by Gus Russo
Male clients included George Raft, Clark Gable, Rock Hudson, and Arvey partner Henry Crown. Bautzer was also a volatile drunk, kicked out of places like the Beverly Hills Hotel dozens of times for besotted behavior. His name appeared regularly in the local rags, which reported on his babe of the month, usually a beautiful young starlet, or his long-running relationships with A-listers such as Turner and Crawford. (The term A-list was coined by gossip columnist Joyce Haber in reference to revelers on Sidney Korshak's
invitation list to his sumptuous holiday parties.)
As in any good networking friendship, the benefits were mutual. When Bautzer client Susan Hayward was scheduled to be the focus of a 1955 Confidential magazine expose, Korshak had it spiked. (Hayward tried to kill herself that year during a bitter child-custody battle, and public screaming matches with her ex were grist for the local media.)32 On November 29 of that year, Confidential publisher Bob Harrison, a Korshak pal, wrote Korshak at his 134 N. LaSalle office, "Dear Sidney, In accordance with your request, we are dropping the Susan Hayward story from the upcoming issue of Confidential. Love and Kisses, Bob." For his part, Bautzer introduced Sidney to up-and-coming film producer Albert "Cubby" Broccoli and his cousin Pat DeCicco, a hard-partying Hollywood agent, and an alleged Hollywood front for New York's Lucky Luciano.33 Broccoli went on to produce the lucrative James Bond film franchise, occasionally with the labor-consultation expertise of Sid Korshak.
Eventually, Bautzer graduated from the divorce courts to the world of corporate law, which opened up vast new possibilities for himself and his friends such as Korshak. Later, he formed the L.A. powerhouse law firm Wyman, Bautzer, Christianson, and Kuchel.34 Thomas Kuchel, a protege of Earl Warren's, would become a U.S. senator from California, a position from which he introduced tax legislation at the urgings of Lew Wasserman that allowed huge tax write-offs for the movie industry. Bautzer helped Bugsy Siegel and Meyer Lansky set up the corporation from which the Flamingo Hotel-Casino was born. Bautzer had actually been deeded the land by Moe Sedway and then transferred it to Siegel. At the Flamingo,
Howard Robard Hughes (Library of Congress)
Bautzer associated with another investor, Al Hart. The two had known each other since at least 1937: it was Bautzer who originally owned Maier Brewing and sold it to Hart that year.35
By far the most brilliant, powerful, and eccentric person that Bautzer brought to Korshak was a Susan Hayward boyfriend and Bautzer client soon to be dubbed "the billionaire kook," Howard Robard Hughes. The Texas-born Hughes had taken a sizable inheritance from his father, the founder of Hughes Tool Company, and parlayed it into numerous profitable endeavors when he started Hughes Aircraft, a major World War II contractor, and Trans World Airlines (TWA). In the early 1920s, Hughes entered the world of motion pictures through his uncle, Rupert Hughes, a famous author and movie producer. Howard produced twenty-six films, each of poor to average quality. However, he excelled in the role of producer-cum-babe-magnet, dating an enviable roster of the most desired women in Hollywood.*
Greg Bautzer met Hughes in 1947, when the competing cocksman made a pass at Bautzer's latest flame, Lana Turner. Hughes not only landed Turner, but also engaged Bautzer as his Hollywood attorney. Within a year, Hughes had achieved the producer's dream, acquiring his own studio, the Joseph Kennedy-created RKO, for $8.8 million. The purchase was a steal, as RKO was one of the most powerful studios of its time. But Hughes's Midas touch deserted him as a studio honcho, leading to massive financial losses and employee layoffs. Part of the reason for the decline was that Hughes's interest in the studio was, like that of many moguls before and after him, motivated by factors other than the bottom line. Noah Dietrich, Hughes's right hand, and director of Hughes Tool Company, described his boss's connection to RKO: "Howard's involvement with RKO had other motivations than the pursuit of profits and furtherance of the art of the cinema. It also aided the exercise of his libido. I was never certain throughout Howard's long association with the motion picture industry whether his amours were an offshoot of that activity or film production was a screen for his romantic adventures."36
By 1952, Hughes, who was enduring endless complaints from the company's stockholders, was ready to sell RKO. Hollywood had "grown too complicated," he said. Bautzer's firm was to handle the details of the sale.37 When Bautzer passed Hughes's dictum on to Sid Korshak, the former Chicagoan seized the opportunity to solidify his entrenchment in the movie business. While not yet possessed with pockets deep enough to contribute to the $1.25 million down payment,* Korshak was happy to be the behind-the-scenes facilitator, putting together a purchasing syndicate, with the understanding that he would become the new owners' "labor consultant" at a rate of $15,000 per year. He proceeded to convince Bautzer's law partner Arnold Grant to become chairman of RKO (for $2,000 per week), if Korshak could assemble a group of investors. When Grant (who was already the president of Al Hart's Del Mar Turf Club) agreed, Korshak set about synthesizing a motley group of investors hailing from his corrupt Midwest stomping grounds.
