Citizen Hughes

by Michael Drosnin

  *Robert C. Kuldell, general manager of Hughes Tool Company when Hughes inherited it, fired in 1938; Simon Ramo and Dean Wooldridge, top scientists at Hughes Aircraft who quit in 1953 and founded TRW, Inc.; Frank Waters and James Arditto, Hughes’s political lawyers who both quit and filed suit against Hughes in 1961.

  3 The Kingdom

  Shortly after Thanksgiving 1967, Nevada Governor Paul Laxalt got a sudden chill—as if he had seen a ghost. The Ghost of Thanksgiving Past.

  In the year since Howard Hughes had made his holiday-week pilgrimage to Las Vegas, Laxalt had been haunted by a hidden fear. Without once meeting him, the governor had granted Hughes nearly feudal rights, doing everything in his power to help the unseen billionaire become Nevada’s biggest private employer, its largest landowner, and king of its one industry, gambling.

  Laxalt waived all the rules, placed Hughes above the law, and let him seize full control of four major casinos. No individual had ever before owned even one, but all were licensed at the governor’s command despite the billionaire’s refusal to submit a photograph, fingerprints, or the detailed personal and financial records required by Nevada law. Nobody even dared to suggest that Hughes make a personal appearance.

  In addition to the casinos, the recluse now owned four resort hotels, most of the land on the Las Vegas Strip, a vast amount of other real estate, two airports, one airline, and a local television station. It all came to almost $100 million, an investment Hughes had to protect. He bought local politicians wholesale, imposing his will on officials from the courthouse to the statehouse, and seemed to have enormous influence over the silver-haired Republican governor.

  Laxalt had allowed an invisible man to control Nevada more completely than anyone has ever controlled a sovereign state. And now he was haunted.

  Hughes, on the other hand, was quite pleased. “I think Laxalt can be brought to a point where he will just about entrust his entire political future to his relationship with us,” wrote the phantom. “I think that is the way it should be and the way it can be.”

  In fact, Hughes had promised to make the obliging governor president of the United States.

  “I am ready to ride with this man to the end of the line, which I am targeting as the White House,” he declared. “I think we must convince him beyond a shadow of a doubt that I intend to back him with unlimited support right into the White House in 1972.”

  Paul Laxalt for president! At the time it seemed just another bizarre notion hatched in the unreal world of the penthouse. But even as Laxalt nurtured his hidden relationship with Hughes, he was also developing a special relationship with the newly elected governor of a neighboring state, Ronald Reagan. One that would make him the future president’s closest friend, his chief political adviser, and his national campaign chairman.

  But even when Laxalt became one of the most powerful men in the country, Howard Hughes would still be there to haunt him, as he haunted Laxalt now.

  Visions of the White House could not still his fears. The governor could not forget that he was dealing with a phantom, that he had never seen Hughes, had not even spoken to him. That nobody had. Not since he supposedly arrived in Las Vegas, indeed not for an entire decade.

  Dread thoughts, which the governor might have repressed forever if no one had discovered the strange midnight meeting of his Gaming Control Board. In late November 1967, several of the state’s top regulatory officials gathered like a secret coven at the witching hour, roused sleeping colleagues with a conference call, and by 1:30 A.M. had formally approved the impatient billionaire’s fourth casino license. When the incredible story leaked, a few legislators were sufficiently shocked to demand a full investigation.

  Laxalt could no longer suppress his fears. They came tumbling out, one chilling thought after another. What if Hughes was not really up in the penthouse? What if Hughes had been replaced by an imposter? What if Hughes did not in fact exist?

  The governor was frantic. On December 11, 1967, Laxalt secretly summoned his gambling czars to the state capitol in Carson City. All agreed that something must be done.

  This was a job for the FBI.

  “It was the unanimous consensus of this entire group,” the chief agent in Las Vegas reported to J. Edgar Hoover, “that some effort should be made to enable the Nevada state authorities to know for certain that HOWARD HUGHES actually is alive and that they are actually licensing a ‘live individual.’

