by Russo, Gus
Although Sarno appeared to have a clean reputation, the FBI had learned two years earlier, just before its bugs were pulled, that the Caesars grand strategy had long been in the planning and that its putative owner would be just another in a long series of front men used by the Outfit and its partners. Before the casino opened in August 1966, the Bureau leaked a nine-hundred-page bug and wiretap report to Chicago reporter Sandy Smith, who in July of that year wrote a two-part expose in the Chicago Tribune, followed by another in Life magazine. Since the Bureau was embargoed from using the illegal tap evidence, they decided to leak the material in hopes of arousing public disapprobation. Smith’s articles stated emphatically that the soon-to-open Caesars, like many other Las Vegas casinos, was actually owned by a gangster consortium that ultimately answered to the Outfit. In his Life series, Smith also named “The Lady in Mink,” Ida Devine, as the Outfit’s new courier and even displayed an FBI surveillance photo of her at the train station (the only way she would travel).
The FBI was later told by an informant that the deal to cut up the Caesars skim was arrived at in October 1965 at a Palm Springs house rented by two Las Vegas showgirls. In what came to be known as the Palm Springs Apalachin, mob bosses from around the country, including Joe Accardo, Longy Zwillman, and Jimmy Alo, arrived to work out the details.
The disclosures in the Smith articles reverberated throughout gangland. “Jimmy Blue Eyes” Alo advised his Las Vegas partner Meyer Lansky to sell out. “Let’s take the money and have a quiet life,” Alo said to his lifelong friend. Chicago entrepreneurs took a similar tack, but with a critical distinction. With Jimmy Hoffa packing for college (and Allen Dorfman not far behind), Joe Accardo devised a temporary solution to the G’s Vegas onslaught. He would instruct Johnny Rosselli to keep an eye out for squeaky-clean suckers with deep pockets, then start unloading the gang’s holdings, with one key proviso: The Outfit would manage the casinos. “Timing is everything” goes the aphorism, and Accardo’s timing could not have been more fortuitous. On Thanksgiving Eve, 1966, Howard Hughes, the “billionaire kook” as he was known to the mob, moved into the penthouse suite of the gang’s Desert Inn Hotel. Hughes, a total recluse, liked the habitat so much that he refused to leave on checkout day, much to the rancorous objection of the hotel’s other pampered high rollers.
“Tell them to go to hell,” Hughes ordered his aides after the hotel managers attempted to evict him.
As fate would have it, Hughes, the sole owner of Hughes Tool Company, had just sold his stock in Trans World Airlines for $546 million, and it was burning a hole in his pajama pocket. Thus, the famous agoraphobe felt it less troublesome to buy the Desert Inn than to move out and instructed his key staff to work out the details. And Joe Accardo’s good fortune did not end there, for Hughes’ right-hand man was none other than Robert Maheu, friend of Johnny Rosselli, Las Vegas’ greatest partnership broker, most recently tasked to find a purchaser for his casinos - and who better than a man who would never surface to testify in court.
Bob Maheu instinctively turned to his old assassination chum Rosselli to get the ball rolling. “I told Mr. Hughes that I thought I had found a person fitting the background that he had requested me to seek,” Maheu later testified in court, “a person who had connections with certain people of perhaps unsavory background. . .” In his autobiography, Maheu admitted, “Johnny smoothed the way.” Although the Outfit had decided on a new front man, its mob partners in other cities had to be convinced. Using the skills that later earned him the sobriquet The Mafia’s Kissinger, Johnny Rosselli spent three months convincing the partners to agree to the Hughes buyout. For his diplomatic legerdemain, Rosselli was paid a $50,000 “finder’s fee.”
