by Gus Russo
Michele Eugenio Sindona was born in Sicily on May 8, 1920. After World War II, Sindona forged his first alliance with the Sicilian Mafia in his desire to expand his lemon-exporting business; the mafiosi had a vise grip on all goods imported or exported from the island. In 1946, Sindona left Sicily for Milan, where he worked for a business consultancy and accounting firm, from where he continued to correspond with numerous Mafia clients, and where it was widely believed that he himself became a "made" Mafia member. 11 In 1957, Sindona was approached by the Gambino crime family and their Sicilian cousins, the Inzerillos: the Mafia wanted Sindona to launder monies garnered through the heroin drug-trafficking pipeline between Italy and the United States; the laundering was accomplished through Sindona's Milan currency brokerage, Moneyrex. Shortly after the accommodation was reached, Sindona purchased his first bank, an undertaking that would soon render him an adviser to the Vatican Bank in Rome. His advice became so crucial to the Vatican that he became known as St. Peter's Banker.
Sindona was also a pioneer in the use of anstalten, a term denoting a Swiss- or Liechtenstein-based corporation with only one stockholder, and a powerful financial tool, especially if an individual wishes to remain anonymous while moving his money around. Investigative author RT Naylor wrote, "In the postwar period, Sindona, a pioneer in the use of the Liechtenstein anstalten, allegedly put his financial skills to work channeling CIA money to the church and the Christian Democratic Party, and laundering and reinvesting heroin profits for the Mafia."12
In 1964, Sindona was inducted into the secret Masonic lodge known as Propaganda Due, or P-2, a shadowy clique that contained members of some of the most powerful corporations in Italy and counted a number of cardinals among its supporters. It has been referred to as "a parallel state" and the "secret power behind Italy."
Sindona also offered advice to Roberto Calvi regarding international expansion for his own institution, the Banco Ambrosiano. Calvi established shell companies in Panama that on paper looked to be controlled by the Vatican Bank. According to Fortune journalists Shawn Tully and Marta Dorion, Calvi "lent $1.3 billion to shell companies, which used the money to manipulate the stock of Banco Ambrosiano to push up its price and to buy big stakes in other companies." Calvi had to borrow almost $600 million from 120 foreign banks so he could lend the $1.3 billion to the shell companies.
Throughout the 1960s, Sindona continued to purchase banks, launder money for the Mafia—his network of banks and offshore companies were a convenient vehicle for the laundering of dirty money earned from heroin traffic and other mob-connected businesses—and to forge closer financial links with the Vatican. Interestingly, during this period he was represented in the United States by the law firm Mudge, Rose, Guthrie and Alexander, where both Richard Nixon and his future attorney general John Mitchell were partners.13 By 1964, Sindona directed over five hundred companies in Italy, England, France, Switzerland, and the United States. In 1968, Sindona developed a new plan that would allow the Vatican money to be hidden in offshore investments. He eventually invested the Church's money in weapons manufacturing and even a pharmaceutical firm that produced birth control pills. In 1969, the Vatican honored Sindona as a "man of confidence." 14
Around the time that he purchased the Brown Paper and Plywood Company of New Hampshire, Sindona appeared on Bluhdorn's radar, himself a commodities magnate. In January 1968, Sindona was in Milan when he received a telephone call from Bluhdorn in New York, asking for a meeting next morning at the Grand Hotel in Rome. Bluhdorn indicated that he had an interesting deal to propose. In just one hour the following day, Sindona sold the Brown Company to Bluhdorn for $15.5 million in cash.
In the spring of 1970, Bluhdorn again became enmeshed in negotiations with Sindona, successfully effecting a stock swap that provided Societa Generale Immobiliare (SGI), Sindona's real estate investment company, half of the Paramount lot, and Bluhdorn a seat on Immobiliare's board of directors.* Gulf & Western also purchased 15 million shares of SGI and listed them on its books at one and one-half times their market value. Sindona, in turn, purchased a Hollywood holding company at double its assessed value from Bluhdorn's conglomerate. The Securities and Exchange Commission, already adjudicating Gulf 's connection to Parvin-Dohrmann, quickly charged Sindona and Bluhdorn with violating securities law by trading worthless stock back and forth to create a false market. Sindona and Bluhdorn agreed to halt all trading, and the SEC therefore decided to drop all charges.15
Throughout this period, Peter Bart's journalistic instincts were unrestrained, as he took copious notes on what he was seeing and hearing at Paramount, including details of a secret Bluhdorn confab with Fidel Castro in an attempt to persuade him to launch a global sugar cartel with him, and a Bluhdorn plan to use Sindona's dirty European money for a limitless G&cW expansion.16 When Sid Korshak became aware of Bart's note taking, he stepped in, as only he could.
