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SPIEGEL ONLINE

03/13/2006 12:00 AM

A.Q. Khan's Nuclear Mafia

Network of Death on Trial

By Jürgen Dahlkamp, Georg Mascolo and Holger Stark

The world's first-ever court case against a presumed member of Khan's global nuclear weapons bazaar is beginning on Friday. The German defendant may have helped Libya acquire nuclear weapons technology. Iran is implicated too.

Parts for a centrifuge were discovered on a container ship bound for Libya in 2003. It was the beginning of the end for A.Q. Khan's nuclear mafia.

Parts for a centrifuge were discovered on a container ship bound for Libya in 2003. It was the beginning of the end for A.Q. Khan's nuclear mafia.

The building itself is modest. Dating from the 1960s, it's covered with rust-brown steel siding on the outside and nicotine-yellow ceiling tiles on the inside. But the building, a courthouse in the German city of Mannheim, has been charged with a vitally important mission -- case number 25 Kls 613 Js 17967/05. The mission is that of saving humanity, and it starts at 10:00 a.m. this Friday.

There are two ways to describe the case against German engineer and businessman Gotthard Lerch coming before the Mannheim District Court. One involves the complex language of Germany's War Weapons Control Act and Foreign Trade Act -- the language of the indictment against Lerch. The other description is much easier to understand. Lerch stands accused of aiding and abetting the end of the world through nuclear Armageddon.

Lerch, it is alleged, lent his support to the efforts of a number of dictators around the world to construct a nuclear weapon. He is charged with supplying plans, manuals and even entire systems. The case going before the Mannheim court on Friday deals with Lerch's alleged involvement with Libyan dictator Moammar Gadhafi. According to a confidential expert report, Gadhafi would have been able to produce up to 30 kilograms of weapons-grade uranium a month with the equipment he ordered from his German contact. It is the first trial worldwide against a suspected member of the nuclear mafia and it is shining an unwelcome spotlight on Germany -- the country is once again at the center of a case focusing on the international arms trade.

Clues to Iran's nuclear program?

Prosecutors can thank two key figures for strengthening the case against Lerch: Sri Lankan businessman Buhary Seyed Abu Tahir and Swiss engineer Daniel Geiges. Tahir gave important testimony to German investigators and Geiges spoke candidly with SPIEGEL last week. The details the two men provided have now made it possible to reconstruct -- from the standpoint of those involved -- one of the most unscrupulous crimes of the modern age, a story that has become all the more politically relevant in light of the current dispute with Iran.

After all, it's also likely the network provided its services to Tehran. But it remains unclear as to exactly how full the Iranian mullahs filled their shopping baskets at Khan's European arms-dealer bazaar. Indeed, some of the Iranian on-again-off-again negotiating strategy with the international community could very well be an attempt to cover up just how much of the country's nuclear technology came from abroad. Mohammad ElBaradei, head of the International Atomic Energy Agency (IAEA), is hoping the Mannheim trial will shine some light on similarities between the Libyan deal and what might have happened in Iran.

Dr. Khan's network.
DER SPIEGEL

Dr. Khan's network.


IAEA reports already strongly suggest that the Iranians were regular customers in a global supermarket for nuclear equipment and materials -- and not just because they wanted to enrich uranium for nuclear power plants. Despite their many denials, the Iranians, it would seem, are clearly interested in nuclear weapons.

Such is the geo-political backdrop for the first-ever trial of a presumed member of the international nuclear Mafia. Mannheim has the dubious honor because Lerch, who lives in Switzerland, was extradited to Germany in June 2005. The trial will be held in the Mannheim court's largest courtroom -- a 250-square-meter (about 2,700 square feet) gymnasium of criminal jurisdiction.

"Polite and decent"

Lerch, 63, is by all accounts a quiet, good-natured and refined man. While in Swiss detention awaiting extradition, Lerch made himself popular among fellow detainees because, as an engineer, he was able to reconfigure the remote controls for the facility's TV sets. According to the director of the Altstätten regional prison where Lerch was held, he was consistently "polite and decent," a man with a "friendly nature."

An unimpeachable character, in other words. Except for the fact that, according to the prosecution, Lerch used his same positive character traits to serve the network of Pakistani nuclear scientist Abdul Qadeer Khan. It was the same Dr. Khan who not only became the celebrated "father of the Pakistani nuclear bomb" in the 1990s, but also used his talents to remake himself into the most notorious figure in the global black market for nuclear weapons. And it was the same Dr. Khan who was consistently at the service of regimes in Iran, Libya and North Korea, and possibly other nations, that were secretly attempting to join the nuclear club.