It is not known if Maheu or his boss were aware that they had become merely the newest pawns in the Outfit’s front-man motif, but years later Maheu told Chicago investigator Jack Clarke, “Johnny told me who to hire to run the casinos and pit crews.” Las Vegas Review-Journal reporter Sergio Lalli divined what had happened when he wrote, “The mob went about its business as usual.” Historians Roger Morris and Sally Denton called the sale nothing more than “a classic Las Vegas shell game.” And Johnny Rosselli himself told Jimmy Fratianno, “The whole thing was a Syndicate scam . . . We roped Hughes into buying the Desert Inn.” Fittingly, Hughes took over on April Fools’ Day, 1967. Shortly thereafter, the hoods sold their newest sucker the Frontier, the Sands, the Castaways, and the Silver Slipper, for a total of $45 million. Before he pulled up stakes four years later, on another Thanksgiving Eve, Hughes was relieved of another $50 million via the skim.
It would take Howard Hughes four years to realize that he was being robbed blind in his casinos’ count rooms. In 1970, he put his Las Vegas holdings up for sale, as his Mormon Mafia aides secreted him out the back door to the Bahamas. In a parting shot, Flughes called Bob Maheu “a no-good, dishonest son of a bitch” who “stole me blind.” Thanks to the 1969 passage of the Corporate Gaming Act, corporations were finally permitted to own casinos in Nevada, and they seized the baton lustily, moving quickly, as one local historian put it, “to purifying the wages of sin.” Overnight, upperworld bastions such as Hilton Hotels, MGM, Holiday Inn, the Ramada Inn Corporation, and impresarios Kirk Kerkorian and Steve Wynn began their irreversible push to give Sin City a superficial veneer not unlike that of Disneyland - but at the heart of it all would remain gambling activities shamelessly rigged in the casino owners’ favor.
Before they were completely finished with Las Vegas, however, the Outfit would find one more sucker to front for them in Sin City.
The Hughes purchases were not the only occurrences causing celebration in underworld enclaves in 1967. Although they were not the architects of Jack Kennedy’s murder, the nation’s organized-crime bosses, not unlike Fidel Castro, became the chief beneficiaries of Lee Harvey Oswald’s marksmanship. President Lyndon Baines Johnson, the Democratic successor to Jack Kennedy, appointed one do-nothing attorney general after another. After a stint by Nick Katzenbach in which little was done to continue Bobby Kennedy’s war on crime, things only got better for the bosses.
President Johnson brought still more smiles to the faces of Accardo and Ricca when he appointed Ramsey Clark, the son of Supreme Court justice Tom Clark, to be the new attorney general, replacing Nicholas Katzenbach. (Tom Clark resigned his Supreme Court chair to avoid conflict-of-interest charges.) The reader may recall that it was Tom Clark who had facilitated the early paroles of Ricca and his cohorts in the Hollywood extortion case two decades earlier; Clark had also restricted the FBI’s probe into vote fraud in the Truman-Pendergast stronghold of Kansas City in 1947. The Outfit’s enthusiasm for the appointment of Ramsey Clark would prove well-founded, as the new AG made it clear from the beginning that he was not going to authorize bugs or wiretaps, both of which he felt were infringements of privacy rights, in addition to being “wasteful and unproductive.” Incredibly, Clark also abandoned the G’s one ace in the hole when it came to bagging the most wanted hoods, the Internal Revenue Service. The new AG surely warmed the heart of Joe Accardo, who had been fighting the taxman for years, when Clark testified that it is “not OK to select organized crime cases” for scrutiny by the IRS. When Congress passed the Omnibus Crime Bill of 1968, Clark made it clear that he would not utilize the wiretapping provisions of the bill.
