Dark Victory

by Moldea, Dan E. ; Miller, Mark Crispin;

  In short, organized crime has become institutionalized in the United States. One organized crime expert explained, “Whenever some tribute [to the underworld] is paid financially, it’s going to be passed on to the consumer. The public doesn’t view the problem in terms of how it affects them.”

  Prosecutors battling against the mob have been aided by the Racketeer-Influenced and Corrupt Organizations Act, or RICO, which made it a crime to conduct or finance even a legitimate business through any form of racketeering. The RICO statute also gave the federal government jurisdiction when certain crimes including murder were committed under state law.

  The use of such laws by the Carter administration—especially by Attorney General Benjamin Civiletti, FBI Director William Webster, and David Margolis, the head of the U.S. Strike Force Against Organized Crime—was responsible for the investigations and indictments, as well as the convictions in some cases, of several top Mafia bosses, including Tony Accardo of Chicago, James T. Licavoli and Angelo Lonardo of Cleveland, Nick and Carl Civella of Kansas City, Dominic Brooklier and Sam Sciortino of Los Angeles, Santos Trafficante of Miami, Frank Balestrieri of Milwaukee, Carlos Marcello of New Orleans, Carmine Persico and Funzi Tieri of New York, Russell Bufalino of Pittston, Pennsylvania, Raymond Patriarca of Providence, Rhode Island, and Joseph Bonanno of Tucson, Arizona.

  Less than a month after President Ronald Reagan was inaugurated, Ryan Quade Emerson, the publisher and executive director of Organized Crime Review, reported in his February 1981 issue, “About six months before the presidential election I received word that certain individuals within the Reagan camp were negotiating with key people in Las Vegas, Nevada, who were involved in the casino industry, the Teamsters Union, and organized crime. The basis for the discussions was the acute desire of the Teamsters Union to obtain relief from the aggressive probes by the United States Department of Justice organized crime strike forces and the Federal Bureau of Investigation. There was also a continuing grave concern about the FBI’s productive court-ordered wiretaps that had revealed the hidden interests in many Las Vegas hotels and casinos by some of the country’s most powerful organized crime figures.”

  During the early months of President Ronald Reagan’s first term, Nevada senator Paul Laxalt met with Attorney General William French Smith no less than three times, specifically to discuss the possibility of minimizing the role of the Justice Department’s Strike Force Against Organized Crime in Las Vegas. Laxalt had been loudly complaining that Las Vegas was “infested” with pesky FBI and IRS agents, and he pledged to use his influence on the U.S. Senate Appropriations Committee to get federal investigators off the backs of Nevada’s casino operators. Laxalt had publicly taken the position that organized crime was no longer a factor in Nevada, which, he insisted, had established tight monitoring programs to keep out mobsters.

  Neither Laxalt’s associations with a variety of shady figures nor his brazen attempts to curb the government’s investigations of the casino industry drew even a flicker of interest at the White House. Fred Fielding, President Reagan’s special counsel, said, “The White House doesn’t review elected officials, but I have never had one moment’s hesitation to be concerned about Paul Laxalt [sic].”9

  David Gergen, Reagan’s then-director of White House communications, added, “The president regards Paul Laxalt as one of his most trusted confidantes, someone who has been of tremendous assistance to him in his political life—not only in campaigns, but in the time he’s been president. He believes that Laxalt is a man of integrity and forth-rightness. He welcomes his advice, and it’s always proven to be valuable.”10

  Apparently, Laxalt’s advice was taken.* At President Reagan’s first opportunity to revise the federal budget, he imposed a one-third cutback of the FBI’s investigations of gambling, prostitution, arson-for-profit, gangland murders, and pornography—along with a hiring freeze and dramatic staff reductions within the FBI. Reagan also indicated that no new undercover operations would be authorized in fiscal 1982 against organized crime or white-collar crime.11

  The Reagan administration then severely curtailed the investigative and enforcement abilities of the Securities and Exchange Commission, the Internal Revenue Service, and the Justice Department’s Strike Forces Against Organized Crime—as part of its program to get the government off the backs of the people. The administration also attempted but failed to dismantle the Bureau of Alcohol, Tobacco, and Firearms of the Treasury Department, which had been extremely effective in the war against organized crime but had been opposed by the Reagan-allied National Rifle Association.

