Dark Victory

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

  Back in Washington, Reagan announced that he would ask Congress to approve his $155 million antidrug package, including $25 million for south Florida alone, and to transfer the necessary funding from other government programs. On December 7, The New York Times once again published an editorial critical of Reagan’s crime program. “Was this just another bold anticrime proposal surfacing in the thick of a campaign and destined to sink from sight after the votes were counted? The skeptics now seem vindicated. The administration duly asked Congress to pare the needed money funds from other budgets. But when this met opposition, the White House backed off. The Office of Management and Budget now says it cannot find enough money in other programs, and offers no alternative.… Not to fund the program, now that the election is over, turns an admirable plan into a cynical ploy. In the matter of crime-busting, that is disgraceful.”

  Two days after the Times editorial, Smith went to the Senate Appropriations Subcommittee for an additional $130 million to help bail out Reagan’s antidrug program. Senator Ernest Hollings charged, “We’re behind the eight-ball in crime,” adding that the number of employees in the FBI, DEA, Coast Guard, Customs, INS, ATF, and IRS had dropped by 19,609 since Reagan took office.

  In response to the Reagan administration’s pleas for help, Congress passed an anticrime bill, which, among other reforms, called for the creation of a Cabinet-level “drug czar” to oversee the federal crackdown against drug dealers. The administration immediately opposed the bill solely because of the drug czar clause, which the White House said would add another layer of bureaucracy.

  Senator Joseph Biden of Delaware wrote an Op-Ed piece for The New York Times on January 4, 1983, insisting: “Turf wars among government agencies responsible for federal control of narcotics, long a major obstacle to such control, would finally be eliminated by a bill that is awaiting President Reagan’s signature. If he succumbs to bureaucratic arguments to veto it, he will invite a severe setback to his own commendable efforts to control drug trafficking and the crime it spawns in every corner of this country.”

  In response, Smith claimed, “We have taken unprecedented steps to combat the widespread lawlessness in America.” The war against crime in America continued to be a war of words.

  Within the underworld, there was still plenty of action. On January 20, 1983, Allen Dorfman was shot eight times in the head by two ski-masked killers while walking across a parking lot in Chicago.* The previous month, Dorfman and Teamsters general president Roy Williams were convicted of attempting to bribe Senator Howard Cannon. Informed sources said that Dorfman was considering plea-bargaining his way out of a long prison term at the time of his murder.

  As Reagan pondered the fate of the congressional anticrime legislation, the General Accounting Office—which had finally pried loose the necessary documents from the DEA and the Justice Department—issued a status report regarding the war on drugs. The GAO report stated that the price of heroin had fallen from $2.25 a milligram in 1979 to $1.66 in June 1982, while cocaine dropped from sixty-five cents to fifty-two cents. The report added that while the price was going down, the purity of both drugs had also increased, indicating a larger supply. The GAO blamed the failure of the drug war on the lack of a central coordinator to direct those federal agencies involved. In south Florida alone, the report said, $66 million had been spent during the previous year with little result because of this lack of coordination.

  Despite the official pressure to sign the anticrime bill, Reagan vetoed it in mid-January 1983 because of the drug czar clause. Soon after, William Webster said that the illegal flow of drugs into the U.S. without an effective response had caused Americans to lose faith in the government’s ability to protect them. “It is the inundation of drugs—some of which are grown here—that is eroding public confidence and corrupting public officials,” Webster said.

  The convicted Roy Williams was succeeded by Jackie Presser as general president of the Teamsters Union on April 21, 1983. Presser promised to operate “an open, honest administration.” When asked whether organized crime still had influence in the Teamsters, Presser simply replied, “Not to my knowledge.” At the time of his selection as president, Presser was the target of a Labor Department probe, investigating his role in a union embezzlement scheme in Cleveland.

  On April 25, after receiving a telegram of congratulations from Reagan, Presser had lunch with Secretary of Labor Ray Donovan. After the meeting, Presser said that Donovan “extended the hand of friendship … and gave me some advice … about which direction he would like to see this International go. He also gave me a couple of boots here and there, but I’m big enough to take that, and I understand what he’s saying.”