In place of the surveillance, which had actually proved of immense use to the FBI’s understanding of organized crime activities, Clark expanded the regional Strike Force operations, which by 1967 had only one outpost, in Buffalo, New York. Under Clark, the Strike Force set up shops in Detroit, Brooklyn, Philadelphia, Chicago, Newark (N.J.), and Miami. However, having been stripped of their most effective tools, and receiving little encouragement from their standard-bearer, the Strike Forces under Clark saw few successes. Clark Mollenhoff, the reporter who had persuaded Bobby Kennedy to join the McClellan Committee, wrote in his book Strike Force, “The Organized Crime Division weakened under Acting Attorney General N
icholas de B. Katzenbach, and all but expired as Ramsey Clark became the Attorney General . . . His bleeding for the poor criminals was so extensive that some joked that he must be in quest of the Mafia vote.” Ramsey Clark indeed harbored short-lived presidential ambitions and faced the prospect of challenging the leftist, antiwar positions of candidate Robert Kennedy. Mollenhoff surmised that Clark’s views on privacy rights “appeared to be the only way for a young man with obvious presidential aspirations, who at that time was backed by everyone from the New York Times to President Johnson, to move to the left of Senator Kennedy.”
When Richard Nixon again ran for president in 1968, the “law and order” candidate aimed much of his campaign rhetoric at Ramsey Clark, whom he charged with “leading an official retreat” in the battle against organized crime. “If we are to restore order and respect for law in this country,” Nixon fulminated upon accepting the Republican nomination, “there’s one place where we’re going to begin: We’re going to have a new attorney general of the United States of America.”
After Nixon won the 1968 contest, thanks to his own election high jinks, he indeed appointed as attorney general a bug-happy John Mitchell, who charged up both the FBI and the regional Strike Forces in their antimob prosecutions. Of course, President Nixon’s motives may not have been entirely grounded in morality: He obviously remembered how organized crime had helped steal the 1960 election from him, and he was now in a position to prevent a reoccurrence in 1972. And Mitchell’s prosecutions turned out to be straw targets, especially after Mitchell’s sloppiness resulted in the dismissal of nearly seven hundred federal indictments that were based on improperly authorized wiretaps.
More troublesome for the underworld was the passage of the Organized Crime Control Act of 1970, the most important aspect of which was a section entitled “Racketeer Influenced and Corrupt Organizations,” or RICO, crafted largely by one of Bobby Kennedy’s Justice Department subordinates, G. Robert Blakey. Now the G would be able to indict not only entire crime organizations by showing a pattern of criminal activity over a ten-year period, but also anyone who could be shown to be involved in said organization. Such associations would not be easy to prove, but at least it was now possible to make war on the “organized” part of organized crime.
Combined with the Omnibus Crime Control and Safe Streets Act of 1968, Title III of which sanctioned court-approved wiretaps, RICO would eventually decimate criminal organizations in every major city. (During the next decade, more than twenty Mafia bosses were indicted, and most were convicted.) The FBI heard one New York mob boss complain, “Under RICO, no matter who the fuck we are, if we’re together, they’ll get every fuckin’ one of us.” Interestingly, the first prosecutor to successfully navigate the intricacies of RICO was an Italian U.S. attorney in New York City named Rudolph Giuliani, who worked tirelessly for years to create the templates for the first RICO convictions.
The Outfit and Hoffa’s Presidential Clemency
In 1971, Nixon was under pressure from many directions to offer executive clemency to Jimmy Hoffa, imprisoned since 1967 on jury-tampering and pension-fund kickback convictions. Without presidential intervention, Hoffa v/as likely to serve out his two concurrent thirteen-year terms. 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.1 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, it now appears that Nixon was finally convinced by the promise of another fat check, this one from none other than Joe Accardo.
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, but we’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.” In February 1973, fourteen months after Hoffa’s release by Nixon, and just as Nixon was frantic to raise “hush money” for the 1972 Watergate burglars, Accardo, Dorfman, and Fitzsimmons met at “the mob’s country club,” LaCosta, to make good on a promise to Nixon. It was fortuitous timing for the president, who would five weeks later be informed by aide John Dean that the Watergate burglars would require one million dollars to bite their collective tongues.
“You could get a million dollars,” Nixon replied. “You could get it in cash. I know where it could be gotten.” Many journalists, such as Hoffa chronicler Dan Moldea, author of The Hoffa Wars, believe Nixon was referring to the money that he had just been promised by the Teamster-Mob alliance.
