Top cop backs Mafia man

Andy Duffy

One of South Africa’s top policemen has given controversial businessman Vito Palazzolo a written undertaking that a long-running police probe found nothing on him.

The extraordinary statement, written in consultation with Palazzolo, badly damages and may even derail attempts by the Italian and South African authorities to investigate Palazzolo for alleged criminal activities.

It also emerged this week that Palazzolo, who lives in Cape Town, is on Interpol’s wanted list, for charges in Italy relating to Mafia drug-trafficking and money- laundering in the early 1980s. One document from Interpol’s Pretoria office also lists Palazzolo’s alleged association with the Mafia as a further charge, and names a string of South African officials and businessmen as his associates.

The document is dated May 1995 - months after Palazzolo became a naturalised South African citizen.
South Africa has rejected one extradition request, and is waiting for the Italians to submit another.

The letter defending Palazzolo was written in August by Director Andre Lincoln, head of the Cape-based undercover squad, the Presidential Investigations Task Unit.

The unit, which enjoys close ties with the highest echelons of government, was supposed to help the Italian police investigate Palazzolo and others in South Africa allegedly involved in crime- syndicate activity. Instead, it closed the probe down. This outraged the Italians and other elements in the South African police. Palazzolo’s relationship with Lincoln forms part of an internal police inquiry recently ordered by National Police Commissioner George Fivaz.

Lincoln’s letter, dated August 27, clears Palazzolo of virtually all the allegations the Italian police and Lincoln’s unit were probing. “None of these activities is the subject of any complaint of irregularity whatsoever,” Lincoln writes. “No past or current investigation carried out by myself or my office can implicate your client in the extortion of Italian businessmen in South Africa ...

“It has been a pleasure for me to assist your client and confirm the matters which you have raised, and I really hope that this letter contributes toward solving your client’s problems.”

Lincoln was unavailable for comment, but it is thought he believes the Italians had nothing on Palazzolo. It is understood, however, that the letter surprised even members of Lincoln’s unit.

Palazzolo’s Cape Town lawyer, Cyril Prisman, says he will use Lincoln’s letter if anyone tries to bring proceedings against Palazzolo. “The letter sets out the information the police have got and I can follow this with subpoenas,” he adds. “I want to face the authorities with the truth [against] any further stories or lies which any foreign government can put forward.”

Prisman says his client is the victim of a smear campaign, and that he knows of no possible crime committed by his client that would merit his inclusion on Interpol’s wanted list.

Official documents, however, show Palazzolo has been in Interpol’s sights for 13 years, with the Italians issuing at least three arrest warrants.

One Interpol document, from March 1987, months after Palazzolo first surfaced in the Eastern Cape, alleges that he was “strategically very important” in a drug- trafficking operation between Italy and the United States.

“Specifically, he took care of payments of the large quantitiesof morphia base coming from Turkey and of recirculation of money gained by selling drugs in the US,” the document says. It alleges the payments were made from Palazzolo’s office in Lugano, Switzerland.

Palazzolo was jailed in Switzerland for the money-laundering offences before he settled in South Africa. It is understood this jail term, under the concept of double jeopardy, is one of the reasons why Pretoria blocked the Italians’ initial extradition request.

The scam was exposed in the early 1980s, partly by Tomasso Buscetta, the former top Mafia member now living under US federal protection as a state witness. The operation involved heroin bought and processed in Europe and distributed in the US, mainly through pizza stores. Sales in New York City alone are reported to have been around $750-million, and the case was the first indication that the Sicilian Mafia had branched out into big international business.

Palazzolo was sentenced to five years in a Swiss jail for his role in the operation, after he was identified as holding some of the accounts where money raised from the drug sales was stashed. He served one year before arriving in South Africa in 1986.

“Three separate investigations, initiated by different offices of the Italian state police ... with the aim of identifying the criminal activities that were all connected to the same criminal matrix headed by Cosa Nostra, and that culminated in the operation Pizza Connection, have always identified Palazzolo as the person who ordered the transfers of illegal profits,” the Italian police told Lincoln’s unit in a detailed briefing earlier this year.

The Italian police came to South Africa earlier this year, even visiting and searching Palazzolo’s farm in Franschoek, before Lincoln’s unit closed down the investigation.

The Department of Justice, which deals with extradition requests, says the issue remains in Interpol’s hands. Interpol declines to comment. The Department of Home Affairs was unable to respond at the time of going to press.

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