"Peter, do you know what's the best insurance policy in the world that absolutely guarantees continued breathing?" Korshak asked. "It's silence." In his book Who Killed Hollywood: Bart described his reaction to the rare, and valued, Korshak advice. "How often did one receive advice from the man who was arguably the word's best fixer?" Bart pondered. "I realized that the single most prudent thing I could do with my notes was not simply to discard them but to incinerate them. They were quite accurate; they were also quite dangerous . . . It would be fascinating to re-create precisely who did what to whom . . . It would be great to have a record. On the other hand, I have felt a sense of security over the years, knowing that I took out Sidney Korshak's recommended insurance policy"17
Before the IBI (Illinois Board of Investigation) and SEC hearings commenced, Sid Korshak's pal Irv Kupcinet revealed in his column that Korshak was going to file a libel suit against Len O'Connor of Channel 5 (Chicago) for saying that he was involved in $500,000 in "hanky-panky" concerning the O'Hare Airport hotel deal.18 When the IBI convened their hearings that spring, investigators Richard Gliebe, Thomas Schupp, and Edward Wolf testified as to what they and Jack Clarke had found in New Jersey and Acapulco, including the fact that Meyer Lansky had gone to Morton, Korshak, and Levin's Acapulco Towers for "many meetings." Morton himself refused to come to Illinois from California to testify.19 As noted previously, Levin explained that it was his son who was making all the calls to the home of the Jersey mafioso DeCarlo.
Coincidentally, on the same day Levin testified in Illinois, June 23, 1971, his partner Sid Korshak was doing the same in Washington for the SEC Parvin probe. In Korshak's three days of testimony, transcribed in 463 pages, it is clear that his interrogators knew nothing of the hoodlum conventions at the Acapulco Towers. While in Illinois, the IBI was in the dark about the stock fraud shenanigans of Parvin-Dohrmann, in which Levin was a major shareholder.
In Washington, Korshak rolled out the big ammunition: D.C. power attorney Edward Bennett Williams (whom Korshak also hired for St. John), and Frank Rothman of Greg Bautzer's firm and former head of MGM (1982-86). "He was not an admitted California lawyer," Rothman later said of his friend Korshak, "and he referred a considerable amount of legal business to me."*
Williams first refused to allow Korshak to testify if the SEC wouldn't guarantee them a copy of the transcript. In his opening remarks, Patrick K. Leisure, the attorney for plaintiff Denny's Restaurants, criticized Korshak and Coleman over their alleged associations in the Acapulco deal. Rothman then derailed the commission by showing that Leisure had been a partner in a law firm that represented Korshak's group in the sale of Acapulco Towers to Transnation, and since Coleman and Korshak were involved in both Acapulco and the pending Parvin action, Leisure was "conflicted out." SEC attorney William Sullivan said, "This raises in my mind the propriety of the attorneys who represented several of their now adversaries, whether they should put themselves into a position where they are attacking their former clients based upon the same transaction."20
When Korshak finally testified, he merely described how he'd brought the o
ther partners into the Parvin investment with no intent to defraud Denny's or the majority of Parvin investors. An example of Korshak's overweening confidence was when he was asked, "What did you know about hotel operations in Las Vegas?"
"Very little" was Korshak's patently absurd answer.21
In questioning Korshak about his Stardust commission, the government was able to show that all he did to earn his huge fee was introduce Coleman to Morris (Moe) Dalitz, the owner of the Stardust, and make about twenty telephone calls.22 When his turn came, Del Coleman was accompanied to Washington by his close friend Nevada governor Paul Laxalt. Despite the obvious conflict, Laxalt also accepted a free round-trip to Switzerland from Coleman, even while the SEC was investigating Coleman's Las Vegas casino purchases.* Coleman also testified to Korshak's minimal work and his unreported $500,000 fee—a fact that attracted the attention of the IRS, it would later be learned.
