Palazzolo: A Prominent International Jurist’s View

A great deal has been written about Vito Roberto Palazzolo in the press. He has been described as a member of the Sicilian crime family, the Cosa Nostra. He is said to have been implicated in the so-called Pizza Connection conspiracy to distribute heroin from pizza parlours in the United States.

It is true that Palazzolo has been prosecuted in Switzerland, Italy and South Africa, and that he has been investigated by the FBI. And the Italian government has on no less than six occasions sought to have him extradited from South Africa.

But who is this man? And is he really a Mafia kingpin? Many take it for granted that the allegations against Palazzolo are true. Those with little knowledge of specifics assume there is, as the saying goes, “no smoke without fire.” So, it came as a surprise to many when, on 14 June 2010, a full bench of the Cape High Court quashed the South African Government’s latest attempt to send him to Italy. Could it be that the time has come to reassess Palazzolo, and the charges against him?

Judges Fourie and Yekiso – who also ruled that the South African government should pay the costs of Palazzolo’s three counsel — did not throw the government out of court only on narrow procedural grounds. They also found that:

  • Two successive South African Ministers of Justice, both of whom had given the green light to extradition proceedings, had done so after being falsely told that Palazzolo was wanted for drug smuggling and money laundering.
  • South African law had no equivalent of the Italian law that lay behind the extradition request – a much criticised provision of the Italian Criminal Code that allows for guilt by association.

The historic judgment of the Cape High Court begins by noting that Palazzolo had maintained that:

“Probably because of his undeserved reputation as an influential member of the Italian Mafia, the South African government has for many years waged a vendetta against him.”

But is Palazzolo’s reputation really “undeserved”? Anyone who examines the investigations and prosecutions lodged against him over the years in four different jurisdictions may well conclude that the answer is: Yes.

In point of fact, Courts and prosecutors in countries where Palazzolo has been thoroughly investigated have come to conclusions that should make his harshest critics think twice. For example:

  • A Swiss Court refused to convict Palazzolo of being a Mafia member.
  • U.S. prosecutors stated in writing that they did not now see Palazzolo as a Mafia member.
  • Italy’s highest Court overturned a conviction of Palazzolo on a charge of Mafia membership.
  • A Sicilian Court that convicted Palazzolo on vague associational grounds emphasised that it had not been proven that he was a member of the Mafia.  (The Sicilian conviction  on the basis of a statute that both American and Italian legal academics have condemned as badly flawed – is currently on appeal to the European Court of Human Rights.)

The 1985 Swiss Conviction

The protracted pursuit of Palazzolo on three continents has been based largely upon his conviction of a relatively trivial financial offence in Switzerland a quarter of a century ago. It is worth considering the background.

In 1981 after several years as a Swiss private banker, Palazzolo became Chairman of Consultfin, the financial services arm of a major Swiss bank, in Lugano, Switzerland. Mr Della Torre, General Manager of the bank, introduced Palazzolo to Oliviero Tognoli, a prominent Italian industrialist.

Soon after Palazzolo had commenced financial dealings on behalf of Tognoli, he became aware that the United States Treasury was investigating the source of certain funds invested in the United States by Tognoli. Palazzolo requested Della Torre to raise questions with his client.  Having been assured that the funds were not unlawful Palazzolo completed a pending transaction involving the purchase of gold bullion. However, he thereafter terminated his relationship with Mr Tognoli, precisely because of the questions raised from Washington.

Despite the fact that Palazzolo at the time had no way of knowing that Mr Tognoli was involved in the international narcotics trade, he was charged in 1985 with complicity in such activities. In handing down a relatively lenient sentence, of less than three years imprisonment, the Swiss Court took into account Palazzolo had acted under pressure from Tognoli, and that he lacked direct intent to launder drug funds.

No doubt Palazzolo could have been more careful about the source of the assets he helped to transfer. But his conviction must be understood in the context of Swiss banking secrecy laws. Although the KYC (“know your customer”), rule applied even in Switzerland at the time, the rule applied only with respect to the identity of the client, not the origins of his funds.

