STEFAANS BRUMMER, Cape Town | Friday
THE Nelson Mandela Childrens Fund has found itself in bed with a business linked to Mafia don Vito Palazzolo – but the fund protests that it is an unwilling partner and says it has asked for an audit of moneys collected in its name.
Sicilian-born Palazzolo was arrested in November 1999 on fraud charges relating to his entry to South Africa after evading a Swiss jail sentence and also relating to the way he later gained South African citizenship. He is out on bail of R500_000 pending conclusion of his trial, set to resume in the Cape Regional Court on August 20.
Ironically, Palazzolos arrest, by the elite Scorpions unit, followed a call the previous year by Mandela, then still president, for the Palazzolo matter to be reinvestigated. Mandelas call was in response to a renewed media focus on Palazzolo and his links with the Sicilian Mafia.
Achmat Dangor, chief executive of the fund, this week said he was expecting no money from Franschhoek-based La Vie de Luc mineral water, which has been sporting labels with the words, Benefiting the Nelson Mandela Childrens Fund.
But Wayne Robertson, financial manager of La Vie de Luc, said: As far as were concerned we have a three-year agreement to use the childrens fund [logo]. He said the first payment to the fund was due on July 31.
La Vie de Luc is bottled at La Terra de Luc, the wine farm where Palazzolo maintains a residence. A majority stake in the R30-million farm, which earlier belonged to Palazzolo, was reportedly sold around the time of Palazzolos arrest to his equally colourful neighbour, the Italian racing driver-entrepreneur Count Riccardo Agusta.
La Vie de Luc, though its attorney Igor Vukic, on Thursday asked the Mail & Guardian to publish no reference to Palazzolos ownership of La Vie de Luc. He said Palazzolo was not the owner and that any such suggestion could affect the companys image in the marketplace. Robertson said the mineral water company, like the farm, was owned by Agusta. The ultimate shareholder is the count and it is a 100% shareholding by the count.
Whether or not Palazzolo – who also calls himself Roberto von Palace Kolbatschenko – has an ownership stake, his links remain clear. His sons Christian and Peter von Palace Kolbatschenko were listed as recently as February as directors of the company La Vie de Luc Mineral Water, and Christian remains the general manager at the bottling plant.
Palazzolo also remains a consultant or manager at least to the farm itself. At the time of the sale, it was reported that Palazzolo had been asked to stay on indefinitely in the manor home as a consultant. When the state tried to withdraw Palazzolos bail last year, Palazzolo opposed it on grounds which included that he was still a consultant at the farm. His representative also told the court that Palazzolo received a monthly salary for managerial duties.
The link-up between the childrens fund and La Vie de Luc was formalised in May last year, but at that stage possibly without the funds knowledge. The deal was done in the funds name by Edusaf Projects, a charity which had entered a fundraising joint venture with the childrens fund some months earlier.
Edusaf and the fund are now at loggerheads, and the funds Dangor told the M&G that he had demanded audited statements of transactions Edusaf had conducted in the funds name. If Edusaf failed to produce these, the fund would consider legal action. Dangor said that partnership between Edusaf and the fund was a failed experiment in outsourcing that would not be repeated.
Edusaf legal adviser Jon Gephardt this week said the link to Palazzolo was news to him. He said La Vie de Luc had been introduced as a donor by Swiss citizen Peter Mark, who was an associate of Cape-based music promoter Udo Klotz, who was involved with Edusaf in arranging a Nelson Mandela Childrens Fund exhibition at Expo 2000 in Hanover, Germany.
Events at the exhibition led to a breakdown in relations between Edusaf and the childrens fund. Correspondence between La Vie de Luc, Edusaf and Peter Mark shows that La Vie de Luc agreed to sponsor Edusaf R5_000 in cash and R5_000 in mineral water, as well as provide at wholesale prices 15_000 bottles of mineral water, sold at the Hanover fair to the benefit of Edusaf and the childrens fund.
But Expo 2000, said Gephardt, turned out to be a terrible failure. The pavilion had cost about R500_000 to set up. The water sales made a bit of money, but in total there was a huge loss. Gephardt said Edusaf still owed much money on that venture – a fact confirmed by Robertson, who said La Vie de Luc had, in addition to the sponsorship, also provided the start-up loan. That loan had been repaid but much was outstanding on the water supplied by La Vie de Luc.
But the childrens fund had a different reason for being angry with Edusaf over the Expo 2000, which ran between June and October last year. Dangor said that South Africas embassy in Germany informed the fund that the Edusaf pavilion was giving the childrens fund bad publicity. Among problems were claims by South African workers, brought to Germany to work at the pavilion, that Edusaf had breached their contracts and left them in the lurch.