AQ KHAN TRIAL: FURTHER DETAIL ON WISSER GUILTY PLEA

C O N F I D E N T I A L SECTION 01 OF 06 PRETORIA 003210 SIPDIS SIPDIS DEPT FOR P, T, ISN/CPI, AF/S E.O. 12958: DECL: 09/10/2017 TAGS: PARM MNUC PREL KNNP SF SUBJECT: AQ KHAN TRIAL: FURTHER DETAIL ON WISSER GUILTY PLEA REF: PRETORIA 3091 AND PREVIOUS Classified By: Deputy Chief of Mission Don Teitelbaum. Reasons 1.4(b) and (d). ¶1. (SBU) SUMMARY and INTRODUCTION: As reported reftel, on 04 September German citizen Gerhard Wisser was convicted in the Pretoria High Court of unlawful manufacture of components for illicit gas centrifuge uranium enrichment plants intended for Libya and Pakistan and associated export control violations. This message details the terms and requirements of Wisser's plea bargain agreement, as well as the media attention given to this historic conviction of a senior A.Q. Khan network supplier. The complete plea package and all annexes have been emailed to AF/S and to ISN/CPI. Prosecution of co-conspirator Swiss citizen Daniel Geiges remains a possibility. Wisser's sentencing requirement to cooperate fully with further investigations and prosecutions offers opportunities to other governments pursuing individuals and companies named in the plea agreement. END SUMMARY and INTRODUCTION. -------------- The Conviction -------------- ¶2. (SBU) Wisser pled guilty to seven of the original ten indictment counts. He maintained his not guilty plea on three others. The prosecution declined to prosecute two of these three, on the grounds that they were redundant and that Wisser had already admitted his guilt in relation to other indictment counts. On the third, the prosecution accepted Wisser's argument that a witness statement established the illegal action in question had been committed by someone other than Wisser. Details of Wisser's admissions of guilt follow below: COUNT ONE: Import, transit holding, and export of a Denn Model RL 400/2 flow-forming machine, serial number 6319/6318 without a permit issued by the South African Council for the Non-Proliferation of Weapons of Mass Destruction during the period November 2000 to December 2001. Wisser pled guilty, admitting: -- he illegally imported, held in transit, and exported the flow-former during the times and at the places detailed in the indictment; -- the flow-forming machine is defined as a controlled item; -- the content of the affidavit submitted by retired ORNL fellow Ron Miskell detailing the technical specs of the flow-former which made it a controllable item is truthful; -- the acts related to import, transit, and export of the flow-former required a permit from the South African Council for the Non-Proliferation of Weapons of Mass Destruction; -- he knew he was acting unlawfully when he associated himself with all acts related to the flow-former's import, transit and export; and, -- the factual circumstances surrounding Count One are correctly set out in para 11 of the plea agreement. COUNT TWO: Unlawful and intentional manufacture or production of feed systems, product and tails withdrawal systems, and machine header piping systems for gas centrifuge uranium enrichment plants without written authorization from the Minister of Minerals and Energy during the period 24 February 2000 to 01 September 2004. Wisser pled guilty, admitting: -- he unlawfully and intentionally caused the referenced nuclear related material or equipment to be manufactured during the period described; -- the systems are correctly described in Count Two; -- the equipment falls within the relevant legal definitions and the contents of the affidavit submitted by USDoE Deputy Administrator William H. Tobey are true; -- he was required to obtain written authorization from the Minister of Minerals and Energy prior to manufacturing these PRETORIA 00003210 002 OF 006 systems and he did not do so; -- he knew he was acting unlawfully when he manufactured these systems; and, -- the factual circumstances surrounding Count Two are correctly set out in para 10 of the plea agreement. COUNT THREE: Unlawful and intentional conspiracy with Johan Andries Muller Meyer, Buhary Seyed Abu Tahir, Gotthard Lerch, Abdul Qadeer Khan, and others in commission of the offense outlined in Count Two during the period 1999 to 23 February ¶2000. Wisser maintained his not guilty plea, but his plea statement explicitly refers the court to the portions of the plea agreement where he admits elements of this offense. During the court session, NPA lead prosecutor R.C. Macadam specifically stated that the prosecution continues to maintain the guilt of the accused, but had declined to pursue the charge since Wisser had already admitted to the facts of his illegal activities in the commission of the Count Two offenses. COUNT FOUR: Unlawful and intentional attempt to export nuclear related equipment or material (i.e. the systems outlined in Count Two) without written authorization from the Minister of Minerals and Energy during the period 2001 to 01 September 2004. Wisser pled guilty, admitting: -- he unlawfully attempted to export the nuclear related material