The Battle for Las Vegas: The Law vs. The Mob

by Dennis Griffin

  The black marketeers weren’t deterred from their larcenous actions by Bugsy’s fearsome reputation, and Las Vegas police officer Hiram Powell was equally unimpressed with the gangster. The bronco buster from Texas arrived in Vegas in 1941 to compete in a rodeo and never left. He was hired as a cop in 1942 and recalled his first encounter with Siegel in a 2002 interview.

  “It was a winter morning in the mid-1940s. I pulled Siegel over for a traffic violation at East Charleston and Fifth Street [now Las Vegas Boulevard]. When he handed me his license, there was a hundred dollar bill folded up with it. That was a lot of money at the time, but I let the bill drop to the ground. The last I saw of it, it was blowing down Charleston. I gave Siegel his ticket and let him go. Back then he had a reputation as a tough guy, but as far as I was concerned he was just another punk.”

  Bugsy may have been just another thug to Powell, but the cop soon learned he was a well-connected one.

  “About an hour after I stopped Siegel, I got a radio message to return to the station. The chief asked me what had happened between Siegel and me. I told him the story and then he fired me,” Powell recalled. The officer was reinstated a day later, but Siegel was never one of his favorite people.

  Bugsy’s political clout, however, wasn’t able to help him when it came to his financial woes at the Flamingo. Quickly running out of his own estimated $1 million, he made numerous trips back to the Midwest and East Coast in search of additional funding. Over time, he was able to get his gangland associates to invest $3 million, but that still left him a couple million in the hole. Seeing the Flamingo project as a bottomless pit, Bugsy’s hoodlum friends cut off their largesse. Some even began to wonder if Siegel was just an incompetent businessman or if something more sinister was behind the burgeoning cost of the Flamingo. Was it possible that Bugsy had sticky fingers and was stealing from his friends? Coming under that type of suspicion from his investment partners didn’t bode well for the would-be gambling tycoon, neither financially nor physically.

  In June of that year, an incident took place that convinced Siegel’s New York pals that his ego was growing as fast as the Flamingo’s debt. James Ragan, the owner of Continental Press Service, was gunned down in Chicago in an attempted hit. Surprisingly, the man survived the attack and was recovering in a hospital six weeks later when he suddenly died. An autopsy revealed that Ragan had enough mercury in his body to kill him twice over. In spite of an around-the-clock police guard, the Chicago Outfit had apparently found a way to spike the dead man’s soft drinks with the poison. The Chicago people quickly took over Continental Press, eliminating the need for the mob-owned Trans-America. Still, Bugsy needed his income from the wire service and figured his colleagues liked the extra cash, too. He also needed more money for the Flamingo. He flew to New York to discuss the situation with the board of directors of the Combination.

  In a stunning presentation, Siegel told some of the most dangerous men in America that if they wanted Trans-America to stay in business, they’d have to give him $2 million, which happened to be the amount he owed Del Webb. That was the deal, take it or leave it. With that he walked out, leaving a room full of gangsters looking at each other in open-mouthed amazement.

  Back in Las Vegas, Siegel was like a man possessed in trying to get the Flamingo ready for opening. He ordered everyone on twelve-hour shifts and seven-day work weeks. With the Vegas valley’s population at around a meager 40,000, additional craftsmen were flown in from Los Angeles, Denver, San Francisco, and Salt Lake City to supplement the local labor pool. Construction continued to be plagued by design flaws and poor workmanship.

  Trouble was also brewing in Los Angeles, where the bookies were looking for relief from being forced to pay fees to both Chicago’s Continental Press Service and the still-operating Trans-America. They didn’t like it, but knew it was dangerous to cease doing business with either one. Siegel told them to go to hell. As the dissatisfaction grew, his attitude placed the local people running Trans-America in an increasingly tough spot.

  Though unfinished, the Flamingo opened on December 26, 1946. The casino, lounge, theater, and restaurant were ready to go, and that was enough for Bugsy. Dressed in a white tie and swallowtail coat, his Beverly Hills girlfriend Virginia Hill by his side, the handsome gangster was ready for his big night. Unfortunately, it proved to be a disaster, a flop that was not well-received back east.

  The day started out bad when planes Siegel had hired to bring in specially invited guests from Los Angeles were grounded due to poor flying weather in California. Even so, some entertainers and celebrities did make it to the Flamingo that night. They included Jimmy Durante, performing the leadoff act, followed later by the Xavier Cugat Band. Actors George Sanders and George Raft also appeared.

