my command or by any person or persons associated with or involved in Project Coast or any of its front companies or private companies utilised in its programme"

DR KNOBEL: ...very clearly and deliberately. Also with reference to what Dr Jan Lourens said to me three months previously. In support of this affidavit I have requested Mr Mike Kennedy of the National Intelligence Agency to submit a separate independent affidavit which will corroborate what I have declared above. I would also recommend strongly that the TRC consider the need to call Mr Mike Kennedy or any of the other persons I have mentioned in my affidavit to give evidence with relation to my position and role in the above events.

Mr Chairman if I may just finally say the following. We have a saying that paper is patient. There is a very large document here referring to numerous other documents and that one can read at your leisure and form an opinion. But what is not written in these documents is that both Mr Kennedy and I briefed Mr Mandela and Mr Mbeki on Mr Mandela certainly on one occasion and Mr Mbeki on at least two occasions about our personal impressions. Those briefings are not reflected on paper. And what I said just now about the Minister, about the Chief of Defence Force, the Minister and the previous State President applies equally to the present government. They knew exactly what I knew or what I did not know. And therefore I would like to request the Commission to take that into consideration. Thank you very much indeed Mr Chairman for the opportunity.

CHAIRPERSON: Thank you General for that extensive exposition. Can I just before we do anything else for the purposes of our record and in the scientific vein of these hearings the panel has grown by twenty five percent in the form of our colleague Dumisa Ntsebeza, who like the rest of us is a hundred percent Commissioner but now forms twenty percent of this panel. Also for the record Ms Reynolds I see Mr Currin has joined us in the meantime. I am not sure if he is assisting you or vice versa but we leave that for Mr Currin to mediate on in the meantime whilst we take our tea adjournment and reconvene at eleven. Thank you.

COMMITTEE ADJOURNS.

ON RESUMPTION:

CHAIRPERSON: Are we ready to start Mr Vally?

MR VALLY: Yes Chair.

CHAIRPERSON: You are not on the record Mr Arendse.

MR ARENDSE: Chairperson if I may just put something on record regarding the status of the annexures referred to by General Knobel. We would prefer these documents to be treated or regarded as Category B documents, i.e. documents which the Commission agrees are sensitive for one or another reason which shall not be released to the press. But are required for the hearing. Because my attention has been drawn particularly to a document which forms part of the bundle in Annexure J which is clearly the stuff or proliferation. So for that reason we would prefer these documents to be treated as Category B.

I did indicate just before General Knobel started to testify that there was no objection to the statement as it stood and also to him referring to these annexures. And the General referred to that particular annexure in Annexure J.

CHAIRPERSON: What is J? Is that the Viljoen, French and Kota?

MR ARENDSE: Ja it is not the lawyers letter, the demand it (...intervention)

CHAIRPERSON: No, no, no but it is in that sort of bundle.

MR ARENDSE: It is in that bundle yes.

CHAIRPERSON: What specifically in that is it J2 that is being objected to or is it?

MR ARENDSE: Yes it is the letter by Dr Koekemoer to General Knobel of the 24th of November 1994.

CHAIRPERSON: Appendix B especially?

MR ARENDSE: That is correct.

CHAIRPERSON: I don't want to proliferate but is it 003890?

MR ARENDSE: Yes and also.

CHAIRPERSON: Right up to 3891 and rands and cents?

MR ARENDSE: Yes and also the whole of Annexure K which is the Cloud Report.

CHAIRPERSON: Now K does it, defensive equipment is that it?

MR ARENDSE: Annexure K?

CHAIRPERSON: Ja.

MR ARENDSE: Annexure K is the Cloud Report which is not part of this bundle.

CHAIRPERSON: My K here.

FEMALE SPEAKER: ...(inaudible)

CHAIRPERSON: No I just want to be clear. Is K not this?

FEMALE SPEAKER: No ...(inaudible)

CHAIRPERSON: Well we will have to straighten the record and the annotation. Anything else Mr?

MR ARENDSE: Nothing at this stage Mr Chairperson.

CHAIRPERSON: Mr Vally?

MR VALLY: Mr Chairperson I want to put on record that there are a large bundle of documents which were given to us by General Knobel. We will still have to go through these documents.

CHAIRPERSON: No, no Mr Vally can you address on the application by the Ministry?

MR VALLY: In principle I have no objections but I cannot support or argue against it because I haven't studied these documents in detail. As you have heard Mr Chairperson they are being photocopied at the moment. What I am saying is that we can have a discussion with my colleague, Advocate Arendse on which documents are problematic and which are not and I am sure we can reach an accommodation with him and then we can put on record specifically which ones should require or in terms of Section 33 so that they are not released to the public. But I also want to put on record that once we have an opportunity to study these documents we will want to question General Knobel about these documents and we may need another day or half a day to question General Knobel on the new documents he supplied us with.

CHAIRPERSON: Now okay so.

MR VALLY: I am told by my experts that Annexure J we agree that there should be an order as requested by Advocate Arendse.

CHAIRPERSON: General Knobel I am sure Mr Toyeli or you haven't got any objections?

DR KNOBEL: No objection Mr Chair.

CHAIRPERSON: I would expect that you have no objection as well. You are not instructed. Mr Vally you have a ruling as requested as far as that goes. Now as far as the rest goes is it your request that you need to study the documents? You are quite happy for them not to be released at this stage until between you and Mr Arendse you have clarified which can and which cannot be under Category 2? You are not necessarily saying you are accept he say so that they all fall under Category 2?

MR VALLY: That is correct Mr Chairperson with the exception of Annexure J that has been referred to for which I think you have already got.

CHAIRPERSON: Yes there is a ruling in that relation. Mr Arendse does that assist you?

MR ARENDSE: Thank you Mr Chairperson.

CHAIRPERSON: We have to apologise to the members of the media for the way in which this has to take place. You all understand that this was an arrangement in terms of which we have been able to be where we are. We can assure you that as soon as there are agreements again between Mr Vally and Mr Arendse on the basis of which certain documents must be made available to the media those would be made available without ado. Mr Vally, Mr Chaskalson?

MR VALLY: Thank you Mr Chair. General Knobel where we had left off when we were questioning you prior to you reading your statement into the record is the whole issue of the extent of your knowledge when it came to your attention that there were certain irregularities and what you did about that. Now if I recall correctly and you refer to it in your statement as well, that Dr Lourens in fact brought to your attention that his company or individuals in his company, a front company SRD were making poison applicators in the form of screwdrivers, in the form of walking sticks which shot pellets as well as umbrellas which shot pellets. This was brought to your attention I believe in early 1993?

DR KNOBEL: No Sir I am sorry you are incorrect. It was brought to my attention in October 1993. And you are further also incorrect in again stating that it was a front company. I have said to you that it was not a front company. I certainly didn't realise it was if you are saying it was. And furthermore he did not say that other members of that company had been involved in this. He said that he was requested, he was instructed by Dr Basson to make certain gadgets. That is what he said to me.

MR VALLY: Let's just go through the three issues you have taken umbrage at. Firstly you say it is October 1994 fine.

DR KNOBEL: No I did not Sir.

MR VALLY: 1993. I beg your pardon. October 1993?

DR KNOBEL: That is correct.

MR VALLY: That he told you about this issue?

DR KNOBEL: That is correct.

MR VALLY: You confirm in your statement that your reaction to him was; "Well that is another project and not my project."

DR KNOBEL: I didn't use words to that effect. I said: "I am sorry I don't know about it and I don't want to know about it." It had nothing to do with the Project Coast as far as I was concerned.

MR VALLY: Alright so you didn't know about it and you didn't want to know about it?

DR KNOBEL: That is correct.

MR VALLY: Fine. Thirdly you are saying that SRD and I am talking SRD now - is not a front company?

DR KNOBEL: Mr Vally I tried to explain that to you last week.

MR VALLY: No fair enough. I just want you to tell me yes or no.

DR KNOBEL: I was under the impression it was a private company. I reported throughout to everybody that I reported on this project that it was a private company and I have also reported that Protechnic that emerged out of it was a private company.

MR VALLY: Is your position still that SRD was a private company?

DR KNOBEL: Yes Sir.

MR VALLY: Fine. Well (...intervention)

CHAIRPERSON: But let me understand this. You are not therefore General, are you saying you are stating it authoritatively that it was not a front company? Or are you saying your impressions of the way in which it was functioning and the way you understood it are of a nature that you cannot - you as a person cannot classify it as a front company?

DR KNOBEL: Thank you Mr Chairman you have helped me a lot. I mean exactly what you have described in the second statement that you made thank you.

CHAIRPERSON: Mr Vally.

MR VALLY: Thank you. You also advised us that you raised this issue with the co-ordinating committee is that correct?

DR KNOBEL: I know that I said that in my testimony last week but I want to just explain that. I have explained to you this morning that General Liebenberg was retiring at the end of October. I addressed this issue with him personally. I believed that the chief of staff finance was present. It was at a meeting not an official meeting of the co-ordinating committee but those were both members of the co-ordinating committee that had met about the whole Croatian issue. And that is why I said it was brought to the attention of the co-ordinating committee. Well if I can qualify that. It did not mean that a special meeting was called where all the other members that had sitting on the co-ordinating committee was involved. But I certainly mentioned it to General Liebenberg as I testified this morning without mentioning that he was personally implicated. I wanted to see what reaction I would get. I certainly mentioned it later on also to General Meiring, who was also a member of the co-ordinating committee. At that opportunity after I spoke to Dr Jan Lourens which was in October I spoke to General Liebenberg discussing the Croatian problem and just before he retired and I confronted him with that information.

MR VALLY: Now let me understand this. You have a report from a person who you believed worked for a private company and he told us it was a front company. But he used to work for a front company before he transferred to SRD. That is Dr Jan Lourens. You are aware of that. Before he moved to SRD he was working for Delta G.

DR KNOBEL: Yes I believe that is correct.

MR VALLY: That is right and Delta G was a front company?

DR KNOBEL: That is correct.

MR VALLY: Fine. He tells you that he is manufacturing applicators for poison, for toxins at the request of Dr Wouter Basson. The project officer of Project Jotta which is specifically tasked into looking at possible toxins. Especially biological toxins which could be used in chemical and biological warfare. In retrospect don't you think your view that this has nothing to do with Project Jotta and therefore I am not interested is not a valid one?

DR KNOBEL: Mr Vally SRD was formed in the early eighties and Protechnic emerged out of it. At that point I was concerned that these were things that he was telling me about that had happened in the eighties. At that stage Roodeplaat had not been functioning fully. At that stage I had no knowledge of what emerged out of the trunks only in 1997. I had only this statement by him. I also had counter-intelligence reports like the one that you put in front of me the other day and which I gave you my opinion about the counter-intelligence reports in general. Where there were various allegations also made about Dr Jan Lourens and we can go and get that documentation.

I wasn't certain what this man was saying to me whether it was true or not. But I listened to it and I said to him I don't want anything further to do. If you have that kind of information the right place to go and report that is in the authorities. And the authorities at that time was díOliviera Investigation. And I sincerely hope that he has told that to you. I made it afterwards at the 10 year anniversary of Protechnic where I saw him again I asked him what had happened he did not give me a direct answer. We were in a social function but he then indicated to me that he was going to testify in front of the TRC and I said to him all that you must remember is just tell them the truth. And I am reasonably satisfied with the evidence that he gave you. I can confirm what he said. It is true.

MR VALLY: At this stage were you made aware by OSEO that they were concerned about certain financial irregularities regarding transactions carried out by Dr Basson? We talking October 1993.

DR KNOBEL: Good heavens Mr Vally I have read a statement to you this morning Sir.

MR VALLY: Yes we have heard that. I just want you to confirm that yes or no?

DR KNOBEL: Yes.

MR VALLY: Fine. So there was reason to be concerned about Dr Basson's activities?

DR KNOBEL: Absolutely.

MR VALLY: And here you getting information that he is instructed by Dr Basson to make applicators which inject poison or shoot poison pellets into people and you say it doesn't concern Project Jotta. I don't need to take it further.