  “Even though everything appears to be 100% above board,” continued the FBI memo, “no one, including the Governor of the State of Nevada, has ever personally seen, talked with, or discussed any licensing matters with HOWARD HUGHES. There is grave concern among the Nevada gaming authorities and Governor LAXALT that a great ‘hoax’ could be being perpetrated.…”

  Still, it was inconceivable to actually confront the phantom financier. Early on, the gaming board had timidly asked his lawyer, Richard Gray, if just one member might see the billionaire. His reaction was troubling, in retrospect.

  “Mr. GRAY lost his composure and indicated that if the authorities would require this then Mr. HUGHES would probably withdraw from the State of Nevada,” the FBI report recounted. “No further effort was made to pursue a personal meeting with HOWARD HUGHES.”

  All the state ever got was a power of attorney supposedly signed by the recluse. Now the governor took this treasured scrap and nervously handed it over to the FBI for authentication. Was the signature genuine, had the phantom left any fingerprints?

  “Nevada gaming authorities do not desire to do anything of an official nature with the results of this examination,” the surreal report concluded, “other than to satisfy in their own minds that HOWARD HUGHES exists and that they are dealing with him.”

  If the question was more than embarrassing, the answer was truly a rude shock.

  J. Edgar Hoover had not become a national institution by sending his G-men in pursuit of ghosts. The director took one look at Laxalt’s pitiful plea and unceremoniously scrawled, “We should have absolutely nothing to do with this. H.”

  Case closed.

  Hughes would continue to haunt Nevada as long as Laxalt remained in office, and the governor would continue to do his bidding, but Laxalt would never get to see him, nor would he ever get any real proof that he was dealing with a “live individual.”

  Howard Hughes, of course, was alive, right there on the ninth floor of the Desert Inn. Had Laxalt managed to meet him, however, he probably would have had the shock of his life.

  Naked and disheveled, his hideously long fingernails tracing patterns on color-coded maps, the phantom of the penthouse sat in bed busily plotting to buy the rest of Nevada.

  He had not come to Las Vegas with a master plan. He had come only because he didn’t know where else to go and because he had been there before and liked it. He liked the all-night ambiance, he liked the showgirls, he liked the whole tone and feel of the place. In the early 1950s, before he went into seclusion, he used to fly in regularly for a night or a few days or a few weeks, catch the shows, perhaps pick up a showgirl, dispatching one of his lackeys to arrange the assignation, always ordering him to first get a signed release. He rarely gambled, just occasionally dropped a nickel in a slot machine, but he cruised the casinos and was a familiar figure at ringside in the showrooms, and he kept coming back.

  Others now speculated as to why Hughes had come back again. All were certain he had some great “mission”—to reform the loose morals of Las Vegas, to clean out the Mob, to join up with the Mob. In fact, Hughes had no plans at all when he arrived, except to find a safe place to hide. And, in a real sense, that was still all he was after.

  At first, it was safe enough to hide in his blacked-out bedroom, behind a closed door, behind his phalanx of Mormons, behind a locked partition in the hallway, behind an armed security guard on an otherwise vacant and sealed-off penthouse floor. Then he had to own the entire hotel. To protect himself. Having bought the Desert Inn, he had to buy all the surrounding hot
els on the Strip. Again, for self-protection. Now he had to buy the rest of Las Vegas. For the same reason.

  Desperate to control his own little world, Hughes bought increasingly greater control of the world outside, expanding his domain in concentric circles, only to discover that the more he owned, the more he needed to protect, so that each new acquisition generated the need for further acquisitions to protect those that came before.

  Atop his desert command post, Hughes loomed over the Las Vegas Strip, snatching up its gaudy hotels and gambling casinos like some demonic demigod playing an outsized Monopoly game. Had he looked out his window, he could have seen it all: miles of improbable flash set down by mobsters in the middle of nowhere, with eighty-foot signs blinking STARDUST and SANDS and CAESAR’S PALACE, a fabulous façade for the bare bones of capitalism, pure money with no product, as skeletal as Hughes himself, the garish front as much a mirage as his own public image.