First there was Ray Ryan of Evansville, Indiana. Ryan was a gambler and a partner in a Texas oil venture with New York mafioso Frank Costello, his lieutenant Frank Erickson, and George Uffner, an ex-con and underworld leader.38 Other Korshak recruits were the regionally notorious Ralph Stolkin and his father-in-law, Abe Koolish. Chicagoan Stolkin had amassed a fortune by selling a sort of take-home lottery contraption known as the punchboard, which had been invented in 1905 in Chicago.^ This easily rigged contraption, although legal, paid off so rarely that complaint letters about Stolkin filled boxes in Better Business Bureau offices nationwide. The device, like the modern lottery, preyed on the poorest people and predictably drew its share of mob and small-time con-man purveyors. For a time, the hapless Chicagoan Jack Ruby ran a punchboard con before moving to Dallas, where he would take out JFK's assassin Lee Harvey Oswald in 1963. But Stolkin turned the scheme into an art, earning over $4 million as the "Punchboard King of America" in the 1930s to 1950s.
The third partner, Stolkin's father-in-law, Abe Koolish, was no shrinking violet himself, having been indicted in 1948 after years of warnings by the Federal Trade Commission in a mail-order insurance fraud scheme. The charge was dropped only because the indictment was "faultily drawn."'* With Stolkin, Koolish also plied the old con of running "charity drives" that were actually profit-making machines wherein the managers siphoned off most of the donations for "expenses." It is a classic con that is still ongoing. Rounding out the quintet of investors were a Ryan partner, Edward "Buzz" Burke, and Sherrill Corwin, a Los Angeles-based director of the Theater Owners of America.
After negotiations, the RKO sales agreement was signed in Hughes's Beverly Hills Hotel bungalow on September 23, 1952, and within three weeks it started to fall apart. On October 16, the Wall Street Journal began a series of exposes regarding the new owners. RKO's NEW OWNERS: BACKGROUND ON GROUP WHICH NOW CONTROLS BIG MOVIE MAKER: A PUNCHBOARD KING, A MAIL ORDER CHARITY MOGUL, AND A GAMBLING OILMAN blared the first headline. Describing Sid Korshak as the "catalytic agent" in the sale, the story recounted all the aforementioned details about the new owners' true professions. Over the next few days, the Journal and Time magazine continued to pound away at the new owners, citing, among other evidence, Frank Costello's recent Kefauver testimony wherein he disclosed his partnership with Ryan.
Six days after the first Journal piece, the new owners began resigning from the RKO board; none of them could easily afford the glare of increased public (or official) scrutiny. Sid Korshak and Arnold Grant were the last to go, on November 13. For the next few weeks, RKO was in disarray, as the syndicate defaulted on their next installment. However, by February 1953, Hughes had named a new board and taken control of the stock. In what the Journal called "the financial feat of the year," Hughes also kept the $1.25 million down payment proffered by the Korshak syndicate, moved to Las Vegas, and continued to search for new buyers. But he had ignited a lifelong feud with Sid Korshak that would play o
ut over the next two decades in the Las Vegas gambling mecca.39
Years later, Korshak disclosed the reason for the depth of the vitriol to a business partner. "Korshak told me that Hughes himself had leaked the [Stolkin] story," the associate wrote, "knowing it would kill the deal and make him over $1 million richer, the down payment that Hughes never returned to the potential buyers. Hughes had bested Korshak, a fact that the latter neither forgot nor forgave."*'40 A former Hughes employee seemed to corroborate Korshak's intuition, saying, "Howard Hughes knew the kind of people he was dealing with; he knew their backgrounds, and he knew their associations. That was the way he operated. In the case of the Stolkin group, he took their down payment and then waited. At the right time, he leaked the story to the press."41 Former L.A. private detective Ed Becker agrees, saying, "Howard Hughes and his entourage had about ten trained security people, and they of course would have checked out Korshak immediately because Hughes obviously killed the RKO deal."