Lerch, in pre-trial detention in Mannheim, allegedly worked for Khan as something of a division manager for the Libyan business -- with responsibility for South Africa as a production site. According to the investigation conducted by the Mannheim district attorney's office, Lerch received 55 million German marks for his services for a total profit of some 25 million marks.

Two circumstances could prove to be Lerch's undoing: first, the fact that the German ship "BBC China" was intercepted in October 2003 carrying a cargo of containers filled with nuclear technology headed for Libya and, second, that the incident prompted a panicked Gadhafi to disclose the names of all those who had supplied the Libyans with material and expertise for their nuclear program.

It was the biggest strike ever against the Khan connection and against the international nuclear black market. And for a moment, it almost seemed as if the whole thing were about to collapse. Khan, the popular hero, was forced to apologize to the Pakistani people in a humiliating television address, and has been under house arrest ever since. His protégé, Sri Lankan Buhary Seyed Abu Tahir, nicknamed "Junior," submitted a general confession to Malaysian criminal investigators and later to German officials. According to Tahir's testimony to the German investigators, large chunks of which remain classified, Libya spent $85 million with the Khan network -- Tahir himself received payment.

Terrifying chapter for global security

The authorities caught up with Gotthard Lerch, who Tahir calls his "main contractor," in Switzerland. They also arrested members of the Tinner family -- Friedrich Tinner and his two sons, Urs and Marco -- all on the suspicion of having built parts for Gadhafi's nuclear weapons program in return for 15 to 20 million Swiss francs. South African authorities captured German engineer Gerhard Wisser, who confessed to having collected €850,000, although after questioning Tahir, German authorities believe that Wisser may have earned as much as €10 million on the deal. Finally, Swiss authorities arrested Wisser's right-hand man, Swiss citizen Daniel Geiges, who broke his long silence for the first time last week.

Everything seemed to be falling into place -- a terrifying chapter in the story of global security was reaching a happy end after all. But then things became complicated again. Foreign investigators, including IAEA officials, have not been given access to Khan -- apparently a reflection of Pakistani President Pervez Musharraf's concerns over the touchy question of just how much his government knew about the dealings of its very own Dr. No. Khan's protégé, Tahir, has only been willing to talk in Malaysia. Indeed, he ended his testimony to German prosecutors -- so damaging to Lerch -- with the remark that he would not repeat anything he had just said before a German court.

And now the intelligence agencies are stonewalling. It is becoming increasingly clear that the CIA and Britain's MI6 infiltrated the Khan network and that they probably even recruited some of the main suspects. How else, for example, could one explain the fact that vacuum pumps manufactured by Germany's Pfeiffer Vacuum, ended up in both Libya and Iran? The company, after all, never sent any vacuum pumps to Libya or Iran -- but did send some to the US nuclear weapons research facility in Los Alamos, New Mexico.

The investigation has also been dragging in South Africa, where it will apparently take a few more months before a case is finally brought against Wisser and his former employee, Geiges. In Switzerland, the case against the Tinners is likely to be postponed even further -- at least until next year.

Part II: Khan's Worldwide Network 

Libyan leader Moammar Kadhafi was one of Khan's best customers, until he turned over everything he knew to the IAEA.
AFP

Libyan leader Moammar Kadhafi was one of Khan's best customers, until he turned over everything he knew to the IAEA.

All of this places the Germans in Mannheim at the front of the line with their case -- they are now the ones on which the Vienna-based IAEA is pinning its greatest hopes.

The case will take the court back to the 1970s, when Gotthard Lerch first met Pakistani scientist Abdul Qadeer Khan. Khan, a young metallurgy engineer, was working for an Amsterdam firm that provided consulting services to Urenco, a German-Dutch-British consortium. At the time, Urenco was building a uranium enrichment facility in the Dutch town of Almelo. The core of the system consisted of so-called gas ultracentrifuges. Urenco planned to use its ultra high-speed centrifuges, running at 70,000 rpm, to concentrate the isotope U-235 -- which occurs in natural uranium at a concentration of only 0.7 percent -- to the level of 4 percent needed for use in nuclear power plants. A 90-percent concentration of U-235 can be produced by centrifuging the material even further, in other words, running it through entire cascades of hundreds or even thousands of vacuum-sealed centrifuges connected in a series. A 90-percent concentration of U-235 is the material used in nuclear weapons.

Khan remained at Urenco until 1975, when he copied the company's most important plans and then fled to Pakistan to build the bomb for his country. However, in addition to being theoretically complex, uranium enrichment poses extremely difficult technical challenges -- especially for a scientist without access to a high-tech laboratory and working in a third-world country like Pakistan.

