In November 2008, after eluding conviction for decades, German engineer Gotthard Lerch was sentenced to sixty-six months in prison by a court in Stuttgart, Germany, for providing assistance to the clandestine nuclear equipment supply network led by Pakistani scientist Abdul Qadeer Khan. [1]  Three prior attempts to prosecute Lerch for purveying nuclear-related goods as part of Khan network operations in violation of German export laws had failed for reasons that also came close to derailing the 2008 trial – and that remain serious challenges to future nuclear smuggling prosecutions in Germany and around the globe. Notwithstanding his conviction, Lerch is no longer in custody.  He was given credit for the extensive time he had served in pre-trial detention and was released at the end of this trial. [2]

The first two prosecutions, in 1987 and 1992, were based on allegations that Lerch had misappropriated blueprints for uranium enrichment centrifuges and participated in the export of components for vacuum systems needed to feed and withdraw gaseous uranium hexafluoride in centrifuge-based uranium enrichment facilities to Pakistan. [3]  Such facilities can be used to enrich uranium to the level needed to fuel nuclear power plants or, as they were used in Pakistan, to further enrich uranium to the level needed for nuclear weapons.  After the failure of these two prosecution attempts, Lerch reportedly renewed his links with Khan, whose network would soon provide equipment and technology to three would-be nuclear powers: Iran, North Korea, and Libya.  From at least 1999 through 2003, Lerch allegedly supplied equipment and expertise for the construction of aluminum tubing and vacuum feed-and-withdrawal systems for linking centrifuges to form a cascade in South Africa.  This module, to be disassembled after construction and testing and shipped to Libya, was to be part of a clandestine facility to produce material for nuclear weapons. [4] These activities became the basis for German authorities’ third attempt to convict Lerch in 2006. Although this effort foundered due to evidentiary deficiencies, the case was reopened in June 2008 and a guilty verdict was secured against Lerch after four months of proceedings.

An engineer by training, Gotthard Lerch first became acquainted with industrial vacuum technology during his brief employment in the aerospace industry.  In 1971, he accepted a position with the German mechanical engineering firm, Leybold Heraeus, which was under contract to the Anglo-German-Dutch uranium enrichment consortium, Urenco, to develop vacuum feed-and-withdrawal components for use in uranium enrichment centrifuge facilities. [5] 

While working on Leybold’s contract with Urenco, Lerch came into contact with Abdul Qadeer Khan, a Pakistani scientist employed with a Dutch firm that supplied precision-crafted outer shells for gas centrifuges, called casings, in support of the Urenco project.  Khan returned to Pakistan in the late 1970s and brought with him the technical experience and illegally-obtained centrifuge blueprints which helped him launch Pakistan’s nuclear weapons program. [6] Khan maintained contact with many of his former European colleagues, including Lerch, who assisted him in procuring the components he needed to produce material for Pakistan’s nuclear arsenal. [7]  In the mid-1980s, when Khan began to assist Iran and North Korea, Lerch allegedly became one of his European suppliers. [8]

German authorities first suspected Gotthard Lerch’s involvement in Khan’s nuclear trafficking operations in 1987, shortly after Lerch left Germany for Switzerland where he founded his own mechanical engineering firm.  Lerch’s company began to produce vacuum systems similar to those created by Leybold Heraeus for Urenco and exported them to Khan in Pakistan. [9]  Suspecting Lerch had smuggled blueprints for the vacuum delivery and extraction components into Switzerland, German investigators hoped to end his involvement in Pakistan’s nuclear weapon program by prosecuting him for violating German export control laws and misappropriating classified information.  The investigation was critically impeded in 1990, however, when “Swiss authorities refused any further assistance on the grounds that the statute of limitations had passed.”[10] 

Although the nuclear Nonproliferation Treaty (NPT), to which both Switzerland and Germany are parties, requires export controls to prevent the transfer of nuclear technology except under appropriate international safeguards, the treaty makes no provision for criminalization of nuclear trafficking. [11]  Therefore, German prosecutors had to rely on existing general export control laws which were intended primarily to punish those who falsified export permits by failing to disclose the true contents of their shipments. 

Unable to intercept any of Lerch’s alleged information transfers, German authorities had to make their case on the basis of business and bank records, along with highly technical evidence about the design of the vacuum systems Lerch’s Swiss firm had begun to produce.  German export control statutes were not designed for such a complex case, and therefore German officials had very limited investigatory authority and insufficient time to complete their inquiry.  Furthermore, since Lerch was suspected of violating German criminal law, Swiss authorities had no legal obligation to surrender critical evidence in their possession to German investigators.  Switzerland’s denial of legal assistance and the expiration of the statute of limitations caused the investigation of Lerch’s business dealings to collapse, and the case was never brought to trial.