Another possible reason for Hughes's alleged leak was that in January 1953, Sidney Korshak filed a divorce suit on behalf of Chicagoan Theodore Briskin against his wife, twenty-one-year-old starlet Joan Dixon, an actress under contract to Hughes.42 (Typically, Korshak would get the last word when he brokered the sale of five of the Outfit's hottest Vegas hotel-casinos to Hughes on April Fools' Day, 1967. The underworld, however, kept its boys in the pits and count rooms and, over the next three years of Hughes's custodianship, relieved the recluse of over $50 million of his profits.)
RKO continued its free fall, as stockholder lawsuits began piling up. The troubled studio's featured player Dick Powell chided, "RKO's contract list is now down to three actors and one hundred and twenty-seven lawyers." Hughes finally sold RKO in 1955, netting himself a $6 million profit.
Stolkin bounced back quickly, but temporarily, hawking a thirty-two-hundred-acre Florida pastureland he dubbed Coral City.^43 Abe Koolish and his son had a more ignominious future, continuing their bilking of unsuspecting charities. From 1952 to 1959, the Koolishes siphoned an astounding $11 million from the Sister Elizabeth Kenny Foundation of Minneapolis, their fee for soliciting $19 million in contributions to the fund for polio-afflicted children. The Koolishes' plundering of Sister Kenny prompted a state prosecutor to later say, "The Kenny Foundation was like a subsidiary of Koolish." The scam was finally broken in 1960 by thirty-two-year-old Minnesota attorney general Walter Mondale, making headlines for a year, and catapulting Mondale into prominence. "I went into office in May unknown, untested and very young and inexperienced," Mondale later said, "and within a month I was a very well-known state figure . . . It was a major source of strength to me." Mondale went on to become a leading Democratic senator (1965-76), vice president of the United States (1977-81), and a Democratic presidential nominee (1984). The Koolishes spent seventeen months in the federal penitentiary in Terre Haute and repaid a mere $1 million to the Sister Kenny Foundation.44
Of course, much more would be heard from Howard Hughes as well. In the aftermath of the RKO sale, Hughes personally authorized a $205,000 loan to Vice President Richard Nixon's brother, Donald, allegedly to boost the sagging finances of Donald's restaurant (which featured the appetizing-sounding "Nixonburger") in Whittier, California. However, just days after the December 1956 "loan," Hughes's TWA airlines was granted a lucrative route to Manila, then a route to Frankfurt, and a fare increase. Within a few months more, according to the director of the Hughes Tool Company, Noah Dietrich, the IRS granted Hughes tax-exempt status for his Hughes Medical Institute, a shell organization created to foster the illusion that Hughes Aircraft was controlled by a public trust. On the first day alone that the exemption took effect, Hughes saved $1 million. Two decades later, the loan would play a huge role in the careers of both Richard Nixon and David Bazelon.45
With the advent of the Velie and Kefauver investigations, the Supermob was beginning to lose its cloak of invisibility, if only to a few far removed from the nation at large. The most public difficulties centered on a Supermob partner in the Ohio Franklin Investment deal. In 1952, Art Greene was found guilty of stock fraud by the Securities and Exchange Commission and sentenced to two years in prison. Considering his affiliations with notorieties such as Gioe, Zwillman, and Lansky, Art Greene, the Franklin partner of Pritzker, Bazelon, and Ziffren, got off easy.
Most of the attention to the Supermob was occurring well behind the scenes, especially in Washington, where both Congress and the FBI were receiving disturbing reports about the workings of David Bazelon's Office of Alien Property. Among the protestations arriving on Capitol Hill was one from a confidential informant who advised, "Bazelon, while with the Office of Alien Property, saw to it that concerns in which he had an interest received preferential treatment in obtaining material from sources under the control of the Office of Alien Property."46 The first reports found their way to the House Judiciary Committee, which oversaw the OAP.
At the time, popular forty-six-year-old Kentucky Democrat Frank Chelf, who went on to serve ten successive terms, chaired the committee. Chelf initially assigned a subcommittee to look into the possibility that OAP had favored certain companies in making allotments of materials recovered from seized enemy properties. The congressional investigators chose to begin by focusing on two specific allegations: (1) whether Bazelon had obtained lucrative stocks in German banks seized by the Custodian Office, and (2) if it was a mere coincidence that as custodian he appointed a Chicago friend to appraise a seized German coal mine and that when the mine was auctioned, it was purchased by another friend of Bazelon's.
