Cape Town. 120430. Trevor Bailey, an ex spy, speaks about amoung other things, the Diamond trade and relationships with Druglords from his Diving School in Strand. Reporter Caryn Dolley. Picture Courtney Africa.

Caryn Dolley

A FORMER police spy who said he investigated Vito Palazzolo for years while undercover, purporting to be a diamond diver and infiltrating major syndicates, is glad that his ex-target is now behind bars.

“When I saw he was in custody I was like: ‘Wow. After 30 years, he’s in custody’,” Trevor Bailey, 51, told the Cape Times.

Palazzolo was arrested in Thailand on March 30. He remains in custody and it is unclear whether he will be extradited to Italy, where he faces a nine-year prison sentence for Mafia-type associations, or be returned to SA where he has lived for more than two decades.

Bailey, who is originally from Durban but who is now based in the Strand, spoke out for the first time this week about the years he investigated Palazzolo and the frustration it resulted in.

Between 1988 and 1991, he had been permanently undercover in Port Nolloth and it was during this period that Bailey had focused on Palazzolo. He does not know if Palazzolo is aware he was a policeman.

Bailey said he started out as a police officer in 1978 and three years later was stationed in Port Elizabeth as a member of the diamond gold branch, which in those days consisted of 260 hand-picked members who investigated illegal diamond and gold deals.

A few years later, word started spreading about Palazzolo who had recently arrived in SA.

“Information was passed on from a captain in the VIP protection unit. He was a bodyguard to (former foreign affairs minister) Pik Botha.”

Bailey said he had not managed to ever get a statement from Botha.

The bodyguard had said Palazzolo “had too much money and was too comfortable throwing about names to not be involved in anything”.

Bailey said there had been a function at the home of Peet de Pontes, a National Party MP for East London who, it later emerged, had helped Palazzolo get citizenship in the Ciskei.

“Palazzolo’s name came up as someone interested in buying uncut diamonds in SA. He was living in East London at that stage,” Bailey said.

In 1988 he and his wife became the first married police couple to go undercover together.

Their task: to tackle diamond smuggling occurring along the coast.

This led to the probe into Palazzolo.

To infiltrate diamond smuggling gangs, Bailey had to learn the basics and this had entailed going on a two-month course with a commercial diving school.

He had then gone to Port Nolloth, an area identified as a diamond smuggling hotspot, and within 24 hours landed a “job” which got him connected to syndicates.

Bailey said he had no experience or lessons in going undercover and to try and appear as natural as possible, he had used his real name and life story, simply omitting the fact he was a policeman.

“At that stage in SA there was no one to tell what to do or say.”

His cover was nearly blown at a party when he bumped into his dive supervisor’s brother who had been part of the same lifesaving club as Bailey in Port Elizabeth. But the brother had not pointed out he was a policeman.

Once Bailey had settled into his diving job and home in Port Nolloth, he contacted Palazzolo a few times to try to extract information from him as to what he was doing in SA.

“I met Palazzolo once face-to-face. It was in East London at a Holiday Inn. He thought I was a diamond diver and though the meeting was about financing a boat … He was very nice, but rather arrogant. His arrogance came through in that he was very sure of himself,” Bailey said.

As an undercover policeman, Bailey was guided by an “operator”. He made use of a “dead letter box” to communicate with his operator.

“I had a set of keys to the letter box and so did the operator. I had to go to the letter box, which was at the Port Nolloth post office, at a pre-arranged time. I’d pick up my instructions and drop off my requests and statements.”

By 1991, while still investigating Palazzolo, Bailey got fed up with his job.

He was in his office in Port Elizabeth when three colleagues from the police’s security branch came to tell him they feared for their lives.

“Three days later they died in a car bomb. They’d planned to go to the ANC and give over security information.

“I lost a lot of faith in my fellow policemen.”

When Bailey resigned, he did not feel he had achieved much regarding Palazzolo. “When I finished in 1991 we actually came to a point where I couldn’t proceed.”

He said he believed Palazzolo may have been protected or information had been passed on to him.

After Bailey resigned, he returned to Port Nolloth to become a professional diamond diver. He now has a dive school in Strand.

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