by Connie Bruck
Allotting the skim wasn’t easy. On one occasion in October 1962, Dalitz was meeting in his office with a longtime associate, George Gordon, a courier for the overlord of the Cleveland mob, John Scalish. Dalitz and Gordon were talking about rearranging the percentage points in the Stardust, and trying to straighten out the actual ownership in relation to the public ownership (there were seventeen individuals registered publicly as part owners, or licensees, all with varying numbers of points—but then there was the other, hidden list). The percentage points were, of course, supposed to add up to 100; but once they counted and got 96; again they counted, and came up with 110. On another occasion, two of Dalitz’s employees at the Desert Inn were counting money behind locked doors for one and a half hours, trying to figure who was to receive what amount, scribbling on pieces of paper, trying to make it all balance. They never could. Payments mentioned in this episode included $2,500 to Jack Benny, $2,000 to the Catholic Church, and $30,000 to the Chicago mob.
While Dalitz was unaware of the hidden microphones, he knew that he had been named one of the top-echelon racketeers in a list compiled by Bobby Kennedy in 1961, and, also, that he had been made the subject of a crash investigation for prosecution. “If only I could get my name off that ‘Top Forty,’ ” he lamented in July 1962. He discussed several people who he thought might be able to help him with the Kennedy administration. At a meeting held in Dalitz’s office in October 1962, attended by Dalitz, Gordon, Sam Tucker, and Allard Roen, one of the publicly identified owners of the Desert Inn, Dalitz was discussing the Chicago mob. Referring to Johnny Roselli and Sam Giancana, he worried aloud, “I was seen with them. I don’t think that’s good. It ties the whole mob up.”
Dalitz was convinced that Bobby Kennedy was the source of his troubles. Referring to a federal grand jury in Los Angeles that was investigating hidden interests in the Sands Hotel, Dalitz commented, “They feel Doc Stacher is an undisclosed partner in the Sands Hotel and that he represents the gangster element at the Sands. The government feels if they can expose that, they would cut off the money flow. . . . Bobby Kennedy is using this as a cloak to kill the industry in Nevada. He feels this is a pipeline for undisclosed interests.” But he took some solace from his colleagues’ solidarity. “There’s less hysteria than eight months ago—at least everyone’s decided to take the Fifth,” he commented. Dalitz and his associates felt a considerable sense of betrayal in their relationship with the Kennedys; they knew that the mob had helped to get John Kennedy elected in 1960—and now their payback was Bobby’s war on organized crime! Wilbur Clark, Dalitz’s front man at the Desert Inn, commented one day that Bobby Kennedy was in Las Vegas, and he hoped Kennedy would get poisoned.
Korshak was a good friend of Dalitz’s, and the two met often in Las Vegas. He agreed with Dalitz’s assessment of Bobby Kennedy. Korshak had tangled with him earlier: when Korshak testified before the Senate Rackets Committee in 1957, Bobby Kennedy was his questioner. On a visit with Dalitz in February 1963, Korshak told him that “Bobby has been trying for six months to catch someone either in Las Vegas or Los Angeles who is carrying money . . . he is desperate and has now issued instructions to have narcotics agents grab any suspected money bag under the pretense that they are looking for narcotics,” according to an FBI report. Korshak was also heard on the FBI wiretap in Dalitz’s office exhorting Dalitz to take full advantage of the privilege afforded by the Fifth Amendment. “Actually, Moe, you never waive the Fifth. The rule is that you can testify and when a question is put to you, you are the judge of whether you think it will incriminate you or not. You don’t have to answer.” Korshak referred to a recent court case upholding this right, and added, “This in itself will stop the investigations of Bobby, you know.
Sidney Korshak, who was rarely photographed, testifying before the U.S. Senate Select Committee on Improper Activities in the Labor or Management Field on October 30, 1957, in response to questions posed by the committee’s chief counsel, Robert Kennedy. Corbis-Bettmann
“Moe, I have preached this all over the country,” Korshak continued. “Do not answer anything. I have testified before Grand Juries in New York and Chicago and at that time I could do it because then I was only dealing with certain people. I tell you now, Moe, if I am called before any Grand Jury, I will take the Fifth Amendment and I am a lawyer. I will give my name and address and from that point on I will answer no questions. They can disbar me, but I will take the Fifth. Now I have to take the Fifth, because I am operating in a different atmosphere.”