Most importantly, the Swiss Court specifically found that Mr Palazzolo was not a Mafia member.

The U.S. Charges

One must consider the investigation conducted by US prosecutors. Like the probes in various other countries, these were characterised by errors, identity confusion, and ultimately, acknowledgement by prosecutors that Palazzolo was not a member of the Mafia.

At about the same time as the investigation into Mr Tognoli was proceeding in Switzerland, US authorities opened an investigation into an Italian named Vito Girolamo Palazzolo. In 1985 a man with that name was indicted before a Federal Court in New York. This individual was born in Cinisi one year before Palazzolo; he is not the same man as Vito Roberto Palazzolo. The confusion caused by this similarity in names has caused the latter decades of hardship.

A narcotics case in which the “Palazzolo name appears was handed down in New York on 29 October 1985.  (Case No 84-Cr-236).Once again, however, this case concerns not Palazzolo, but one Emanuels Palazzolo. It had nothing whatsoever to do with Vito Roberto Palazzolo.

Five years later, on 2 May 1990 a United States Court in Michigan affirmed the conviction of one “Girolamo Vito Palazzolo” for conspiracy to possess cocaine with intent to distribute.  (The decision is recorded under Case Numbers 89-1989 and 89-1990.) The reported decision contains not a single reference to Vito Roberto Palazzolo.

In the wake of these Federal cases, Palazzolo’s lawyers were anxious to confirm that he was not a wanted man in the United States. Subsequently Palazzolo’s New York attorney received a letter from the US Attorney for New York, confirming that there was no arrest warrant or extradition request for his client pending, and that Palazzolo was not regarded by US authorities as a leader of the Sicilian Mafia.

A meeting between US prosecutors, Palazzolo and his lawyers were held in Bellinzona on April 10 1989. Mr Richard Martin of the US Dept of Justice and an attaché of the US Embassy in Rome were present. Palazzolo told the latter that he was ready to cooperate with any US investigation. He insisted that he did not want to participate in a witness protection program. However, Palazzolo also said that he would not be prepared to break Swiss banking secrecy laws. The Americans responded that they were satisfied that Vito Roberto Palazzolo was neither a narcotics dealer nor a member of the Mafia.

This closed the book on the investigation of Palazzolo by American Authorities Any suggestion that he has ever been convicted in the US is simply false and so is the allegation that he is still sought in America for any crime.

Proceedings in Italy

Over a period of almost 30 years Palazzolo has been intermittently pursued by Italian prosecutors, on the basis of little more than his initial conviction in Switzerland, aggravated by the mistaken identity in the United States. Unfortunately, Palazzolo became a pawn in ongoing competition between prosecutors in Sicily and Rome, who have asserted competing jurisdictions to deal with organised crime.  Both sets of prosecutors have attempted to draw Palazzolo into their net.

But despite their best efforts, most of the charges faced by Palazzolo both in Rome and in Sicily were eventually dropped, or have been dismissed by Appellate Courts:

  • In a judgment dated 28 March 1992, the Supreme Court of Appeal acquitted Palazzolo on the charge of Mafia association because the facts to prove such association “do not exist”.
  • On 12 October 2000, a Palermo court sentenced Palazzolo to 12 years imprisonment. However, that conviction was overturned on 22 July 2003, by an Appeal Court in Palermo and he was acquitted.
  • On 9 January 2004, the Supreme Court of Appeal in Rome ruled in favour of Palazzolo’s appeal against a Palermo conviction of 2002 of Mafia membership.

Despite all of this, in July 2006 a Sicilian court convicted Palazzolo– who had since the 1980’s  been living in South Africa – in abstentia under Article 416 bis of the Italian Criminal Code for association with“Mafia-type” activities. Palazzolo was sentenced to nine years imprisonment,in violation of the principle, recognised in all common-law jurisdictions, that every accused has a right to be present at a criminal trial.

