Supermob

by Gus Russo

  In prison, a confident Hoffa told his son, "My association with the mobs has hurt me, no doubt about it. It gave Bobby Kennedy the handle to immobilize me, put me in jail—uproot me from my union work. But I'm coming back."2 Aware of the work of his fellows on the outside, Hoffa felt certain that an early parole was inevitable. Nixon may have been leaning toward such a move, since he felt he owed Hoffa for the million-dollar contribution he had made to Nixon's candidacy in 1960. However, Nixon was finally convinced by the promise of another fat check, this one from none other than the Supermob's underworld partners in Chicago and Las Vegas. According to some, Sidney Korshak was one of the key behind-the-scenes negotiators—understandable given his power in Vegas and his connections to such Nixon intimates as Murray Chotiner and Henry Kissinger.

  By early 1971, the Korshak allegations were reverberating across the country. In Washington, F. C. Duke Zeller, who served as communications director, government liaison, and personal adviser to four Teamster presidents, was among those who learned of Korshak's intercession. "I certainly heard that [Korshak] was involved in the negotiating or at least involved in the process," Zeller said recently. "Fitzsimmons had used several people to get to the Nixon White House, and Korshak was one of them. Korshak apparently had intervened on Fitzsimmons's behalf with [Nixon aide Chuck] Colson. I heard about it early on in direct conversations with Fitzsimmons, so there was never any doubt in my mind that Korshak intervened with the Nixon White House to execute that Hoffa deal."3

  Also in Washington, an investigator for syndicated columnist Jack Anderson was told of Sidney's broker role by D.C. political-gossip maven Washington Post reporter Maxine Cheshire. "Maxine told Jack Anderson the Hoffa pardon was organized by Korshak using Jill St. John to work Kissinger in order to get to Nixon," said the source, who wished to remain anonymous.

  In Chicago, investigator Jack Clarke also picked up evidence of the Sidney connection. "I conned Marshall Korshak into a conversation at Eli's [Steakhouse]," said Clarke. "He told me and a number of other people that his brother Sidney had intervened with the Nixon administration. Hart was involved in that too—the money came from Vegas and Chicago and was being held in one of Hart's banks where the IRS couldn't get to it." Clarke also heard the story from Audie Murphy. "Audie Murphy was my best friend. He told me he was asked by Sidney Korshak to go see Nixon in the White House. Senator George Murphy and Nixon had been good to Audie, and he was told to go to the White House and cop a plea for Hoffa. Korshak talked to Murphy about it in the office of Senator George Murphy, and they got Audie to go talk to Nixon."4

  In Las Vegas, where production was ongoing on Diamonds Are Forever, screenwriter Tom Mankiewicz, who saw Korshak often during the shoot, also heard the rumor. "If memory serves me right, it was Sidney who negotiated Hoffa's release with Nixon," Mankiewicz said in 2003. 5

  Mob messenger boy/actor/singer Gianni Russo said the Korshak-Hoffa story was known from New York to L.A. "I knew the Korshak talks were going on because there were some messages about it that were going back and forth," Russo recalled recently. "There was a lot of problems coming out of that for a lot of people."6

  The main problem was that during Hoffa's absence, both the mob and the Supermob had grown to like Frank Fitzsimmons (and his partner Dorf­man) more than Jimmy Hoffa, who only used the mob loans to help strengthen the Teamsters; he was never considered "one of ours" by the hoods. (Hoffa would later become a government informant against Fitzsim­mons.) Before going away in 1967, Hoffa had said to his board about Dorf­man, "When this man speaks, he speaks for me." He made similar statements about Frank Fitzsimmons. Now the duo surpassed their iconic colleague in his appeasement of the underworld. Under Fitzsimmons and Dorfman, Moe Dalitz was loaned $27 million to expand La Costa; Frank Ragano, Santo Trafficante's lawyer, received $11 million in a Florida real estate deal; Irving Davidson, Carlos Marcello's D.C. lobbyist, received $7 million for a California land purchase; and in addition to Caesars, the fund was tapped to construct the skim-friendly Landmark, Four Queens, Aladdin, Lodestar, Plaza Towers, and Circus Circus.

  All told, the pension fund controlled by Allen Dorfman had loaned over $500 million in Nevada, 63 percent of the fund's total assets, and most of it went to the hoods' favored casinos. But, perhaps most important, Fitzsim­mons had decentralized Teamster power, which benefited local mob bosses, who could now easily outmuscle small union fiefdoms without having to bargain with an all-powerful president.