  Donovan simply said, “I want to work closely with him [Presser] to accomplish the ends that he has promised this union and the public that he would do. I have confidence that this relationship will … benefit all Teamsters throughout this country and I look forward to the relationship with Mr. Presser.”

  Three weeks later, Presser was invited to the White House for a June 7 state dinner. The move was viewed as part of an administration plan to use the Teamsters’ support again this time for Reagan’s 1984 reelection campaign. Fred Fielding, who advised Reagan against close ties with Presser, said that he was told by another top administration official that “the Teamsters are always under investigation. Presser hasn’t been indicted, and there are good reasons for inviting him to the White House.”15

  Presser chose not to attend the White House dinner on June 7. However, earlier that day, he appeared before a Senate committee to testify against an antiracketeering bill pending before Congress.

  After Reagan issued baseless public statements in June 1983, declaring victory for his antidrug program, columnist Jack Anderson wrote, “President Reagan has pronounced his war on drugs a raging success. But the truth is that the war has been long on ballyhoo and short on results. The price of illegal drugs [continues to be] down across the country, a sure sign that the supply is up.”16

  On July 28, 1983, Reagan continued his public relations war against organized crime by establishing a twenty-member President’s Commission on Organized Crime, headed by U.S. federal judge Irving R. Kaufman of New York’s Circuit Court of Appeals. After signing the executive order creating the commission, Reagan again declared war on the underworld, repeating that it was “time to break the power of the mob in America,” which he said “infects every part of our society.” Like the Kefauver Committee, the commission was expected to travel to cities across the country, gathering information and testimony about local organized crime problems. Its findings would be contained in a final report due by March 1, 1986.

  The same day that Reagan signed the executive order, Attorney General Smith was on Capitol Hill defending Reagan’s attendance ten days earlier at the convention of the organized crime–infested International Longshoremens Association, where he called its president, Thomas Gleason, a man of “integrity and loyalty.” Smith also defended Reagan’s appearance on videotape at the Teamsters convention in Las Vegas. Referring to the convictions of congressmen and a senator in the FBI’s ABSCAM sting operation—conducted during the Carter administration—Smith said, “If the suggestion here is that we should boycott an organization because there may be individuals connected with that organization who have been convicted of some criminal activity, if that is the suggestion, it has remarkable ramifications because I assume, based on what has recently happened, there might be circumstances under which we would then have to terminate our relationships with Congress.”

  As the selection process for members of the president’s commission was under way, John Duffy, the sheriff of San Diego County, who had been sponsored for a commission seat by Ed Meese, was forced to withdraw his name from consideration after his friendship with mobster Morris Dalitz was revealed.

  Comparing Duffy’s situation with that of Paul Laxalt, who had openly admitted his personal and financial relationship with Dalitz, a member of the
commission said, “The controversy over Duffy arose, because, one, Duffy had been hurt by the revelations and, two, it could have led to a political embarrassment having him continue to serve on the commission.… Laxalt hasn’t been hurt by any of the revelations about him, and he certainly hasn’t become a political embarrassment to anyone. The only people who really seem concerned by all of this information are those who study the problem of organized crime—those in law enforcement and the media.”

  Back in New York, a cellmate of one of the men arrested in the gangland slaying of Nat Masselli stated under oath in court that he had been told the murder was committed to prevent Masselli and his father from cooperating with Silverman’s investigation of Donovan. The informant neither asked for nor received any benefit for his testimony.

  Meantime, the Senate Government Affairs Subcommittee disclosed that during the Reagan administration, federal judges had cracked down on white-collar criminals and drug traffickers, often imposing large fines to prevent them from profiting from their crimes. However, the federal government had failed to collect more than fifty-five cents on the dollar of those fines levied, and 22,532 criminal fines, worth over $185.6 million, had not been paid.