  It was a cheap, loud, vulgar place, and Hughes never set eyes on it during his entire stay. His windows had been blacked out the day he arrived, and not once did he peel back the masking tape, pull up the blinds, and look outside. Never in four years.

  Hughes had his own vision, and he didn’t want it sullied.

  “I like to think of Las Vegas in terms of a well dressed man in a dinner jacket, and a beautifully jewelled and furred female getting out of an expensive car,” he wrote, conjuring up a more acceptable image. “I think that is what the public expects here—to rub shoulders with V.I.P.’s and Stars, etc.—possibly dressed in sport clothes, but if so, at least good sport clothes. I dont think we should permit this place to degrade into a freak, or amusement-park category, like Coney Island.

  “Dont misunderstand me about the clothes,” he quickly added. “I am not suggesting that our entire staff go out and blow themselves to a new wardrobe at the hotel’s expense. (That is intended to be a joke.) I am not thinking of what our employees wear, and I am certainly not thinking of spending any unnecessary money. So lets make do with the present uniforms.

  “I was thinking more of the impression given in the advertisements, etc.,” he continued, trying to get back to his vision, but suddenly sidetracked by another disturbing thought.

  “One thing is certain—if you permit Jai-Lia to come in here you will never get them out, and it is a dangerous crowd filled with communists from Cuba.

  “Anyway, the point I am trying to make is that you well know (from my resistance to the Monorail, for example) that I see Las V. as being just one notch in class distinction above the amusement park category. For this same reason I am bitterly opposed to dog-racing. I would not oppose horse racing in a few years if we are cut into it.

  “Bob, ever since I arrived here I have been fighting attempts to down-grade the Strip into some kind of freak show—an amusement park—a cross between Coney Island and the Hudson Palisades Park. If one of these sideshows is allowed, there will be 3 or 4 or six and then we will have a real avenue of merry-go-rounds and roller coasters.

  “I have certainly made no secret with you of my feelings that the Las Vegas strip does not have much class (in fact, I was laughed at once when I said it had a certain degree of class), but nevertheless it does have just that small difference in class distinction between an amusement park and a place which is garish, but like no other place in the entire world.

  “I dont think I would like to live here or center all of my future plans around this pivot point if Freemont Street is going to be moved to the Strip.”

  Class. They may have laughed at him once, but Hughes was now determined to make Las Vegas a real high-class place, and there was no room in his vision for the honky-tonk atmosphere that had already overrun downtown, much less for monorails, dog racing, or (God forbid) jai alai.

  In fact, Hughes had more than a vision. He had a plan. A mission. He would “make Las Vegas as trustworthy and respectable as the New York Stock Exchange—so that Nevada gambling will have the kind of a reputation that Lloyds of London has, so that Nevada on a note will be like Sterling on silver.”

  Real class. But his plans went still further.

  “We can make a really super environmental ‘city of the future’ here—No smog, no contamination, efficient local government, where the tax-payers pay as little as possible, and get something for their money.”

  There it was. Hughes Heaven—no contamination, no taxes, and lots of class. There was, of course, one other requirement: he had to own it all.

  He already owned the Desert Inn, the Sands, the Castaways, and the Frontier, all nicely clustered in the center of town. Now he was eyeing the Silver Slipper, a low-class “grind” casino just across the street, and its huge next-door neighbor, the Stardust, which alone would nearly double his holdings.

  “I feel there is something very important and very significant about being in a position of 100%, admitted undisputed leadership,” wrote Hughes.

  “I know you tell me that such a position has already been achieved,” he chided Maheu, who urged restraint, “but if you asked ten different people, you would probably get ten different opinions.

  “Bob, stated briefly, I am certain that there is great value in any entity which is clearly, indisputably the world’s greatest and largest gambling operation.

  “So, I am talking about a clear cut leadership of such magnitude that the word of mouth report would become accepted throughout the world. So that when anybody thinks or speaks of gambling, the reaction would be automatic, just like the reaction to Sterling on silver.