  Thus all agreed that any Hoffa release would be conditional, mandating that he not assume a political role in the affairs of the Teamsters for at least eight years. According to White House tapes released in 2001, Nixon informed Henry Kissinger on December 8, 1971, "What we're talking about, in the greatest of confidence, is we're going to give Hoffa an amnesty, butwe're going to do it for a reason." (Italics added.) Nixon then whispered about "some private things" Fitzsimmons had done for Nixon's cause "that were very helpful." It is now taken as fact that Nixon was referring to another promised "contribution" when the 1972 campaign rolled around.

  "It's all set for the Nixon administration to spring Jimmy Hoffa," Walter Sheridan told Clark Mollenhoff. As the man who'd worked closest with Bobby Kennedy in putting Hoffa away, Sheridan was frustrated. "I'm told Murray Chotiner is handling it with the Las Vegas mob."7

  It was a busy year for Korshak's good friend (and Richard Nixon's mentor) Murray Chotiner. According to Jeff Morgan and Gene Ayers of the Oakland Tribune, Chotiner was also putting out Teamster fires in Beverly Hills, where a fund borrower had come under indictment for fraud. The affair started with an $11 million 1969 fund loan for a development named Beverly Ridge Estates, a similar undertaking to the misbegotten Trousdale Estates investment in Beverly Hills a decade earlier. In this case the loan went to Leonard Bursten, a Milwaukee attorney who had founded the Miami National Bank, which was used by Lansky and others to launder money and have it transferred to Swiss accounts. Bursten, a political protege of Joe McCarthy's, had also distributed anti-Catholic literature for Nixon's 1960 campaign versus JFK, most likely under the direction of Chotiner. When the Teamsters tried to foreclose on the bankrupt Beverly Ridge partnership, Bursten attempted to conceal $500,000 of the total from the IRS. (When Bursten pled guilty and was sentenced to fifteen years in 1972, the punishment was reduced to probation and the record was expunged after Chotiner supposedly interceded with the U.S. attorney in L.A. who was handling the case.)8

  On December 23, 1971, Sheridan's fears were realized, when Nixon in fact granted Hoffa's early parole.* It was later learned that money had been pouring into various Nixon slush funds from Teamster coffers for just that purpose. It was also reported that the money would guarantee that NixonMitchell would take it easy on investigations of pension-fund loans. According to newly released FBI documents, the first payoff came in 1970, via Korshak's underling at the pension fund, Allen Dorfman. The file stated, "Dorfman and another individual (not identified) had a private meeting with [Attorney General] John Mitchell. Dorfman gave $300,000 to Mitchell and obtained a receipt. The money was paid to obtain the release of James R. Hoffa from jail."9

  The next big payback came less than a month after five men linked to the White House were nabbed breaking into the Democratic National Committee headquarters housed in the Watergate Complex. The venue itself was riddled with Supermob connections, bizarre coincidences, and laughable ironies:

  • The residential portion of the Watergate served as home to the nation's most influential jurist below the Supreme Court—Chief Judge David L. Bazelon of the U.S. Court of Appeals for the District of Columbia Circuit, friend of both Paul Ziffren and Howard Hughes's enemy Sid Korshak. One year after the break-in, Bazelon would make a critical ruling on the Watergate prosecution, and in 1975 Bazelon and his wife returned home from Christmas vacation to discover their own Watergate break-in: $16,000 worth of jewelry was missing from their apartment.

  • The Watergate Complex was owned by none other than Michele Sin-dona's Soc
ieta Generate Immobiliare (SGI), and owned in part by the Vatican. SGI, linked to Charlie Bluhdorn's Gulf & Western and Bob Evans's Paramount Pictures, had bought the ten-acre site from Washington Gas for $7 million.

  • In what the Washington Post called "a delicious irony for the father of the Watergate," the first Bush administration tapped SGI in 1989 to demolish the new U.S. embassy in Moscow because it was infested with electronic bugs.