  Associate Attorney General D. Lowell Jensen, who had been endorsed for his post by Ed Meese, insisted that it would “take time” for the Reagan administration’s drug program to show results. “Our drug effort is like running a marathon,” Jensen said. “And you shouldn’t be timing a hundred-yard dash.” He said that the drug war had already produced 183 indictments involving over 1,000 defendants, adding that 425 cases had been initiated against drug rings. Tom Lewis, a Republican congressman from Florida, criticized Reagan’s drug war in his state, saying, “We’re just arresting ponies, the little people. Why aren’t we getting the big guys?”17

  The President’s Commission on Organized Crime battled the White House and the Justice Department over the questions of general independence, access to information obtained through electronic surveillance, and the power to subpoena witnesses. These measures were opposed in the Congress by Senator Paul Laxalt, who sat on both the Judiciary and Appropriations Committees, and by the American Civil Liberties Union—which wrote a letter to the Judiciary Committee warning that “it is essential that the fundamental civil liberties not be sacrificed in our zeal to attack” organized crime.

  On November 29, during his testimony before the organized crime commission, Attorney General Smith told its members that a “new phase in the history of organized crime” had been created by the growth of motorcycle gangs, and foreign-based, drug-rich crime organizations, like the Hell’s Angels, the Bandidos, the Outlaws, and the Pagans, as well as the Mexican Mafia, La Nuestra Familia, the Aryan Brotherhood, the Black Guerrilla Family, and the Chinese, Japanese, and Vietnamese crime groups. Smith had little to say about the traditional Italian/Sicilian Mafia.

  Once again, on December 3, Reagan declared war on organized crime at a White House meeting of federal prosecutors, saying, “I’ve always believed that government can break up the networks of tightly organized regional and national syndicates that make up organized crime.

  “So I repeat, we’re in this thing to win. There will be negotiated settlements, no détente with the mob. It’s war to the end with the mob. It’s war to the end where they’re concerned. Our goal is simple. We mean to cripple their organization, dry up their profits, and put their members behind bars, where they belong. They’ve had a free run for too long a time in this country.”

  Reagan, in his State of the Union Address on January 25, 1984, declared, “Already, our efforts to crack down on career criminals, organized crime, drug pushers, and to enforce tougher sentences and paroles, are having an effect. In 1982, the crime rate dropped by 4.3 percent, the biggest decline since 1972. Protecting victims is just as important as safeguarding the rights of defendants.”

  Reagan had earlier submitted his own forty-four-point anticrime package to Congress—deleting the drug czar concept and asking approval for, among other things, wider latitude for use of the death penalty, the submission of illegally obtained evidence in court, and bail and sentencing provisions. Reagan called for major budget cuts in the Treasury Department’s anticrime programs, forcing Treasury Secretary Donald Regan to reduce funding for the Customs Service almost by half. Then, in his weekly radio address to the nation on February 18, 1984, Reagan attacked House Democrats for holding up passage of his anticrime proposals. “Nothing in our Constitution,” Reagan said, “gives dangerous criminals a right to prey on innocent, law-abiding people.”

  In response, Representative Glenn English said, “The White House war on drugs is being bombed by its own troops.… I am appalled by the lack of cooperation and coordination at the highest levels of this government to put teeth into the nation’s war on drugs. While Vice-President Bush is the titular head of the White House effort, the secretary of the treasury [Donald Regan] has all but thwarted the effort.”18

  In an effort to overcome the negative reaction to virtually cutting the Customs Service out of the war against drugs, the Treasury Department proposed regulations requiring U.S. financial institutions to furnish government agencies with records of their transactions with certain foreign banks that had been known to be laundering drug money for American dealers. Gambling casinos, like banks, would be required to report any and all financial transactions over $10,000 to the IRS.

  Although the new Treasury regulations were enthusiastically endorsed by the President’s Commission on Organized Crime, Nevada’s Paul Laxalt opposed the measures and led an intense but unsuccessful lobbying effort in the Senate against it. Laxalt explained that he felt that the reporting requirements would be an unwarranted intrusion into the major industry of his state.