DR KNOBEL: Mr Vally, Mr Jan Lourens and I didn't discuss the gadgets and exactly what they could be used for and what their purpose were. He said to me that he had made certain gadgets and instruments. I wasn't even prepared to listen to what they were about. I didn't want to know about it. So I didn't have all the detail that you are now referring to. You are putting words in my mouth. I did not even discuss it with him.

MR VALLY: Well tell us what he told you?

DR KNOBEL: He said that he was a man with engineering background. That he could produce substances with engineering capability and that he was asked to make certain instruments and gadgets such as umbrellas and screwdrivers. I then said I don't want to know any more about it.

CHAIRPERSON: General I am finding difficulty. I am having a great difficulty following your evidence. I thought that we understood each other very well that you understood what he said but you felt that because of the nature of the information that he was giving to you it was of a nature that it must be reported to higher authority and even referred him to the díOliviera Unit. Now did he tell you, okay maybe let's forget about what he said - toxins and all that. Did he tell you something the nature of which you felt a crime is being committed? That it is a contravention of the law in this country which is why you referred him to díOliviera? Because I mean if a man comes to me and says: "I am making screwdrivers. I am a scientist. I making umbrellas." And then you say: "No I don't want to hear about it. Go and talk to the Attorney General." Now how would you come to the conclusion that this is a matter for the ears of the Attorney General? So let us understand exactly what it is that Lourens said to you the nature of which you felt it was something to be heard by an Attorney General who is charged with the duty in the country to establish whether crime has been committed and deal with the crime as such.

DR KNOBEL: Mr Chairman I will do my best to try and say to you what he said to me. But I will sum it up by saying that I understood him to say that he had developed instruments or gadgets or I have no other name that I can use for it, that could be used to either kill or maim individuals. We did not use, Mr Chairman if you will allow me to finish. He did not go into the detail of these gadgets being made specifically for toxins or for poisons or whatever the case may be.

CHAIRPERSON: No I think for purposes of our question and our understanding that is the critical part and I think the question by Mr Vally still follows. Here is a person who is working as a scientist in a project which you associate in some way or the other with projects that you are also aware of and he says: "I am being asked by Dr Basson to manufacture instruments that can kill or maim." I think his question is even if we accept your own version and for purposes of this enquiry I am prepared to accept your own version - is it not now when you look back something which you should have dealt with in a much more thorough-going fashion than you actually did?

DR KNOBEL: Yes I am prepared to agree to that Mr Chairman but it is with the wisdom of hindsight. At the time I did not consider it to be that urgent to attack and besides that I couldn't do anything more than bring it to the attention of my direct commanding officer. Remember I said this morning that we had already at that point had the meeting with National Intelligence. At that meeting as I testified this morning National Intelligence indicated to me that they were investigating far more than the Office of Serious Economic Offences enquiry. So I, it is true I was beginning to realise that there was something amiss. I found myself in a difficult position with regard to General Liebenberg. I tried to test the water by seeing how he would react. Thereafter his position was taken over by General Meiring. The demarche situation began to appear and it was then in February the next year that I realised what the direct link was. And I testified to that effect this morning.

CHAIRPERSON: Mr Vally.

MR VALLY: And how did General Liebenberg react when you advised him of this?

DR KNOBEL: I testified this morning that he indicated to me what he had done on a number of occasions before to say: "This type of thing is dealt with by the díOliviera Commission. And as you well know up to this stage nobody has been prosecuted or proceedings been taken against by the díOliviera investigation on any so-called." And those were his words, "so-called third force activities." So he really pushed it off the table totally.

MR VALLY: You are aware of Dr Lourens' statement that General Liebenberg advised him: "I want my toys back"?

DR KNOBEL: Yes.

MR VALLY: And by that he was referring to?

DR KNOBEL: Correct.

MR VALLY: What was he referring to?

DR KNOBEL: He was referring to the gadgets that he had made for him.

MR VALLY: What else?

DR KNOBEL: No Sir I don't know what you.

MR VALLY: You not aware of the explosives?

DR KNOBEL: No Sir.

MR VALLY: The oval boxes which could explode?

DR KNOBEL: I am sorry I know nothing about that.

MR VALLY: The letter bomb mechanism?

DR KNOBEL: No Sir.

MR VALLY: Dr Lourens didn't tell you all these things?

DR KNOBEL: No.

MR VALLY: He did not tell you at all?

DR KNOBEL: Mr Vally I am trying to concentrate exactly on what he said to me. I am, I cannot recall him saying anything about - did you say letter bombs?

MR VALLY: Mechanism for a letter bomb?

DR KNOBEL: No I am not aware.

MR VALLY: I am referring to sheets of explosives?

DR KNOBEL: Not aware of that.

MR VALLY: I am referring to Omo boxes which were bobby trapped to explode?

DR KNOBEL: Mr Vally I have said to you already the minute he started talking about gadgets I indicated to him that I don't want to have this type of detail. He did not give me that type of detail.

MR VALLY: But he did tell you he told General Liebenberg about it?

DR KNOBEL: He did tell me. When I said that I don't know about this he indicated to me that he knew that I didn't know about it and he also knew where the instruction originated from. He said: "I was at a social function where General Liebenberg approached me and asked me 'Are you looking well after my toys?' Or: 'Are you hiding them?'" Words to that effect as I testified this morning.

MR VALLY: And General Liebenberg was head of Defence Force at the time?

DR KNOBEL: No Sir at that time I think he was the Commanding Officer of Special Forces. He was certainly the head of the Defence Force when I got the information. But he was referring to General Liebenberg as the Commanding Officer of Special Forces where he was working at that time.

MR VALLY: At the time when you got the information and you raised it with General Liebenberg he was head of the Defence Force?

DR KNOBEL: That is correct.

MR VALLY: So as far as you are aware up to the top most structure in the Defence Force knew about these killing instruments that he was manufacturing?

DR KNOBEL: Mr Vally (...intervention)

MR VALLY: As far as you are aware? Your impressions?

DR KNOBEL: I don't even agree with that statement.

MR VALLY: Fine.

DR KNOBEL: All that I had was that Dr Lourens indicated to me that General Liebenberg knew about this. When I tested the water with General Liebenberg he ignored it totally and said: "Man don't pay any attention to that nonsense it has being dealt with by the díOliviera Commission in the past and they have not prosecuted anybody." And that was that. So I can't say that I was aware that at the level of the chief of Defence Force he had known about it. I only had the story that Dr Jan Lourens told me.

MR VALLY: Well let's go on.

CHAIRPERSON: Excuse me Mr Vally. There are questions from the panel just to clarify issues.

MS SOOKA: General what was your impression about what Dr Lourens actually wanted from you by telling you this story?

DR KNOBEL: At the time I think he was concerned about his own personal position and he was uncertain as to whether he should take it any further. In that regard in my opinion I reassured him by saying there are authorities that you can go to with this and my advice to you is to take it to those authorities. At that time I was aware of the fact. In fact I was reminded of it constantly by General Liebenberg that there had been commissions appointed by the President of which the latest one after the Steyn Report was the díOliviera Commission. When he gave me this information I thought to myself that is the type of thing that obviously would resort under the díOliviera investigation. And that is why I said to him my opinion is that you should take it there.

MS SOOKA: You see I think we are having some difficulty with the fact that in October you already know of the cloud of suspicion that lies in the realm of what Dr Basson's activities related to. Here comes somebody to you who tells you that he is involved in making instruments responsible for killing. And you keep on affirming before us that you have acted correctly. And my inclination would be that you would actually go yourself to the Attorney General concerned and make a report to him of the conversation that takes place between you and Dr Lourens. I certainly would have done that. And so I find it even stranger that in your position, a man responsible for Dr Basson because he reports to you functionally, I think that is what you say in the report. And Dr Lourens is actually complaining to you about an instruction he receives from Dr Basson, some one under your care and supervision. And all you say to him is: "Go to see the Attorney General." But you yourself don't do anything more other than reporting to this committee.

DR KNOBEL: No I am sorry Ms Sooka I am sorry I did not do nothing. I confronted General Liebenberg. I thereafter informed General Meiring. That is my direct line of command. You may be right. If I look back now it might have been wiser for me to go directly to the Attorney General's office. But if you consider the position that you have in a state department like that it is not the normal channel of command and control that any officer in a defence force would follow. The right channel of command would be to go to the commanding officer. Now the fact that General Liebenberg had been mentioned that concerned me certainly. As I said to you I tried to find out how he would react to it. I told you how he reacted. But thereafter when General Meiring took over as chief of the Defence Force I did inform him about that. But it wasn't until and I say that again, that is the truth whether it was unwise of me or not may be so. But that is the truth. It wasn't until we had the briefing from National Intelligence in February that we really realised that this was in fact proudly related to the project or around the project. And that is where the idea emerged of two channels of command and control which I have then shared with National Intelligence, with Chief of Defence Force, with the Minister of Defence and with the President.

CHAIRPERSON: What could have happened General if for instance you had called Basson and said: "Listen," and confront him and say, "now listen this is what I hear. Here is Lourens, this is what he says to me about you. What have you got to say? I don't believe it but I need to make sure at this stage that I have a clean house in which I am dealing."

DR KNOBEL: I understand your question Mr Chairman. I confronted Basson on many occasions before. Mainly about the financial abuse.

CHAIRPERSON: No I am asking about this particular thing. What could have been wrong if you had confronted him about this issue? I know that you testified earlier to say you know it was the sort of thing that you had no confirmation on and I think that is what you are implying also by saying it is only when in February you had sufficient briefing from NIS that you felt something was really amiss.

DR KNOBEL: That is correct.

CHAIRPERSON: But here is a, I mean you see part of the questions that I always ask is we are at a stage where we are dealing with a negotiations process. In fact in 1993 we had signed a Constitution which has got a charter of human rights and we are heralding in a society that was going to be premised on notions of democracy and human rights and whatever. And here you get told at that critical juncture that your people are manufacturing maiming and killing weapons and all you are telling us is that you couldn't confront the person who was being alleged to be behind that programme. All I want to ask at that time taking into account everything else what would have gone wrong if you had called Basson and confronted him?

DR KNOBEL: Mr Chairman I was trying to answer that question by saying to you that I had regularly confronted Basson in the past. I confronted him once again. I did not give him the information that Jan Lourens had given me. I confronted him and said: "Are you certain that there is anything that you are doing inside this project which is illegal or criminal in nature?" And I testified to that effect this morning that he constantly indicated that he was certain that he was being confused with somebody else. With the wisdom of hindsight we may say that I should have acted immediately more strongly at that point. I realise that but the fact of the matter is exactly as I explained it to you this morning.

CHAIRPERSON: You see General the inference becomes irresistible that even at that stage you realised that this is something bad. This is something I ought not to sanction. And the inference is irresistible that you then reconcile yourself with that situation and said to yourself look I don't want to know. I don't want to know in fact I regret that I have known even as far as I have by allowing Lourens to talk to me in these circumstances. And I think the question I want to put to you is; don't you in fact think it was a dereliction of duty on your part given your position? Let me ask the question; did you investigate? Did you set an enquiry in motion that was going to establish the correctness or otherwise of what Lourens was saying so that if needs be as Surgeon-General you should take or initiate disciplinary proceedings against the people concerned? Don't tell me about the Attorney General. That is another arm, it deals with issues of State crime. There are I am sure procedures within your department where if people go beyond their mandate they are disciplined.

Did you on the basis of what Lourens had told you initiate an investigation that might have lead to disciplinary action and if not, why?

DR KNOBEL: Well the answer to the question is no I did not. And the reason why is because I was under the impression at the time and the fact that I had made it possible for Basson to be seen by National Intelligence personally and they could question him on their own would reveal whether this was true or not. And that is why I asked this morning that National Intelligence should also be asked to testify in this regard.

CHAIRPERSON: Did you, okay having done that we are in February now having been alarmed to the extent that you were by the NIS report did you initiate any disciplinary proceedings against Dr Basson, Dr Lourens or whoever was involved in that nefarious (...indistinct)?

DR KNOBEL: No I did not Mr Chairman and there was also a good reason for that.

CHAIRPERSON: Let us hear the reason for that?