There is another reason the conviction will be viewed with suspicion in any jurisdiction that respects the rule of law. Judges Fourie and Yekiso found that the “crime” created under Article 416 bis of the Italian Criminal Code was unknown in South African law. Palazzolo’s lawyers argued before the Cape High Court that Article 416 bis created a crime of mere association, without the need for the prosecutor to demonstrate criminal intent. That would clearly be unconstitutional in South Africa.

It is not only in South Africa that Article 416 bis has been criticised. In an article published in a prestigious US law journal, The Loyola International and Comparative Law Review. It is noted that the Italian Justice Department had admitted that Article 416 bis caused the boundary between members of the Mafia and innocent people to be obscured, and that numerous innocent persons have been indicted under the Article. The author points out that Article 416 bis is so broad that:

“If a list of names contained the name of at least one convicted Mafia member, the State would identify it as a Mafia list.  Unfortunately, since many Italians share identical surnames, it was not uncommon for prosecutors to inadvertently seize the wrong person … Eventually the Justice Department acknowledged that innocent people were being erroneously accused.”[1]

It now seems clear that Palazzolo’s 2007 conviction in Sicily was based upon similarly flimsy evidence.

Proceedings against Palazzolo in South Africa

Palazzolo established himself in South Africa in 1985.  Although he does not deny that his initial entry into the country was unlawful, he subsequently obtained full South African citizenship.

The Cape High Court observed that there had been no less than five attempts by the Italians to procure the extradition of Palazzolo from South Africa. It was the sixth attempt that was struck down in the June 2010 decision. Evidence was led that Palazzolo had been relentlessly pursued by South African authorities, and that courts and prosecutors in South Africa had acknowledged the injustices inflicted upon him.

In fact, South African law enforcement authorities have found themselves embarrassed by their overreaching in pursuit of Palazzolo. For example, in the 1990’s, under mysterious circumstances, a special Presidential task team was established to investigate Palazzolo.But the Head of the task team, a Mr Lincoln, was himself convicted of criminal offences thereafter (although his conviction was overturned on appeal). In March 1998, the Pretoria branch of INTERPOL requested the Italian police to return a report from Mr Lincoln’s task team which it found included information that had been illegally obtained.

Subsequently, Palazzolo’s South African lawyers, wanting to clear his name, sought to obtain assurances from South African authorities that he would not be subject to charges. This was forthcoming in 1990, when prosecutor De Jager wrote as follows to Palazzolo’s Counsel:

“With reference to your further enquiry regarding Palazzolo I wish to point out that it was decided, after the police concluded their investigations, not to institute any criminal proceedings against Palazzolo.  In particular I wish to stress that no evidence whatsoever implicating Palazzolo with drug-dealing, money-laundering or Mafia-activities during his initial sojourn in South Africa has been brought to our attention.  Since Palazzolo’s arrival in South Africa on 1 October 1989 he has been in regular contact with investigating officers and they have not been informed of any misdemeanor on the part of Palazzolo.”

Despite this assurance, elements in the South African government continued to target Palazzolo. For example, in 2002, Palazzolo was charged with fraud in connection with his acquisition of South African citizenship.  The prime witness in the State’s case was a high-ranking officer of the Department of Home Affairs, one Mr Lambinon.  But, under cross-examination, Mr Lambinon made it clear that he thought that the government’s pursuit of Palazzolo was unjustified and unfair.  Palazzolo’s lawyers put into evidence a memorandum by Mr Lambinon addressed to the Minister, stating as follows:

“I was … embarrassed for the Department’s sake, because it is unacceptable that a person can be subject to a threat of possible termination of his citizenship for a period of 3 years without a decision one way or the other. This is exacerbated by the fact that he is at the same time being prosecuted on the same facts which misguidedly inspired the recommendation that his citizenship be revoked by the Minister.”

