Perhaps Reagan himself supplied an answer for his right-wing colleagues on March 3, 1986, when he spoke of his “best friend,” Senator Paul Laxalt, at a $l,000-a-plate dinner given in Laxalt’s honor by conservative Paul Weyrich’s Free Congress Political Action Committee:
“As most of you know, Paul [Laxalt] and I were elected governors of our respective states at about the same time. They say we started even. I had California, with one of the biggest economies of the nation. Paul had Nevada and Howard Hughes … There were those who said a straight shooter like Paul could never make it in Washington. But sure enough, Paul has disposed of problems here just as [easily] as he disposed of them in Nevada. He had the best possible training for Washington—as a rancher and a herder: They have exactly the same sort of disposal problems that we have.”
Then, seemingly in an emotional plea, Reagan beckoned to his followers, “Look to the son of the high mountains and peasant herders, to the son of the Sierra and the immigrant Basque family. Look to a man, to a friend, to an American who gave himself so that others might live in freedom.”
President Paul Laxalt? Ronald Reagan, Lew Wasserman, and Sidney Korshak would probably be the first to say that stranger things have happened. And, somehow, there would be a symmetry to it all.
Dan E. Moldea
Washington, D.C.
May 22, 1986
*In 1981, Wasserman also intervened in the midst of a thirteen-week strike of the Writers Guild (formerly the Screen Writers Guild) and managed to negotiate a settlement between the screenwriters and the producers.
*In March 1984, MCA negotiated six-year, nonexclusive contracts with HBO/Cinemax and Showtime–The Movie Channel.
*James Petrillo died on October 23, 1984.
*MCA later acquired a $1.7 million option to purchase nearly eleven percent of the Major Realty Corporation, which owned over a thousand acres adjacent to MCA’s proposed theme park. Federal and state law enforcement agencies had previously linked Major Realty to top organized crime figures, including Meyer Lansky.
†The MCA theme park project in Orlando suffered a severe setback in May 1985 when Disney World announced that it was planning to build its own studio tour and the Florida legislature killed a bill that would have given MCA $ 175 million from the Florida Retirement System Pension Fund to help finance construction. MCA accused Disney of lobbying against the measure; Disney denied that it had.
*Both Wasserman and Sheinberg refused to be interviewed for this book.
†Wynn had signed Frank Sinatra to an exclusive entertainment contract for the Golden Nugget in November 1982; the two men had done television commercials together promoting the casino. Sinatra also owned two percent of the Golden Nugget’s stock.
*Smith was replaced by Edwin Meese as attorney general on February 23, 1985.
*While the Reagan Justice Department was reconsidering its antitrust laws, MCA outbid Westinghouse Broadcasting and agreed to buy WOR-TV—an independent station in New York, broadcasting throughout the U.S. via cable television—from RKO General, Inc., for $387 million. It was the first time MCA had purchased a television station.
*Knoedelseder also reported on May 11, 1985, on a lawsuit filed against MCA by George Collier—the former West Coast regional director for MCA Distributing, the manufacturing arm of MCA Records—who had been fired in June 1984. Collier claimed that he was doing “detective work” about the activities of several company vice-presidents who … were improperly sending “thousands” of free records to two retail accounts in the Los Angeles area. Knoedelseder wrote: “Collier became suspicious of the shipments because the records supposedly were being given away for promotional purposes but, on the orders of the vice-presidents, they contained no markings prohibiting their sale through normal retail channels.” When asked about the case, MCA attorney Allen Susman simply said, “He was fired for cause,” and refused further comment. The case is pending.
*In a letter to The Sacramento Bee dated November 18, 1983, Laxalt wrote, “Since 1981 and after investigating the FBI situation in Nevada, I came to the conclusion that staffing in Nevada was reasonable and since that time I have supported full funding for the FBI in Nevada in the committees in which I have direct jurisdiction over its resources.” Attempts to interview Laxalt for this book were unsuccessful.
*Bronx prosecutor Stephen R. Bookin testified at a federal court hearing on December 13, 1984, that Silverman had limited the scope of the Donovan inquiry, telling grand jurors that a probe into the business link between the Mafia-controlled Jopel Contracting Company and Donovan’s Schiavone Construction Company “was not within their mandate,” according to Bookin. Donovan was later indicted with nine others on charges stemming from his relationship with Jopel. After the special prosecutor’s second report on Donovan, the press, for all intents and purposes, stopped covering the charges against Donovan. The lone exception was George Lardner from The Washington Post, who kept the story alive.
*The night before Reagan declared war on organized crime, top Reagan administration officials—Attorney General Smith, CIA Director Casey, and Presidential Chief of Staff Meese, among others—attended a fifty-dollar-a-plate “Tribute to Raymond J. Donovan” dinner. Guests wore buttons reading, “I’m a friend of Ray Donovan.”
*The principal target of the Dorfman murder investigation was Anthony Spilotro, the chief enforcer for Chicago Mafia boss Joey Aiuppa and his underboss Jackie Cerone. Believed to have engineered the killing at the behest of Aiuppa and Cerone, Spilotro was also alleged to be the Chicago underworld’s point man in Las Vegas, overseeing all of its gambling, narcotics, and prostitution operations. Also suspected to be a stone killer, Spilotro was a convicted gambler who had been arrested over twenty times and once indicted for murder. Although his alleged accomplice testified against him at that trial, describing how Spilotro mutilated the victim’s body with a knife, Spilotro was later acquitted. Federal investigators believe that during his career, Spilotro has either ordered or participated in the murders of a dozen people. Dorfman’s murder was the 1,081st unsolved gangland murder in Chicago since 1920.