DR KNOBEL: At that point I testified this morning, at that point the main issue was to deal with the demarche in South Africa's international position. This situation of Basson that was then being addressed by not only myself by National Intelligence, by the Chief of the Defence Force, by the Minister, by the President and very soon after by the new Minister, by the new President became an extremely difficult thing to handle. Even to the extent should he be re-employed to get him under control.

CHAIRPERSON: Now what was the nature of dealing with this matter? What was the end result? Was it being dealt with for purposes of keeping it under wraps because of the sort of signals that were coming out it is such a thing that - couldn't you have instituted an in camera disciplinary enquiry that would have dealt with this matter in a manner that shouldn't really now put you on your defence at this stage? Because we are sitting in times now when we can all see and say now look what sort of responsibility did this man carry on his shoulders? Now maybe if we understand the nature of the enquiry. When you say NIS and everybody else were dealing with this matter what was the end purpose? What was the purpose? Was it to contain it so that it does not get out there and jeopardise national security interests? Or what was the aim, was it to cover it up?

DR KNOBEL: No it was certainly not to cover it up because it was known to everybody who was then concerned Mr Chairman. But I will try and explain it to you in this way. Basson was a key figure in the process of discussing with the American and the British experts the details of our programme. Quite frankly the briefing I gave to the Americans and the British was the type of briefing that I had been given for how many times to all the new ministers, etc, etc. It was the briefing about the management and about the general direction and the guidelines that were given and how the process were mandated and that sort of thing. But in terms of the scientific work on the ground the only person who had that knowledge and insight and could be able to discuss it with the American experts and the British experts that had come with their teams was Basson personally.

CHAIRPERSON: Now let me ask a blunt question. Was there a fear perhaps that if the approach was one like for instance disciplinary action and stuff like that, that it would do more harm than good? That the man might flee the country and then expose the country to more danger than actually trying to contain it?

DR KNOBEL: Yes I think you have summed it up very well Mr Chairman that was very proudly what we had in the back of our minds.

CHAIRPERSON: Mr Vally.

DR RANDERA: Sorry General can I just get that clear because if I remember rightly what had come out of the Steyn Report that is December 1992 Brigadier Basson is one of the people actual singled out within that report for dismissal.

DR KNOBEL: Yes.

DR RANDERA: So in a sense the President had actually made a decision given all your concerns about proliferation and him going off to America or Iraq or Libya or wherever he would want to go to but a decision had already been made to dismiss him. Irrespective of the fact that he had actual headed the chemical and biological warfare programme. Irrespective of the fact that he was actually heading 7th Medical Battalion, that he was a cardiologist. All these concerns had been taken into consideration but he is brought in into the citizens force. You see I also have this concern. Here you are as the head of the medical side of the army and I remember very clearly your coming to the medical, the health hearings and I am sure you are very proud of what you have accomplished in the period that we are looking at. But you are told that the head of your, the person who is heading your 7th Medical Battalion, the person who is heading chemical and biological warfare may be involved in activities. In covert activities and yet you don't take any action. And I think that is what we are trying to understand here as to what was your actual frame of mind at the time. Because we are not dealing in the abstract here. We are dealing in a situation where out there in the media there are a number of reports coming out on third force activity. The President actually appoints one of the people from the military himself at the time. You get a report back. Seven months and not even seven months - ten months later because it is October 1993 that you say that Mr Lourens came to you. Ten months after General Steyn had said this person should be dismissed from the army and yet no action is taken besides a cursory discussion with General Liebenberg. Not even in an official capacity as you yourself said. And also the Intelligence Services had, had discussions with you. Did you share this information? Never mind the Attorney General. Did you share this information with the Intelligence Service?

DR KNOBEL: Yes I did later. At that time (...intervention)

DR RANDERA: At the time?

DR KNOBEL: No Sir I did not. At that time I was satisfied that Basson was persuaded and I explained to you this morning that I had some difficulty in persuading him to cooperate with National Intelligence. And I was assured in myself that they would now reveal or unravel whatever other activities he may have been involved in. But I have to admit to you that maybe I should have acted more strongly at the time and it certainly looks like it with the wisdom of hindsight. But I am giving you the facts as they happened. I was at a loss as to how to deal more. If you say that I could have gone to díOliviera myself certainly I could have done that. I think it is not the type of thing that a person in the military environment does. The person goes to his direct commander, which I did. To make it clear to him that I was aware. I was becoming aware of something. Whether it was true or not I had no proof of what Dr Jan Lourens said to me. I had only the story that he told me. I was alarmed by the story. I told it to the Chief of Defence Force and immediately thereafter to his successor.

DR RANDERA: General what was the time period between informing General Liebenberg and then going to General Meiring?

DR KNOBEL: It was about a week later. I said this morning that after Dr Jan Lourens saw me General Liebenberg retired at the end of October. So it was within that period of two or three weeks that General Liebenberg retired. Immediately thereafter General Meiring took over. I explained to you this morning that I didn't have to tell General Meiring anything about the project. He was part of the CMC, he knew exactly what the broad guidelines were and the mandate was, etc, etc. And I informed him of this information that I had got from Lourens. So I was under the impression I had done as much as I could do at that stage. I agree with you that it would have been wiser now looking back to insist that there should be a board of enquiry as I explained right at the beginning of my testimony. All members in the medical service are not only under the disciplinary code but also under the professional code of conduct of the medical or other professions that they are registered with. You are right that would have been proudly wiser at the time. But we got caught up and when I say we, not only myself the whole Defence Force, the whole government got caught up in the demarche situation. In which this man played a key role. He was being offered to the American, the British I understood to expose to them exactly what our programmed was about so as to reassure the government about the legitimacy of the programme. They certainly commented otherwise on the programme but by that time, that was after February I was far more informed than I had been in October. By that time we shared that information with government and we said what have we have to do with Basson. If we get the testimony of National Intelligence they will confirm to you that one of the issues that was discussed was what do we do with this man. It was an issue that was carried over to Mr Mandela also, what should he do with the man. You know exactly what happened afterwards when Mr Mandela approved that he be re-appointed there was an outcry in the country about the re-appointment. But it shows you in what difficulties the government was as to what to do with this man with the information that he has, with the background that he has.

DR RANDERA: General just one last question. Are you now saying that a decision is taken to dismiss Brigadier Basson by the President no lest and within the forces, Intelligence Services, Military Services, you were contravening an order?

DR KNOBEL: No Sir I don't (...intervention)

DR RANDERA: Because we not, in terms of the events that took place December 1992, these concerns that you expressing are post the decision. A decision has been taken already to dismiss the man.

DR KNOBEL: No Sir you are not correct there. He was dismissed as a member of the permanent force. He was placed on the citizen reserve which happens to everybody who is pensioned earlier. He was not actually dismissed, he was put on pension. But what is a fact is we discussed when I say we, Mr Mike Kennedy and I discussed with Mr de Klerk personally the fact that he was actually illegally or unlawfully dismissed or unlawfully put on pension. He was never charged with anything. He was never given a chance to give any account of the reasons or whatever. And the fact is when we discussed it with Mr de Klerk by the time the demarche took place we indicated to him this man is going to create a problem for us. We need to take him under control again. And Mr de Klerk did not want to do that and he said I will leave that for the new President to decide about and that is exactly what happened.

CHAIRPERSON: Ms Sooka. Sorry Mr Vally.

MS SOOKA: General is it possible that one of the reasons you didn't actually do anything about Mr Basson at the time Lourens came to see you is perhaps the suspicion that you already had that possibly what Basson was doing had been authorised by another chain of command other than yourself?

DR KNOBEL: Ms Sooka I think that realisation of what you are saying now that took place in February. What you are saying now is what I realised in February. That was when we had the briefing from National Intelligence along with the Minister of Defence.

MS SOOKA: Sorry just to, I mean I have heard what you have said but did it ever occur to you I mean the name of a general is mentioned, General Liebenberg you have discussed, you have informed us before that you confronted him but you didn't actually mention that it was about him. Why was that? Why did you not say to General Liebenberg; "This man has come to me to tell me that on your instructions he is manufacturing this stuff and that he is being instructed to do it by Wouter Basson"?

DR KNOBEL: Yes I am trying to be quite honest with you I can't explain that to you but I simply say to you that at a very short date thereafter I said so to General Meiring that, that was the information I have.

CHAIRPERSON: But Meiring had not given an instruction to Wouter Basson?

DR KNOBEL: No I know that Mr Chairman.

CHAIRPERSON: See that is exactly why we are having a difficulty you know. You allow a person to - well you don't allow him but you know at a time when you could have effectively dealt with the thing by raising it with him you don't and you raise it with somebody else who can easily take the attitude; "Oh well it has nothing to do with me. I never gave that person an instruction." In fact if Meiring never did anything about it who can blame him.

DR KNOBEL: Mr Chairman I think that I may have made a misjudgement there but I was of the opinion that if there was any truth in it that General Liebenberg would have come out with it. He did not. He dismissed it. He ignored it. He reacted in such a way that I had some uncertainty in my mind whether it was true or not.

CHAIRPERSON: What would a cynic say? What would you say if a cynic say well you just took the attitude that: "Well it is clear now we are heading for an election and it may well be that the ANC are going to come in. Let that be their problem. We don't care."

DR KNOBEL: Mr Chairman I am sorry I cannot agree with you that a person in the civil service in my position had the responsibility to decide whether it would affect the election. That might have been considered at governmental level. I certainly didn't consider that as a factor. In fact I agreed that Mr Mandela should be informed as quickly as possible after the election. We knew that the balance of power was going to shift. And we were in, I was eager to get that under the attention of the new government.

And then Mr Chairman the new government had exactly the same problem.

MS SOOKA: I think that precisely is what concerns us. You see Mr de Klerk in his evidence before this Commission has said: "When this problem came to my notice I dismissed the man. The new government in fact re-hired him." But you are telling us in your evidence that as early as February the old government also had a problem with how they were going to account to other countries on this programme. So you created the monster and you left it for a new government to deal with.

DR KNOBEL: Ms Sooka both of these are my governments. I have acted in the civil service in support of both governments. So I really do not accept saying that it was my government. Both governments were my governments. But let me say this quite categorically when it was brought to our attention in February Mr de Klerk was informed about this. Mr de Klerk was told that in fact the dismissal was not fair, was not based on judicial processes that had been followed and this man was in a position where he could actually sue the government as some of his colleagues have done since then. But the fact is it was then in the political domain. I said this morning the impression I got and I stand by that was that at that point the most important issue was deal with the demarche get that off the table. We can deal with the abuses or possible abuses along a different process.

And I was satisfied that it was now brought to the attention of everybody that I could possibly bring it to the attention to. Where the Chairman is correct I could have instigated a board of enquiry of my own but that would be far less important than what is taking place at governmental level surely.

MS SOOKA: May I just follow that up with one more question. Would it be fair to say that in reality you or the old government couldn't really afford to have this man placed in the permanent force because in reality he was needed to actually deal with the problems that had arisen. And so never mind the legal technicalities of his dismissal or his pensioning off. The reality is that control of this programme from a technological point of view rested solely with one person, Dr Basson.

DR KNOBEL: That is true.

MS SOOKA: Thank you.

CHAIRPERSON: Mr Vally.

MR VALLY: General Knobel we gather from your evidence that OSEO was aware in a letter dated the 8th of December to you, 8th of December 1992 to you that there may be certain financial improprieties regarding Dr Basson's activities?

DR KNOBEL: That is correct.

MR VALLY: You weren't aware of it before this date?

DR KNOBEL: No Sir I testified this morning that when I met with National Intelligence at that meeting on the 24 of September 1993 I briefed them also about a number of counter-intelligence reports and investigations that had taken place within the Defence Force.

MR VALLY: No the question is this that before a letter from OSEO - the Office for Serious Economic Offences on the 8th of December 1992 you as project manager for Project Jotta and Dr Basson who fell under you as project officer for Project Jotta, you were not aware of any financial improprieties on his part?