However, during the committee's investigation, highly placed confidential sources attested to a litany of disparaging allegations about the OAP custodian, including:
• Bazelon saw to it that concerns in which he had an interest received preferential treatment in obtaining property and goods under the control of the Office of Alien Property.47
• Bazelon was given his judgeship thanks to an inner circle of the Democratic Central Committee, which regularly met with Bazelon in "an unidentified room in the Mayflower Hotel."
• Bazelon appointed attorney friends such as Democratic Party honcho William Boyle, Harold Horowitz, and Arnold Shaw (Shapiro) to be the legal representatives of vested companies, which resulted in their obtaining lucrative fees.48 According to the president of the Norfolk and Southern Railway, Joseph Kingsley, Boyle had paid large sums of money to Bazelon, who, to conceal it, used the name Weld in his dealings with Boyle. Kingsley added that Bazelon was "scared to death" that this information would be disclosed. 49 Shaw was a former assistant to Bazelon and was "said to have done the 'dirty work' for Bazelon."50
• Bazelon, according to "reliable information," had "obtained control of certain hotel interests on the West Coast, formerly in the hands of [Office of] Alien Property," and "Ziffren and Bazelon formed a partnership for the purpose of administering warehouse properties which were under the control of Alien Property."51
• Bazelon "shows up in San Francisco in a shady manner as aligned with a Los Angeles lawyer [Ziffren] in owning or being equal counsel for hotels in Stockton, Modesto, San Francisco, Fresno, Bakersfield, etc., which wereformerlyhandled by OAP after being taken over from Japanese and others."52 (Author's italics.) (Note: Bazelon's benefactor Abe Pritzker was also heavily invested in San Francisco. According to a former Department of Justice Strike Force officer, Pritzker worked in partnership there with hotel and real estate tycoon Donald Werby, who the source believed was dispatched westward from Chicago by none other than Al Capone.)*
• David Bazelon's brother Gordon, also an attorney, appeared to be the recipient of special treatment when he was indicted by the IRS for income tax evasion. The committee noted that "the case was extremely good from a prosecutorial viewpoint." However, when the case was forwarded to the Department of Justice, where brother David was assistant attorney general, it simply vanished. Recall that David had previously been assistant U.S. attorney in Chicago in charge of fed
eral tax matters. (There were also uninvestigated reports that David Bazelon's father-in-law, corporate executive M. J. Kellner, relied on David when he got into tax trouble.)53
The "Chelf Committee" declined to publish a report of its findings, opting instead to forward the material directly to the Justice Department for further disposition. In those days is was not uncommon for a committee to avoid writing a report on a politically sensitive investigation. Pulitzer Prize-winning journalist and racketeer specialist Clark Mollenhoff wrote of how Congress demurred when investigating labor corruption: "It is often forgotten that pitfalls were there for committee members or staff investigators who tackled the job . . . Where investigations could not be stopped, union influence was used to cripple the investigators by sharply limiting their funds or curtailing their jurisdiction . . . One of the finest investigators to tackle the union racket was out of a job for six months because he was blackballed by union-influenced Congressmen . . . The heroes of the 1953 to 1957 period were Republicans and Democrats, liberals and conservatives. Some had their investigations ended by political pressure; some gave up in frustration."54
With the buck thus passed, the responsibility to act shifted to the Department of Justice. After receiving the Chelf data, Attorney General James McGranery on August 8, 1952, instructed J. Edgar Hoover to look into the Bazelon affair, but drastically limited its scope to just the Franklin Hotel allegations—understandable since McGranery was Bazelon's boss and friend at the department.55 The FBI thus opened a new subject header: "Judge David L. Bazelon; Misconduct in Office." Their investigation proceeded quietly for the next five years and, as noted in the previous chapter, corroborated the accuracy of the Goe/White research, labeling the Bazelon-Ziffren dealings in Rohm Haas and other OAP transactions "suspicious." But since their initial charge was to conduct a narrow investigation of just the Franklin deal in Ohio, they conservatively refused to expand the probe. The FBI's liaison to the Department of Justice, Courtney Evans, wrote, "We will take no action in this matter in the absence of a request from the Attorney General [Herbert Brownell]."56 Brownell and his Justice Department, however, declined to pursue the evidence against a sitting federal judge (Bazelon) and the man who had, by the report's closing, become the Democratic National Committee chairman from California (Ziffren). Interestingly, after an exhaustive search by National Archives staff, all Justice Department records on the Bazelon investigation have turned up missing.57
