Publication: Mail and Guardian Issued: Date: 2003-01-31 Reporter:

The Sneaky Side of SA's Sopranos


Publication  Mail and Guardian
Date 2003-01-31
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Agusta's utterances then may have been harbingers of his present fix.

"Mobster's associate ‘bribed' Malatsi to expedite Plett development" could be a synthesis of headlines since last week when New National Party leader Marthinus van Schalkwyk accused David Malatsi, a deputy minister and senior member of his own party, of irregularly approving Roodefontein after Agusta had "donated" R300 000 to party coffers. Van Schalkwyk later followed up with information that Agusta had given another R100 000 to Malatsi's own Khayelitsha branch of the NNP.

In that same broken-English interview with the M&G in 2001, Agusta said one more thing: that by then he had invested about $20-million in South Africa but that if he got too much bad publicity, he'd up and leave: "It take me a sec to sell everything and find another country to invest. I am not here to invest and to get beaten on the other side."

Well, there may be many in South Africa — including the environmentalists who first raised the alarm on Roodefontein and the investigators and prosecutors who have been trying to get at Palazzolo for years — who would not mind at all if Agusta's words were self-fulfilling.

Bulelani Ngcuka's national prosecuting authority has expended great effort to bring Palazzolo to trial for immigration fraud (see sidebar). It is a relatively minor offence, but if convicted Palazzolo might lose his citizenship.

Not as well known is Ngcuka's efforts to nail Palazzolo on more substantive grounds. In October 1999, as three of his investigators headed to Europe, Ngcuka wrote to a foreign affairs official tasked with smoothing their way : "The criminal case under investigation is exceptionally high profile and a positive result is of extreme importance to the government. Secrecy is essential."

A contemporaneous affidavit by Percy Sonn, then head of the Scorpions, listed the charges being investigated against Palazzolo : fraud, racketeering, money laundering…

And in March 2000 a judge in the offshore haven of Liechtenstein, granting an order sought by the South Africans for judicial assistance, outlined the allegations against Palazzolo : "Palazzolo can be identified as the head ‘finance manager' of the Mafia, at least in Southern Africa. As such, he can be identified as one of the team of five existing main bosses of the Mafia. Palazzolo himself dealt with the ‘management' of wealth flow from criminal activities of his accomplices."

But the man has not been easy prey. In 2001, after Palazzolo sued, claiming bad faith and procedural irregularities by the investigators, Ngcuka had to hand back all documents gathered as a result of the Liechtenstein judicial order.

Palazzolo is a marked man. But what does Agusta have to do with it and why would anyone want him out of the country?

Part of it could be a sneaking suspicion that Agusta, through his business association with Palazzolo and his sons, may lend the Mafioso cover, even if inadvertently. South Africa's own Sopranos.

Agusta, an Italian jet-set resident of Monaco, is best known for three things: his endurance racing (Le Mans, Daytona); his inheritance of the Agusta Helicopters (the military helicopter company founded by his grandfather, Giovanni Agusta) fortune; and the decade-long battle his glamorous stepmother, Contessa Francesca Vacca, fought with him over that inheritance.

Agusta and Vacca finally settled in November 2000, but Agusta was saved paying her 15-billion lire (more than R70-million) in instalments when two months later her broken body was found on the French coast. Theories about the cause of her death have included murder, accident and suicide. Agusta believes it was suicide.

After a South African holiday in 1991 Agusta bought his first portion of La Grande Provençe, the Franschhoek wine farm where he now lives for part of each year. Across the road was La Terra de Luc, then Palazzolo's farm. Agusta bought that in 1999 as Palazzolo's legal hassles mounted. He also bought Palazzolo's property in Plettenberg Bay, Roodefontein.

Some have questioned whether the transfer of ownership was more than just a paper transaction, but Agusta has denied that Palazzolo has any residual ownership.