  “But, what is most important of all, is that it will put to rest this gnawing urge I have for a slightly stronger position,” he concluded, reassuring his regent, “and when this urge is satisfied, I am positive our relationship (yours and mine) will improve immeasurably.

  “I am certain, Bob, that the removal of this one thorn in my side will leave us with a really harmonious prospect for the future.”

  Hughes had to have the Silver Slipper and the Stardust, and he also wanted the Silver Nugget and the Bonanza and Bill Harrah’s clubs in Reno and Lake Tahoe and perhaps the Riviera and … well, just about every hotel and casino in Nevada. But for now the Slipper and the Stardust were a must.

  Up in Carson City, Paul Laxalt was getting worried again. If Hughes had a gnawing urge, the governor still had a gnawing fear. The legislative probe stirred up by Hughes’s last casino license was coming to a head, and two new purchases right now might be dangerous. Laxalt asked Maheu to ask his hidden boss to slow down.

  “Because of the developments of the last few days and a concerted effort to make multiple licensing a political football, the Governor respectfully requests that you refrain from any additional acquisition at this time,” Maheu wrote Hughes. “He thinks that if we wait a few months until the atmosphere has changed that the situation would be entirely different. He is preparing a long confidential memorandum for your consumption. Anyway, Howard, he pointed out his great devotion to you and begs of you to hold still until at least you have had a chance to absorb his comments.”

  Hughes could not hold still. He was upset by Laxalt’s wavering support, and he was angry.

  “Do you think maybe it is just barely possible that the Gov. is cooling just a little bit toward me?” he wondered, feeling unappreciated. “Maybe now that I have contributed the 100 million to the sagging Vegas economy and stopped the run on the bank (so to speak) is it just possible he has decided I am more of a liability than an assett?”

  The more Hughes brooded on Laxalt’s ingratitude, the angrier he got. Hold still? Hell, he would take his money where it was appreciated.

  “I can only call the shots as I see them, Bob,” he fumed. “I think this multiple ownership howl is a lot of shit.

  “I will lay you ten to one that if I tell the Gov. that I will be willing—unhappy but willing—to divert our investments elsewhere if that is really what he wants, but I wish to be very sure he realizes the situation. I have at least another hundred and fifty million
to invest. Since moving here, I have turned down three very attractive investments simply because they were not in Nevada.

  “Now, if the Gov. looks at this fairly I dont think he will want to see me put 40,000,000 in a hotel-casino in Venezuela where I have an unbelieveable offer. I think he may prefer not to have multiple licensing up to a point. But when it reaches the spot where he has to stand by and see us plant 40,000,000 down in Venezuela, I dont think he will go for it. Not when he need only pick up the phone to keep the 40 right here.”

  But why wait for Laxalt to pick up the phone? Hughes had a bold idea: he would call Laxalt! That should buck him up. Yes, he would do it. It had been a long time, but Howard Hughes was now ready to reach out and touch someone.

  To soothe the nervous governor, the phantom placed a phone call to the statehouse. It was the first time he had talked to anyone outside his inner circle since coming to Nevada, and the conversation was banner headline news throughout the state: “GOVERNOR TALKS TO HUGHES.” Something like the Second Coming.

  “It was one of the most interesting conversations of my life,” Laxalt proclaimed, seemingly dazzled by the billionaire’s grasp of state affairs and his big plans for Nevada. The governor, however, failed to mention what Hughes himself considered most important.

  It was not the Stardust, it was not the Slipper, it was not the threat of a legislative probe or the growing resistance to his casino-buying spree. It was not even his plans to make Laxalt president. It was something far more important than all that. It was the water. Hughes was in an absolute frenzy about the water.

  “When I spoke to Gov. Laxalt,” he complained a few days later, “I told him I was truly and urgently alarmed at the way the authorities were rushing ahead into the so-called ‘Southern Nevada Water Project.’ I told him I felt the entire plan simply was not palatable. That the water might be treated with sufficient chlorine so that it would meet the minimum test requirements and be technically drinkable—just as they boast that you can drink the effluent of the Los Angeles sewage disposal plant.