or equipment referred to in Count Two during the period described; -- he received from Tahir a draft water purification plant contract, which he had re-typed at Krisch Engineering and was eventually signed by JAM Meyer and another individual purporting to be purchasing such a plant from Krisch; he subsequently traveled to Maputo in September 2003 to obtain quotes for local shipping agents to export the plant to the Middle East; he also associated himself with the purchase and delivery of sea freight containers to Tradefin and with obtaining quotes for export from Rohlig Grindrod; -- he was required to obtain written authorization from the Minister of Minerals and Energy prior to performing these acts, but did not do so and therefore was acting unlawfully. COUNT FIVE: Unlawful and intentional attempt to dispose of technology relating to nuclear related equipment or material (i.e. the systems outlined in Count Two) without written authorization from the Minister of Minerals and Energy during the period 24 February 2000 to 01 September 2004. Wisser maintained his not guilty plea, but his plea statement explicitly refers the court to the portions of the plea agreement where he admits elements of this offense. During the court session, NPA lead prosecutor R.C. Macadam specifically stated that the prosecution continues to maintain the guilt of the accused, but had declined to pursue the charge since Wisser had already admitted to the facts of his illegal activities in the commission of the Count Four offenses. COUNT SIX: Fraud via the provision to shipping company Rohlig Grindrod of documentation misrepresenting the Denn flow-former referred to in Count One as a lathe and misrepresenting its monetary value at USD 23,500 (actual value was approximately USD 300,000) with the intent of evading import permit and tax obligations. Wisser maintained his not guilty plea, referring the Court to para 20 of the affidavit submitted by Tahir in which Tahir states that Peter Griffin and Gotthard Lerch arranged the creation of the fraudulent documents in question. During the court session, Macadam acknowledged that based on the evidence from Tahir the prosecution had declined to pursue PRETORIA 00003210 003 OF 006 this charge. COUNT SEVEN: Unlawful and intentional manufacture or production of three autoclaves and accessories for gas centrifuge uranium enrichment plants without written authorization from the Minister of Minerals and Energy during the period 15 July 1994 to 10 January 1995. Wisser pled guilty, admitting: -- he unlawfully and intentionally caused the manufacture of the referenced autoclaves during the period described; -- the equipment is correctly described in Count Seven; -- the equipment falls within the relevant legal definitions and the contents of the affidavit submitted by Deputy Administrator Tobey are true; -- at the time of manufacture, he was not a member of the Atomic Energy Corporation and thus required written authorization from the Minister of Minerals and Energy before performing these acts; -- he did not have this written authorization and thus was acting unlawfully; and, -- the factual circumstances surrounding Count Seven are correctly set out in para 6 of the plea agreement. COUNT EIGHT: Unlawful and intentional export of nuclear related equipment or material (i.e. the autoclaves outlined in Count Seven) from South Africa to Dubai, UAE without written authorization from the Minister of Minerals and Energy during the period January 1995. Wisser pled guilty, admitting: -- he unlawfully and intentionally caused the export of the referenced autoclaves from South Africa to the UAE; -- the equipment is correctly described in Count Seven; -- the equipment falls within the relevant legal definitions and the contents of the affidavit submitted by Deputy Administrator Tobey are true; -- at the time of export, he was not a member of the Atomic Energy Corporation and thus required written authorization from the Minister of Minerals and Energy before performing these acts; -- he did not have this written authorization and thus was acting unlawfully; and, -- the factual circumstances surrounding Count Seven are correctly set out in para 6 of the plea agreement. COUNT NINE: Forgery of an order form from Electric Lamp Manufacturer of Southern Africa for ten vacuum pumps Trivac D16B, five vacuum pumps Trivac D14B, one UL200 helium leak detector, three Cal leak TL9 detectors and two Cal leak TL7 detectors with intent to defraud potential supplier Leybold Heraeus and South African nuclear non-proliferation control bodies. Wisser pled guilty, admitting: -- he unlawfully and falsely caused the documents in question to be forged at the time and place specified; -- he did so with intent to defraud and prejudice the referenced parties; and, -- the factual circumstances surrounding Count Nine are correctly set out in para 8 of the plea agreement. COUNT TEN: Forgery of an order from Integrators of System Technology (Pty) Ltd for the supply of Leybold vacuum equipment for integrated systems and package plants with intent