  Siegel’s run of bad luck continued in the casino: It lost money. As word of the losses made their way to Bugsy during the evening, he became irate. He reportedly took his anger out on some of the guests, becoming verbally abusive and throwing out at least one family.

  Two weeks later, as the losing streak continued, Bugsy closed the Flamingo’s doors. He decided to wait for the hotel to be finished to reopen, hopefully with better results.

  As Siegel cooled his heels waiting for his next chance at gambling stardom, he received disturbing news from New York. Lucky Luciano, who had been exiled to Italy as part of a deal he made with the government to get out of prison after a racketeering conviction, had convened a meeting of the Combination in Havana and Bugsy wasn’t on the list of invitees. In Siegel’s world, a snub like that often boded ill for the one being excluded.

  Sensing that he might be in trouble, Bugsy flew to Havana on his own to see Luciano. Meeting in the headman’s hotel suite, the talk eventually turned to the Flamingo. Siegel sang its praises, but Lucky was unimpressed with his underling’s descriptive phrases of glitz and glamour. He was more interested in where his partner’s $3 million investment stood. Siegel pleaded for more time, a year, to get the Flamingo open again and turn it into the revenue producer he was sure it could be.

  Luciano dismissed Siegel with the admonishment that he should go back to Vegas and behave himself. The boss also ordered him to give up the wire service and let the Chicago Mob have the operation to itself. With that, the famous Siegel temper kicked into high gear. In no uncertain terms, Bugsy told Lucky what he could do with his orders, then stormed out of the meeting.

  Few if any men talked to Lucky Luciano the way Siegel had and lived very long to tell about it. Bugsy would be no exception.

  The Flamingo reopened on March 27, 1947. For the first three weeks it continued to operate in the red, and then things began to turn around. In May it was $300,000 in the black. Bugsy had been apprehensive after his return from Havana, but the positive financial reports calmed him down. His vision was finally being realized. The Flamingo was on its way to becoming the gold mine he’d predicted. He was sure Lucky and the others would be pleased they had listened to him. However, the Flamingo’s success was a case of too little, too late for Siegel.

  On the night of June 20, a now-confident Siegel was relaxing in the living room of Virginia Hill’s mansion in Beverly Hills. Conveniently for her, she was away on vacation in Paris, but his trusted friend Al Smiley was with him. Suddenly, rifle shots rang out from outside the living-room window. Two slugs struck Siegel in the face. One of them ejected his left eye, which was found on the floor some 15 feet away from his body. Benjamin Siegel had been murdered at the age of 41. Bugsy was dead, but Las Vegas was just coming to life.

  Morris Dalitz

  Not long after Bugsy’s permanent departure from the Las Vegas scene, another key player arrived in town.

  Morris “Moe” Dalitz was born in Boston in 1899. His father, Barney, operated a laundry and taught Moe the business as he was growing up. The family moved to Michigan where Barney opened Varsity Laundry in Ann Arbor, catering to University of Michigan students.

  As time went by, Moe opened a string of his own laund
ries in Michigan before branching out to Cleveland in the 1930s. Once there, he expanded his earning potential by getting involved in the bootlegging business and becoming associated with the Mayfield Road Gang. By the time prohibition ended, Dalitz had opened several illegal gambling joints. His two careers—legitimate business owner and criminal bootlegger and casino operator—would combine to lead him to Las Vegas.

  In the first instance, Moe’s laundry business resulted in his developing a close relationship with a very important man: Jimmy Hoffa. This happened in 1949, when the Detroit Teamsters local demanded a five-day work week for laundry drivers. Laundry owners, including Dalitz, strongly opposed the union’s position. Negotiations reached an impasse, with each side unwilling to budge.

  Dalitz, the shrewd businessman, saw a way around the issue. He had the owner representatives bypass the local’s negotiator, Isaac Litwak, and reach out directly to its former business agent and current leader of the Detroit Teamsters, Jimmy Hoffa. Agents of the laundry owners asked what it would take for Hoffa to intervene on behalf of the owners. Hoffa’s man said $25,000 would do the trick. The owners agreed. Neither side bothered to inform Litwak of the developments.