  • The first known Watergate break-in was a 1969 residential burglary in which jewelry and a papal medal were stolen from the apartment belonging to Nixon's secretary Rosemary Woods, later accused of erasing eighteen and a half minutes of incriminating evidence from one of the president's secret tapes, in which he discussed covering up his own break-in at the Watergate. (Dozens of White House staffers and fully one quarter of the cabinet lived at the complex, including Attorney General John Mitchell, Commerce Secretary Maurice Stans, and Transportation Secretary John Volpe; the residence was nicknamed Administration Arms, and White House West.10

  At least one purpose of the June 17, 1972, break-in appeared to have been Nixon's worries over what the Democrats may have sussed out about the payoffs given by Howard Hughes to Vice President Nixon in the fifties and President Nixon in 1968. Nixon had reason to worry: in 1972, at the time of the break-in, the new head of the Democratic National Committee was one Lawrence O'Brien, Hughes's former D.C. lobbyist, who had a good likelihood of knowing about the bribes.

  On July 17, 1972, Frank Fitzsimmons and the Teamsters executive board met at La Costa Country Club, and for the first time in its history the Teamsters pledged that its huge membership would support a Republican presidential campaign. It was estimated that more than $250,000 would be collected for the campaign from Teamster officials alone.

  Over the coming months, as Nixon became frantic to provide hush money to the burglars, he suggested to aide John Dean (in a conversation being recorded by Nixon), "You could get a million dollars. You could get it in cash. I know where it could be gotten." When Dean observed that money laundering "is the type of thing Mafia people can do," Nixon calmly answered, "Maybe it takes a gang to do that."

  Soon thereafter, just as Nixon predicted, over $1 million was funneled to the White House from sources that were the known domain of Sidney Kor­shak: the Teamsters Pension Fund and Las Vegas. FBI "Hoffa" documents released to the Detroit Free Press in 2002 point out that informants re­ported:

  • Jay Sarno, the owner of Circus Circus, delivered $300,000 to Allen Dorfman at his Chicago home in August of 1972.11

  • That same month, Hoffa said "he was aware of certain Las Vegas casino people who had made large cash contributions to the Nixon campaign."

  • On January 6, 1973, $500,000 was given to Nixon aide Charles Colson, or a designee, in Las Vegas (Colson later denied this to reporters).12 On that same day, Fitzsimmons retrieved the money from Dorfman's home. Two years earlier, in an internal memo marked SECRET, Colson had reported that "substantial sums of money, perhaps a quarter of a million dollars, available for any . . . purpose we would direct" could be generated by "arranging] to have James Hoffa released from prison." Attorney Colson told D.C. attorney Richard Bergen, "I am going to get the Teamster account in several months."13 In fact, Fitzsimmons later transferred Teamsters legal business to a law firm where Colson would eventually work. Colson, who did prison time for his involvement in the Watergate affair and who now runs a prison ministry, maintained that there was no connection between the commuted Hoffa sentence and the change in Teamsters legal business. Soon after the Teamster money was received by the Nixon camp, John Mitchell indeed scuttled investigations into the Teamsters Pension Fund loans and rescinded the taps on Accardo and friends.

  • On February 8, 1973, Fitzsimmons met with numerous California mobsters* near Palm Springs at Indian Wells Country Club (coincidentally the winter home of Chicago boss Tony Accardo) during the Bob Hope Desert Classic golf tournament. The topic of discussion was a new Teamsters prepaid health plan, expected to generate a possible $1 billion in annual business, and real estate transactions in Orange and San Diego counties involving more than $40 million in commercial property—all financed by Teamsters Pension Fund loans.

  In the next days, the meetings shifted to Rancho La Costa, where Fitzsim­mons met with Chicago's Vegas enforcers Anthony Spilotro and Marshall Caifano, Outfit boss Tony Accardo, and an unnamed Justice Department informant. The motley crew discussed the prepaid health plan, under which a Los Angeles physician named Dr. Bruce Frome would provide West Coast Teamsters with medical care. Monthly medical fees for each member would be paid by the central-states fund from the millions of dollars contributed into it by employers. But most important, it was agreed that 7 percent of take would go to the California underworld, with 3 percent kicked back to a shell company called People's Industrial Consultants, run by the Chicago Outfit. FBI wiretaps revealed that Accardo's underboss Lou Rosanova had set up a Beverly Hills office of People's Industrial Consultants to handle the kickbacks to be paid under the health plan. The office was located at 9777 Wilshire Boulevard, two blocks from Korshak's Riviera office (#9571). The wiretaps at the shell company picked up a conversation between Dr. Frome and Raymond de Derosa, identified by the California authorities as a muscleman for California mafioso Peter Milano, who operated out of the consulting company's offices.14

  On the morning of February 13, 1973, Fitzsimmons drove to El Toro Marine Air Station and joined Nixon on board Air Force One for the flight to Washington. According to mob sources located by author William Balsamo, Fitzsimmons told Nixon on the flight, "We're prepared to pay for the request I put on the table. You'll never have to worry about where the next dollar will come from. We're going to give you one million dollars up front, Mr. President, and there'll be more that'll follow to make sure you are never wanting."15 Just days later, the Justice Department shut down the FBI's court-authorized wiretaps.

