Citizen Hughes

by Michael Drosnin

  “But that is not the point. This is a resort, and we have to make the air and the water etc. not just non-poisonous but attractive, tasty, palatable. We are in competition with other resorts and if it becomes known that our new water system is nothing but a closed-circuit loop, leading in and out of a cesspool, our competitive resorts will find this out and they will start a word-of-mouth and publicity campaign that will murder us.

  “Anyway, it is not the actual purity of the water that counts. In this case, where we are considering a resort, the question is how many tourists will be dissuaded from coming to Las Vegas by the word-of-mouth campaigns of Hawaii, Florida, and all the other U.S. resorts sneering at the spectacle of people swimming, bathing, and drinking water which is nothing more or less than diluted piss and shit.”

  Hughes had gone on at some length and with considerable passion about the purity of fluids, and Laxalt had been quick to agree with him.

  “The Gov. said he was aware of this situation and was ‘sick about it,’ ” the billionaire continued, recalling their conversation. “Those were his words. I said I felt no matter how far the present program had progressed, it had to be changed. I urged him to see what could be done to hold it up temporarily while he and I try to find some solution.

  “I have not heard a word in reply, and it appears everything is going right ahead,” complained Hughes, for the moment more puzzled than angered by Laxalt’s inexplicable failure to scuttle the multimillion-dollar water project. “Why haven’t I heard from him?”

  Not only was the governor strangely silent about the water but he also remained reluctant to ram through two more casino licenses for Hughes. Obviously it was going to take more than a phone call to get Laxalt fully motivated. In order to expand his domain and make his new kingdom a fit place to dwell—to protect himself by becoming absolute sovereign and banishing all contamination—Hughes would have to make at least one additional purchase. He would have to buy Laxalt.

  “Now, to make the Laxalt deal work, we have to find a means of motivation,” he wrote.

  “When I have a real tough assignment like this, I search about for two ingredients: 1. A man who can do the job if he truly wants to. And, 2. A means of furnishing a consideration to this man which will be of such a nature and such an amount as to be well nigh overpowering in its effect upon the man.

  “Now, Bob, I think Laxalt can be brought to a point where he will just about entrust his entire political future to his relationship with us. I think that is the way it should be and the way it can be.

  “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. I think I must even set up some legal entity charged with doing this job, and said intity must be self perpetuating, so that, in [the] event of my death, or change of political objectives, the financial support for Laxalt will continue uninterrupted.

  “Anyway, to return to my original thought, if we can truly convince the Governor that his future destiny lies with me, then I am positive that, with a little coaching from me at the time, he will have no difficulty in accomplishing our objective.”

  An eternal “Laxalt-for-President” slush fund. That should motivate the governor, indeed have an overpowering effect upon him. Hughes, however, was not content to let it go at that. As in all his acquisitions he needed one-hundred-percent control, and he was worried that others might get their hooks into the man he was grooming to be Leader of the Free World.

  “I am fearful that somebody or some company may be getting to Gov. Laxalt on a sub-rosa basis,” wrote Hughes.

  “[W]e must show enough interest to keep the Gov. solely and exclusively devoted to our interests. The first time he ties up with somebody like K[erkorian] or Crosby of Mary Carter Paint or any other source of financing, I think we will be forced to pull out of here lock stock and barrell. I am ready to ride with this man to the end of the line, which I am targeting as the White House in 1972,” he reiterated, “but there is no room in our program for a second angel.”

  No, Hughes could not share his governor. And it would be four years before he could promote Laxalt from the statehouse to the White House. In the interim he had to find some means of keeping Laxalt devoted. Perhaps promise him a second term as governor, maybe just offer to put him on the payroll. Or why not both? Hughes was ready to let Laxalt write his own ticket.

  “Any time you will tell me to go ahead,” he informed Maheu, “I am prepared to make a personal phone call to Laxalt and tell him it is my desire that he remain governor and that I promise unlimited support for this campaign, and, further, that should he fail to be elected governor for another term, I want him to accept a position in private industry which I know will meet his requirements, no matter how extreme they may be.