Know-how transfer

To solve his dilemma, Pakistan's nuclear spy set out on a search for suppliers. At Leybold Heraeus in the German city of Hanau, a global leader in vacuum technology, Khan found what he was looking for in a young engineer, Gotthard Lerch. Lerch soon attracted the attention of German export inspectors, who wanted to know what he was doing in Pakistan. He admitted that Leybold Heraeus had shipped valves, vacuum pumps and a gas purification system worth 1.3 million German marks to Pakistan. When Lerch left Leybold in 1985 and went to Switzerland, a similar know-how transfer took place. Lerch had hardly begun working for his new employer in Switzerland before a company began producing gas ultracentrifuges remarkably similar to those featured in construction blueprints at Leybold Heraeus. The centrifuges were destined for Khan's laboratory in Kahuta.

As early as 1987, the German authorities wanted to investigate Lerch's business connections with Pakistan. But in 1990 Swiss authorities refused any further assistance on the grounds that the statute of limitations had passed. Germany's War Weapons Control Act was not yet applicable, because it was only introduced in 1990. And in the view of the Cologne District Court, there was no evidence that Lerch had smuggled plans to Switzerland.

During this time, Khan continued to assemble a network of suppliers, confidantes and friends. One day he met a young man who was trying to sell him air-conditioners for his laboratory. The man was Tahir, who later came to be known in the industry as "Junior." Tahir soon began calling Khan "Papa," and was even permitted to accompany him on a pilgrimage to Mecca.

Abdul Qadeer Khan is celebrated in Pakistan as the Father of the Nuclear Bomb. He is under house arrest.
REUTERS

Abdul Qadeer Khan is celebrated in Pakistan as the Father of the Nuclear Bomb. He is under house arrest.


And then there was Peter Griffin, a Dubai-based British businessman who, in addition to being technically knowledgeable, was well-versed in the business of importing and exporting questionable merchandise. Swiss national Friedrich Tinner, an expert in building vacuum parts and valves -- precisely what Khan needed -- completed the picture.

Tahir, Griffin, the Tinners -- all figure prominently in the 90-page Lerch indictment that sits before the Mannheim court, and all were already part of the great Khan's network in the 1980s. And Lerch himself? When he was interrogated about a year ago, he claimed that he was unable to recall whether he had in fact ever seen Khan again after leaving Leybold Heraeus in 1985.

Nuclear bombs for sale

But Khan was interested in more than just building a bomb for Pakistan. Sometime during the 1980s, he decided that every country that could afford it should have its own bomb, or at least every Muslim country. At the top of Khan's list was Iran, now indignantly insisting that nuclear weapons are the last thing it intends to pursue through its uranium enrichment program. The IAEA now believes that Khan, through his network, first offered Iran the plans for two types of centrifuges in 1987. Another German is said to have assisted Khan at the time: Heinz Melbus, a university friend of Khan's who died in 1992, and a man who was so closely linked to Khan that a bomb -- presumably sent by Israel's Mossad intelligence agency -- once went off in his front yard.

The Iranians first chose the P1 centrifuge, a simple but not especially powerful version. But even the P1 proved to be too much of a challenge for the Iranians, who lacked the special steel needed to build the device. Conveniently, however, Khan had just happened to be converting the Pakistani nuclear program to the considerably more modern P2 -- the 500 decommissioned P1 centrifuges were shipped to Iran via Dubai. A member of the Tinner family has also recently admitted that Marco Tinner built 5,000 centrifuge parts for Iran in Switzerland, shipping them his brother Urs in Dubai. Tahir was apparently responsible for making sure the parts reached their final destinations.

In mid-1997, Khan met with new customers in an Istanbul café: the Libyans. Khan sat at a table with the head of the Libyan nuclear weapons program, while Khan's protégé Tahir sat at the next table -- at least according to what Tahir told German investigators when he was interrogated in Malaysia in late June 2005.  Gadhafi's men were somewhat at a loss as to what to do with the 20 complete centrifuges and 200 parts Khan had sent to them earlier. A few dozen centrifuges weren't enough to produce weapons-grade material, and the Libyans lacked the expertise to build their own production facility. Instead, the Libyans made it known that they wanted a complete factory delivered from abroad.

