A.Q. Khan Associate Lerch Avoids Jail Time in Deal

UNCLAS FRANKFURT 003206 DEPARTMENT FOR T, EUR, ISN, SCA, AF, EAP SENSITIVE SIPDIS E.O. 12958: N/A TAGS: PARM MNUC PREL KNNP ETTC KJUS KCRM PREL GM SUBJECT: A.Q. Khan Associate Lerch Avoids Jail Time in Deal REF: A. 07 Berlin 2239 ¶B. 08 Frankfurt 1817 ¶C. 08 Frankfurt 2272 ¶1. (SBU) SUMMARY: Nuclear smuggler Gotthard Lerch struck a deal with the prosecution ending his trial October 16 and avoiding any jail time. Lerch received a five and a half year sentence for his involvement in exporting nuclear technology to Libya, but the remaining time of his sentence will be commuted to probation. The prosecution struggled during the long investigation to obtain information from foreign governments, leading it to settle with Lerch who wanted to end the trial and avoid any time in prison. END SUMMARY. Plea-Bargain Deal Brings Trial to Early End -------------- ¶2. (U) On October 16, the Higher Regional Court in Stuttgart issued Gotthard Lerch a five and a half year prison sentence for violating German export control regulations. Prior to the verdict, Lerch's attorneys and the federal prosecutors had agreed that Lerch would plea guilty in exchange for a sentence of no more than six years. The two sides have met several times since August of this year in an attempt to end the long-running case. ¶3. (U) Lerch admitted in his confession that he had taken part in the design and production of pipe systems for a gas centrifuge facility in South Africa, which was to be shipped to Libya for use in its now-abandoned nuclear weapons program. Lerch also admitted to being a long-time associate of A.Q. Khan, the Pakistani nuclear engineer who helped Iran, North Korea and Libya develop nuclear technology (see reftel C). Media sources have speculated that Lerch and other associates shared information with U.S. and other foreign intelligence services on Libya's program, which led to its eventual exposure and end, in exchange for assistance in avoiding prosecution for their actions. ¶4. (SBU) In addition to his sentence, Lerch must make a one-time payment of 3.5 million euros ($4.69 million) to the Federal Republic of Germany, an amount estimated to equal what he received as payment for his participation in the nuclear weapons smuggling network. Lerch has already spent twenty-two months in pre-trial detention, which counts as time served. The judge also ruled that the trial and investigation had gone on too long (almost four years) and therefore suspended another year of the sentence in compensation. Thus, Lerch will most likely not return to prison and will instead be on probation for the remaining time of his sentence, one and half years. The Federal Prosecutor's Office in Karlsruhe told ConGen Econ Spec that the case had gone on so long in part due to a change in law moving jurisdiction for the trial from the state to federal level, which took place once the investigation was well underway. Court Criticizes International Assistance -------------- ¶5. (SBU) Presiding Judge Juergen Niemeyer said in his ruling that Lerch had taken part in the proliferation of nuclear weapons, but had not been a leading player. He praised the amount of legal cooperation Germany had received from Switzerland, Lichtenstein and Malaysia. One of the prosecutors, Sigrid Hegmann, told ConGen Econ Spec that the prosecution settled due to the lack of cooperation from numerous foreign governments in the investigation. Of the fifteen requests for assistance, only Switzerland, Lichtenstein and Malaysia had responded. Hegmann stated that among those that only partly responded or not at all were the U.S. and Great Britain. However, South Africa's refusal was particularly damaging as so much of the evidence is believed to lie there. ¶6. (SBU) Comment: Lerch's motivations to confess were clear as he avoids jail time and brings his long legal troubles to an end. The sixty-five year old engineer has been found guilty of helping the Libya program, but will most likely avoid any further investigation into his long association with A.Q. Khan and his ring of nuclear smugglers. Thus, the final verdict was mostly likely bittersweet for the prosecution, which won the case, but was forced to settle for a weak sentence. End Comment. ¶7. This cable was coordinated with Embassy Berlin. POWELL