Still, the families' fortunes remain strangely entwined. Palazzolo stayed on as a consultant and retained the right to live at La Terra de Luc; Palazzolo's son, Christian von Palace Kolbatschenko, remained in charge of the mineral water bottling plant at La Terra de Luc; and as recently as November Von Palace Kolbatschenko was listed as the sole member of Count Agusta Golf and Equestrian Estate, the company that is developing Roodefontein,.

Agusta said that he and Palazzolo became friendly as neighbours in Franschhoek; others speculate the connection is older, because it is said they share an ancestor some generations back. Either way, Agusta defended their relationship : "I like very much Mr Palazzolo because he's a friend of mine; it's as simple as that."

Whether or not Agusta consciously lends Palazzolo cover, there may be another reason both of them are bad for South Africa, and it relates to their strange view of the proper relationship between patrician and politician.

Agusta's father sold Agusta Helicopters to the Italian state, and Agusta claimed to know no details of the sale of 30 Agusta choppers to South Africa as part of the controversial arms deal.

But when asked about the ethics of the helicopter company having negotiated a logistics subcontract with Futuristic Business Solutions — a firm co-owned by Lambert Moloi, a confidant and rumoured relative of then defence minister Joe Modise — as it won the 30-helicopter contract from a Cabinet in which Modise served, Agusta said : "I don't think that this should be a scandal. I think that all over the world things have been, should be like that."

Both Palazzolo and Agusta have a history of cosying up to decision-makers to get ahead. Malatsi is nothing new.

When in 1986 Palazzolo skipped a Swiss jail sentence for laundering drug money to settle in South Africa, National Party parliamentarian Peet de Pontes was there for him. De Pontes was later convicted of fraudulently helping Palazzolo gain South African residence, but Palazzolo testified against him and was let off the hook.

From his Swiss jail cell in 1989 — he was forced to return to complete his sentence — Palazzolo called on leading South West African People's Organisation (Swapo) politician and lawyer Anton Lubowski, who was later slain, for legal advice. Palazzolo reportedly obtained permanent residence rights in Namibia after Swapo led the country to independence in 1990.

In 1990 Ciskei military ruler Oupa Gqozo gave Palazzolo his homeland's citizenship — the basis for his present South African citizenship —and also appointed him political advisor and ambassador plenipotentiary.

In 1991 NP Cabinet minister Tertius Delport, now the Democratic Alliance justice spokesperson, admitted to having secured jobs for Palazzolo's sons.

Italian investigators, who have been trying for years to have Palazzolo extradited, said in a 1997 briefing document that Italian police had travelled to South Africa, where they found Mafia suspects, including Palazzolo, and "the existence of a well-knit network of corrupted South African officials that protect the Italian fugitives".

In 1997 André Lincoln, the head of the presidential investigative task unit, which reported directly to then deputy president Thabo Mbeki and was tasked to investigate Palazzolo, accompanied Palazzolo on a trip to Angola, sponsored by Palazzolo. Lincoln was sentenced to an effective nine years in jail recently after a marathon fraud trial focusing on the two men's often cosy relationship.

Palazzolo and Angolan President José Eduardo dos Santos have allegedly shared mining interests.

The National Intelligence Agency has internally charged its Eastern Cape manager, Dumisani Luphungela, after an allegation that Luphungela, while supposedly investigating Palazzolo, became close enough to his subject to ask him for R10 000 "funeral expenses".

The M&G reported in 2001 how La Vie de Luc, the mineral water Agusta and Palazzolo's son bottle at La Terra de Luc, struck a deal to sponsor the Nelson Mandela Children's Fund. The fund later retreated in horror. The deal was structured through Edusaf Projects, an NGO that boasted patrons including Public Service and Administration Minister Geraldine Fraser-Moleketi.

Van Schalkwyk reportedly said this week that the DA — of which the New National Party was then still part — warned Peter Marais before his 2001 inauguration as Cape Town unicity mayor not to accept a donation offered by La Vie de Luc. The company nevertheless sponsored mineral water for the inauguration.

The M&G has been unable to reach Agusta for comment on the Malatsi allegations. Palazzolo has maintained his innocence on Mafia-related charges.

With acknowledgement to Mail and Guardian.