to defraud potential supplier Leybold Heraeus and South African nuclear non-proliferation control bodies. Wisser pled guilty, admitting: -- he unlawfully and falsely caused the documents in question to be forged at the time and place specified; -- he did so with intent to defraud and prejudice the referenced parties; and, -- the factual circumstances surrounding Count Ten are PRETORIA 00003210 004 OF 006 correctly set out in para 9 of the plea agreement. -------------- Sentencing Terms -------------- ¶3. (SBU) The prosecution described the following mitigating factors considered in determining an appropriate sentence for Wisser: -- Wisser's age (68) and the health problems associated with his advanced years; -- Wisser's lack of prior convictions (with the caveat that his lack of a criminal record is only due to the fact that the crimes detailed in Counts 7-10 had not been detected previously); -- Wisser's decision to plead guilty to all the main charges has saved the State the costs of an estimated three-year trial; -- Wisser has agreed to cooperate fully by providing South African authorities with a full disclosure of his total knowledge of nuclear proliferation related activities, in accordance with applicable law and policies; -- Wisser has consented to confiscation of criminal proceeds held by a foreign government, which will allow a portion thereof to be shared with the SAG; -- Wisser has agreed to confiscation by South African authorities of locally held criminal proceeds; -- Wisser is the sole AQ Khan network figure to have pled guilty and agreed to cooperate with law enforcement; -- after his September 2004 arrest, Wisser was in custody for three months and has been under house arrest since; -- the Office of Community Corrections submitted a report detailing Wisser's good behavior while under house arrest. ¶4. (SBU) The following aggravating circumstances were highlighted: -- The incredible destructive power of nuclear weapons and the efforts of countries of concern to obtain such weapons, despite international efforts to prevent proliferation and offensive deployment of nuclear weapons, through the use of illicit networks (supported by the contents of the affidavits submitted by Los Alamos National Laboratory expert Jeff Bedell and South African Nuclear Energy Corporation Senior Manager Dietlieb Tillwick; -- the fact that Wisser's crimes all were related to the proliferation of gas centrifuge uranium enrichment plants -- the preferred method of enrichment for states establishing/maintaining illicit nuclear weapons programs; -- Wisser's crimes contributed to Libya's attempt to acquire nuclear weapons and assisted Pakistan in maintaining its program and were committed during a period when "high levels of conflict existed in both the Middle East and Asia"; -- Wisser acted with Lerch and Tahir, key network players, over a protracted period and was aware of the connection to AQ Khan's proliferation activities; -- Wisser's crimes would have gone undetected if not for the interdiction of the BBC China and Libya's subsequent decision to come clean; -- Wisser's crimes undermined South Africa's reputation, policy, and international obligations vis a vis nonproliferation; -- Wisser persisted in his activities even after they had been formally criminalized by the post-apartheid regime; -- Wisser's activities became progressively more serious; -- Wisser committed his crimes between the ages of 55 and 64 (i.e. when he should have known better); -- Wisser's motive was financial gain, but his wealth and social position made such actions unnecessary; -- Wisser's crimes "have all the hallmarks of sophisticated organized crime". An additional 17 aggravating circumstances specific to the various charges also were detailed. These focused on the sophistication of the criminal activities, Wisser's technical knowledge of the systems involved, and the damage to PRETORIA 00003210 005 OF 006 commercial companies unwittingly brought into these activities. ¶5. (SBU) Judge Labuschagne accepted all mitigating factors and aggravating circumstances, noting his own personal gratitude for being able to avoid presiding over a three-year trial, which he predicted would have led to his own divorce. (NOTE: Labuschagne was brought out of retirement specifically to hear this case.) He asked Wisser to confirm his understanding of each of the charges and his plea of guilty to Counts 1, 2, 4, 7, 8, 9, & 10. Labuschagne then sentenced Wisser as follows (per the terms of the plea agreement): For Counts 1, 2 and 4: -- Three years' "correctional supervision" (i.e. house arrest) -- Ten years' imprisonment suspended for a period of five years, on condition that: (1) Wisser is not convicted and sentenced for similar crimes (contravening the Nuclear Energy Act, the Weapons of Mass Destruction Act, or any equivalent laws which replace them); (2) Wisser provides the South African Police Service (SAPS) with affidavits detailing the full extent of his knowledge of all matters relevant to nuclear proliferation as identified by SAPS; (3) Wisser testifies in all