German authorities continued to monitor Lerch’s activities.  They successfully lobbied the German legislature to revise a federal statute, the Law Regulating Weapons of War (Kriegswaffenkontrollgesetz or KVKG), to give investigators significant new information gathering authority to prevent weapons proliferation from or through Germany. [12]  With the revised law’s entry into force in November 1990, prosecutors began collecting significant new evidence about Lerch’s activities in Switzerland and connections with Pakistan.  By 1992, they believed they could prove Lerch had smuggled blueprints to which he had been privy while working for Urenco into Switzerland, where he was now using them to produce vacuum feed-and-withdrawal systems for Pakistan’s uranium enrichment program. [13] 

German authorities arrested Lerch and brought him to trial before the district court of Cologne.  The evidence prosecutors had assembled regarding Lerch’s misappropriation of Urenco blueprints, coupled with physical evidence such as vacuum pumps from Lerch’s firm and client transaction records, would have shed light on Lerch’s nuclear trafficking activities.  As with the earlier case, however, Swiss authorities refused to provide German investigators the critical physical evidence against Lerch located in Switzerland.  As a result, the weapons trafficking charges against Lerch were dismissed. [14]  Furthermore, the court found that the evidence submitted did not conclusively prove the assertion that Lerch had illegally smuggled blueprints into Switzerland. [15]

After his release from custody in Germany and return to Switzerland, Lerch reportedly maintained contact with Khan and his expanding network of nuclear technology experts and equipment suppliers.  In 1997, given Libya’s limited scientific and technological resources and realizing that he would need significant external assistance to launch a uranium enrichment program, Libyan dictator Moammar Qaddafi turned to Khan for assistance in building a nuclear weapons program. [16]  Whereas other Khan network customers, including Iran and North Korea, sought blueprints and prototypes or specific technical expertise to develop domestic enrichment programs, Qaddafi gave the Khan network its most ambitious commission: construct a centrifuge cascade module, test it, and then disassemble and ship it to Libya. [17] The Khan network therefore began to construct an aluminum tubing assembly for linking centrifuges in a cascade in South Africa, and Lerch was reportedly instrumental in orchestrating the delivery of components for this undertaking, as he had done in support of Pakistan’s program a decade earlier. [18]  Lerch allegedly also provided technical expertise for assembling centrifuge cascades and designing vacuum systems for moving gaseous uranium hexafluoride through them in addition to supervising parts of the assembly process. [19] 

The Khan network ordered components for the Libyan plant from mechanical engineering firms in Malaysia and India, which “had virtually no export laws against the manufacture of components that could be used in a nuclear program.”[20]  Furthermore, South Africa was selected as the location for construction because it had an established civilian nuclear energy program and was a member of the Nuclear Suppliers Group, which made the export of nuclear components to the country less suspicious and therefore subject to less scrutiny. [21]

Through close monitoring of the network’s operations, however, the CIA uncovered information concerning the shipment of centrifuge components from Malaysia, where they were fabricated, to Libya. [22]  In October 2003, acting on this intelligence, the United States obtained permission of the owner of the BBC China, the German cargo ship believed to be carrying enrichment equipment to Libya, to search the ship.  After the ship’s captain agreed to dock in Taranto, Italy, [23] inspections revealed a wide variety of components, which, according to some estimates, could be used to assemble up to 10,000 centrifuges. [24]  With his nuclear program exposed, Qaddafi sought to end multilateral economic sanctions against Libya and restore his country as a legitimate member of the international community by openly abandoning his weapons of mass destruction programs and cooperating with Western intelligence agencies in their investigations of the Khan network. [25]

Armed with evidence obtained from Qaddafi and the BBC China interdiction, German investigators once again sought to bring Lerch to justice.  In November 2004, they requested Lerch’s extradition from Switzerland to stand trial in Germany for treason and violations of the Law Regulating Weapons of War, which forbids activity within Germany or by a German national, wherever located, that contributes to the proliferation of nuclear weapons. [26]

Witnesses unavailable. When, after an eight-month delay, Swiss officials agreed to surrender Lerch, they imposed two conditions on his extradition that contributed to the failure of the prosecution.  First, in exchange for Lerch’s extradition, Switzerland demanded the return of its national, Urs Tinner, whom German authorities had recently taken into custody on suspicions of nuclear smuggling. [27] [See “A.Q. Khan Briefly Released from Home Arrest, Other Alleged Members of Smuggling Network Now Free” in this month’s issue of WMD Insights.]  This dealt a critical blow to prosecutors in the Lerch case, who hoped that Tinner, a Khan network operative reportedly turned CIA informant, would testify against Lerch (although more recent statements from Tinner’s lawyers indicate he denies any knowledge of Lerch’s involvement in the Libya operation). [28]