The project that materialized was dubbed "Machine Shop 1001." Khan instructed his man in Dubai, Peter Griffin, to ship an entire assembly line for construction of the simpler centrifuge model, the P1, and the model promptly became known as L1 -- L for Libya. The investigators also believe that it was Griffin's job to arrange for the training of technicians in Spain. In October 2000, after having worked on the project for three years, the Libyans successfully tested a single centrifuge, but then the program stalled again. But by then the Libyans had realized that they were probably better off with the newer version, the P2, which was even more complicated, but also more powerful. In 2000, Gadhafi ordered 5,000 P2 centrifuges from Khan, and later ordered another 10,000 centrifuges.

Nuclear parts "Made in Switzerland"

It is precisely this deal that the Mannheim court is now investigating. It was a project managed very much like any other business enterprise and based on the industrial principle of division of labor. Khan brought in the orders. Tahir was the "Director of Finance," as he was later called by US President George W. Bush. Two or three division managers were responsible for ensuring that their sections of the plant were completed.

Under the Khan scheme, Swiss businessman Friedrich Tinner, together with his two sons, Urs and Marco, were contracted to mass-produce more than a dozen different centrifuge parts in Malaysia and in Switzerland. An attorney for the family has refused to comment on the charges, but officials at the IAEA believe that the family cooperated. In several lengthy interrogations, Urs Tinner has provided extensive testimony and apparently disclosed information to the CIA, which has had him in its sights for some time now.

What is known for sure is that Tahir sent Urs to Malaysia, where he supervised the production of the parts that were later found hidden on the "BBC China" container ship en route to Libya.

Investigators were also interested in Tinner and his son Marco, because they are believed to have manufactured parts for Gadhafi's bomb kit in Switzerland, at Marco's company Traco. The Swiss family apparently also maintained a workshop in Turkey: partial orders and the machinery needed to produce them were sent to a subcontractor in Istanbul who had learned his trade at German electronics giant Siemens.

But Gotthard Lerch is believed to have been in charge of Khan's second production source, one that went back many years to South Africa.

During an interrogation in South Africa in September 2004, defendant Lerch claimed that his only ties to the country were a few apartments he owned, as well as a close acquaintance, 66-year-old Gerhard Wisser, who would occasionally look after Lerch's legal affairs in the country. This, said Lerch, was about all he could remember about South Africa, adding that he had had no recent dealings with Wisser's vacuum technology firm, especially not in connection with centrifuge systems.

A new star witness

Wisser and Lerch have known each other for decades. When Lerch worked for Leybold in Hanau, Wisser was Leybold's representative in South Africa. In the 1980s, Leybold became one of the main suppliers to South Africa's secret nuclear program. According to German investigators, Wisser, supposedly under contract with Lerch, also produced parts for Pakistan's centrifuge program in the 1990s.

On July 17, 1999, Wisser flew to Dubai, where he met with Khan's protégé Tahir. The two men had already known each other for years. Tahir asked Wisser if he could build him a tube system -- the type of system that could be used to link hundreds of centrifuges. Wisser was told that he would receive precise drawings -- and that he would be well-compensated for his troubles.

Wisser, in the middle of an expensive divorce, was interested. He contacted an old friend, Johan Meyer, the owner of Tradefin, a small equipment manufacturing company in Vanderbijlpark, and asked him to produce the tube system. Wisser also initiated Daniel Geiges, his most important employee and a native of Switzerland, into the deal.

Until recently Geiges, 68, was denying everything and covering for everyone. Now, though, he has lost his job with Wisser, his company-owned apartment and his health. Geiges, who has cancer and not much to lose, has become a star witness for the prosecution. His testimony has filled page upon page of documents, and now, in conversations with SPIEGEL, he has publicly accused Lerch.

And what of Lerch's claims that heard nothing, saw nothing and had absolutely no connection whatsoever with Wisser's Libya production? "Lerch was involved in the whole thing," says Geiges, who claims that Lerch monitored the project from Switzerland. Indeed, the term "Project GL" that appears in company documents is a direct reference to Gotthard Lerch's initials, says Geiges.

Technical expertise from Lerch

Some of the plans that Geiges had to update came from the German firm Leybold Heraeus, from the days when Lerch was still working there. According to Geiges, Lerch had kept the plans in South Africa for some time, believing them to be safer there. Even Wisser, who previously claimed that he didn't realize what was going on until late in the game, now says that Lerch was involved in the project in an advisor role to businessman Tahir, who lacked the technical expertise.

In a fax sent on June 14, 2000, Wisser informed Geiges that Lerch was planning to visit Randburg in South Africa in July 2000. In the fax, Geiges was instructed to prepare himself for "questions" relating to the "tube system" and a valve system among other things. In another fax, Wisser, deliberately using cryptic language, informed Geiges that the "'Full House' configuration must be complete -- GL is coming around 8/30-9/1/2001." Indeed, as Lerch himself has testified, he was in Johannesburg during this time period.

