Former deputy and later president Thabo Mbeki was aware of the allegedly dubious background of an investigator appointed to probe the presidential investigative task unit created on former president Nelson Mandela's orders.
Major-General Andre Lincoln submitted this in his testimony before the Western Cape High Court on Monday.
He went on to say that apartheid-era police officers were poor investigators.
"There are very, very few, if any, highly skilled investigators that came out of the old South African police," Lincoln testified under cross-examination.
"What I know is that they were good at setting you up."
In 1996, Mandela tasked Lincoln with heading up a presidential investigative unit to probe Cape Town-based Italian mafioso Vito Palazzolo and his links to government officials, police and businessmen.
But criminal allegations against Lincoln and others in the unit then surfaced.
In August 1997, Lincoln therefore met Mbeki, who was then deputy president, and then-national police commissioner George Fivaz.
Lincoln on Monday testified that at that point it had already been decided that policeman Leonard Knipe would head a probe into the presidential task unit.
Fivaz, according to Lincoln, had ordered this.
"I had nothing to hide," Lincoln said, adding that was why he had not objected to Knipe's appointment to probe the presidential unit.
It was put to Lincoln that Knipe was chosen because of his objectivity and good investigative skills.
But this prompted Lincoln to testify that apartheid-era police had generally not been good investigators.
Last week, he testified that members of the apartheid-era security police swept the scenes after the bombing of Community House in Salt River in 1997 and the killing of the so-called Gugulethu Seven in 1986.
Lincoln said that Knipe was aware of what he knew and was among a group of police officers who went out of their way to tarnish his name.
On Monday, Lincoln testified that Mbeki knew about this as he had been briefed on it.
"The deputy president was well aware of the agendas… He agreed with the investigation (into the presidential task unit) if done for the right reasons...
"All the deputy president said to Commissioner Fivaz is: 'I hope you're doing this for the right reasons.'"
Lincoln said he discussed his reservations about the probe into the presidential unit three times.
"I spoke to the deputy president about it. He said to me: 'Let the investigation run its course.'"
"I told him witnesses were being pressurised to make statements."
Lincoln said two officers - an Advocate Joubert who headed up the police's legal services, as well as a Director Human - had also travelled from Pretoria to Cape Town to tell Palazzolo that Lincoln was not his friend, which had been Lincoln's cover to get access to the mafioso.
"That was because Mr Knipe convinced [Palazzolo] to make a statement [against me]."
'Malice, personal hatred'
Lincoln was previously arrested on an array of charges linked to Palazzolo.
He was later acquitted on the charges.
This is why Lincoln is now claiming R15-million in damages from the minister of safety and security (now the minister of police) for what he has termed "malicious prosecution".
On Monday, he testified that investigators had played a role in the decision to have him prosecuted.
"It was malice; personal hatred that drove this prosecution."
The civil case continues.