  “I am positive I can sell this to Laxalt.

  “Please call the Governor and simply tell him that I wanted to be sure he understands that I do want him to become one of the very top executives of my company.”

  Maheu was soon sending Hughes regular progress reports on the secret job negotiations:

  “I had a very fine meeting with the Governor. I truly believe that I can convince him to join your organization permanently as a top executive in charge of all your Nevada operations or anywhere else you may choose to assign him.”

  “Governor Laxalt has started to ask me precisely what his assignment will be in your organization,” Maheu reported a few weeks later, as Hughes stalled on the details.

  The talks dragged on for years, and the governor continued dickering for a job almost the entire time he remained in office. As late as June 1970, Maheu noted: “Laxalt is very anxious to discuss his future employment with us and I really believe we owe him the courtesy of sitting down with him at a very early date.”

  Rather than accept the job Hughes kept dangling just out of reach, however, Maheu speculated that the governor would instead rejoin his family law firm, which received at least $180,000 from the billionaire while Laxalt was in office.

  “My guess is that he will hit us for a retainer with the understanding that we have priority on all of his time but allow him to build a law practice at the same time,” Maheu reported after another meeting with the governor.

  Ultimately Laxalt would send Hughes a handwritten letter suggesting his availability as a private attorney, but noting that the long-discussed job would be such a blatant conflict of interest that he dare not go directly on the billionaire’s payroll.

  “Dear Howard,” wrote the governor as he prepared to leave the statehouse, “… I fear that a direct contract relationship with you might be misinterpreted. I would dislike, as would you, to have anyone think that the cooperation of our administration with you during the past four years was on a ‘quid pro quo’ basis.…

  “I’ve decided to open a law office in Carson City.… If you should ever have need of any assistance from me, I’ll be happy to provide it.”

  Almost immediately upon leaving office, Laxalt did in fact start collecting legal fees from Hughes that would total at least $72,000.

  But all that was far in the future as Hughes plotted early in 1968 to expand his domain. With the governor no longer a problem, Hughes began to present himself as a benefactor to the other citizens of Nevada. He would build the world’s largest hotel in Las Vegas, a spectacular one-hundred-and-fifty-million-dollar resort, “a complete city within itself.” He would create the world’s greatest airport in the Nevada desert, make it the new “gateway to the West,” and build a high-speed railway to whisk passengers from the Jet Air Terminal to downtown Las Vegas. He would endow a new medical school for the University of Nevada, promising “$200,000 to $300,000 per year for 20 years.” He would bring new industry to the state, indeed he would move the Hughes Tool Company and the Hughes Aircraft Company and the Howard Hughes Medical Institute to Nevada, make it the headquarters of his entire empire.

  In fact, the only thing Hughes would actually ever build in Ne
vada was Maheu’s new mansion, and indeed he would do his best to block all new hotels, all new industry, all “competition.” But as each day brought some fresh report of Hughes’s intended good works, nobody seemed ready to refuse him a couple of more mere gambling casinos.

  With Laxalt firmly behind his plans to acquire the Stardust and Silver Slipper, with all opposition to his Monopoly game melting before his munificence, Hughes began to worry that a horde of freeloaders would also be licensed.

  “I am informed that, since word has gotten out that our applications will be approved, everybody and his little dog is filing for a gaming license because they all reason that if the Commission passes ours they cannot very well refuse somebody else. So what I want is a report on those applications which are nearest to being considered favorably, in order that we may take whatever preventive measures may be indicated.

  “Bob, competition is moving in on all sides on a rampant basis,” he added. “Every time somebody starts the preparation for the opening of a new casino I suffer very substantially.”

  It was agony. Hughes could no longer enjoy the prospect of expanding his empire. He could only dread the “excessive competition, or the threat of future excessive competition, or competition of a type which I consider harmful.” He demanded that Maheu “cast an evil spell” on all rivals to his power.