  In one of its first legislative moves, the Reagan administration urged Congress to repeal two federal taxes on gambling, saying that it is “wasteful and inefficient” to try to collect them. An assistant to Secretary of the Treasury Donald Regan outlined Reagan’s views at a Senate hearing on a bill proposed by Senator Howard Cannon to exempt legal gambling from taxes.

  Attorney General Smith moved to eliminate the Ethics in Government Act and the Foreign Corrupt Practices Act; as well as major portions of the Freedom of Information Act. He then reshuffled the Justice Department’s priorities away from investigations and prosecutions of organized crime figures to a new emphasis on “violent crime.” State and local authorities were not promised any additional funds from the federal government—although ninety-four percent of all crime committed is within their jurisdictions. Other federal programs slated for severe budget cuts were those dealing with the problems of narcotics trafficking and juvenile justice.

  Reagan blamed the rising crime rate on “utopian presumptions about human nature. We should never forget: the jungle is always there, waiting to take us over.”

  While the Reagan administration went through the motions of fighting crime, Secretary of Labor Raymond Donovan had again found himself in trouble. He was facing numerous hearings before the Senate Labor Committee and a variety of charges leveled against him by an array of respected government informants. The focal point of most of the investigations of Donovan revolved around his personal and professional relationship with mobster William Masselli. At the time of the Donovan investigation in 1981, Masselli was under a double indictment for hijacking food and for manufacturing synthetic cocaine.

  On May 22, 1981, less than a week after taking over as general president of the Teamsters Union in the wake of Frank Fitzsimmons’s death, Roy Williams was indicted for conspiring to bribe Senator Howard Cannon. Two days earlier, the U.S. Permanent Subcommittee on Investigations released an interim report on the Teamsters. It described Williams as “an organized crime mole operating at senior levels of the Teamsters Union.… A serious question has arisen as to whether or not Roy Lee Williams has any place in any position of trust in the labor movement.” At the time of his appointment as Teamsters president, Williams announced, “I’ll never forget where I came from, and I’ll never forget the people who helped me get here.”

  The subcommittee recommended that the Labor Department take action against Williams to have him removed as the general president of the union because he had taken the Fifth Amendment in lieu of testifying in August 1980, the day before he and Jackie Presser met privately with Reagan. Ray Donovan refused to take any action against Williams, claiming that he lacked the authority to do so. Senator Sam Nunn recalled that in 1976 the Labor Department had forced William Presser to resign as a trustee of the pension fund because, like Williams, he had taken the Fifth while appearing before the subcommittee. Nunn charged that Donovan was trying “to protect the interests of the union hierarchy [rather] than the rank and file.”

  On June 1, just ten days after Williams’s indictment and twelve days after he was described by the Senate as “an organized crime mole,” President Reagan addressed the delegates of the Teamsters convention in Las Vegas on videotape. During his talk, Reagan said, “I hope to be in team with the Teamsters.” On June 12, despite the criticism he received for his praise of the Teamsters, Reagan invited Williams to the Whit
e House with other labor leaders to discuss his federal tax-cut proposals.

  Peter B. Bensinger, the head of the Drug Enforcement Administration who had been originally appointed by President Ford and retained by President Carter, was ousted by the Reagan administration in favor of Francis “Bud” Mullen, the assistant director of the FBI. Members of the Senate Labor Committee questioned whether the job was a payoff to Mullen, who had been chiefly responsible for concealing Labor Secretary Raymond Donovan’s organized crime ties from the committee during his confirmation hearings.

  In response to Reagan’s proposals that the FBI budget be cut by six percent and that the DEA budget be cut by another twelve percent (which would cause the dismissal of 434 DEA employees, including 211 agents), Ira Glasser, the executive director of the American Civil Liberties Union—characterized by Reagan’s chief of staff, Ed Meese, as a “criminal lobby”—called Reagan’s anticrime proposals a “fraud in terms of being serious proposals to reduce crime.”