Additionally, Buhary Sayed Abu Tahir, the Sri Lankan “Chief Financial Officer” of the Khan network, had been detained by authorities in Malaysia and was cooperating in their investigation of the Khan network.  During interrogation, Tahir informed Malaysian authorities about Lerch’s involvement in the construction of a centrifuge cascade assembly for Libya.  Though the Malaysian government sent an affidavit to German authorities confirming Tahir’s testimony, German criminal law requires witnesses to be present in court so they can be cross-examined by those against whom they are testifying. Prosecutors were therefore barred from using Tahir’s testimony as evidence, since Tahir, still in custody in Malaysia, could not appear in court in Mannheim. [29]

Second extradition condition leads to venue dispute. The second condition the Swiss government imposed on Lerch’s extradition was that German prosecutors dismiss charges of treason against him.  Since Lerch had allegedly stolen blueprints from Urenco, which was partly owned by the German government, prosecutors intended to charge Lerch with violations of export and arms control laws and also with treason for misappropriating classified materials and revealing state secrets.  The addition of treason charges would have allowed German authorities to take their case against Lerch to the Oberlandesgericht Stuttgart, the highest court in the federal state of Baden-Württemberg, which had the resources to prosecute complex international cases. [30]  Citing a provision of its extradition treaty with Germany under which both countries refuse to grant extradition for crimes of a political nature, Switzerland demanded the dismissal of the treason charges.  As a result, Lerch’s case was remanded to a lower court in the city of Mannheim.

The change of venue from a high court to the local court in Mannheim had further implications for the quality of the prosecution.  Local personnel rather than specially trained federal officials with experience in cases involving weapons of mass destruction (WMD) proliferation and arms trafficking assumed responsibility for the conduct of the trial.  As the Mannheim judge himself remarked, his court’s limited resources and lack of experience with cases of concern to international security made it ill-suited for handling Lerch’s prosecution. [31]

Evidentiary obstacles. The Mannheim court’s requests for evidentiary assistance went largely unfulfilled by authorities both in Switzerland, where Lerch’s business documents were located, and South Africa, where the cascade assembly had been constructed. [32]  In addition, the prosecution’s case against Lerch suffered two further evidentiary setbacks.  First, much of the prosecution’s information regarding Lerch’s involvement with the Khan network and his dealings with Libya was contained in intelligence reports from agencies such as the CIA and Britain’s MI6.  Due to the sensitive nature of the information in these classified documents, the originating organizations proved reluctant to authorize their submission as evidence in an open trial. [33]  Moreover, the defense questioned the reliability of the intelligence reports the prosecution hoped to use, arguing that such documents are often speculative and therefore did not constitute clear and convincing evidence for use in a court of law. [34]

Yet another blow came when prosecutors, unable to prove Lerch had willfully contributed to the proliferation of nuclear weapons in violation of the Law Regulating Weapons of War, attempted to charge him with violations of Germany’s Foreign Trade Act for arranging shipments of restricted goods.  Because Germany had requested Lerch’s extradition solely on the basis of violation of the Law Regulating Weapons of War and treason, prosecutors were unable to charge Lerch under the Foreign Trade Act without Swiss approval, which only came after the judge declared a mistrial.

Meanwhile, Lerch’s attorneys filed a successful petition in Germany’s Federal Constitutional Court claiming that Lerch’s constitutional rights had been violated during the proceedings at Mannheim.  On May 29, 2006, the Federal Constitutional Court ruled that Lerch’s due process rights had been violated because the arrest order against him never received appropriate judicial review, the evidence submitted to the court against him was not made fully available to his lawyers, and the foreign witnesses who testified against him had motive, as indicted criminals, to draw attention away from their own guilt by exaggerating Lerch’s involvement in the Khan network’s Libya project. [35]

As a result, the presiding judge in Mannheim dismissed the case against Lerch on July 26, 2006.  Lerch was subsequently released from his five-month investigatory detention on August 18, 2006, under two conditions.  First, he was required to post bail of 3.5 million Euros, an amount thought to be commensurate with the remuneration he received for his support of the A.Q. Khan network. [36]  Additionally, Lerch was ordered to take up residence in Germany to obviate the need for extradition in the future and prevent him from eluding German jurisdiction should the case against him be reopened. [37]

Prompted by a promise of assistance from Swiss authorities, the German state prosecutor’s office reopened its case against Lerch in June 2008. [38]  On November 16, 2008, after nearly six months of deliberations, the State Security Council, a special chamber of the High Court of Stuttgart with jurisdiction over national security cases, convicted Lerch of involvement in the construction of a centrifuge cascade assembly in South Africa, although the court did not determine whether Lerch was aware of the purpose or final destination of the facility. Lerch was sentenced under the Law Regulating Weapons of War to sixty-six months incarceration for contributing to the proliferation of nuclear weapons in violation of the German Law Regulating Weapons of War. [39]  Important developments within the German legal system coupled with increased international legal assistance enabled prosecutors to finally secure the conviction.