  During a subsequent bargaining session, Litwak was confident he had the owners on the ropes. Late in that meeting the door opened and in walked Jimmy Hoffa. He told the group there would be no strike and he wanted the contract signed on the owners’ terms, with no five-day work-week provision. The stunned Litwak had no choice but to comply.

  In the great scheme of things, this transaction wasn’t a particularly big deal. But it did open the door for something much bigger ten years later: multi-million-dollar loans from the Teamster Pension Fund to finance the mob-controlled casinos of Las Vegas.

  Also in 1949, Moe Dalitz found a business opportunity in Vegas similar to Bugsy Siegel’s Flamingo experience. Another Strip hotel and casino construction project had been abandoned and was available to anyone who could come up with the right money. Dalitz, casino-savvy from running his own illegal businesses, and three of his cronies from Cleveland raised the funds and purchased the Desert Inn. The Strip’s fourth resort opened on April 24, 1950.

  The 1950s saw seven more casinos added to the Strip, all allegedly backed by mob money from the Midwest and East Coast. The Sands and Sahara opened in 1952, the Riviera and Dunes in 1955, the Hacienda in 1956, the Tropicana in 1957, and the Stardust in 1958. One existing property changed names when the Last Frontier became the New Frontier in 1955. During that same time period the population of the Valley grew from 45,000 to 124,000.

  The ’50s also saw an increase in the number of celebrity weddings held in Las Vegas. Among the more notable, Rita Hayworth and Dick Haymes were wed in 1953, Kirk Douglas and Ann Buydens in 1954, Joan Crawford and Alfred Steele in 1955, Carol Channing and Charles Lowe in 1956, Steve Lawrence and Eydie Gorme in 1957, and Paul Newman and Joanne Woodward, and David Janssen and Ellie Graham exchanged vows in 1958.

  Moe Dalitz and Jimmy Hoffa combined to bring the first installment of Teamster Pension Fund money into Las Vegas in 1959. But the $1 million loan didn’t help to build a hotel and casino. It financed the Dalitz-controlled Sunrise Hospital.

  To help assure that the new medical facility would have some business, Hoffa worked out a deal between his union members, their employers, and Sunrise for the provision of medical treatment. The employers agreed to pay $6.50 per month for each union employee into a fund that paid the provider of the medical services, Sunrise Hospital. In turn, the hospital promised to set five beds aside specifically for union members and provide basic medical care.

  After this successful beginning, more Teamster money found its way to Vegas in the 1960s and beyond. The millions of dollars in loans were used to build or expand casinos, shopping malls, and golf courses. This was at a time when most lending institutions wanted nothing to do with entrepreneurs from notorious Sin City.

  In 1966, the Aladdin and Caesars Palace joined the growing number of Strip resorts. The Teamster-financed Circus Circus opened in 1968.

  More big-name celebrity weddings took place in Vegas in the ’60s. Mary Tyler Moore and Grant Tinker were married at the Dunes in 1962 and Betty White and Allen Ludden said their vows at the Sands in 1963. The Dunes hosted its second big marriage of the decade when Jane Fonda and Roger Vadim tied the knot in 1965. The next year, Xavier Cugat and Charo were hitched at Caesars Palace. Two mega-nuptials occurred in 967, between Elvis Presley and Priscilla Beaulieu at the Aladdin, and Ann Margret and Roger Smith at the Riviera. Wayne Newton and Elaine Okamura were wed at the Flamingo in 1968. By the end of the decade, the valley’s population had reached 273,000, more than doubling in ten years.

  As the years passed, Moe Dalitz continued to use his friendship with Jimmy Hoffa to facilitate loans sought by Las Vegas businesses. In spite of his power, Dalitz kept a low profile, remaining an intensely private man. He became heavily involved in charity work and in 1976 was named Humanitarian of the Year by the American Cancer Research Center and Hospital. In 1982 he received the Torch of Liberty Award by the Anti-Defamation League. Moe Dalitz died in 1989 of natural causes.

  As the ’60s came to a close, Las Vegas was booming. It was an “open town” for organized-crime families nationwide, many of which had already established their presence. But one of them held a position of dominance—Chicago.

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  Chicago

  The history of organized crime in Chicago is rife with the names of some of the most infamous gangsters ever to make a dishonest dollar in this country. They include the likes of “Big Jim” Colosimo, Johnny Torrio, Sam Giancana, Frank Nitti, and the legendary Al Capone.