proceedings and complies with all processes relating to him (domestic and foreign); (4) Wisser provides his full cooperation to the South African Council for the Non-Proliferation of Weapons of Mass Destruction and with the IAEA on nuclear proliferation matters. For Counts 7 and 8: -- Five years' imprisonment suspended for a period of five years, on condition that Wisser is not convicted and sentenced for similar crimes (contravening the Nuclear Energy Act, the Weapons of Mass Destruction Act, or any equivalent laws which replace them). For Counts 9 and 10: -- Three years' imprisonment suspended for a period of five years on condition that Wisser is not convicted and sentenced for similar crimes (forgery or any other crime of which dishonesty is an element). For all Counts: -- Confiscation of Rand 6 million in cash, held domestically (approximately $836,000 US). -- Confiscation of Euro 2.851 million in assets held by German authorities (approximately $3.94mil US). -------------- Media Coverage -------------- ¶6. (U) The conviction was featured in local print media, including articles in The Citizen, The Star, Pretoria News, Business Day, and The Mercury. Local broadcast media, including SABC TV, SABC radio, Radio 702, and SAFM, reported on the trial and its outcome as court events unfolded. On-line editions of these media outlets provided coverage as well, along with SABCnews.com. Both the National Prosecuting Authority and the South African Council for the Non-Proliferation of Weapons of Mass Destruction issued public statements lauding the conviction (emailed to AF/S and ISN/CPI). The NPA statement specifically thanked the USG and the governments of the UK, Malaysia, Switzerland, Spain and Jordan. Mission Public Affairs Section received no press inquiries. -------------- Co-Defendants Geiges and Krisch -------------- ¶7. (SBU) As reported reftel, the prosecution requested separation of the Wisser and Geiges trials at the 04 September court appearance, immediately prior to submitting the plea agreement with Wisser. The prosecution also noted that the independent assessment of Geiges' medical condition ordered by Judge Labuschagne at the 31 July court appearance had been delivered to them only that morning. They therefore PRETORIA 00003210 006 OF 006 requested that the matter concerning Geiges be postponed until 21 September to give them time to evaluate Geiges' ability to stand trial, and that it be reassigned to one of the three regular High Court criminal judges. Geiges' advocate did not contest the separation, but commented (without further explanation) that Geiges might be in hospital on 21 September and therefore unable to appear personally before the new judge. Labuschagne took note of this last point, and then ordered that Geiges' case be assigned to a new judge and that his next court appearance be scheduled for the 21st. ¶8. (SBU) The prosecution informed the court that the State was declining to pursue charges against Krisch Engineering (Accused Number 3 in the indictment),since Krisch Managing Director Gerhard Wisser had admitted his personal guilt. Judge Labuschagne took note of this decision and recorded the charges as dropped. -------------- Comment -------------- ¶9. (C) We will be interested to see how the case against Geiges proceeds now that Wisser has pled guilty. A/PolCouns sat across from Geiges for several minutes while waiting to enter the courtroom. He was engaged in a lengthy monologue, protesting his continued innocence to his poker-faced attorney and describing at length how the charges were a grand plot orchestrated by British and American intelligence services (to what end was unclear). Geiges showed no visible signs of illness, gesturing, pacing and speaking with energy and animation and smiling frequently. While he may not have been able to endure the lengthy trial initially expected by the prosecution, it is possible that Wisser's testimony could shorten the trial period to a point where it becomes feasible to pursue Geiges' conviction. ¶10. (SBU) The sentencing requirement imposed on Wisser to provide affidavits detailing all his proliferation activities and to participate in relevant legal proceedings -- domestic and international -- presents an opportunity for other governments pursuing related prosecutions. Of particular interest are the foreign individuals and companies named in Wisser's plea agreement: Sri Lankan citizen B.S.A. Tahir; German citizen Gotthard Lerch; Swiss citizens Fred, Urs, and Marco Tinner; UK citizen Peter Griffin; German company Leybold Heraeus GmbH; Swiss company AVE Apparate Verfahren und Engineering AG; UAE company BB Enterprises of Dubai; UAE company Al Hadwa General Trading of Dubai; Pakistani company Arshad, Amjad and Abid, Ltd. of Karachi; UAE company Gulf Technical Industries of Dubai; and, the unnamed Spanish company which shipped the Denn flow-former to GTI in Dubai. It is not clear from the content of the plea agreement whether Wisser ever had personal contact with A.Q. Khan or whether such contacts were channeled through Tahir and Lerch. Bost