Korshak was preaching to the converted. “FBI agents were in here a while back, and tried to ask me some questions,” Dalitz responded. “I told them to put them right back in their (obscene) pocket because I was not going to answer anything. They said, we would like you to at least hear the questions. I said, you are not going to read them because I don’t want to hear them. Sam [Samuel Tucker] and Morris [Morris Kleinman] and [deleted] all told them the same thing.”
During this meeting, Korshak and Dalitz discussed what they considered the happy outcome of a deal very important to Dalitz, and one that Korshak had facilitated. Since 1958, the Desert Inn had been leasing the Stardust Hotel and casino from John “Jake the Barber” Factor—though the full reality was rather more complicated. As Doc Stacher explained, when the Stardust was being built in 1957, Dalitz had feared it would be too competitive with the Desert Inn. “It looked like an old-fashioned war might break out,” Stacher said, “but Meyer [Lansky] suggested a meeting and we all flew in for it. I was there with Dalitz, and his right-hand man, Kleinman, was there, and Longie [sic] Zwillman and so forth. We worked out a deal that gave each group an interlocking interest in each other’s hotels, and our lawyers set it up so that nobody could really tell who owned what out there.” Now, Dalitz (with other undisclosed partners) wanted to purchase the Stardust. Any transfer of ownership, obviously, had to be handled by a mob insider. And inasmuch as Korshak had known Factor for many years, and the Chicago mob also had an interest in the Stardust, Korshak was a natural intermediary.
Factor, who hailed from Chicago in the Capone era, was a notorious international swindler. In 1933, he had been about to be extradited to England to serve a long prison sentence when he was apparently kidnapped; released unharmed, he had fought extradition on the grounds that he had to remain in this country to testify against his purported kidnapper, Roger Touhy—the same Roger Touhy whom Jules Stein had speculated was behind the plan to kidnap him. But after Touhy had served twenty-five years in prison for the Factor kidnapping, a federal judge ruled that Touhy was innocent, and that Factor had staged his own kidnapping and, with the collusion of the state attorney’s office in Chicago, framed Touhy. Touhy was ultimately paroled in November 1959, shortly after the publication of a book he wrote with a Chicago newspaperman, Ray Brennan, that detailed the whole sorry episode, and excoriated Factor, Murray “the Camel” Humphreys, and others. The book, coupled with his dramatic release, received a good deal of attention. Factor filed a libel suit; Korshak was his lawyer. Then, roughly three weeks after his release from prison, Touhy was shotgunned to death on the doorstep of his sister’s house in Chicago. Factor, who was in Chicago at the time, told the New York Times, “I am very broken up about it—I hope they get the killer.” But Touhy’s murder, in the great Chicago tradition, went unsolved.
None of this seemed to have any deleterious effect on Factor. He had served a prison sentence for another fraud in the forties, but since then he had prospered; he was a very wealthy, increasingly philanthropic member of the community in Los Angeles. He had been trying to obtain a presidential pardon for years, but had been consistently rejected. Then, on Christmas Eve 1962—only two weeks before Factor was to appear at a hearing to show cause why he should not be deported to England to face outstanding criminal charges there—President Kennedy granted him a pardon, which quashed the deportation proceedings. Among the people who had lobbied for his pardon, interestingly enough, was Senator Estes Kefauver (perhaps s
till under the influence of those incriminating photographs). As press stories revealed that Factor had contributed $20,000 to Kennedy’s campaign in 1960, the pardon became intensely controversial—indeed, it would be compared many years later to the pardon that President Bill Clinton granted fugitive financier Marc Rich. What was especially interesting, though, was that the Justice Department’s recommendation—then, as now, not disclosed—was that Factor should be pardoned. It was particularly ironic, considering Bobby Kennedy’s fixation on the mob, and Las Vegas in particular. For Factor—notwithstanding testaments to his character from many members of the Los Angeles community—was still deeply enmeshed with the Chicago mob through his interests in Las Vegas.