The German government improved statutes concerning court jurisdiction before attempting to prosecute Lerch a fourth time. Acutely aware of district courts’ inability to handle complex international prosecutions, they sought to ensure that Lerch would stand trial in a high-level court despite their obligation to dismiss the treason charges initially brought against him as a condition of his 2006 extradition. Federal prosecutors lobbied the German parliament to adopt a new provision in the statute governing the structure and jurisdiction of the German court system to allow those accused of illegally exporting weapons or components for weapons development to be tried in a court deemed appropriate by federal prosecutors. [40]  In accordance with this provision, Lerch’s retrial was opened in the High Court of Stuttgart.

The success of Lerch’s fourth trial was also the product of significant international legal assistance.  Switzerland and Liechtenstein cooperated in the trial by providing bank records and business documents, as well as physical evidence linking Lerch to the project in South Africa.  Libya also provided financial records indicating the remuneration Lerch received for his assistance to the Khan network. [41]  In addition, Peter Griffin, a U.K. national and suspected supplier of the Khan network’s Libya operation, testified against Lerch in Stuttgart.

Although the testimony of two additional foreign witnesses who remained abroad could not be introduced in court, the detailed information they provided German prosecutors permitted them to refine their case. South Africa, for example, declined to extradite Gerhard Wisser, another Khan network member convicted in South Africa of contributing to the proliferation of nuclear weapons in 2007, who nevertheless provided German prosecutors highly useful information about Lerch’s involvement unofficially through an attorney in Frankfurt. [42]   Similarly, while testimony obtained by the Malaysian government from B.S.A. Tahir during its investigation of the Khan network was not admitted at trial, German prosecutors were able to leverage this information to convince Lerch to accept a plea bargain, whereby he would admit to involvement in the construction of the centrifuge cascade assembly in South Africa in exchange for guarantees that he would serve no more than six years in prison. [43]

The court found Lerch guilty only of contributing to the proliferation of nuclear weapons by participating in the construction of a uranium enrichment plant.  The court did not find that Lerch was a member of the Khan network and did not agree with the charge in the prosecutors’ indictment that Lerch had spearheaded and supervised the Libya project. [44]

Despite his conviction, Lerch was given credit for the extended amount of time he spent in pre-trial detention awaiting his third and fourth prosecutions and was released from custody at the conclusion of his trial. In January 2009, the U.S. State Department imposed sanctions on Lerch and several other members of the A.Q. Khan network for their illicit activities.  Lerch has been banned from receiving contracts or export licenses from the U.S. government and no product or service he offers may be imported into the United States.  Additionally, his property and assets in the United States and in U.S. banks have been frozen. [45]

In ultimately obtaining Lerch’s conviction, German prosecutors demonstrated considerable tenacity.  They took advantage of the diversity of German criminal laws, in particular the Law Regulating the Weapons of War, in crafting their indictment; overcame complex procedural issues to ensure their case was heard in a court with specialized capabilities; and dealt with refusals to extradite at least two key witnesses by finding means to exploit the information they possessed, even when it was not admissible at trial. This experience can provide valuable lessons for other states as they develop and/or refine legislation to control WMD-related assets under their jurisdiction, as required by UN Security Council Resolution 1540. According to the prosecutors, however, the most important factor in bringing Lerch to justice was the unprecedented evidentiary support from foreign governments and witnesses that may rarely be available in future prosecutions of suspected nuclear smugglers. [46]

Speaking in February 2008, South African Deputy Foreign Minister Aziz Pahad underscored this point in explaining why his government had been able to obtain a conviction the previous year against Daniel Geiges, another member of the Khan network:

You see there is a great deal of focus by most of the [W]estern countries, as it so happens, on legislation – that you must have strong legislation on non-proliferation, and they focus a great deal on developing countries, saying “you don’t have this legislation.” What we have said in all our submissions and also to the 1540 Committee [overseeing implementation of Security Council Resolution] is that legislation is very important but what is critical in this sort of case is information-sharing and investigative capacity – so you can have all the paper legislation you want but if you don’t get information from other governments and go share the information with other governments and work with them together, it is very difficult to get convictions. [47]

Thus, as states strive to implement Resolution 1540, one area that may deserve further attention is the development of new means to facilitate information sharing and evidence collection across national boundaries.

Philip Johnson – Georgetown University