  Attorney General Smith announced that the Justice Department was going to launch a “vigorous” war on crime without additional funding. In response, Senator Joseph Biden charged that while the Reagan administration was talking tough about crime, it was cutting the budgets of the FBI, DEA, U.S. attorneys, Immigration and Naturalization Service, and Coast Guard. Biden also noted that sixty percent of the cases handled by the attorney general’s office were being dropped because its lawyers did not have enough time to deal with them.12

  Attorney General Smith later shifted gears and announced that narcotics trafficking—not violent crime—was the nation’s “most serious crime problem,” and that the FBI would assume jurisdiction over the Mullen-led DEA. FBI Director William Webster opposed the idea for the same reason J. Edgar Hoover had spoken out against FBI agents being involved in drug-related investigations. Both Webster and Hoover had feared that FBI agents might be corrupted by drug work that involved large amounts of cash. Unlike Hoover, Webster also wanted to avoid the perception that the FBI was becoming a national police force.

  On January 28, 1982, Reagan appointed a Cabinet-level task force to coordinate federal efforts to combat drug-smuggling operations in south Florida, a haven for narcotics traffickers. Vice-President George Bush was appointed as the head of the special unit. Other members of the task force included Smith, Meese, and the secretaries of state, defense, treasury, and transportation. Soon after, Bush announced that federal authorities would use radar planes in their “war against drugs,” as well as 130 customs and 43 FBI agents.

  In March 1982, the General Accounting Office was lodging complaints with the White House, Congress, and the Department of Justice about the secrecy within the DEA, and the GAO’s inability to review the agency’s progress against big-time drug dealers. The study had been requested by Senator Joseph Biden. Both the White House and Attorney General Smith refused to cooperate and release the documents necessary for the GAO’s investigation. In a March 31, 1982, letter to Reagan, Comptroller General Charles A. Bowsher reported that “for the most part, access to the records was denied altogether” by DEA. “Although some records were provided, access to them was delayed, and not all of the records were complete.”13

  As a result of the mounting charges against Labor Secretary Donovan, the U.S. Court of Appeals selected Leon Silverman, a New York attorney, as a special prosecutor to investigate Donovan. Smith wanted to limit Silverman’s power to probing only specific allegations raised during Donovan’s confirmation hearings, but the appeals court broadened his authority to include investigation of any charges brought against Donovan. Almost immediately, Silverman was criticized for the narrow scope of his investigation despite the latitude he had been given.

  As Silverman began his grand jury investigation on February 1, 1982, the Senate Labor Committee continued its probe into allegations of mob money being laundered through Donovan’s construction firm, as well as the FBI’s handling of information regarding Donovan’s underworld connections prior to his confirmation hearings. In the spring, the committee asked the Justice Department for wiretapped conversations of mobsters who had discussed their dealings with Donovan. However, Attorney General Smith refused to cooperate with the committee and did not turn over the tapes.

  When finally asked how he was viewing the entire Donovan matter, President Reagan replied, “Nothing I’ve heard has … reduced my confidence in Secretary Donovan.”

  In mid-June, as the Donovan probe intensified, a key government witness against him in the special prosecutor’s investigation, Fred Furino, was found in the trunk of his own car in Manhattan with a bullet in his head.

  On June 20, puzzled by Reagan’s apparent apathy regarding Donovan, The New York Times wrote: “At a minimum, Mr. Reagan’s aides showed a lack of curiosity in January 1981, when they were told that Mr. Donovan had ‘close personal and business’ ties to organized crime figures.”

  Soon after Furino’s murder, when asked whether Reagan had changed his mind about Donovan, presidential spokesman Larry Speakes replied with two words: “No change.”

  On June 28, Silverman issued a 1,026-page report that stated, “In sum, there was insufficient credible evidence to warrant prosecution of Secretary Donovan on any charge.” Donovan called a press conference and said happily that he was “extremely pleased and not surprised,” adding that the report “vindicated” him. President Reagan said, “Certainly I’m sticking with him.… This case is closed.”

