In September 2007, a South African court issued a suspended 18-year jail sentence for Gerhard Wisser, a German engineer who admitted to participating in the nuclear smuggling network formerly headed by Pakistani scientist Dr. Abdul Qadeer Khan. (For background on the Khan network, see “The A.Q. Khan Network: Crime…and Punishment?” WMD Insights, March 2006.) According to sources, Wisser made arrangements for uranium enrichment equipment and other sensitive nuclear technology to be transferred to Pakistan and Libya to be used in the countries’ respective nuclear weapons programs. The conviction, which is the first issued in an ongoing investigation into the participation of South African firms in the illicit nuclear trafficking network, establishes a precedent for future prosecutions of individuals tied to the Khan network. Furthermore, the testimony of Wisser may prove crucial to the conviction of Gotthard Lerch, the suspected German coordinator of Khan’s operations in South Africa. On November 14, 2007, sources reported that a new trial had been ordered for Lerch in Germany. [1]

Roots of the South African Investigation
The first publicized accounts of the South African investigation came in September 2004, when authorities apprehended Johan Andries Muller Meyer, a South African engineer and founder of the South Africa-based firm Tradefin Engineering. [2] In a 2004 raid of Tradefin’s headquarters, investigators discovered “[f]eed systems/product and tails withdrawal systems and machine header piping systems, as identified in Part 1, Annex B, 5.2.1 and 5.2.2 respectively, of the Nuclear Suppliers Group Guidelines.” [3] According to published sources, this equipment was designed to “insert and withdraw uranium hexafluoride gas that is enriched in centrifuges.” [4] The technology is strictly controlled because uranium enrichment centrifuges can be used both for the production of low enriched uranium for nuclear power plant fuel and highly enriched uranium, usable for nuclear weapons.

Initially, South African authorities charged Meyer with importing and exporting a flow-forming machine, potentially usable to manufacture rotors for uranium enrichment centrifuges, without necessary permits and with “contravening the Nuclear Energy Act by possessing and producing certain components of a centrifuge enrichment plant without the necessary authorisation [sic] of the Minister of Minerals and Energy.” [5] However, the charges against Meyer were quickly withdrawn when Meyer became a state witness and testified that he had been acting on behalf of Krisch Engineering, another South African engineering firm established in 1971 by Gerhard Wisser. [6]

Krisch Engineering and the A.Q. Khan Network
Empowered by Meyer’s testimony, investigators arrested Wisser and Daniel Geiges, a Swiss engineer who served as the project manager of Krisch Engineering, in 2004. In preliminary hearings, Wisser and Geiges denied involvement in procuring controlled equipment and contended that the parts in question were to be used in a water purification plant. [7] The South African investigation, however, had amassed evidence that suggested otherwise. According to sources, Wisser was contacted in 2000 and provided blueprints to manufacture a “compact pipework system” for an “anonymous client.” [8] Although Wisser recognized the blueprints as a uranium enrichment plant, he proceeded with the deal and awarded the contract to Meyer’s Tradefin Engineering firm. Wisser later claimed that he believed that the plant was destined for Pakistan’s civilian nuclear energy program. For his part, Meyer admitted that he had suspicions about the destination of the plant when two Libyan engineers traveled to South Africa to inspect the plant in 2002, and he finally realized the true intent of the plant in 2003 following a payment originating from Libya. [9]

The project was allegedly halted in 2003 due to Wisser’s fears that the transaction would be discovered. The seizure of the cargo ship BBC China, which had been transporting uranium enrichment equipment from a Khan network facility in Malaysia to Libya, publicly exposed both the network and Libya’s nuclear ambitions. [10] Following the October 2003 interdiction of the BBC China by German and Italian authorities, Wisser ordered Meyer to destroy the plant and scrap the project, but Meyer did not follow the instruction. [11]

Beyond its dealings with Libya, the connection between Krisch Engineering and the A.Q. Khan network has yet to be fully disclosed. According to some sources, Wisser “had a long history of involvement with other members of the network.” [12] Although South African investigators have refused to reveal publicly the true extent of Wisser’s involvement in the nuclear smuggling ring, limited testimony indicates that Krisch Engineering provided now-controlled nuclear equipment to Pakistan beginning in 1986. [13] Wisser appears also to have been associated with Leybold Heraeus, a German company accused of supplying vacuum technology used for handling uranium hexafluoride gas in the enrichment process, to the nuclear weapons programs of Iraq, Iran, and Pakistan. [14]