DR KNOBEL: No I have just confirmed that I was. I said that at the 24th of September meeting with National Intelligence I referred back to counter-intelligence reports prior to 1992 where he had been investigated by Chief of Staff Finance, by Chief of Staff Intelligence with regard to activities that he was involved in what originally was thought was to be part of the project and it was in fact not part of the project. It referred to the house of Murton, the Murton House position in Pretoria. It referred to the use of aircraft of - I forget now what the name of business was. I think Aeromed Services, words to that effect. Those things had been investigated before 1992 within the Defence Force by the Chief of Staff Intelligence and by the Chief of Staff Finance and they had dismissed it as not being part of the project or not being part of Defence Force. In fact they accepted the explanations that Basson had given them.

But the answer to your question is yes I was aware that there had been internal investigations in the Defence Force into possible activities by Basson in terms of financial gain.

MR VALLY: You state further, so you were aware already by 1991 there was some concern regarding money and therefore I assume you were more diligent thereafter?

DR KNOBEL: Oh yes Sir.

MR VALLY: You also state in your statement you read out this morning that during February 1994 and I quote you: -

"It was abundantly clear to both the Minister and myself that there were definite indications that Dr Basson had acted outside the mandate of the project and had probably abused capabilities that had been researched and developed in the project."

DR KNOBEL: That is correct.

MR VALLY: But if you look at TRC 28, 7th of May 1994 a letter from Dr Basson to you and he is still project officer of Jotta on the 7th of May 1994.

DR KNOBEL: I beg your pardon Mr Vally?

MR VALLY: I am sorry, TRC 28.

DR KNOBEL: You are saying that he was still project officer of Jotta that is not true.

MR VALLY: Well he signs his letter as W Basson, Project Officer Jotta, Brigadier and it is addressed to you, well your name is on the bottom of the letter - D B Knobel, Project Leader Jotta, Lieutenant General.

DR KNOBEL: He was certainly not the project officer any longer. He may have signed the letter like this and he may have been involved with the finalisation of this particular problem that existed at the time but the project officer from the 1st of March was Colonel Ben Steyn of 1993.

MR VALLY: I see because this letter is headed "Extremely secret. Only copy." It has got "Enquiries; Brigadier W Basson" His address is given as SAMS head office and a private bag in (...indistinct) is set out there. All indications are on the face of this letter that he is still intensively involved in this project. Did you ever refute this? Did you ever write a letter to him saying: "Please refrain from calling yourself the project officer of Operation Jotta"? Did you ever react in that way?

DR KNOBEL: No quite honestly I didn't notice this and I would have reacted if necessary but I think if I see this letter I remember it. It was in answer to part of the investigation that was being carried out about the financial abuses and we wanted an explanation from him and this is the explanation that he had given at that time. I believe if you give me time I will go back to the CMC meetings and I believe it was discussed there. It is incorrect for him to write down here project officer. He was certainly not project officer any longer.

MR VALLY: Well let's go on. I want to go through this letter with you. Firstly the first paragraph. It says:

" Final report,

sorry it is in Afrikaans. I will read in Afrikaans to you.

"Finale verslag VSA dollar voorskot."

Can you just briefly tell us what this is all about? Very briefly please?

DR KNOBEL: No I am afraid Mr Chairman it is not possible. It is a highly complexed story that is being investigated by the OSEO and I would need the help of OSEO to give you the exact explanation of this.

MR VALLY: Alright.

DR KNOBEL: But I do know this that he had required some cash in dollars which had been given to him. As he says there on the 28th November 1991.

MR VALLY: Now that is the first question.

DR KNOBEL: And it was required to deal with the flights there etc as he explains here.

MR VALLY: Fine. My first question is by 1991 there were people in the Defence Force who had already heard of certain financial improprieties regarding Dr Basson?

DR KNOBEL: That is correct.

MR VALLY: But he was still given a lump sum of dollars.

DR KNOBEL: That is correct.

MR VALLY: To spend and then account for and he accounts for it on the 7th of May 1994. As I see from this report.

DR KNOBEL: Yes that is not correct. The co-ordinating management committee approved the availability of this sum of money. The questions arose at a much later date as to exactly what the expenditure of that money was about. And it was part of the Office of Serious Economic Offences' investigation and he was asked for an explanation so that I could give the information to the OSEO. And I think I can confirm that by going back into all the files and the OSEO investigation. And that was when he wrote this letter.

MR VALLY: We will come back to that because I want to go through this letter with you. The co-ordinating committee also knew the allegations of financial impropriety regarding Dr Basson?

DR KNOBEL: Oh yes.

MR VALLY: But they were still at this stage and I will go through the periods with you, but in November 1991 although they were aware they were still willing to make an advance of a large sum in dollars available to him.

DR KNOBEL: On the 28th of November 1991?

MR VALLY: Well for example.

DR KNOBEL: Yes certainly.

MR VALLY: They did. Alright he says and I won't read the whole letter but I will quote verbatim from it. He was given a certain;

"dollar cash amount required for the next six months for flights through Africa to Europe. For the transporting of samples and material."

Are you aware number one that there were flights through Africa to Europe transporting samples I suppose you could call it?

DR KNOBEL: Yes.

MR VALLY: Samples and material?

DR KNOBEL: That is correct yes we were aware of it.

MR VALLY: Was this a two-way trip? Were things coming in as well as things going out?

DR KNOBEL: No Mr Vally my impression was these were substances that we were obtaining in front agents and so on and within Europe and bringing back to South Africa.

MR VALLY: You are aware that Dr Lourens said he had taken one of his applicators through to Britain at the request of Dr Basson?

DR KNOBEL: I was not aware of that at all.

MR VALLY: Did Dr Lourens ever tell you that?

DR KNOBEL: No Sir.

MR VALLY: Alright. It goes on: -

"To pay for the purchasing of fuel."

Are we to assume that he flew in his own plane or a chartered plane?

DR KNOBEL: A chartered plane probably.

MR VALLY: And that was common occurrence that Dr Wouter Basson flew in chartered planes?

DR KNOBEL: Yes in fact it was policy. It was policy that no dangerous substances like chemical substance could be flown on international flights. It had to be done in private flights or on chartered flights.

MR VALLY: Fine. It goes on: -

"Landing fees and "discretionary costs." "Cash payments to airport security officials for procedures with regard to clearances and searches, to make this proceed smoothly."

What you are in fact saying is that there were bribes to make sure that your plane was not searched?

DR KNOBEL: That is correct. His plane.

MR VALLY: His plane was not searched. And it says an amount of 75 000 US dollars is obtained in cash from an HSI front for this purpose.

DR KNOBEL: That is correct.

MR VALLY: HSI?

DR KNOBEL: Chief of Staff Intelligence.

MR VALLY: And that is the same General Jophar van der Westhuizen?

DR KNOBEL: Mr Vally yes I think it is but I would like to just confirm exactly when General van der Westhuizen was replaced by General Vebeek. We need to check that date but certainly it was either General van der Westhuizen or General Vebeek.

MR VALLY: Well we know in terms of TRC 14 which you claim was not accurate which is signed by C P van der Westhuizen.

DR KNOBEL: Is that the same date?

MR VALLY: It is in March 1992.

DR KNOBEL: Well that doesn't prove that it was still General van der Westhuizen.

MR VALLY: Right but we know.

DR KNOBEL: At some point he was replaced by General Vebeek.

MR VALLY: The issue is this; it is referred to as an HSI - Chief of Staff Intelligence front company and it says (pass load flights.)

DR KNOBEL: That is correct.

MR VALLY: That Dr Wouter Basson got 75 000 dollars upfront from them.

DR KNOBEL: That is correct.

MR VALLY: We know according to this letter TRC 14 that Lieutenant General C P van der Westhuizen appeared to have some knowledge of Operation Jotta.

DR KNOBEL: He was a member of the co-ordinating management committee. He had full knowledge of it.

MR VALLY: Well either he had full knowledge or he didn't because you very strongly disagreed with TRC 14 in that you said it was not correct that for example General Neethling was involved.

DR KNOBEL: Mr Vally let me try and explain that again as I tried to explain it to you the other day. The Chief of Staff Intelligence was a member of the co-ordinating management committee. He was responsible for security of the project. He has field workers who is not informed about the project but he instructs them to provide information about what they find in the field because that is the only way he can determine whether there is security leaks within the organisation of the project. This is the kind of report that comes back to him and he brings it to my attention. This is what the field workers of the Intelligence community thinks about the Defence Force and then particularly here with regard to Project Jotta. This is what they have picked up on the ground from sources and from discussions that they have heard. This gives us an idea of whether security is being breached or not. I am not saying that Jophar van der Westhuizen personally didn't know about the project. I am saying this is what he sends to me as a report from his field workers. You know (...intervention)

MR VALLY: Alright let's just stop right there. You have got TRC 14 in front of you?

DR KNOBEL: Yes.

MR VALLY: Fine look at paragraph 22 page 6. I will read it to you: -

"Dr Basson also mentioned that Major General Lothar Neethling was fully informed regarding Project Jotta."

Let's just stop there.

DR KNOBEL: Which paragraph is that please?

MR VALLY: I beg your pardon. Paragraph 22 page 6, the top of the page.

DR KNOBEL: Yes I have got it thank you.

MR VALLY: This wasn't a field worker. It wasn't one of his Intelligence officers running around doing investigations. General Jophar van der Westhuizen says Dr Basson also mentioned. Now is there a better reason? I mean clearly he is in a co-ordinating committee or his predecessor or his successor you say depending on the dates but we talking 1992 now. We got a letter TRC 28 which says in 1991 75 000 dollars was forwarded to Dr Basson by a front company. It doesn't say a military front company. It says particularly a front company of the Chief of Staff Intelligence. Is that right?

DR KNOBEL: That is correct.

MR VALLY: It appears to me as if what he alleges in paragraph 22 of TRC 14 is based on inside information. A personal report from Dr Basson to him.

DR 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.

DR 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.

DR 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?

DR 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?

DR 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?

DR 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?

DR 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?

DR 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.

DR KNOBEL: Yes that is incorrect.

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

DR 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?

DR 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?

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

MR VALLY: Right.

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

MR VALLY: He was accountable to you of course?

DR 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?

DR 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.

DR 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.

DR KNOBEL: Yes Sir.

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

DR KNOBEL: Yes.

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

DR KNOBEL: That is correct.

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

DR KNOBEL: Yes.

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

DR KNOBEL: Yes Sir.

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

DR KNOBEL: That is correct around the financial aspects.

MR VALLY: Oh no, no, no.

DR 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.

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

MR VALLY: You talked about abuses of the project?

DR 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?

DR 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.

DR KNOBEL: Let me just finish please?

MR VALLY: Alright fine.

DR KNOBEL: If you now look at this statement here. This is a statement of expenses that he had incurred and he signs it as project officer incorrectly. He should have written down there previous project officer or whatever the case may be. But this is then submitted to the OSEO investigation as part of the information that he is now giving in terms of questions that they are also asking.

But it is also mentioned within the CMC meeting and you will look at the CMC meeting of the 2nd of December 1994 from Appendix J you will see that under the heading: Outstanding claims at paragraph 3 there is W Basson and he explains some of the costs that he incurred in terms of his travelling fees, etc, etc which was incurred with relation to the Croatian situation and with regards to the arrest. He was arrested in Switzerland as I indicated before.

And that was considered to be reasonable by the CMC. Here you see exactly who was on the CMC; the Chief of Staff Finance was there, the Chief of Staff Intelligence was there, the Brigadier from the financial section of the Defence Force was there and Colonel Steyn as the project officer was there. And some of these expenses were then approved there. I am saying to you - I am not necessarily saying that all the expenses that are have included in this particular letter are addressed there but I am illustrating to you that those kind of expenses were approved by the CMC.

MR VALLY: You see and on the CMC I see Brigadier Meiring, yourself.

DR KNOBEL: No General Meiring.

MR VALLY: I beg your pardon, General Meiring I beg your pardon; Lieutenant General Knobel that is yourself, Lieutenant General Verbeek, General Major Broker.

DR KNOBEL: Ja that is exactly what I have now read to you I just mentioned the posts that they occupied.

MR VALLY: Brigadier Koertzen.

DR KNOBEL: That is correct.

MR VALLY: And Brigadier Basson.

DR KNOBEL: That is correct.

MR VALLY: And Colonel Steyn.