  Maheu was not optimistic. “Unfortunately, Howard, our problem is one of changing the philosophy which permeates the entire area, and that is going to take some time. It is generally known that for the last six months, there has not been one room available in Las Vegas on any weekend, and, as a result, many people don’t even attempt to come to the city.”

  Hughes was unmoved. It was that kind of thinking that led to disaster, and he could prove it.

  “I just cannot go along with your philosophy and that of the community, which seems to be: lend a helping hand to everybody who wants to build a new hotel or casino, the more the merrier!

  “Please remember, Bob, that it was this philosophy, that there is no bottom to the barrell—it was this philosophy that led to the 1929 stock market crash and seven of the worst years this country ever faced.

  “It was this same philosophy that led to the construction of a miniature golf course on every corner in Los Angeles, and the horrible, tragic crash of this industry—taking with it all the little people involved.”

  First the Great Depression. Then miniature golf. Next the ruin of Las Vegas.

  “You say you can’t get a room. Well, Bob, that is just the way it ought to be. Do you think for one minute that ‘21’ and El Morrocco in New York would be such a success if they were not jam-packed to the roof so that it is impossible to dance or even to breathe in there?

  “People only want to go where it is impossible to get reservations—they only want to go where it is crowded and where everybody else is trying to go. Please believe me, I know from bitter experience.

  “The first time it is not, as you say ‘impossible to get a room’ in Las Vegas, then you better start worrying, because serious trouble is ahead—and not very far ahead.”

  In fact, Hughes already saw serious trouble all around him. These threatened new hotels and casinos were not merely dangerous competition, they were something far worse—contamination! Soon he would be surrounded by impure water, swarms of mosquitoes, carnival freaks, and filthy animals.

  “Bob, there are almost ten new hotels announced. The one that troubles me the very most is the new Holiday Inn right smack in front of the Sands. To make it much worse, they are planning to make it a Showboat sitting in a huge lake of water. A Showboat with a pond of stagnant infested water.

  “If they are considering using water from Lake Mead, the effluent in the water would smell to high heaven. Jesus! when I think of that lake of sewage disposal on the front lawn of the Sands. Ugh! It may even smell up our Sands Golf Course. Whatever the source of the water, there would be the additional problem of mosquitos. They would not be able to have water running in and out, so it would become stagnant and an ideal place to breed mosquitos.

  “If this crumby hotel cannot be stopped, I would just as soon sell at a loss the Sands.”

  But there was no escape. Even as the Showboat threatened to befoul the Sands, another monstrosity was going up right next door to the Stardust—the Circus-Circus. It was something straight out of Hughes’s worst nightmare.

  “The aspect of the Circus that has me disturbed is the popcorn, peanuts, and kids side of it,” he wrote, describing with horror a Norman Rockwell vision of Americana. “And also the Carnival Freaks, and Animal side of it. In other words, the poor, dirty, shoddy side of Circus life. The dirt floor, sawdust and elephants. The part of a Circus that is associated with the poor boys in town, the hobo clowns, and, I repeat, the animals. The part of a circus that is synonymous with the common poor man—with the freckled face kids—the roustabouts driving the stakes with three men and three sledge hammers, etc., etc.

  “It is the above aspects of a circus that I feel are all out of place on the Las Vegas Strip,” he continued, returning to his own vision of a high-class resort. “After all, the Strip is supposed to by synonymous with a good looking female all dressed up in a very expensive diamond studded evening gown and driving up to a multimillion dollar hotel in a Rolls-Royce. Now, you tell me what, in that picture, is compatible with a circus in its normal raiment, exuding its normal atmosphere and its normal smell.”

  For most people, the real stench of Las Vegas came from the Mob. Organized crime had tainted it from the beginning. Long before Hughes arrived with his vision, Bugsy Siegel had a vision, and where there had been only a desert he built the first giant gambling casino on a highway to Los Angeles that became the Las Vegas Strip. Bugsy was long dead, rubbed out by his partners, but he had created Las Vegas in his own image and mobsters still set the tone of the town.