The SEC case was settled with a consent decree that cost Korshak most of his potential profit and required him and Coleman to cut their ties with Parvin-Dohrmann. The SEC determined Korshak's profits to be unlawful and placed the funds in escrow with a court trustee who would reimburse aggrieved stockholders. No criminal charges were filed.23
Paul Steiger, the author of the Los Angeles Times Korshak profile, and presently managing editor of the Wall Street Journal, recently offered his opinion of the seemingly mild judgment: "The resolution was a typical SEC injunction. It's the way they did business in those days. There were very rare criminal prosecutions. It was fairly significant that the SEC would bring a case to that level of conclusion. That was as tough as it got in those days."24
The punishment was, however, more severe for the investors' go-betweens. In 1971, lobbyist Voloshen (who died soon thereafter) was fined $10,000, his cohort Sweig went to prison for influence peddling, and McCormack did not seek another term.25
Not long after, Korshak and Coleman had a permanent falling-out. "Del betrayed Sidney," said Coleman's ex, Jan Amory. "Del did the ultimate thing that a mob close friend would never do—he gave an interview to a writer in which he implied that Sid was having a romance with Jill. It was despicable to Sidney that he would open his trap, and it also hurt Bernice." There was little doubt in Amory's mind how Del knew about Jill: apparently Sid shared the actress with Del. "We were married for a swift eight weeks in 1971," remembered Amory. "I was pretty young and married Del against Sid's advice. I soon understood why he was against it. We were on our honeymoon in Miami, and Del said he was in a meeting, so I went out. But I came back to the suite early and caught him in bed with—are you ready for this?—J ill St. John. I filed for the divorce the next morning."*'26
At about the same time, in the IBI hearings, Phil Levin agreed to sell his 129,000 shares of Parvin stock, as the board seemingly overlooked a mountain of mob-related evidence and granted Transnation and Levin the coveted racing license. "I don't want to put anybody out of business or in business," Illinois Racing Commission chairman Alexander MacArthur said on August 10. "You're getting pretty close to playing God then."27 The Republican-controlled board's decision sparked a controversy, given the evidence gathered in Acapulco, and turned into a firestorm when it was discovered what occurred less than two weeks after the hearings. On the advice and guidance of Sid Korshak, Levin made a $100,000 "contribution" to a number of prominent Republicans on August 30. When the payments were investigated a year later, Levin testified that Korshak had advised him as to who exactly should receive the funds, and that Levin's aide subsequently delivered twelve checks to Korshak's office for disbursement. One likely painful payout was a $25,000 gift to GOP county chairman Edmund Kucharski, who had opposed Sid's brother Marshall over the Playboy license affair.28
In the payoff probe, Levin of course testified that these were just political contributions. But even in the unlikely event that that was true, the payments still were illegal, since Illinois law prohibited political contributions from any business that held a liquor license.29 It would all be a moot point when, on August 2, 1971, just weeks after the probe, sixty-two-year-old Phil Levin died of a heart attack in his Pierre Hotel apartment in New York.30 The next day, a New Jersey cop called Jack Clarke with the news. "Well, you finally killed the bastard," the cop said.
Moe Morton was arrested in Mexico after the hearings, and his loyal friend Ybarra worked hard to keep him in local prisons where he could be protected from inmates by friendly guards. After a few weeks, Morton scurried back to California, never to return South of the Border. Two years later, Transnation sold the Illinois racetracks, which were victims of mismanagement.
A casual Sid Korshak, mid-1960s (Dominick Dunne)
In California, where Marge Everett now possessed enough stock to put her on the board of Hollywood Park, Sid Korshak lobbied in vain with his pal Eugene Wyman, the racetrack's counsel (and also an Acapulco Towers investor), to keep Everett off the board.31 Years later at the Bistro, a choking Everett was saved by a deft use of the Heimlich maneuver by actorAmbassador John Gavin, a Bistro regular. Owner Kurt Niklas wrote, "The next day Korshak [who wrongly assumed that a Bistro waiter had saved Everett] came storming through the restaurant doors like a bull entering at a corrida.
" 'I want that bastard fired!'