DR KNOBEL: Yes.

MR VALLY: The question I have to ask you is you believe he is responsible for all these improprieties, there allegations of financial improprieties from 1991. You are worried that he abused the programme and you are convinced of this by February 1994. This is a letter dated, the one I have read to you now TRC 28 is dated 7th of May 1994. These minutes you are now referring me to are dated 2nd of December 1994 which approves the total sum of R240 000.

DR KNOBEL: Yes.

MR VALLY: To be given to Brigadier Basson. How seriously did you take these allegations against Brigadier Basson if you were still willing to pay him in December 1994? And this is a new document we still have to go through them. R240 000?

DR KNOBEL: No I am afraid there is a misunderstanding Mr Vally. Brigadier Basson's activities during that year was to finalise aspects, financial aspects around the project with regards to the Croatian issue, with regards to what had happened in Switzerland. He was arrested, he incurred some expenses in terms of his arrest. The Defence Force took responsibility for all those expenses and for his legal support, etc that was given to him. He was asked to put in front of the CMC, in fact in front of the Chief of Defence Force the expenses that he has incurred and then he was reimbursed after it was properly evaluated by the Chief of Staff Finance. And here you see specifically Brigadier Koertzen he was the man who dealt exactly with those sort of funds of the project.

At the same time all this information had been available to the OSEO investigation and they are still conducting their investigation at this very moment. If they should find that there were expenses incurred by him which were unlawful or criminal they will certainly come out with that finding. And I will support them in that investigation.

MR VALLY: Well we will come back to that because that talks about money being given to him and TRC 28 the 7th of May 1994 letter refers to an advance given to him which he is trying to justify.

DR KNOBEL: No I understand what you saying but it also says that it was from CSI and I am not entirely sure whether those funds are project funds or CSI's own funds. And I think that type of information we can only get from CSI.

MR VALLY: Well let's go on. This is now May 1994 we are looking under (E). We talked about 36 000 dollars given to Dr Choo and under (i) 2500 dollars are legal costs. Under (ii) you say the pre-active closing. I assume that is for pro-active?

DR KNOBEL: Yes that is correct.

MR VALLY: Closing of accounts and cancellation of "bewaar kluise." Did you have safety deposit boxes?

DR KNOBEL: I beg your pardon?

MR VALLY: What is "bewaar kluise" referred to here? I am looking at (ii) (E). TRC 28

DR KNOBEL: Yes, no I am looking at that.

MR VALLY: Well let me read the whole sentence and you can explain to us what it was: -

"The pro-active closing of accounts and cancellation of safes which could associate him with the project officer in case of investigations by the Swiss police. At this stage he was unsure of what the police were investigating or what they had investigated and which compromising documentation they had received from the project officer."

Do you have any knowledge of this?

DR KNOBEL: No certainly at the time we were informed. I was informed to my satisfaction and I was also assisted in this regard by CSF as I have always been in all the financial transactions of the project. And as I have said to you already we had taken it to the CMC for their final approval.

MR VALLY: We are talking about the details of what actually they were hiding from the Swiss police.

DR KNOBEL: No if you saying was I informed about the detail. Not more than what you see in front of you here. But quite frankly we need Dr Basson to explain to us exactly what he means by (...indistinct)

MR VALLY: So you didn't know?

DR KNOBEL: No Sir.

MS SOOKA: ...(inaudible) ask what they were?

DR KNOBEL: Oh yes Ms Sooka please you must understand the project officer had a free hand into how he established accounts in Europe within a broad guideline which had been approved by the Minister and which had been approved by the co-ordinating management committee. What he did on the ground to hide the fact that the client behind these transactions was in fact the South African Defence Force was to shift accounts around into various other accounts and so on to make it untraceable back to the Defence Force. These are the type of transactions that he carried out there. This is the subject of the OSEO investigation. And that is why I said at the beginning we must allow that investigation to unravel this and then ultimately explain to us what exactly he did. I am concerned about this like you are but at that time I had the backing of the co-ordinating management committee. I had on that committee co-opted Brigadier Koertzen who was the officer at the Chief of Staff Finance's offices who looked after the transactions of the project. When the OSEO investigation started I immediately asked Brigadier Koertzen to be totally involved in the investigation and to give them explanations and answers to every question that they ask here. What is more the financial officer of the project which was a man called Twita who has all the documents that are contained in the 14 trunks, all of that has been made available to the Office of Serious Economic Offences and they have been working on unravelling that now for 5 years and they are not yet in a position to come up with final charges. I have great difficulty in saying more than what I have just said to you now. The record is here I don't deny it. It is correct. I dealt with it by taking it to the CMC. The CMC approved the payment of the expenses.

MR VALLY: Mr Vally.

MR VALLY: Thank you. I am going through this in detail for a reason but I will explain that to you right now. You talk about the destruction of two hard drives which may have information regarding the project officer's previous purchases and research activities in Switzerland.

DR KNOBEL: Yes Sir.

MR VALLY: In order that the police do not get their hands on it and there is a sum of 28 000 dollars for that.

DR KNOBEL: That is correct.

MR VALLY: And you talk about the balance under (F) 1500 dollars which the project officer used to travel by car through Europe to go to the trial and thereafter to attempt to search for some person called Jaco Matt.

DR KNOBEL: That is correct.

MR VALLY: Now you have clearly indicated to us that you had no knowledge of the financial dealings. You didn't know which accounts they were. You didn't know how much there was in those accounts. Is that correct?

DR KNOBEL: No I didn't say that Mr Vally. I said (...intervention)

MR VALLY: Alright tell us the extent of your knowledge of the financial affairs?

DR KNOBEL: Mr Vally the accounts opened in Europe had to be approved by the Minister. In the documentation that was given to the Office of Serious Economic Offences that approval, the letter of approval and exactly how it functioned was drawn up by Brigadier Koertzen, handed over to me and I handed over to the OSEO so that they had the accounts that had been approved at ministerial level.

MR VALLY: My question is this (...intervention)

DR KNOBEL: Please let me just finish?

MR VALLY: No, no maybe if you understand my question before you continue. You were the project manager for operation Jotta. You personally in your capacity as Surgeon-General under which 7th Battalion fell, you in your capacity as project manager for operation Jotta - what knowledge did you have of the financial dealings of Dr Wouter Basson round about in connection with directly or indirectly operation Jotta? That is my question.

DR KNOBEL: You talking about detailed knowledge of what had happened on the ground ...(inaudible)?

MR VALLY: Well for example did you know of the 75 000 dollars given to Dr Wouter Basson?

DR KNOBEL: He reported that to me, he explained it to me and then I knew about it certainly.

MR VALLY: So you didn't know about it before that?

DR KNOBEL: No Sir.

MR VALLY: Yet you were his project manager?

DR KNOBEL: As far as, this emerged - no Sir remember the freedom of movement that Dr Basson had with regards to dealing with issues on the ground when they emerged to try and regain the funds that had been lost in the Croatian transaction was given to him directly by General Liebenberg. When he came back and he explained to us in this letter exactly how he had expended those funds it was dealt with at the CMC. Unfortunately by that time General Liebenberg wasn't here any more. But it was certainly in the time when General Liebenberg agreed that he could go and unravel the situation with the Croatian issue.

The fact that I have great difficulty in explaining exactly what he had done and whether he had done it I dealt with as follows. The co-ordinating management committee had a financial work group which was the Chief of Staff Finance, the Chief of Staff and myself and the project officer. Originally with Brigadier Basson, later on Colonel Steyn. This sort of thing would have been discussed at that level and certainly Brigadier Koertzen who is co-opted to this meeting to help us unravel this is sitting there with us saying what impression he had of this. I think if we want to really find out exactly what each of these transactions were we need to have a report from him and we need to speak to the Office of Serious Economic Offences and find out what they have discovered about this.

MR VALLY: So you yourself cannot?

DR KNOBEL: I have great difficulty in answering this in more detail than that.

MR VALLY: And you are saying that we should refer to the co-ordinating committee and Brigadier Koertzen?

DR KNOBEL: Yes.

MR VALLY: Is that correct?

DR KNOBEL: Yes Sir.

MR VALLY: Well let's look at paragraph 2: -

"It is requested that these payments,"

and again your abbreviation. What does that abbreviation stand for?

DR KNOBEL: Due to.

MR VALLY: Thank you.

"Due to the lack of proof or evidence is certified by the project leader."

That is yourself?

DR KNOBEL: That is correct.

MR VALLY: "...as expenses incurred in the interest of the

project."

DR KNOBEL: That is correct.

MR VALLY: So you were asked to certify this as justifiable expenses for the project?

DR KNOBEL: Yes Sir.

MR VALLY: Which you go on and do.

DR KNOBEL: Yes Sir.

MR VALLY: On that same letter.

DR KNOBEL: Yes Sir.

MR VALLY: Do you see the last sentence underneath W Basson Project officer Jotta, Brigadier it says: -

"Abovementioned payments are certified as incurred in the interest of the project."

What basis did you have to say that this was in the interest of the project?

DR KNOBEL: I had the basis of discussing it with the financial committee which had the Chief of Staff Finance and Brigadier Koertzen and the Chief of Staff of the Defence Force that discussed this with me and said you can go ahead and you can sign it. And we then discussed it at the CMC where the Chief of the Defence Force was also present and where the acting Chief of Staff Finance was present and there the approval was given about the refund or the repayment of funds that Brigadier Wouter Basson had expended.

MR VALLY: You see our concern by (...intervention)

CHAIRPERSON: Dr Wendy Orr.

DR ORR: General Knobel the fact that you signed approval of these expenses and that the CMC agreed with you that they were appropriate expenses seems to indicate to me that it was common practice for government funds to be used for bribes. Is that an appropriate conclusion to draw?

DR KNOBEL: Yes it was certainly common practice for bribes to be paid to be able to get the substances we required for the project. That is true.

DR ORR: Was this only within the context of Project Coast?

DR KNOBEL: Well I was only aware or I was only responsible for Project Coast. I am not aware of the other projects that the Defence Force had at that time but I should imagine that it applied generally.

DR ORR: Thank you.

CHAIRPERSON: Mr Vally continue.

MR VALLY: I put to you that the details of the project such as flights via Njamina or bribing people there or bribing people at Duala, bribing people in Croatia and the purpose for which the bribes were given wasn't within the knowledge of anyone except Dr Wouter Basson.

DR KNOBEL: It was left at the discretion of the project officer.

MR VALLY: Here is a man you concerned about his financial improprieties in 1991, you say in February 1992 that you were absolutely convinced that he acted outside the mandate of the project and had probably abused capabilities yet you accept his discretion in May 1994 and certify that the expenses he claims are correct.

DR KNOBEL: Having been supported by Chief of Staff Finance and Brigadier Koertzen in an analysis of that I certainly did that.

MR VALLY: Well ultimately you were the chief accounting officer.

DR KNOBEL: No I am not Sir. The Chief of the Defence Force is the chief accounting officer.

MR VALLY: Oh I see I beg your pardon. Of Operation Jotta?

DR KNOBEL: Of any operation within the Defence Force.

MR VALLY: Fine. Well let's move on. You personally didn't have knowledge of financial dealings. You are not a chemist are you?

DR KNOBEL: No Sir.

MR VALLY: You are not a microbiologist?

DR KNOBEL: No Sir.

MR VALLY: So on the technical side involving the chemical and biological warfare you would have to accept Dr Basson's word?

DR KNOBEL: That is correct.

MR VALLY: So what control did you have of this project whatsoever? You didn't know about the finances. You didn't know about the chemistry. You didn't know about the biology. If Dr Wouter Basson was to lie to you would you know he is lying?

DR KNOBEL: Well Mr Vally I would like to say to you that if you are in a position of the chief of an arm of service where you have 27 different statutory professions, where you have all the other State functions - personnel, logistics, finance and Intelligence and operations. And where you have to do management services you have no choice other than to rely on experts in a particular field. I do that exactly as I think this Commission operates. This Commission and the Commissioners have to rely on their experts and their field workers to advise them and to guide them. It would be totally impossible for an organisation like the medical service to have at its head somebody who can deal with everyone of the issues on his own personal basis. It is not possible.