On 14 March 2003, Magistrate Vermeulen acquitted Palazzolo, in a judgment that harshly criticised the prosecution.  He wrote that

“To institute a prosecution under these circumstances, several years after the event, boggles the mind.  It astounds even more to discover that the decision to prosecute, was taken at the highest possible level, to wit, that of the National Director of Public Prosecutions. … There is no evidence on which this Court can convict.”

But this did not stop Government from pursuing its vendetta. In fact, high-ranking officials of the Department of Justice travelled to Italy in an outrageous attempt to interfere in the in abstentia trial then pending in Palermo. On 15 October 2003, a meeting was held between Judges of the court and prosecutors in Palermo, and a delegation of the South African Dept. of Justice. The South African delegation insisted that both Italian and South African defence counsel be excluded from the meeting.  In the course of the litigation before the Cape High Court this year it was revealed that, behind closed doors, the South African delegation insisted that South African officials be excluded from a list of witnesses that the Italians wished to question in South Africa in connection with the prosecution of Palazzolo.

According to an internal governmental memorandum, the Department was delighted with the outcome of the meeting in Palermo, “especially the exclusion of Messrs Ngcuka, Morrison and Bruce … from the list of witnesses who are to be examined.” The internal memorandum cautioned that:

“(t)he examination of the above-mentioned witnesses would jeopardise (sic) the Italian extradition request and taint the image of the South African Prosecuting and Police Authorities”.

We do not know what the “taint” feared by the South African authorities was about.  But whatever it might have been, it does not reflect well on the decades-long pursuit of Palazzolo by South African authorities.

It was not only Palazzolo’s lawyers who found the collusion between South African government officials and the Italian Court disturbing.  In fact, an Italian professor of criminal law, Professor Onorato, whose affidavit was submitted, not by Palazzolo, but by the South African government itself, commented that the Palermo meeting cast serious doubt on the independence and impartiality of the Italian judiciary. Under Italian criminal law, the Professor said, Judges were not permitted to meet with anyone involved in the trial in the absence of both parties.

Professor Onorato is right. It violates one of the most fundamental principles of criminal justice, as recognized in every legal system in the world, for prosecutors to meet privately with judges. In fact, the documents uncovered in the recent litigation in Cape Town strongly suggest that, after their visit to the courthouse in Palermo, South African officials travelled to Rome with the specific purpose of urging the Italians to pursue their extradition request.

Pretoria has hardly attempted to hide its bias against Palazzolo – despite the fact that under extradition law, the Department is required to make an independent assessment of a request that a South African citizen be extradited to a foreign country.

Palazzolo’s lawyers have sought assurances that Palazzolo could live peacefully in South Africa and not be subject to an on-going threat of extradition based upon unlawful proceedings. On several occasions they requested the opportunity to meet with the Minister of Justice to explain their client’s position and respond to any questions from the Department.  These requests were rebuffed.  In fact, Adv. Simelane, who was at that time Director General of the Department of Justice, told Palazzolo’s lawyers that:

“The Department is … obliged to co-operate and execute the request for extradition, and surrender your client to the Italian authorities.”

As pointed out to the Cape High Court, the idea that the Department of Justice is “obliged” to send Palazzolo to Italy betrays a serous misunderstanding of its role under the Extraditions Act. Italy has no right to demand the extradition of a South African citizen. It has only an entitlement to request that Palazzolo be handed over. And, as the Judges of the Cape High Court have now held, based on the evidence presented, the Department should in fact have turned the Italians away.

Palazzolo sees the Cape Town judgment as a vindication of what he has been saying for many years – that governments and prosecutors have for decades pursued him in a way that violates his fundamental rights, and cannot stand the scrutiny of an independent tribunal.  One can only hope that the Cape High Court’s judgment puts an end to the government’s long vendetta against Palazzolo.  No more of the taxpayers’ money should be squandered on a case that should have died a natural death many years ago.

[1] Rico v. 416-Bis: A Comparison of U.S. and Italian Anti-Organized Crime Legislation.