"'What bastard?'I asked.
" 'The waiter who saved that bitch's life!'
" 'It's already done,' I lied. 'I fired him yesterday.' "32
A smiling Korshak assumed his place at Table Three, never the wiser according to Niklas. When Everett's name was innocently mentioned by a guest at a Korshak holiday bash, Korshak said, "Don't spoil our dinner by talking about that bitch!"33
Niklas asked Korshak what was the problem between him and Everett. Korshak answered, "Acapulco Towers. She was the bitch who had a private investigator snooping in my business."34
Three years later, the racing board continued its beneficent treatment of G&W's Illinois racing enterprise when it granted the company an additional thirty-seven lucrative days of racing at its Korshak-represented tracks.
*By May 1970, Parvin/Recrion stock had plummeted to $12.50, and the company was forced to sell the Aladdin (once the Tallyho) for $6 million. By the end of 1973 it had reduced its debt to $37 million.
*Ironically, one of SGFs properties was the Watergate Complex, events at which would later precipitate the downfall of Richard Nixon, whose law firm represented SGI and Sindona in the United States.
* Rothman was a 1951 USC Law School graduate and one of the nation's most respected and well-known trial attorneys, held in great esteem by judges and business executives across the country. The National Law Journal called Rothman a "legendary litigator" and included him several times on its list of the country's one hundred most influential lawyers. Rothman's clients included Warner Brothers, Walt Disney, Paramount Pictures, and Twentieth Century-Fox, as well as the NFL, NBA, NHL, and PGA. He was perhaps best known for defending the NFL in a 1986 antitrust case filed by the now defunct United States Football League, in which a jury found the NFL guilty of violating one count of antitrust law—but awarded only one dollar rather than the $1 billion in damages sought by the USFL. He also handled a case that invalidated an NBA rule preventing players from entering the league before their college class graduated.
Rothman was especially beloved at USC Law, where he maintained close personal friendships and advised the school's administration as a member and chairman of the school's Board of Councilors; his USC legacy is perpetuated by the Frank Rothman Scholarship Program, established in 2002 by the Rothman family with support from his colleagues, friends, and business associates. Rothman passed away in 2000 at the age of seventy-three.
*Shortly thereafter, Coleman arranged for Laxalt to obtain the interest-free, collateral-free loan from the First National Bank of Chicago that built Laxalt's dream Ormsby House casino. (Denton and Morris, Money and the Power, 317)
*Amory said the vitriol between Korshak and Coleman was so profound that when Coleman suffered a stroke y
ears later, some believed that Korshak had sent him a dose of poisoned cocaine, which Coleman ingested just before the crippling event.
CHAPTER 17
From Hoffa to Hollywood
IN 1971, SIDNEY KORSHAK'S focus quickly turned right back to Washington, where the Nixon White House, as part of Richard Nixon's longstanding ties to the Teamsters, strategized over what to do about Jimmy Hoffa. Apparently, Korshak was among those with a suggestion.
At the time, Nixon was under pressure from many corners to offer executive clemency to Hoffa, imprisoned since 1967 on the jury-tampering and pension-fund kickback convictions. Without presidential intervention, Hoffa was likely to serve out his two concurrent thirteen-year terms; the parole board had rejected Hoffa's parole application three times previously, after expressing concern that Hoffa's wife and son were still on the Teamsters' payroll with salaries totaling nearly $100,000 a year, while Hoffa had received a $1.7 million lump-sum retirement settlement. However, both the rank and file, and the interim Teamster boss, Frank Fitzsimmons, who counted Nixon as a close friend, had been lobbying for Hoffa's release. Other influential constituents such as Ronald Reagan, World War II hero Audie Murphy, and California senator George Murphy all lobbied Nixon on Hoffa's behalf, hoping to obtain either Teamster business or pension-fund financing for pet projects. At the time, Murphy was working for D'Alton Smith, the son-in-law of Korshak associate New Orleans Mafia boss Carlos Marcello. Often Murphy and Smith stayed at Moe Dalitz's Desert Inn while brainstorming the Hoffa issue. On other occasions they met at the same Beverly Rodeo Hotel in Beverly Hills where Korshak negotiated the Schenley labor peace with Chavez's farmworkers.1