  In May 1984, an internal report written by DEA Administrator Bud Mullen charged that Reagan’s antidrug program was a “liability.” Mullen commented that the campaign’s “alleged grandiose accomplishments” will “become this administration’s Achilles’ heel for drug enforcement.” Also critical of Vice-President Bush’s south Florida effort, Mullen said that the task force had done little more than take credit for the work other agencies had done. A Coast Guard lieutenant commander on the front line of the antidrug campaign called the entire program “an intellectual fraud.” Florida congressman Claude Pepper added, “I can’t see a single thing [the south Florida task force] has accomplished. The lack of coordination among the various agencies charged with waging the war on drugs is disgraceful.”19

  Replying to Mullen’s report and in the midst of demands by Congress that the entire program be scrapped, Coast Guard Captain L. N. Schowengerdt, the head of Bush’s program, simply said that the south Florida unit was experiencing “growing pains.”

  Testifying before the Senate Budget Committee on May 25, Attorney General Smith, when asked about Reagan’s anticrime war, replied that “the coordination and cooperation is outstanding” among those federal agencies involved. Senator Dennis DeConcini, a member of the panel, retorted, “General, you’re not in touch with what’s going on.”

  As criticism of the president’s war on crime and drugs continued to mount, Reagan simply blamed the national crime rate on “years of liberal leniency,” adding that the “liberal leadership” of the Congress had bottled up his anticrime legislation.

  That same month, Reagan appointed his old Hollywood ally, seventy-four-year-old IATSE executive Roy Brewer, as the chairman of the Federal Service Impasse Panel, which arbitrated disputes between federal agencies and the unions representing federal workers. A strong anti-communist and a friend of Ray Donovan, Roy Brewer had been the keeper of the Hollywood blacklist during the late 1940s and early 1950s. He blamed America’s drug problem not on organized crime but on the Russians. “The danger is that we cannot permanently exist with the Soviet Union. They will either destroy us, or they will have to be destroyed. See, the dope traffic—and our inability to control it—has been brought about by a subtle program. The
y are undermining the facilities by which we can resist things that are happening.”20

  As the 1984 presidential election approached, none of these issues—the failed or even sabotaged war on crime and drugs or the president’s organized crime–connected appointments and associations—ever emerged as major campaign issues. Despite the warnings of White House counsel Fred Fielding, the Reagan-Bush team happily accepted the endorsement of Jackie Presser and the 1.9 million-member Teamsters Union. Vice-President Bush attended the annual meeting of the Ohio Conference of Teamsters in Columbus. Bush and Presser walked into the convention hall literally arm in arm, sporting broad smiles. “We couldn’t be more pleased,” Bush told the cheering Teamsters. “We’re very, very grateful, I’ll tell you, and we will work, work hard to earn the confidence of your members. We’re proud to be here.” When asked about the federal investigations revolving around Presser, Bush replied sharply, “We have a system of justice in this country that people are innocent until proven guilty. There have been a lot of allegations; the endorsement has nothing to do with that.”

  The closest the Democratic Party came to making an issue out of Reagan’s appointments was to compile a paper entitled “Unethical Conduct by Reagan Administration Officials,” prepared by Congress-woman Patricia Schroeder, chairwoman of the House Subcommittee on Civil Service. The list—which contained 101 names of public officials serving in the administration who had been “involved in instances of criminal wrongdoing, abuse of power and privilege, and improper behavior”—became part of what the Democrats called “the Sleaze Factor.”

  The whole issue suddenly disappeared after press accounts began to detail the New York underworld ties of Democratic presidential nominee Walter Mondale’s running mate, Geraldine A. Ferraro. Among other charges, Ferraro was said to have used a known underworld associate to help her raise money for her campaign for Congress in 1979. Her husband, a real estate executive, was accused of fronting for members of the Gambino crime family in New York. Reporter Sid Blumenthal later wrote in The New Republic: “Despite her personal attractiveness, her support of worthy causes, and her admirable compassion, [Ferraro’s] story can be understood only by taking the Mob milieu into account. Ferraro may be a paragon of legality, but this reality has been crucial to her life.” Among those mobsters linked to Ferraro was alleged Ray Donovan associate William Masselli, who had been “one of the largest contributors to the Ferraro campaign debt retirement fund.”21