In the period of Hoffa’s incarceration, the Outfit seems to have grown to like Frank Fitzsimmons (and 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 was also known to have 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 LaCosta; 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 Curly Humphreys’ Chicago protege 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.
Now at LaCosta, the conspirators, who included an FBI informant, devised a new scheme wherein California Teamsters would be mandated to funnel dues into a prepaid billion-dollar health plan, 3 percent of which would be kicked back to something called People’s Industrial Consultants, which was nothing more than Joe Accardo and what remained of the Outfit. For the scheme to work, Fitzsimmons had to remain at the top of the Teamsters. According to high-placed FBI sources, the purpose of the LaCosta meeting was to coordinate a delivery of one million dollars in Las Vegas skim to the besieged Nixon, who had released Hoffa with the stipulation that he not run for the Teamster presidency. It was also reported that the money would guarantee that Nixon-Mitchell would take it easy on investigations of pension-fund loans. According to a secret FBI report, one mobster who attended the LaCosta meetings stated that half of the payback, $500,000 in cash, “had been requested by White House aide Charles Colson, who handled the administration’s relations with the Teamsters.” When Colson was later asked about this by the Senate Watergate Committee, he pled the Fifth Amendment.
While the schemers met at LaCosta, Nixon was at his nearby San Clemente home, with aides John Dean and John Haldeman, both of whom drove to LaCosta where Accardo et al. were in the midst of their four-day meetings. Although no one can prove that the two camps met, it is known that Fitzsimmons flew back to Washington aboard Air Force One with Nixon. 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.”
Soon after, John Mitchell indeed scuttled investigations into the Teamster loans and rescinded the taps on Accardo and friends.
Hoffa’s conditional release was not the Outfit’s only behind-
the-scenes power play in 1971. One of its unheralded successes simultaneously displayed how thorough had been the gang’s commandeering of the nation’s labor unions and also treated the world’s movie fans to what has been called “the best three hours one could spend in a movie theater.”
At the time, Las Vegas real estate millionaire Kerkor “Kirk” Kerkorian had just seized control of MGM Studios in Hollywood and thought to use the association with the MGM film Grand Hotel to construct another Las Vegas theme hotel, $106-million megalith to be called the MGM Grand Hotel, the largest hotel in the world. A millionaire many times over, having recently sold his Trans International Airlines for $100 million and having built the hugely successful International Hotel, Kerkorian could build anything he wanted. However, all of the money in the world could not overcome the stranglehold Accardo and Humphreys had placed on the nation’s labor force, and the Outfit wanted something in return for its cooperation: They wanted one of MGM’s contract actors for a production by another studio.
At the time, Paramount producer Robert Evans was attempting to package a film project based on Mario Puzo’s wildly successful novel The Godfather, for which Evans owned the movie rights. A problem arose when the director, the as yet unsuccessful wunderkind Francis Ford Coppolla, insisted on an unknown, diminutive actor named A! Pacino for the lead role of Mafia boss Michael Corleone. The fly in the ointment was Pacino’s unbreakable contract with Kerkorian’s MGM. Evans first called MGM’s president, Jim Aubrey. “With the emotion of an IRS investigator,” Evans wrote, “he turned me down.”
The way Bob Evans saw it, he had no choice but to call the Outfit’s Hollywood dealmaker, Sidney Roy Korshak. The producer had been a great friend of Korshak’s since the early fifties and claimed that the pair met every day until 1980, when they had a falling out. Like most upperworld achievers, Evans was well aware of the Outfit’s knack for getting things done - they were, after all, action men. Years later, Evans wrote of the power Sidney Korshak, and by proxy the Outfit, now wielded: “A nod from Korshak, and Santa Anita closes. A nod from Korshak, and Madison Square Garden stays open. A nod from Korshak, and Vegas shuts down. A nod from Korshak, and the Dodgers suddenly can play night baseball. Am I exaggerating? Quite the contrary. In the spirit of confidentiality, it’s an underplay.”