South African Law and the Prosecution of Gerhard Wisser
According to some sources, South Africa has some of world’s strictest legislation governing the transfer of dual-use technology. [15] The most important legislation governing the transfer of sensitive technologies is the 1993 Non-Proliferation of Weapons of Mass Destruction Act. Under the Act, South Africa pledges broadly to “control…the use, transit or export of dual-purpose capabilities” by private individuals and entities under threat of lengthy imprisonment and large fines, specified in implementing regulations adopted in 1994. Furthermore, the act establishes the South African Council for Non-Proliferation of Weapons of Mass Destruction. Consisting of experts from the nuclear industry, the Department of Foreign Affairs, the Department of Defense, and the Atomic Energy Corporation, the Council is directed by a chairperson and vice-chairperson appointed by the Minister of Trade and Industry. Among the primary missions of the Council is “to control, register and inspect controlled goods, and to verify the import, export, re-export, transit and end-use of controlled goods.” Pursuant to these objectives, the Council is empowered to conduct inspections and create boards of inquiry. [16]

Investigators revealed that Krisch Engineering had provided nuclear equipment to Pakistan from 1986 to 1995. Because the regulations implementing the Non-Proliferation of Weapons of Mass Destruction Act were not issued until 1994, however, Wisser and Geiges could be prosecuted only for acts in 1994 and 1995 (when their work for the Pakistani program ended). [17]

In total, Wisser and Geiges were indicted on 10 criminal charges — six related to Libya’s nuclear weapons program and four related to Pakistan’s nuclear weapons program. Among those accusations related to Libya, Wisser and Geiges were charged with importing and re-exporting a flow-forming machine between November 2000 and December 2001 and with manufacturing and attempting to export to Libya systems for a gas centrifuge plant between 1999 and 2003. Additionally, the accused were charged with manufacturing and transferring to Pakistan three autoclaves between 1994 and 1995, which could be potentially useful in the manufacture of nuclear weapon components, and with forging documents in 1995 in order to acquire Leybold Heraeus vacuum equipment and other sensitive technology. [18]

The trial of Wisser and Geiges was initially set to begin in early 2006. In order to prevent sensitive information from being disclosed during the proceedings, the Pretoria High Court decided to conduct most of the trial in secret and with a strict blackout on media coverage of the closed meetings. [19] Several postponements delayed proceedings until 2007. In late 2006, Daniel Geiges was diagnosed with terminal cancer, preventing him from attending the trial proceedings. As a result, the case against Geiges was separated and is currently delayed pending medical review of his condition. [20] By this point, Geiges was also cooperating with prosecutors, along with Meyer. [21]

Although Wisser had initially indicated that he would plead not guilty to the charges against him, Wisser entered into a plea agreement with prosecutors on September 4, 2007. Under the agreement, Wisser pleaded guilty to seven of the 10 criminal counts (three related to Libya and four related to Pakistan) and pledged to cooperate with ongoing and future investigations into the Khan network. [22] For his cooperation, Wisser received a reduced sentence. The punishment handed to Wisser was an 18-year prison sentence (10 years for the charges related to Libya and eight for those related to Pakistan), suspended conditionally for five years. Wisser also received three years of house arrest and agreed to sacrifice over $3 million in proceeds from his crimes. [23]

Gotthard Lerch: Khan’s Middleman to South Africa?
On November 14, 2007, media sources reported a significant development in a German investigation into a suspected member of the Khan network and partner of Wisser. Following a year of uncertainty, a Stuttgart court announced that Gotthard Lerch, a German engineer accused of supplying uranium-enrichment technology to Libya between 1999 and 2003, would be retried. [24] In 2006, the judge presiding over Lerch’s trial declared a mistrial due to complications with evidence and a lack of cooperation from other countries, but the question of whether he would again be brought to trial had been left unresolved. [25]