That Bobby Kennedy was unaware of Factor’s activities is hard to imagine. These were not difficult to discover, as a letter to the attorney general—one of a flood protesting the Factor pardon—made plain. The writer was a Wall Street investment banker (his name was deleted before the letter was turned over in response to a Freedom of Information Act request), who quickly said that he was a “good Democrat,” and therefore not trying to embarrass the administration—but he was troubled by the pardon for the following reasons, and felt that “responsible citizens are entitled to some clarification.” His firm had been approached to find a buyer for the Stardust Hotel. The prospective investors, however, had all come back with the same information: a purchase was not viable because the Desert Inn, which leased and operated the Stardust, was controlled by the Cleveland Syndicate, which was the Mafia; and the entire situation was sure to “blow up” shortly because of the FBI investigations of mob interests in Las Vegas, and in particular, the Desert Inn. Furthermore, these people indicated that “Jake Factor was in some way privy to . . . Mafia control and that the purported sale of the Stardust property in his name was merely a device by which the Syndicate was endeavoring to bail out part of its capital investment in the Las Vegas area.”
Why Bobby Kennedy recommended to his brother that Jake Factor be pardoned is not clear. Certainly, if he were inclined to cooperate with the administration that pardoned him, he could have provided invaluable information about the mob’s secret machinations in Las Vegas. This, unsurprisingly, was something that had occurred to Korshak and his associates. But in his visit with Dalitz—about six weeks after the Factor pardon—Korshak said, according to an FBI report, that he was convinced that Factor’s “frame of mind is such at the pres-ent time that he will not talk to the authorities about the Stardust Hotel transaction or the parties involved.” And Korshak’s taped conversation with Dalitz suggests that Factor was too afraid of his confreres to brave such peril.
Dalitz was saying that he was very pleased with the deal they had made with Factor on the Stardust. “I scared the (obscene) out of him from day to day about what was going to happen,” Korshak replied. “I think that was one reason he finally agreed to give us the option to purchase. Now I want to show you how scared he is. He was in Chicago last week.” (Korshak referred to a situation in which “Curley”—Murray Humphreys—wanted to see if Factor, who bragged about his influence, could help a mutual friend.) “So they sat down with me and said get ahold of him [Factor] because he can do this. So I started to laugh, so . . . said to me, what are you laughing about. I said, this is the end of a friendship between John Factor and myself number one, and I said, number two, he isn’t going to talk because he doesn’t have that relationship, and number three, nothing is going to be able to help him. But I agreed we ought to try it, so they said fine. So John [Factor] came to town last week and came into my office. I don’t even know what he came in for, but I told him a story and I said, they want to see you. He said, well I’ve got to run now, but I’ll talk to you in about a half hour, and that was the last I saw of him. He caught the afternoon plane (laughter). . . . So this is consistent with what I was saying. He is frightened to death and that is how we were able to make this (obscene) deal.”
Preparing to leave, Korshak asked Dalitz if there was any message he wanted Korshak to give to Giancana. Dalitz asked how Giancana was, and Korshak remarked that he was “still in love with Phyllis” (Phyllis McGuire, the singer). “Madly in love.” Dalitz asked why they didn’t get married then. “I’m not so sure that they’re not married,” Korshak replied. “We had dinner together four or five nights ago and I said, there are a couple of broads in town, and I asked him if he was interested. So I just have an idea they are married. I’m pretty sure.” Korshak was, in fact, wrong in his intuition; but he seemed to want to underscore to Dalitz his intimacy with Giancana by relating these personal details. Regarding the question of whether Giancana had married McGuire, Korshak said, “If I had asked him, he would have told me, but I never did, you know.”
“Yeah, I understand,” Dalitz replied. “Thank you very much, Sidney.”