  For our purposes, we’re going to focus on two lesser-known men, men who were young up-and-comers in the Chicago Mob during the days of Capone. These were guys who rose to power in the ’50s and remained there through much of the ’80s. They were in the hierarchy when a young enforcer named Tony Spilotro became a made man in the Outfit. And during the fifteen years Tony was in Las Vegas, they were his superiors.

  Tony Accardo

  Anthony “Joe Batters” Accardo was born in Chicago’s Little Sicily on April 28, 1906. At the age of five he enrolled in grade school, but by the time Accardo was 14 he’d become disenchanted with the education system. So had his parents, who, like many others of that era, filed a delayed birth-record affidavit, stating that their son had actually been born in 1904. The additional two years allowed Tony to drop out of school and begin working.

  Accardo had several minor brushes with the law in his youth—among them a 1922 arrest for a motor-vehicle violation and a 1923 charge in conjunction with an incident at a pool hall where organized-crime figures were known to hang out—but he never spent a single night in jail. Around this time the teenage Accardo joined the Circus Cafe Gang, named for its headquarters, the Circus Café on North Avenue. Among his fellow gang members was James Vincenzo De Mora, also known as Vincent Gibardi. De Mora later made his mark as Machine Gun Jack McGurn. Under that name he became one of Al Capone’s most trusted hit men and was the reputed planner of the 1929 St. Valentine’s Day Massacre.

  By 1926, the Capone organization was expanding rapidly and Big Al needed more soldiers for his army. McGurn, having experienced Accardo’s criminal abilities first hand as a member of the Circus Café Gang, recommended his friend to Capone as a possible recruit. Tony had already participated in nearly every racket and was a prime candidate for advancement. So it was that Accardo graduated from the street gangs of Chicago to Scarface Al’s powerful Outfit. He was brought before Capone at the Metropole Hotel on Michigan Avenue and, grasping the hand of his sponsor, Machine Gun Jack, swore the oath of Omerta. Having taken the mob’s vow of silence, the 20-year-old Accardo became a made man in the Chicago Outfit.

  Tony was one of Capone’s bodyguards on September 20, 1926, when eleven cars occupied by members of Bugs Moran’s rival North Side Gang attacked Capone’s Cicero headquarters, the Hawthorne Inn. Thousands of
machine-gun rounds poured into the building. As soon as the bullets started to fly, Accardo pulled Al to the floor and lay on top of him to shield his boss from the onslaught. At the conclusion of the assault a couple of bystanders and several minor gangsters had been wounded, but miraculously, no one was killed.

  Tony’s actions that day earned him a position as one of Capone’s regular protectors, and he soon began taking on more important assignments for the Outfit. He allegedly earned his nickname by smashing the skulls of two men with a baseball bat; when Jack McGurn told Capone about the beating, the boss was impressed and said, “This boy is a real Joe Batters.” The name stuck, and from that point on Tony was known as Joe Batters to his criminal colleagues.

  Accardo also worked closely with Capone’s other top assassins: McGurn, Albert Anselmi, and John Scalise. It’s believed the four went to New York City in 1928 to kill Capone’s friend-turned-enemy, Frankie Yale, who was gunned down in Brooklyn. It marked the first time a Thompson submachine gun was used in a gang-related hit in the Big Apple.

  Accardo continued to do the heavy work into the ’30s. When the Chicago Crime Commission released its first “Public Enemies” list in 1931, Tony came in at number seven.

  After Capone went to prison in 1931 for income-tax evasion, Joe Batters moved on to do the bidding of Al’s successor, Frank Nitti. In 1933, the new boss appointed Accardo as capo (captain) of a street crew, in command of a dozen or so soldiers. The promotion made Tony one of the top twelve members of the Chicago Mob.

  In the early 1940s, Accardo’s career took another giant step forward when many of his superiors were implicated in what was known as the Hollywood Extortion Case. As the men above them went to jail, Tony and others moved up the ladder. Eventually, two gangsters were in contention for the top spot: Tony Accardo and Dago Lawrence Mangano. Before the issue could be settled by a vote, the unfortunate Mangano was murdered. Unidentified assailants in a passing car fired shotguns and .45 pistols at him, riddling his body with more than 200 shotgun pellets and five 45-caliber bullets. With his competition gone, Arccado became the number-one man in the Chicago Outfit in 1945.