So what I am saying to you is here is a man who became a brigadier at a very young age just before I became Surgeon-General. He obviously had the trust of the entire Defence Force and of the Cabinet because that type of appointment is approved at that kind of level. He had the total support of my predecessor. The system that was created to run this project and the way that he had operated was then running already for 8 years when I took over. It is quite impossible to then begin to question the way that he carries out his dealings. His word was accepted. I say that and it is true. His word was accepted not only by me but also by the co-ordinating management committee.

I said to you although I was project manager the control over the project was done by a committee. Whether it was wise or not I don't know. But the committee shared the responsibility. The Chief of the Defence Force was the chairman of the committee and it had three sub-committees. The one was designed to look after security. The second one was designed to look after financial affairs and the third one was the sub-committee of which Brigadier Basson was the chairman that was the technical committee that dealt with the actual research and development at grassroots level or ground floor level.

MR VALLY: So the reports that were given to President Mandela after the second demarche was based on what you were advised regarding the technical aspects by Brigadier Basson?

DR KNOBEL: Yes Sir. And what had emerged with the discussions (...intervention)

MR VALLY: And when was this again? Will you remind us?

DR KNOBEL: When Mr Mandela was President?

MR VALLY: Yes.

DR KNOBEL: On the project?

MR VALLY: Yes.

DR KNOBEL: I believe it was in August 1994.

MR VALLY: When in February 1994 you already believed that Dr Wouter Basson had abused the project.

DR KNOBEL: And I conveyed that to President Mandela.

MR VALLY: But your only basis for informing President Mandela is what Brigadier Basson advised you because you have no knowledge on chemistry and biology.

DR KNOBEL: No Sir. No, no, no Sir I am sorry that is not true.

MR VALLY: I see.

DR KNOBEL: At that stage I was being given all the support also from the OSEO to inform President Mandela about what they were beginning to discover and beginning to emerge.

MR VALLY: My question is this; as regards the biological and the chemical component of the Chemical and Biological Warfare Programme of the South African Defence Force established amongst other front companies Delta G, Roodeplaat under the 7th Battalion whose officer commanding (...intervention)

DR KNOBEL: Not under 7th Battalion. I am sorry it was not part of 7th Battalion.

MR VALLY: I am sorry. Alright fine. Under the project officer Brigadier Basson.

DR KNOBEL: Correct.

MR VALLY: Your information to President Mandela on the Chemical and Biological Warfare aspects was based on what Brigadier Basson told you?

DR KNOBEL: Originally certainly but (...intervention)

MR VALLY: I am talking August 1994 a report to President Mandela.

DR KNOBEL: No Sir I am sorry I don't agree with that.

MR VALLY: What was it based on?

DR KNOBEL: It was based on the collective information that I had gathered over the years and have learnt from my predecessor and from the other members of the CMC and from a new project officer and from the OSEO investigation and from National Intelligence.

MR VALLY: I see. And who did you rely on for technical information on chemical and biological warfare?

DR KNOBEL: Certainly in that regard that was Dr Basson. To a lesser extent Colonel Steyn.

MR VALLY: So in that regard on the technical aspects of chemical and biological warfare we are talking about technical aspects we talking about research?

DR KNOBEL: Yes.

MR VALLY: We talking about development?

DR KNOBEL: Correct.

MR VALLY: We talking about production?

DR KNOBEL: Yes.

MR VALLY: Of chemical and biological weapons you got that from Dr Basson?

DR KNOBEL: That is correct.

MR VALLY: In August 1994? Which is when you made a report?

DR KNOBEL: Mr Vally no you are right in a sense the extended detail that was given also to the TRC at a later stage in the briefing that I gave the TRC I had gone back to Dr Basson particularly for the parliamentary group presentations that I had to make. I had to make a presentation to (...intervention)

MR VALLY: When was this?

DR KNOBEL: I have it here somewhere but let me just finish what I am trying to say to you.

MR VALLY: Sure.

DR KNOBEL: Whenever we had to make a presentation after Dr Basson had left the Defence Force and after he had been pensioned off he was still in the citizen force. He was later on re-appointed in the permanent establishment. Not in the permanent force but in the full time component of the Defence Force as a civilian, as a physician. It is true to say that I had made use of his knowledge to give me a further explanation into the details of the substances that had been studied under some of the headings that I gave you. That certainly included the presentation that I made for you in January 1997. It certainly if you look at that document you will see that it is also based on the document that was given or the explanation that was given to the parliamentary committee on public accounts.

So your question is right. I had to rely heavily on him to give me details about the technical aspects. But certainly Colonel Steyn who is not a chemist. Who is a doctor who has become an anaesthetist he gained quite a lot of knowledge with his experience in terms of the chemical weapons convention and the biological convention and he had to help me with some of the technical details.

And in this hearing I have been referring a number of times to the need that I have that Professor Forbes can advise us about some of the technical details.

MR VALLY: General I understand that (...intervention)

For the record Professor Peter Forbes has had absolutely nothing to do with advising you about any issue whatsoever.

DR KNOBEL: I am not saying advising me I am saying (...intervention)

MR VALLY: No, no just for the record would you confirm that?

DR KNOBEL: Yes.

MR VALLY: Thanks.

DR KNOBEL: I didn't say that. I said advising the TRC with regard to some of these.

MR VALLY: Fair enough I hear that but you are presently on the sub-committee or chairing the sub-committee of the National Chemical Anti-proliferation Council on chemical and biological weapons.

DR KNOBEL: Yes that is correct.

MR VALLY: Are you still taking advice from Brigadier Basson or Dr Basson?

DR KNOBEL: Of course not. No of course not. He is not a member of that sub-committee.

MR VALLY: So if you have no knowledge or little knowledge of the technical aspects of chemical and biological warfare on what basis are you chairing this sub-committee?

DR KNOBEL: Well Mr Vally you would be welcome to take over the chair if you so wish. But I am saying to you those two working groups - the chemical weapons working group and the biological weapons working group consists of representatives of the entire industry in this country that is involved in either chemical or biological research as well as the academics. As well as Colonel Steyn and they are the people with the technical knowledge and the role that I play there is not to be technical but rather to look at the implications of the Convention to the regulations, to the declarations that have to be made. And to advise both foreign affairs and the Non-Proliferation Council on proliferation dangers, etc, etc. And again I make use of the experts I have on those committees and you are welcome to have a look at the members of those committees. They are the top people in this country with regards to those technical aspects.

MR VALLY: Let's go on. Did you know the difference between hard projects and soft projects as been (...intervention)

DR KNOBEL: I have already answered that question. That was an internal arrangement within the companies and I only discovered that when I saw the documents that came out of the trunks.

MR VALLY: And that was in?

DR KNOBEL: Before that it was never ever discussed even at CMC level.

MR VALLY: And what date was that again?

DR KNOBEL: The trunks?

MR VALLY: The knowledge of that information?

DR KNOBEL: I think it was in February 1997 that the trunks had been found.

MR VALLY: Well maybe you can take us through some of the projects that you were involved in? Project Jotta?

DR KNOBEL: It is just a different name for Project Coast. It was an arrangement by Chief of Staff Intelligence that the name Coast was becoming far too familiar and everybody was talking about it, the name of the project had to be changed. It was a security measure.

MR VALLY: Project academic?

DR KNOBEL: Project Academic as far as I recall was the project that was started by the army after we had produced CR in large quantities and it was the process of weaponisation and delivery systems for CR which is a combat service function not a medical service function. Therefore it was handed over to the army.

MR VALLY: Project Black.

DR KNOBEL: Project?

MR VALLY: Black?

DR KNOBEL: No I am afraid I can't remember what Project Black was about.

MR VALLY: We understood Project Black to be the weaponisation of CR gas.

DR KNOBEL: Well I am sorry I was under the impression. You have a document in your folder here which is about Project Academic can we have a look at it?

MR VALLY: We will find it for you and we will come back to you on this issue. Just for interest sake can you tell us what were you purchasing from Croatia?

DR KNOBEL: In the chronological report that I gave you today in one of the appendices where Dr Basson gives the chronology of events I think he mentions - if we can just look at that quickly. Yes in your appendix G the first document in that series was the document that was produced by Brigadier Basson at the request of the Minister with the meeting that we had with him on the 15th of July. If you refer to page 3 you will see under paragraph 16: -

"It's been agreed that 500 kg of a substance M would be made available to the project officers under the following conditions."

And substance M.

MR VALLY: M stands for?

DR KNOBEL: I think Methaqualone.

MR VALLY: Which is the active ingredient in Mandrax?

DR KNOBEL: No Sir which is a ground substance that could be used for the development of an incapacitory agent. I don't know if it can be used for Mandrax.

MR VALLY: Well I will tell you it is. It is in fact in the abuse of substances Act it refers to methaqualone there as well.

DR KNOBEL: Thank you Sir.

MR VALLY: So we were importing Mandrax or Methaqualone rather from Croatia?

DR KNOBEL: That is correct.

MR VALLY: Why would we be importing Methaqualone from Croatia when General Lothar Neethling was making vast quantities available to Dr Basson? Were you aware of this?

DR KNOBEL: Mr Vally I know that you say it is vast quantities but you argued that whole point with General Lothar Neethling who kept on saying to you that it was in fact not vast quantities.

MR VALLY: Well let's start off firstly; were you aware of this?

DR KNOBEL: That we were obtaining some substances from the police?

MR VALLY: That is right.

DR KNOBEL: Yes Sir.

MR VALLY: In the quantities that were referred to?

DR KNOBEL: No not at that time.

MR VALLY: Were you aware of whether any documentation had been issued?

DR KNOBEL: No in fact I was under the impression that there was no documentation. I have constantly at the beginning of the OSEO investigation this was one of the questions that was addressed in that very first letter to me that you have in your possession that I gave you this morning. And there Dr Basson said that there was an approval given by the Minister and by the Commissioner of Police and that he had such a document. But we, both the OSEO and I have not been able to get that document at any time. So I haven't seen that document.

MR VALLY: So with your knowledge of his financial improprieties in 1991 and your further knowledge in February 1994 there is no record whatsoever that the 200 000 Mandrax tablets and these were Mandrax tablets put in the boot of Brigadier Basson's car were in fact used as he claimed.

DR KNOBEL: Mr Vally would you repeat that again I am sorry I didn't follow that? You said with my knowledge of his impropriety in 1991?

MR VALLY: Right financial improprieties.

DR KNOBEL: The financial improprieties came to my attention at the end of 1992 and with the beginning of the OSEO investigation is 1993.

MR VALLY: No you were aware of it before that in 1991. But in 1992 you received a letter. This is what you advised us.

DR KNOBEL: No, no I testified earlier on that I reported to National Intelligence that there was some internal investigations by CSF and CSI about the Murton House and about the Aeromed Services and that was towards the end of 1992. That is what I testified earlier this morning. And the letter of the OSEO that was originated in December 1992 reached me on the 11th of January 1993 and I replied to it and my reply is the 11th of January. But be that as it may could you now complete that question? You say with my knowledge of his impropriety?

MR VALLY: Yes I had understood you saying that there were concerns raised about financial matters regarding Brigadier Basson in 1991 already. And I have put a number of questions to you on that basis already. Are you saying that you only heard about that for the first time in 1992?

DR KNOBEL: No I am not saying that Mr Vally and I don't want to make an issue about 1991 or 1992. I am prepared to accept what you say that I must have been aware of some financial irregularities in 1991. But none of it at that time, internal investigations by the Defence Force had any finding that there were in fact improprieties.

MR VALLY: I see. But by February 1994 you were seriously concerned?

DR KNOBEL: Yes. Then the investigation of OSEO had been going full-out for almost a year.

MR VALLY: And you are aware that there are certain legal formalities which have to be complied with in order to be in possession of certain substances listed?

DR KNOBEL: Yes.

MR VALLY: And are you aware that it was the Medical Control Council that had to authorise the possession or use of Methaqualone?

DR KNOBEL: No I wasn't aware of that, that they were in control of Methaqualone per se.

MR VALLY: Well amongst other drugs but that was one of them.

DR KNOBEL: I am aware of the fact that they have had general control over all drugs that are abuse, that are used in abuse.

