The order was revoked 14 months after a large donation was made to the Liberal Party by the man's brother, an alleged Calabrian crime figure, Fairfax newspapers say.
Four Liberal MPs in two states lobbied or contacted Ms Vanstone about Francesco Madafferi's case, Fairfax says.
Madafferi's brother, Antonio, donated $15,000 to the Liberal Party in September 2004 and a further $7,500 in June 2006.
Ms Vanstone granted the visa in November 2005.
However, Fairfax says there is no evidence to show that the donations influenced any decision-making by Ms Vanstone or encouraged any of the politicians to contact her about the case.
But it says the case raises questions about the appropriateness of political parties accepting donations from those seeking favourable visa-related decisions or access to politicians.
Madaferri was ordered to be deported to Italy on character grounds in 2000 by Ms Vanstone's predecessor, Philip Ruddock.
His alleged serious and repeated criminal activity in Italy in the 1980s and his status as an illegal immigrant who had overstayed his tourist visa in 1989 were cited as reasons.
Madafferi, 47, was charged by federal police last month in Melbourne in connection to a syndicate allegedly involved in the world's largest seizure of ecstasy.
20 Sep 2008
Just another example of how corrupt politicians are.
In this case this information has made it out into the public eye. There is NO excuse for this kind of action. Everyone has a price, and in the case of Vanstone, a few thousand, not much cheaper than a high class whore and definitely LESS SATISFYING.
The drug industry especially of this calibre is well known to people higher in the hierarchy. The couriers and dealers that are shown to be caught are only the small fry.
The producers are well known to the people in power, and as a general rule LEFT ALONE
It is a well organised industry that involves, politicians and law makers and enforcers alike. It is the rogue newcomers that are caught / disposed of.