Geiges, for his part, says he remembers two visits by Lerch, one in early 2001 and one in late February 2002. The men discussed technical problems for hours, says Geiges, "and in the end we did it the way Lerch had recommended."

None of this is consistent with Lerch's claims that his only ties to South Africa were his real estate transactions and his vacations there. But if Geiges were lying, two other people would also have to be lying: Johan Meyer in South Africa, the head of Tradefin, who became the investigators' star witness promptly after being arrested a year and a half ago, and Fridolin Z. in Liechtenstein. In the summer of 1999, Lerch ordered a few items from Z.'s company, including pumps and heating wire. According to Z.'s testimony to German federal prosecutors, Lerch instructed him to ship the pumps to Tahir. And the heating wire? It was to be shipped to Gerhard Wisser -- ASAP. Lerch, says Z., paid for the wire in cash, a claim supported by receipts on file with the Mannheim court.

A five-stage cascade consisting of 5,832 centrifuges, including the vacuum, processing and control systems, was complete and ready for shipment in South Africa by 2003. But before the merchandise could be shipped, the Libyans blew the whistle and brought down everyone involved. "They fed us to the dogs," Wisser complained to Meyer. In Tripoli, the Libyans turned over boxes to the IAEA full of parts from Malaysia, many never even unpacked, and a special lathe that Khan's network had already sent to Tradefin in South Africa once before. More importantly, however, the Libyans revealed names.

How deeply was the CIA involved?

Tahir was one of the first one named. He claimed that Lerch signed an agreement with Khan in 2000, which guaranteed him a payment of 55 million German marks -- an estimated 30 million marks for the project and 25 million marks for himself. In return, Lerch met with Khan and Tahir periodically, sometimes in Dubai, keeping them "constantly up-to-date." Then, Wisser -- a man who still feels falsely accused of wrongdoing -- began to talk: Lerch, he says, was "definitely" involved in the deal.

But neither Wisser nor Tahir will be available to testify in Mannheim, nor will Geiges. The Briton Peter Griffin, presumably responsible for shipping the merchandise to Libya, and who lives in the south of France today, is likewise unavailable. He was interrogated by the French intelligence service in the summer of 2005. For years, Griffin has been seen as a man with good connections in the intelligence community, especially with the British. Amazingly enough, Griffin is still a free man, and the Mannheim court stands little chance of securing his extradition.

Testimony by Urs Tinner would likewise no doubt be valuable to the prosecution. But he is said to have been recruited by the CIA shortly before the end of his mission in Malaysia. Upon his arrest and detention in Germany, the Americans made a big show of supporting him. Indeed, the entire case is beginning to bear the telltale signs of the CIA and MI6, a windfall for Lerch's defense attorneys, who argue that the entire deal was concocted by the intelligence agencies. Their client, they say, is a victim, not a perpetrator, and he expressly contests "the violations of the War Weapons Control Act and the Foreign Trade Act of which he has been accused."

In other words, the Mannheim case will be a difficult one. And as if it weren't complicated enough already, the trial has also raised hopes that it will yield important information pertaining to the ongoing dispute with nuclear wannabe Iran -- perhaps even information that will help the international community in its case against Iran.

A smoking gun pointed at Iran?

Iran is notoriously obstructionist. At first the mullahs even claimed that the plans for their enrichment technology came from the Internet -- nuclear power only a mouse click away. Then, a few months later, they finally released a one-page letter from 1987: Khan's bid for the delivery of 2,000 centrifuges. And why did Iranian negotiators meet with Khan in 1996 and supposedly obtain the plans for the modern P2 centrifuge? The country claims it has never worked with such high-end technology.

No one trusts the Iranians, especially after Tehran refused to hand over a 15-page report that describes how highly-enriched uranium can be molded into semi-spherical shapes -- the kinds of shapes that are used only in bombs, but not in reactors.

"The dealers gave us this document. We never asked for it," claims Iran's Deputy Foreign Minister Abbas Araghtshi. But it's difficult to believe that just this one document was handed over and that nothing else related to nuclear weapons production made it into the hands of the Iranians. Khan, after all, has proven to be a very thoughtful supplier -- he allegedly handed over an entire bag full of construction plans for a 10 kilogram nuclear bomb with the sentence, "they'll find this to be quite useful."

But as long as Iran seeks to cover up its dealings with the Khan network, the nuclear watchdog agency will be forced to take an indirect path to arriving at the truth. One such path could now be about to pass through Mannheim.

Translated from the German by Christopher Sultan

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