In Las Vegas, Korshak appeared even more omnipotent than he did in Los Angeles. The mob’s presence there was so ubiquitous that Korshak could leverage his affiliation in a variety of ways. He represented one of the largest and most corrupt unions in town, the Hotel and Restaurant Workers. He was the broker for the Teamsters Central States Pension Fund, which was pouring money into Las Vegas—to Dalitz, Factor, and many others. He spoke for the Chicago mob. And, along with them, he owned a piece of the Riviera Hotel—the Strip’s first high-rise, looking more like Miami than Las Vegas, and so tall, with its nine stories, that many believed the desert soil couldn’t support it. In the late fifties and early sixties, the Riviera had more cachet than any other hotel, recalled Richard Gully, whom Korshak hired as the hotel’s publicist. It became part of the Korshak legend that when he arrived at the Riviera on one occasion and Jimmy Hoffa was occupying the Presidential Suite, Hoffa was moved out of it to accommodate Korshak. Something else, too, was part of the Korshak legend (though this, only whispered). For Willie Bioff—the only member of the mob to publicly identify Korshak as connected to them—had lived quietly in Arizona for years under an assumed name until he had been foolhardy enough to go to work at Korshak’s Riviera in 1955. And it was not long after that that he had been murdered when his pickup truck exploded. Such incidents only added to the mystique. “When Korshak entered the room in Vegas, everything stopped,” Dean Shendal, who was a debt-collector for the casino owners, said. “You’d hear people saying, ‘Korshak is here!’ ”
However, for all Korshak’s perceived power, Humphreys, holding forth at Celano’s, maintained that he had the upper hand in their relationship. For example, he had told Korshak that since he, Humphreys, had an interest in the Stardust, Korshak was not to have any, according to a 1960 FBI report. And in 1961, Humphreys recounted how he had rebuked Korshak on one occasion for not showing the mob proper fealty. He seemed to feel that Korshak was getting too self-impressed. Korshak had booked Dinah Shore at a casino in Las Vegas not controlled by the Chicago mob; Humphreys (“Mr. Lincoln”) had called him, and Korshak had not responded quickly enough. Humphreys said he had ordered Korshak to book Shore at the right places in the future. “We brought you up; you’re our guy,” Humphreys said he had told Korshak. “Anytime we yell, you come running.”
Humphreys might have offered Hoffa to Korshak as a role model. Hoffa, too, had reached an apex of power, but he didn’t need to be reminded about how he got there. In a conversation with Joey Glimco, a Teamsters official in Chicago, Humphreys described Hoffa as “the best man I ever knew.” And the two agreed that whenever Hoffa was asked to do something by the Chicago mob, he “just goes boom, boom, boom, he gets it done.”
The microphones in Chicago and Las Vegas were a bonanza for the government, but it all came to an end in the spring of 1963 when an FBI memo on skimming, summarizing much of what had been learned through the tapes, was sent to the Justice Department. A few days later, FBI agents listened in, flabbergasted, as the casino boss of the Fremont read the memo aloud to his associates. Casinos were promptly searched, some of the devices discovered—and a hush fell on Las Vegas. News, of course, traveled
east. On June 23, 1963, in Celano’s, Humphreys gave his brief valedictory. “Welcome to the 11 a.m. meeting of the Chicago crime syndicate. We hope everybody is tuned in.”
Before leading MCA into full-scale television production in 1952, Wasserman had already secured his edge—MCA’s acting as both agent and producer. And ten years later, when he abandoned the agency business and embraced production, he apparently knew, once again, that he had a built-in advantage, albeit one that he would not want to display too soon. In the antitrust investigation, Justice Department lawyers had been very interested in the relationship between MCA and NBC; they had tried to discover not only whether Kintner had been paid off, but also whether another kind of illegal arrangement existed between him and MCA—say, whether Kintner guaranteed he would fill his prime-time schedule with nearly all MCA shows, and in return would be given first pick of their productions. Ultimately, the government lawyers had given up trying to prove that element of their case, and had focused more on the Screen Actors Guild waiver. But it would be impolitic and perhaps even rash of Wasserman, immediately after having settled the case with the government in such advantageous fashion, to flaunt his special relationship with NBC. Privately, though, Wasserman and Kintner had reached an understanding, according to attorney Billy Hunt, with whom Wasserman worked closely for years. Hunt had learned from Wasserman that when Wasserman had been deciding about the breakup of MCA’s agency and production businesses, “Kintner told him that if he went into production, NBC would buy everything he made.”