  In May 1973, Korshak's Beverly Hills friend Murray Chotiner publicly took credit for arranging Hoffa's early parole. Chotiner bragged, "I did it, I make no apologies for it, and frankly I'm proud of it!" But when Chotiner was charged by the Manchester Union Teader of April 27, 1973, with also having funneled $875,000 to the Nixon campaign from Teamster officials and Las Vegas gambling interests, Chotiner typically responded with an attack of his own: "Unless there is an immediate retraction, I plan to sue or take whatever action the law allows against whoever is responsible for this horrible libel." Unwilling to take on the expense of a multimillion-dollar lawsuit, the paper retracted the story.

  Observing from Chicago, Labor Department organized crime investigator Tom Zander saw what was happening but could do nothing about it. "Anybody who wanted to pay for it had a connection to Nixon," Zander said recently. "The locals gave massive amounts of untraced money to Nixon. They got away with murder." An FBI agent told Los Angeles Times reporters Jack Nelson and Bill Hazlett, "This whole thing of the Teamsters and the mob and the White House is one of the scariest things I've ever seen. It has demoralized the Bureau. We don't know what to expect out of the Justice Department."

  Any Korshak participation in the Hoffa-Nixon financial arrangements was juggled with Korshak's own monetary negotiations with the feds. After following up on the SEC's Parvin revelations, the IRS's scrutiny of the sixty-five-year-old Korshak's tax statements resulted in a September 7, 1972, charge that Korshak was guilty of tax evasion and fraud. The agency alleged that between 1963 and 1970 the Fixer had, among other things:

  • Only reported $4.4 million of his $5 million taxable income.

  • Taken improper deductions for expenses to the tune of $428,056.

  • Failed to pay gift taxes on such items as $115,000 in stocks to his sons, and $10,000 to Jill St. John.

  Among the details in the charge were the notations that in 1969 Korshak had given each of his sons $20,000 in shares of Al Hart's City National Bank, and that he claimed an average of $16,000 per year in deductions for his Chalon Road mansion, wh
ich he claimed as his office. The IRS examiner auditing Korshak's taxes concluded that Korshak's actions were "intentional and substantial." All told, according to the IRS, Korshak owed over $677,000 in back taxes, plus $247,000 in penalties.16

  Within months, the IRS turned on Sidney's sixty-three-year-old brother, Marshall, who was at the time the city collector for Chicago, a $23,000a-year job. The feds were focused on the years 1967 through 1970, when Marshall's reported earnings had averaged $155,000 per year, a fraction of his older brother's income, but almost five times his own city pay. The IRS said in a press release that it was interested in Korshak's stock holdings in sixty companies and alleged contributions to an astonishing forty-seven charities.17 Official sources said that the IRS mostly wanted to determine if Korshak was acting as a "nominee" for others in all the stock holdings—a number of local pols, including former governor Otto Kerner (for whom Kor­shak had served as revenue director), had recently been convicted in a bribery scandal involving horse-racing stocks, and it was believed that illegal investments were now being fronted by nominees. The IRS wanted to see Korshak's brokerage statements to make the case.

  Appearing under a summons at the IRS offices on February 6, 1973, Kor­shak failed to bring his stock records as ordered and instead pleaded immunity under the Fifth Amendment.18 Within days, Marshall traveled to Los Angeles, probably to confer with his big brother.19 Meanwhile, the IRS went to court and obtained an April 18 deadline for Korshak to produce the records. In a headline reading KORSHAK: TALK OR RESIGN, the Sun-Times editorialized that "ethics laws and rules require that public officials be open and aboveboard about their financial affairs . . . If Korshak persists in his refusal to discuss his financial affairs candidly and openly with federal income tax officials, he should resign his public job or be removed by Mayor Da­ley." 20 A Chicago Today editorial called Korshak's recalcitrance "striking."21