Pikoli defended the National Prosecuting Authority's decision to grant indemnity to the killers of mining magnate Brett Kebble, saying "you need to use criminals against criminals".
Testifying in Selebi's corruption and defeating the ends of justice trial in the South Gauteng High Court, Johannesburg, Pikoli, a state witness, told Judge Meyer Joffe that statements by Selebi in his plea explanation were "a lie".
At the start of his trial last month, Selebi said that he was the victim of a political conspiracy waged by Pikoli and Pikoli's predecessor, Bulelani Ngcuka.
Ngcuka, Selebi claimed, tried to solicit a bribe from businessman Billy Rautenbach and it was after he had learned of this that the Scorpions tried to slap him with corruption charges.
In court, Selebi's advocate, Jaap Cilliers, put it to Pikoli that Selebi confronted him in December 2005 about free shares that his wife, Nozuko Majola-Pikoli, received in mining company Vulisango, created by Kebble's JCI group.
Pikoli did not deny that his wife received the shares, but vigorously denied that a confrontation took place, calling the claim "a lie".
In his plea statement, Selebi claims that, after confronting Pikoli, the prosecutions boss "became emotional" and told him that he knew about his wife's connection to JCI and that she was his "Achilles heel".
In court, Pikoli was visibly incensed, saying: "It is the work of an evil and cruel mind that can concoct such things that never happened. It is a lie I have said the accused never, never confronted me with all those allegations you mentioned."
Cilliers told the court that Pikoli and the National Prosecuting Authority had an "ulterior motive" in prosecuting Selebi. He contended that the authority offered indemnity to a number of "criminals" in return for them saying "something against the accused".
He referred to affidavits by Kebble's security chief, Clinton Nassif, and by security company owner Paul Stemmet, in which they alleged that Selebi received bribes from the Kebbles and convicted druglord Glenn Agliotti.
"Did you discuss and decide that Nassif would get indemnity for charges of attempted murder, and the murder of Kebble, if he was willing to testify against the accused?" Cilliers asked.
Pikoli responded: "Yes."
Cilliers: "You, as well as the [Scorpions], had ulterior motives in dealing with the case against the accused, that you gave indemnity to anyone."
Pikoli: "I take offence to this; I take offence that there is an ulterior motive."
Cilliers, who called the agreement between the Scorpions and Nassif "interesting", said conditions laid out in Nassif's agreement, in which he asked for indemnity for other criminals, pointed to "ulterior motives". Nassif wanted to ensure indemnity for the three Kebble triggermen - bouncers Mikey Schultz, Nigel McGurk and Faizel Smith - as well as for his business partner, Stephen Sander.
Cilliers told Pikoli that one of the agreements that had caused him concern was one "reached with a Mr Sabatini, who was granted indemnity for unspecified offences . And the NPA agreed to that? I find that extraordinary, Mr Pikoli."
Pikoli responded that the NPA took a "risk".
"We knew it would be a big problem in terms of public opinion but, given the gravity of the accusations against Selebi, we thought that was the gamble we were going to have to take. You need to use criminals against criminals."
Yesterday morning, Pikoli testified that he had known Selebi "since my days in exile from 1980" and that it had been "painful" to investigate someone he knew well.
He said that he was the one who had confronted Selebi in late 2006. Selebi "denied any knowledge" of why his name came up in Nassif's affidavit after Kebble's murder.
"He was very convincing that he did not receive any monies. I believed him. It is the most painful thing to be investigating someone that you know. I cried tears of relief and he also cried," he testified.
Pikoli said that during a trip to Eastern Cape on police business, Selebi said to him: "You guys, why are you not dropping charges against Rautenbach?"
Pikoli responded: "Why should we?" To which Selebi allegedly said: "Because I am in possession of a letter that can cause embarrassment [to] Ngcuka and the NPA."
Selebi's trial was postponed to tomorrow to allow prosecutor Gerrie Nel to prepare his next witness, Billy Rautenbach.
Agliotti earlier testified that Rautenbach had paid him (Agliotti) $100,000 to give to Selebi, then head of Interpol, to help Selebi quash international warrants for Rautenbach's arrest.
Ngempela