With alleged ties to Wisser and Geiges, Lerch has been suspected of coordinating Khan’s South African operations. According to German sources, on July 17, 1999, Lerch was responsible for sending Wisser to Dubai to meet with Buhardy Seyed Abu Tahir, a Sri Lankan protégé of A.Q. Khan and an admitted middleman in Khan’s nuclear network. [26] At the meeting, Tahir asked Wisser to build a tubing system capable of linking hundreds of gas centrifuges. [27] While Wisser began filling the order, Lerch acted as a technical supervisor, visiting South Africa at least twice to address technical problems and providing needed equipment and material from European sources, such as pumps and heating wire. [28] For his part in the network, Lerch allegedly received between $20 and $34 million. [29] However, the completed order — a “five-stage cascade consisting of 5,832 centrifuges, including the vacuum, processing and control systems” destined for Libya — was never delivered. [30] Before the order could be shipped in 2003, the Libyan operation was exposed, and Libya revealed to U.S. and British officials the details of the Lerch/Wisser contract, implicating the South Africans involved. [31] Tahir, too, was incriminated, and in 2004 provided a confession to Malaysian police “deeply implicat[ing] Lerch in the activities of the Khan network.” [32]

Based on Tahir’s testimony, transaction records, and information uncovered in investigations conducted by authorities in Germany, South Africa, and Switzerland, Lerch was arrested in November 2004 in Switzerland and extradited to face trial in Germany. [33] In March 2006, Lerch’s trial began in Mannheim, Germany. Among the charges against him, Lerch was accused of violating Germany’s War Weapons Control Act and Foreign Trade Act by providing sensitive technology to Libya. [34] For example, the War Weapons Control Act prohibits developing, producing, trading, importing, or exporting “parts, devices, assemblies, or substances especially designed for” the production or use of nuclear weapons. [35] Violators, including those who “induc[e] another person to commit” a specified act, are subject to prison sentences between one and five years. [36]

As the trial progressed, however, problems with the prosecution’s case quickly became apparent. Key pieces of evidence disappeared, were admitted late by prosecutors, or were not provided by other countries. [37] More damaging, key witnesses — such as Tahir, Wisser, and Geiges — never agreed to testify in person. [38] In a final blow, Tahir’s 2004 testimony from Malaysia was deemed inadmissible “because no defense attorney for Lerch was present when Tahir testified.” [39] As a result, in July 2006, the presiding judge ended the trial and ordered Lerch to be released pending a new trial. [40]

The announcement of Lerch’s retrial follows more than a year of procedural delays. First, state prosecutors had to secure an agreement with Switzerland regarding the sharing of financial records, testimony, and subpoenaed witnesses. [41] Once secured, procedural experts then had to decide which court had jurisdiction over the proceedings. New rules have enabled a court in Stuttgart, responsible for crimes against the state, to try persons accused of export control violations. [42] From initial reports of the retrial, it appears that Lerch will indeed be tried in Stuttgart under these new rules, although no date for the trial has yet been given. [43]

The timing of the announcement of the retrial has led some to speculate that Wisser may be a key witness in Lerch’s retrial. [44] Other sources, however, have expressed doubt that Wisser will be involved in Lerch’s trial. South Africa has no extradition treaty with Germany, and extradition will therefore require a special bilateral agreement. [45] Moreover, South African officials have expressed doubt about Germany’s ability to convict Lerch and raised concerns that their confidential sources — which were protected during the closed trial in Pretoria — would be exposed in a public trial. [46] Rather than provide direct evidence for the Lerch trial, South Africa has proposed to contribute evidence through the International Atomic Energy Agency, which would analyze confidential evidence and deliver a report to German prosecutors. [47] German prosecutors, however, have resisted the proposal, arguing that the admission of indirect evidence against Lerch would again result in a mistrial. [48]

Conclusion
The successful prosecution of Gerhard Wisser establishes an important landmark for international efforts seeking to prosecute members of the A.Q. Khan network. The terms of his punishment, though mitigated by his willingness to cooperate in the on-going investigation of Khan’s activities, could serve as a precedent for other members of the network who are currently under investigation or awaiting trial on similar criminal charges. [49] Furthermore, Wisser’s cooperation with South African authorities could provide potentially valuable information on the involvement of other states and individuals. Gotthard Lerch, who has long been suspected but never convicted of proliferating sensitive technology to Pakistan and Libya, could be the first such individual to fall as a result of the South African investigation. However, the complications surrounding Lerch’s trial and the extent of South African assistance demonstrate the ongoing difficulties in prosecuting suspected members of the Khan network. Competing needs for secrecy and international cooperation, among many factors, have hindered investigators from bringing members of the Khan network to justice.

Adam P. Williams – Monterey Institute James Martin Center for Nonproliferation Studies