  However, on August 1, Silverman reported that two new “substantial” charges had been made against Donovan. Twenty-four days later, William Masselli’s son, Nat Masselli, was shot to death. Masselli had also been a key witness for Silverman, who stated after the killing, “I am disturbed that anybody who is involved in my investigation should be murdered, and I have asked the FBI to conduct an intensive investigation to see whether that murder is linked to this investigation.”

  Nevertheless, on September 13, Silverman, for the second time, announced that there was “insufficient evidence” against Donovan to prosecute him. But Silverman permitted himself to describe the lingering allegations about Donovan as “disturbing.”* Larry Speakes said, “It was not unexpected. Case closed again.”

  In response to the Reagan administration’s cosmetic anticrime measures, attorney Paul Ziffren’s old friend, Judge David I. Bazelon, a member of the U.S. Circuit Court of Appeals for Washington, D.C., claimed that Reagan’s anticrime actions would endanger civil liberties. “Nothing could have given Reagan’s war on crime more legitimacy than an attack from Bazelon,” said an FBI agent in Washington, D.C. “The liberals, taking their lead from Bazelon, would follow suit, saying that Reagan was being too tough on crime. In fact, Reagan had one of the softest attacks on crime we’d seen in years.”

  The Reagan administration reaped the rewards of President Carter’s effective anticrime attack. William Webster, the FBI director, and Benjamin Civiletti, whom Carter had appointed attorney general in 1979, proved themselves to be the best crimefighters this country has had since Robert Kennedy was attorney general. But because of judicial due process, the success of the Carter administration’s investigations and prosecutions of organized crime figures was not known until the early years of the Reagan administration.

  By September 1982, of those organized crime cases initiated, investigated, and prosecuted by the Carter Justice Department, an amazing 1,100 convictions were won. This figure included over three hundred Mafia members, including top mob kingpins in New York, northern Pennsylvania, Philadelphia, the Buffalo-Rochester area, New Orleans, Chicago, Milwaukee, Cleveland, Detroit, and Kansas City.

  The Reagan administration immediately took credit for these cases, adding them to its list of accomplishments to be heralded at election time—while continuing to attack the Democrats for being “soft on crime.”

  On October 14, 1982, to dramatize the administration’s purported commitment, Reagan declared “war on organized crime,” announcing that “the time has come to cripp
le the power of the mob in America.” The president announced that he was going to create twelve special task forces around the country, composed of nine hundred new agents from a variety of federal agencies, in addition to two hundred new assistant U.S. attorneys and a support staff of four hundred. The program, Reagan said, would cost between $130 million and $200 million, and would be patterned after the special task force being conducted by Vice-President Bush in south Florida.*

  The New York Times was skeptical about Reagan’s announcement and published an editorial on October 18 saying, “Announcing a new White House drive against organized crime prior to a national election looks, well, political. There are no new funds for the program, and it offers no additional resources for what may be the most effective strategy: attacking the drug crops in other countries.”

  Immediately after the president’s declaration of war and his early-November appointment of Paul Laxalt as the general chairman of the Republican National Committee, a budgetary dispute erupted among the heads of the ten federal agencies slated to be involved in Reagan’s war against drugs. When Reagan was asked to intervene and settle the question of who would control the bulk of the funding as well as the prosecutions, the White House promised answers after the midterm elections.14

  Reagan had few answers for the agencies after the elections, but did have time for a photo opportunity in south Florida on November 17. Photographers flashed cameras at Reagan and Smith while they inspected a cache of $4.5 million worth of marijuana and $5.9 million worth of cocaine that had been seized by federal agents. Later in November, Smith went to Pakistan and Landi Kotal, a tiny town in the Khyber Pass—which had been a major drug smuggling center for hundreds of years. In another photo opportunity that backfired, Smith and a small army of Pakistani soldiers became fearful for their safety as they walked through the town, filled with locals who were rumored to be well-armed and dangerous.