  To Hughes, however, the Mob was just another form of contamination. And now Bugsy’s creation, the Flamingo, was back in the news. One of Siegel’s original partners, the underworld’s financial wizard, Meyer Lansky, had been caught siphoning off millions. Hughes was outraged. He saw the scandal pulling his new purified, respectable, blue-chip Las Vegas back down into the gutter. It was time to clean out the Mob.

  “Bob, the Flamingo has been accused of skimming,” wrote the angry billionaire. “It is one more set-back in the reputation of the Strip. Now, I feel this kind of thing has gone too far.

  “First there was Parvin and all their miserable dishonesty, then came the Circus, the Stardust and their personnel, then the Bonanza, and I failed to mention Caesar’s and their junket of hoods.

  “Bob, I moved heaven and earth to try and persuade you to do something about the mess. In spite of my pleas, however, each of these activities has been gradually swept under the carpet with absolutely no real effort by anyone to do anything about it.

  “Now, finally, in the case of the Flamingo, I beg you from bended knee please to take some action, and urgently, immediately.

  “The Flamingo, because of its position at the top or entrance of the Strip, has always represented and epitomized Nevada gambling. Many motion pictures have been made using the Flamingo as the example of the grandeur and the luxury of plush gambling on the Las Vegas Strip.

  “I made one myself, called ‘The Las Vegas Story,’ using the Flamingo to represent all that is glamorous and exciting about Las Vegas.

  “Anyway, the Flamingo has represented Las Vegas ever since its unfortunate beginning with Bugsy Siegel. And I assure you that, as a result of this incident, the Bugsy Siegel episode will get the full treatment again.

  “Bob, you have got to take some action about it this time. I truly plead with you.

  “Bob, I am sick and tired of being the Patsy of the entire Las Vegas area.”

  Hughes was sure he was the only honest man in town. He was certain that explained why all the unscrupulous rival casinos were piling up big profits, while his, against all odds, were losing m
oney. “It goes without saying that you cannot have principles and high profits both,” he wrote.

  In fact, Hughes may have been far more of a “Patsy” than he ever realized. Las Vegas seemed to be changing hands, from the mobsters who created it, to Hughes; but the billionaire may have been only an unwitting front man for the Mob. His arrival could not have been more timely for organized crime. After two decades of lucrative skimming, the heat was on. A massive FBI wiretap operation had become public, revealing that the casinos were controlled by hidden owners who routinely took their profits off the top, shipping the hot cash down to Miami, where the mastermind Meyer Lansky counted the take in his condo on Collins Avenue and made the split for his Mafia cohorts across the country. Just when it looked like the jig was up, Hughes arrived. A mark with an unlimited bankroll.

  It may have been a setup from the start. Maheu’s Mafia pal John Roselli claimed the whole Desert Inn eviction crisis was a Syndicate scam. “We roped Hughes into buying the D.I.,” Roselli reportedly told hit-man-turned-informer Jimmy “the Weasel” Fratianno. “Now it looks like he wants to buy the whole town, if we let him. He’s just what we need, especially with Maheu running the show.”

  Clearly, Hughes was not running it. Apparently the Mob kept real control of his casinos, sold him their gambling emporiums at inflated prices, and kept right on picking his pocket, raking off millions. A secret IRS investigation would later conclude that Hughes had been the victim of a vast Mob skim, perhaps topping $50 million.

  If that was true, Hughes was blissfully unaware of it, and for the moment seemed surprisingly untroubled by his casinos’ puzzling losses. And while he saw the Mob as a dangerous contaminant, he also saw a way he could use their threat to get on with his Monopoly game.

  He would save Las Vegas from the gangsters, and he would save it from the gangbusters as well. For a price.

  “Today, the President is chaffing at the bit in his eagerness to get at Nevada with a massive crime crusade, in order to divert public attention away from his failure to improve the Vietnam situation,” wrote Hughes.