MR VALLY: Well as a medical doctor are you aware that methaqualone is an active substance in Mandrax?

DR KNOBEL: Yes I am Mr Vally. You asked me this question last week too and I confirmed yes I do.

MR VALLY: Right and so the question is were you aware that this was an illegal transaction?

DR KNOBEL: No I was not aware that it was an illegal transaction. I was under the impression that with the authority that we had from the Minister and from the Commissioner of police that legalised what we were doing.

MR VALLY: Can you tell us expressly and crisply what happened to the 200 000 Mandrax tablets given to Dr Basson?

DR KNOBEL: I have no idea.

MR VALLY: You have no idea?

DR KNOBEL: I have no idea. I was certainly informed that the contents of the tablets were all collected together and was used as a ground substance to research the possibility of creating an incapacitating agent out of it.

MR VALLY: And was this before you started importing your own Methaqualone from Croatia or after?

DR KNOBEL: I am under the impression or I was under the impression that the Methaqualone that came out of Croatia is what is reported as on our shelves in the letter that I showed you this morning in November 1992. Where it says clearly that we had 500 kg of substance M.

CHAIRPERSON: Dr Randera, sorry Mr Vally.

DR RANDERA: General can we just understand. If I remember correctly and you know we have heard a great deal of information in the last two weeks. If I remember rightly from Dr Koekemoer Delta G had the facilities for producing and in fact there is documentation to that effect that it wasn't even part of a research project. It was seen in that document that we have within our file shows that the Methaqualone that was produced was not even for, didn't fall within the hard projects. Now if you had a facility already and you had the ability to produce Methaqualone here in South Africa why was it necessary to go all the way to Europe with a person where there is a great deal of suspicion already to go and buy some more Methaqualone?

DR KNOBEL: Dr Randera I am not entirely sure that I agree that having the ability to produce an incapacitating agent is exactly the same.

DR RANDERA: Sorry General we were told explicitly the other day.

DR KNOBEL: By Dr Koekemoer?

DR RANDERA: That Delta G was set up as a company not only for research but to mass produce if necessary.

DR KNOBEL: That is correct.

DR RANDERA: Now we were told by him. In fact he gave us the amount that they produced in this one year. I think it was 1988, 1989 where they produced 500 kg of Methaqualone. Now that facility was there. It was set up by you as the head of this operation.

DR KNOBEL: Yes I understand your question.

DR RANDERA: But in 1993, 1994 you then send Brigadier Basson - sorry if I have got the times wrong.

DR KNOBEL: No it is not right. But Brigadier Basson (...intervention)

DR RANDERA: But what I am trying to understand is why is it necessary when we have got the facility already that can produce whatever amounts that you require?

DR KNOBEL: Dr Randera the substance or the ground substance if I could use that term, that you require to produce what we were producing at the time namely a possible incapacitating agent was Methaqualone. The information that I had that, that Methaqualone were obtained in Croatia in 1991. The reason Dr Basson went back to Croatia was to recover the funds which had been lost at the time.

DR RANDERA: But still does not answer my question which is you have a facility.

DR KNOBEL: Dr Randera I didn't testify to you that Delta G made a 1000 kg of.

DR RANDERA: It is documented. It is not only Dr (...intervention)

DR KNOBEL: Within the Delta G files?

DR RANDERA: Documents that we have where Dr Koekemoer points out to us that the facility was there, the abilities were there, the skills were there. You are not telling us that you went to buy that, Dr Basson went to Croatia just to buy the ingredients. He actually went to buy the substance Methaqualone.

DR KNOBEL: That is correct.

DR RANDERA: And yet you had the facility already to produce it from 1986 onwards.

DR KNOBEL: Well I must say to you that the impression I had was that the Methaqualone which is reflected on our shelves in the letter that I showed you this morning which was dated November 1992 was the Methaqualone that had been obtained from Croatia. I was not aware that, that Methaqualone was produced at Delta G or delivered by Delta G and I would like to see that if you have such a document that can show that to me. It may be so yes if Dr Koekemoer says it was produced at Delta G that is news to me.

CHAIRPERSON: Wouldn't it be in the documents you received from us General?

DR KNOBEL: Yes I have but I must admit Mr Chairman it is a mass of documents that I have not been able to scrutinise all that carefully.

MR VALLY: It is under the code name Mr Chairman Mosrefcat.

DR KNOBEL: Yes I saw those documents.

MR VALLY: And we can give you the exact reference if you want it but it has been given to you.

DR KNOBEL: Yes but I would like to say the following Mr Vally as I understood it that was the project to use Methaqualone to produce a derivative which could be used as anti-capacitating agent. If you saying that those document does not reflect that then I accept what you say.

MR VALLY: If I could follow this particular point up. You see what is of concern to us is in terms of the table you gave us on chemical warfare agents the only psycho chemical referred to is BZ. There is absolutely no reference to Phencyclodine, Ecstasy, Mandrax or Cocaine.

DR KNOBEL: Exactly.

MR VALLY: Or cannabinoids being used as incapacitates that this is nowhere in any of the scientific texts that we saw. And the question we are putting to you is if none of the scientists around the world were of this view on what basis was Project Jotta of the view that Mandrax or Ecstasy or Cocaine or Dagga could be used as incapacitants for crowd control?

DR KNOBEL: No you have made a number of assumptions here that are not correct Mr Vally. There are many scientists who all over the world and General Neethling revealed here that in America that is exactly what they are doing. They are looking at all kinds of drugs that are being used on the streets there as possible incapacitating agents. He made that statement here in his testimony. And this is the information that we were given at the CMC and that we would have to obtain some of these illegal drugs if that is what you want to call it, so that we could investigate the possibility of creating incapacitants of it. And you have the record of the briefing given to the Minister where I indicated that we have three possible incapacitating agents. One which was a BZ derivative which is the one which is listed in the chemical weapons convention clearly. And the other two was the Methaqualone one and the other one was the Baxil Project. I mentioned that the Cocaine and the cannabinoids were also considered to be possible incapacitating agents.

MR VALLY: I ask you whether - I have two questions before lunch Mr Chair, just two questions. I ask you if you are aware of any scientific text anywhere in the world with the exception of what is produced at Delta G under Project Jotta relating to the usage of Ecstasy, Mandrax, Dagga as incapacitants? Can you refer to me?

DR KNOBEL: Am I personally aware of any documentation? No I am not.

MR VALLY: Not. As project manager of Operation Jotta can you tell us unequivocally that you can account for the 200 000 Mandrax tablets which were given by General Neethling to Brigadier Basson, for the 250 kg of Dagga and for the 5 000 LSD tablets? Can you tell me as project manager that you can account for those items?

DR KNOBEL: How do you mean account Mr Vally?

MR VALLY: Well received at point A by so and so, developed, analysed, crushed, extracts removed from it at point B thereafter this was the waste matter disposed of in this way. This was the active substance. That kind of detail that any scientist would be able to give you?

DR KNOBEL: No Sir I don't have that kind of detail. All that I have in front of me is what we had on our shelf as reported by the project officer. What we reported to Mr Louw and what we had destroyed as I gave it to you this morning.

MR VALLY: Thank you Mr Chair.

CHAIRPERSON: Maybe this is a convenient stage to take the lunch adjournment. We will adjourn until two.

COMMITTEE ADJOURNS.

ON RESUMPTION:

CHAIRPERSON: Mr Vally I understood that two things stood over. The one was that you and Mr Arendse were going to decide which documents are covered by Category 2 of the agreement and which are not. And I do not know whether that exercise has been gone into and what the outcome thereof is.

Secondly you indicated that new evidence was brought in this morning in the form of documentation from General Knobel that it was your view that in order to do justice to your case you might need some time to look at that document. I don't know how far you have gone.

We have a time problem. There is a scheduled meeting of the Commission at half past two that is intending to look at a wide range of issues including issues that deal with the final report. I think arrangements have been made with a number of Commissioners to be present and I have seen some that are present. So I don't know how long you were expecting to be with Dr Knobel. But I was not hoping to be here later than half past two. At the very worst quarter to three. So I need to know where we move from here. I do not know what the position is with regard to Dr Wouter Basson. What the position is to Dr Mijburgh and whether you still need to call further evidence in the event those two are going to testify or one of them is going to testify. So I need to be guided by you but I have already indicated what my own time constraints are and I am speaking on behalf of the panel when I say so. It has nothing to do with any other events which are of a national interest today.

MR VALLY: Thank you Mr Chairperson. On the first two issues there is a standard response. The documents that my learned friend, Advocate Arendse and I were supposed to go through are the very same documents which were presented to us by Dr Knobel this morning. It will not be possible for us to have gone through all those documents. So we will have to do it at some stage. Which leads me up to the next point that in view of these new documents and we may have to ask some questions pertaining to those documents that we may have to recall General Knobel to another day where we can go through these documents with him. If that is going to be agreeable then we can get as far as we can by half past two and if necessary we can then postpone this hearing.

It will also be necessary to call Dr Mijburgh. We have just had an indication for the very first time that he has now agreed that he will give evidence. So what we could do is co-ordinate with the various legal representatives suitable dates and then we can complete with General Knobel, deal with Dr Mijburgh also on that date. And we will have had a chance to go through all the documents and determine which ones are potentially of danger to proliferation.

CHAIRPERSON: There has been much on the record certainly from the evidence of Dr Knobel that suggested the possible calling of Mr Mike Kennedy. Is there any indication with regard to that?

MR VALLY: Well we have been advised that should we need to call Mr Mike Kennedy he would require proper notice so that he has an opportunity to get the assistance of legal counsel. However I could suggest that if General Knobel was to indicate more specifically than he has in his presentation what issues he wants Mr Kennedy to raise we could possibly get an affidavit from Mr Kennedy and read it into the record if it is acceptable to General Knobel.

DR KNOBEL: Mr Chairman yes I think it would be acceptable to me. I would have to go and think about it a little bit but the important issues that are relevant here are the chronology of events and the briefings that were given by myself and Mr Kennedy either together or separately on a number of occasions, that I think are important from my point of view. I did as you have noticed this morning in my statement try to indicate where the information is contained in what I called appendix K which is the Operation Cloud report. And I steered away deliberately from dealing with it point by point. It was before you arrived that I was going through some of the other documents. For the very purpose that it then begins to become a problem with regards to proliferation and so on. But those are, let me say those are the critical stage between the demarche and what followed thereafter. Up to the point where we briefed Mr Mandela on that one and Mr Mbeki. That would be the, if that helps Mr Vally that would be the region where I really think it is important that Mr Kennedy should be able to testify thank you.

CHAIRPERSON: Mr Arendse do you want to say anything in this regard?

MR ARENDSE: Chairperson yes. Can I get an indication whether we are going to utilise tomorrow? You will recall that not only Mr Cilliers but I also had a problem with today and tomorrow. So things have been shifted around to accommodate tomorrow and I was wondering whether it is not possible then to continue with General Knobel tomorrow. In so far as the documents are concerned I got them late last night. I spent some time going through them. I would have thought that Mr Vally and Mr Chaskalson could do the same and before we start tomorrow we could have agreement on the issue of the documents.

CHAIRPERSON: I gather that the purpose of having Thursday and Friday when we originally arranged for Thursday and Friday to be the dates, that is today and tomorrow was that was the expectation that we would hear all the evidence to completion. As things stand now we are not going to do that in any event. So the thinking is that we do not sit tomorrow and that the proceedings should be adjourned to a date, in fact to dates to be arranged which would therefore mean all those who are affected by the adjournment should put their heads together and find suitable dates. Such dates to be in the immediate future in view of possibly in July. Mr Arendse do I read something on your face?

MR ARENDSE: Yes.

CHAIRPERSON: May I know what it is that is written on your face? It is in hieroglyphics.

MR ARENDSE: No if that is your view Chairperson and of the Committee's then obviously I will abide by it and we have to arrange dates as soon as possible. But I foresee a problem on my side. That is what is written on my face.

CHAIRPERSON: We will try and accommodate you. Do you have anything to say? Thank you. Mr Vally.

