By Ben Maclennan

Former elite policeman cop Andre Lincoln on Tuesday denied he kept Italian police locked in a Cape Town hotel room while his colleagues raided the farm of alleged mafioso Vito Palazzolo.

Lincoln was in the stand in the Cape Town magistrate's court for the second day, in proceedings in which a series of witnesses are answering Italian prosecutors' questions on Palazzolo.

The replies will be used as evidence in Palermo, Sicily, in Palazzolo's trial in absentia on a charge of involvement with the Mafia.

The Italian-born Palazzolo is now a South African citizen.

Several members of the Italian anti-Mafia police came out to South Africa in mid-1996, with warrants for the arrest of Mafia kingpins Giovanni Bonomo and Guiseppi Gelardi.

The wanted men were allegedly staying on Palazzolo's Franschhoek estate La Terra de Luc, which was raided by members of the South African organised crime unit on June 6.

Lincoln told the court he had been informed of the raid, and flew down from Pretoria for the occasion, but did not go to the estate.

Instead he stayed in Cape Town with the Italian police.

"Why did you keep the Italians locked in a hotel?" asked prosecutor Domenico Gozzo.

"I dispute the fact that they were locked in a hotel. That's not true," said Lincoln. He said there had in fact been an agreement that the Italians would not take part in the search.

Abraham Smith, a policeman with organised crime intelligence, had been in charge of the raid, and if Smith had required any assistance or identification of people "I suppose I would have been the person to drive them (the Italians) out to where he was".

Bonomo and Gelardi were not found at La Terra de Luc, though the investigators discovered evidence that whoever had been staying there had left in a hurry.

Days after the raid Lincoln was appointed commander of the presidential investigation task unit, tasked with probing any links between Palazzolo and key figures in the police and government.

He was dismissed from the police after being found guilty last year of fraud involving expense claims for a trip he made to Angola with Palazzolo.

On Tuesday he quoted from a 1997 letter he wrote to then deputy president Thabo Mbeki, saying he suspected Smith had been secretly recruited by the Italian anti-Mafia police.

The letter said Smith had plotted with members of the organised crime unit to implicate Palazzolo in petty crime, and that Smith had conspired to kidnap and kill the Italian.

Smith had chosen to tell the Italian police that Palazzolo funded the African National Congress' 1994 election campaign, and that the South African government was protecting him.

"Are you able to confirm, Mr Lincoln, that Mr Palazzolo did not give R100 000 to the ANC?" asked Palazzolo's advocate Jan Heunis.

"Your worship, as far as I could establish, it's not true that Mr Palazzolo gave R100 000 to the ANC," Lincoln said.

He confirmed to Heunis that Palazzolo had regarded him as a friend, but said this had been part of his role as an undercover operative.

"In fact you and your family often had dinner with Mr Palazzolo and his family," said Heunis.

"That is correct, your worship," said Lincoln. It was not true Palazzolo gave him a car, but he did lend him one.

On Monday, Smith, who has been boarded from the police with post-traumatic stress disorder, was called to the stand but broke down and was unable to continue his testimony.

On Tuesday his attorney, Andre Roux, told Magistrate Derek Winter that his client had been admitted to a clinic.

"I have a report from a clinical psychologist. The conclusion that he came to is that Mr Smith is presently unfit to testify."

Winter said it appeared to him that Smith was "both competent and compellable", and said the psychologist could be called to testify.

The court on Tuesday also heard testimony from Noseweek magazine editor Martin Welz, largely on his involvement in the making of an SABC Special Assignment programme on Palazzolo.

SABC journalist Jacques Pauw has refused to testify on the programme at the Palazzolo inquiry, and is challenging his subpoena in the High Court.

However, Welz said outside the court that he did not mind testifying about something which had already been published.

"I think journalists should be available to confirm what they publish," he said. "I'm not afraid of doing that. (But) I will not be forced to give evidence on something I believe was given to us on a confidential basis."

He also said he had always believed Palazzolo was a member of the Mafia, and that he was a man "we don't need in South Africa". - Sapa