MR ARENDSE: Sorry Mr Chairperson and then just as far as Mr Kennedy is concerned I don't hold a brief for him but we had discussed this before and he is here. In so far as his attendance at meetings and briefings with General Knobel that doesn't present a problem and if those specific references are made to report on Operation Cloud we have already indicated that, that also wouldn't present a problem.

CHAIRPERSON: Very well Mr Arendse. Mr Vally in the next 17 minutes.

MR VALLY: Do I carry on with General Knobel?

CHAIRPERSON: It is up to you Mr Vally.

MR VALLY: That is what my intention was I was just wondering regarding the response about Mr Mike Kennedy. Can we specifically ask Mr Mike Kennedy to make an affidavit along the lines suggested by General Knobel on the basis that Mr Kennedy is present today.

CHAIRPERSON: I am sure that is something that you can arrange. I can't order that from where I sit. I am sure it is an acceptable arrangement.

MR VALLY: Is it acceptable to General Knobel?

DR KNOBEL: Mr Chairman in my statement this morning I actually suggested two things. I said it would be - I have requested Mr Mike Kennedy whether he would make an affidavit of his own and I suggested that he should be called for testimony. It would be acceptable for me if he makes a statement but I want the Commission to understand that I have a feeling that at a later stage in this hearing or possibly in the future questions put to me I will begin to have to reflect in what is written in this report. And I will have to give some background information there as I did this morning with regards to all the other appendices that I gave. And if you will allow me I will give an example.

The report certainly has lots of documentary evidence that is run with the report but like the ones that I had on the table this morning that is a piece of paper which is very patient and has a lot of things written on it. But the discussion around what is written there is really what I would like to bring out. I am not sure if that can all be brought out in a statement. But I would be happy if that is the arrangement.

CHAIRPERSON: I hear you. Mr Vally I think this is something that is validly put and maybe that is something that you should think about. But in any event we have enough as things stand at the moment for us to read to proceed but that is homework for you and possibly Mr Arendse. If Mr Toyeli perhaps in his capacity as legal representative of General Knobel I think this is something that I would rather you thrashed out at that level. You have got 15 minutes more.

MR VALLY: Thank you Mr Chairperson. General Knobel if we can carry on where we left off. What do you understand to be the responsibilities of a project leader?

DR KNOBEL: Well Mr Vally in the case of this project is was reasonably clearly conveyed to me by my predecessor and it is also contained in some of the documents that have been made available including the briefing that I gave to the TRC initially. I think I did testify the previous round of testimony that the problem that you have with such a project it is a very complexed project. It has lots of technical aspects. It has complexed financial arrangements. It has very complexed security arrangements. And this necessitated in this case that the project was managed by a committee with all due respect a committee is not always the best structure to control any project. However in this case it meant that the chairman of the co-ordinating management committee who was the Chief of the Defence Force like the vice-chairman who was a certain General who was also the responsible functionary because the project officer came out of the medical service. And because the medical service as an independent arm was chosen to deal with the scientists and deal with the subject matter, namely chemical and biological defence.

Both those functionaries, the chairman and vice-chairman was totally dependent on the sub-committees that existed within the co-ordinating management committee. Which meant a division of responsibilities and the position of the project manager was to try and co-ordinate those functions and bring them together.

But I stress again on the financial side the complexity of the front companies and how you structure their financial arrangements and how do you structure the payment of accounts overseas in such a way that it cannot be traced back to the client which is the Defence Force was to a very large extent planned and approved and suggested and controlled by Chief of Staff Finance. And in particular the name came out this morning on that document Brigadier Koertzen who is very familiar with the arrangement of such financial arrangements where you have to transfer money overseas and then allow it to flow to different accounts so that it cannot be traced back and so on.

On the security side the same situation arose where the Chief of Staff Intelligence through his sub-structures would look after the security arrangements in such a way likewise that neither the project officer nor the project nor the Defence Force is compromised or in any way revealed in transactions that take place. Which is after all as came out clearly this morning transactions which are geared to overcome the situation of isolation and sanctions and all that sort of thing.

I think the third sub-committee I think has become clear to you all which is really the technical committee. The research development at grassroots level. The handling of the scientists, the co-ordination of their activities and also keeping it apart, keeping it separate, that was the direct responsibility of the Project Officer.

In the co-ordination role of the Project Manger, it was to ensure and to represent to the Chief of the Defence Force that all three these functions were brought together in budgetary allocations in presentations of the kind that I've been making to all the various Ministers and all the various parliamentary groups, etc., etc., and to do so with total reliance on those three sub-structures.

You are correct if you say that the details contained within those presentations or briefings that refer to the scientific or the technical aspects, that had to be provided by the Project Officer. The privatisation, commercialisation phase, all of that was planned by the Project Officer in conjunction with the Chief of Finance at that time, considering the various company regulations that existed and that is why, you will have noticed, that is why all the documents of financial transactions have had to be kept and they were kept, none were destroyed as far as I'm aware of. Those are the 14 trunks that I've referred to before.

The Company Act provides that you cannot destroy that, whereas other documents in terms of regulations within the Defence Force and in terms of directions that we got either from the Chief of the Defence Force or from the Minister were in fact destroyed or so, that's my information. It certainly is a bit frustrating that you don't have that type of information available today.

Certainly, when I took over and when I became aware of the financial problems I started keeping every single document that was under my control because I realised the important of, for example the support of the OSEO investigation.

At the same time I have to admit to you, the issue of privatisation and commercialisation and whether it was in the best interest of the country and whether it was a reasonable way of doing it, if you look at it today you might think that it was not a very good way of structuring that whole process but the fact of the matter was, at the time with the security constraints, with the guidelines that we had from our own Minister at the time and the fact that the Auditor General was closely involved in the whole negotiating process about how that process should be structured, the State Attorneys were involved in that and ultimately the Minister of Finance approved it along with the Minister of Defence.

Quite frankly it was so complex that I was not capable of dealing with that on my own and I had to rely totally on Chief of Staff Finance. To what extent the Project Officer had understanding and influence and control over that, I can really not tell you. I think it was really the Chief of Staff Finances structure, how it should take place.

It was so complex that even today at the request of the Parliamentary Committee on Public Accounts, the Joint Standing Committee, that have asked questions about that process, the answer to that as far as I know has not yet been provided for the Standing Committee. It was given to the Auditor General to investigate and to take statements from everybody that was involved right from the beginning of the project. In other words, they go back to Admiral Becker who was the First Chief of Staff Finance involved in the project, followed by Admiral Murray, followed by General Raubenheimer etc., etc.

One of the difficulties is if you look at the, my notes, I can provide them if you want me to, if you look at the changeover in the positions of the members of the Co-ordinating Management Committee, we are now talking of about 25 individuals. The Co-ordinating Management Committee consisted as I've said many times now, of the Chief of the Defence Force, the Surgeon General, Chief of Staff Finance, Chief of Staff Intelligence, Chief of the Army, later on the Commanding General Special Forces and later on the Chief of Staff Planning and so on.

If you take the incumbents of those posts, from 1981 onwards we're talking about 25 different people and to preserve continuity within that as Project Manager, first of all my predecessor for the first eight years of the project and then myself for what turned out to be the next five years of the project, is extremely difficult and also to change a system which is working and which is producing results and giving what we're aiming to try and achieve through the objectives is virtually impossible. You inherit a system that is working, that everybody is satisfied with it, with its shortcomings and to come in as a newcomer and now say that: "I'm not satisfied with this process, I want to reverse the whole process or change it or I want to re-evaluate it and so on", that I think is not possible.

And I must say that this is one of the issues which to me became very difficult to handle and that is what I tried to explain this morning in my statement when I said that I found I could not really achieve the results and the answers that I wanted to achieve within the Defence Force alone. I thought I had to get the permission to move outside. I had already had the permission to work as closely as possible with the OSEO investigation and I did. I have spent five years now giving documents and giving inputs at the OSEO investigation. I'm the State witness for their entire case at this stage against Doctor Basson.

I believe there are going to be more charges at a later stage and I will still take part in that entire process. But at the same time the second component which I described this morning as being the second channel of command and control or what was described by National Intelligence as the unofficial programme, that as it emerged in the end of '92 if you like, and in as far as I am concerned the end of '93 with the demarche, that has resulted in an investigation mainly by National Intelligence but certainly by the Attorney General's office, in which I'm very closely involved and which in exactly the same way all these sort of documents that you are showing to me and other documents that have been found in the trunks and other documents that are official documents still today in the Defence Force, even the documents that are in the archives, are brought up and we look at them and we decide together where we can give comment on it.

Likewise, there I'm very limited. The fact that I'm limited is the fact that I wasn't involved in it to begin with until the realisation occurred in '93 and since then Mr Kennedy and I have been working absolutely together in every possible way in every respect and this is why my suggestion to the Commission was that it would be extremely important for the Commission to listen to the evidence of Mr Kennedy.

CHAIRPERSON: That brings us to half past two Mr Vally and in view of everything else that I have said, I think whatever follow-up questions will have to be held.

MR VALLY: I have two questions.

DR KNOBEL: Mr Chairman, I beg your pardon, I just want to rectify something if I may.

CHAIRPERSON: ...[indistinct] Mr Vally, this question was put at a quarter past and you are now at half past. If you are going to put to more questions we will be at 3 o'clock. I sympathise with you but the witness has to give as full an answer as he would like to. You are aware that the meeting that we are going into cannot be adjourned, it is important.

MR VALLY: Well, if I could just get clarification of this answer, I'll shelve the other two questions.

CHAIRPERSON: You are a brave man Mr Vally but you can go ahead.

MR VALLY: Sorry, before I continue. General Knobel, you had something you wanted to say.

DR KNOBEL: Just one word. I testified earlier today when you asked me about various projects and I said that Project Academic was the project for CR weaponisation, obviously that is not true. That was the one project which was the document that we decided would not be discussed here. Academic was in fact the defensive equipment detection apparatus, masks, filters, etc., etc., and I just want to rectify that, thank you.

MR VALLY: Thank you General Knobel. From what I understand from what you explained to me the role of a project leader was, you mentioned that the Chief of Staff Finances would be in charge of finances and the technical work would be done by Doctor Basson who was also on the Co-ordinating Committee?

DR KNOBEL: Yes.

MR VALLY: You co-ordinated the front companies?

DR KNOBEL: No, Sir.

MR VALLY: I'm still trying to pin down exactly, you've given us a long explanation but what precisely was your role?

DR KNOBEL: I think co-ordination, that is why it was called the Co-ordinating Management Committee.

MR VALLY: Co-ordinating what?

DR KNOBEL: Co-ordination between the three components, security on the one hand, financial arrangements on the other hand and the scientific and technical research and development on the third hand. And obviously the Committee was responsible for the budgetary planning on a budget by objectives basis every year.

MR VALLY: Sir, did you attend any scientific meetings?

DR KNOBEL: No, Sir.

MR VALLY: None whatsoever?

DR KNOBEL: No, Sir. It was policy that none of the Co-ordinating Management Committee members, neither the Chief of the Defence Force who was the Chairman, should be visible at the level of the companies. I understand that Doctor Goosen testified that I visited the company with General Nieuwoudt, that is totally untrue. It was policy not to go to the companies.

In the entire period of the project in which I was involved I visited Delta G one Sunday afternoon when there was nobody else present there, so that I could see the facility and I visited Roodeplaat also on a Sunday afternoon on one occasion and one evening I attended a social function at the farmhouse on the skirts of the property there. But the police was that we were not to have contact with any of the scientists on the ground.

I think Doctor van Rensburg testified to that effect, that he said he had seen me only once and that was in my office at my headquarters.

MR VALLY: Thank you very much.

CHAIRPERSON: Thank you very much Mr Vally.

MR VALLY: Carry on Mr Chair.

CHAIRPERSON: Ladies and gentlemen, this brings us to the conclusion of this segment of this hearing. The matter is adjourned to a date to be arranged and on which date the evidence certainly of General Knobel will be concluded and that of Doctor Mijburgh and possibly Doctor Basson will be taken and any other further evidence as it may be necessary for us to have a complete picture of the Chemical and Biological Warfare Programme and its activities. We are adjourned.

HEARING ADJOURNS