*In May 1986, after a twenty-one-month investigation and Ferraro’s announced decision not to challenge New York Republican incumbent Alfonse M. D’Amato for his seat in the U.S. Senate, the Justice Department closed its probe into the finances and disclosure statements of Ferraro and her husband.
†Laxalt was the target of two competing stories by ABC World News Tonight and CBS’s 60 Minutes, which were scheduled to have been aired on September 21 and 23, 1984, respectively. The stories detailed allegations of Laxalt’s connections to organized crime. However, both stories were killed after 60 Minutes reporter Mike Wallace, who was also a personal friend of Laxalt’s, determined that the key source in both the ABC and CBS stories had lied to him about whether he had already been interviewed by ABC (which he had, when he claimed to Wallace he had not). After being told by Wallace about the lie, Laxalt had his attorney send both networks letters, threatening libel actions if the stories were broadcast. After being briefed on the matter by Wallace, Don Hewitt, the executive producer of 60 Minutes, telephoned Roone Arledge, the president of ABC News. On the basis of their source’s lie to Wallace about being interviewed by ABC, the two executives from the competing networks jointly decided to kill each of their stories.22
*Attempts to interview Korshak for this book were unsuccessful.
*A year earlier, in January 1980, during a meeting of the Mafia’s national crime commission, the Chicago mob was given control over the underworld’s interests in Las Vegas after the decision was made to keep Chicago mobsters out of Atlantic City.
*The major disqualifying factors in Playboy’s license application were the corporation’s bribing of an official from the New York State Liquor Authority during the early 1960s, and the improprieties that led to the loss of Playboy’s casino license in England in 1981. Also, the Elsinore Corporation, Playboy’s partner, was part of the Hyatt hotel chain, owned by the P
ritzker family, which had also been represented by Korshak.
*Interestingly, General Dynamics, the nation’s largest defense contractor, was owned by Colonel Henry Crown, for whom Korshak had done some unspecified legal work. While Hoy was a vice president of General Dynamics and Korshak was working for Crown, General Dynamics had engaged in fraudulent cost-overrun claims to the U.S. Navy. In 1984, when the Senate Judiciary Subcommittee began to investigate General Dynamics, it subpoenaed the Justice Department’s internal records on the company. When Attorney General William French Smith repeatedly defied the committee, refusing to give it the requested documents, the subcommittee cited Smith for contempt of Congress. It is not known whether Hoy—who had earlier pleaded guilty to mail fraud in connection with a $2 million bank fraud case—or Korshak appears in those secret reports.
*The Meese-Webster meeting was held eleven days before Donovan’s nomination. Meese asked Webster to inform him as to whether “checks [on Donovan] reveal any allegations relating to organized crime”—before the bureau conducted its Full-Field investigation of Donovan.
†In June 1983, Meese had attended a celebration for Presser at the Georgetown Club in Washington. Also in attendance at the party for Presser were Secretary of Labor Ray Donovan, former Reagan political adviser Lynn Nofziger, U.S. senators Robert Dole and Ted Stevens, and Congressman Jack Kemp, a presidential hopeful.
*After a five-month leave of absence from the Labor Department awaiting trial, Donovan decided to resign after his pretrial motion to dismiss the 137-count indictment against him and his nine co-defendants was rejected. President Reagan, upon receiving Donovan’s resignation, issued a statement saying that Donovan “has not been convicted of anything” and that he “leaves the cabinet with my friendship and heartfelt gratitude.”
†Williams was suffering from severe emphysema and heart problems.
*In early April 1986, a new grand jury was convened in the Presser case. The investigation concentrated on whether three FBI agents had made false statements to the Justice Department about Presser’s role as an FBI informant. Consequently, Presser faced renewed federal charges about his activities, particularly those stemming from the Cleveland fraud case. Under extreme political pressure, Jackie Presser was indicted on May 16, 1986; on May 21, he was reelected president of the Teamsters Union.
*On October 21, 1985, during a speech before a meeting of U.S. attorneys, Reagan said, “I’d like nothing more than to be remembered as a president who did everything he could to bust up the syndicates and give the mobsters a permanent stay in the jailhouse.”
*In late August 1985, Laxalt announced that he would not seek a third term to the U.S. Senate. According to published reports, Laxalt had simply come to the conclusion that he would make more money working in the private sector.
POSTSCRIPT
Ronald Reagan is a very loyal man. That is his special gift. He is loyal to those who protect him and his interests. He takes care of those who protect him. That is the story of his life. That is what has kept him alive politically.
In early November 1986, a small magazine in Beirut revealed that the United States had engaged in a secret deal to sell weapons to Iran, in return for American hostages held in Lebanon. The arrangement violated the expressed Reagan policy against making concessions to terrorists. While operating this plan, Reagan had been referring to Iran as “Murder, Inc.” The revelation by the Beirut publication caused a public outcry against the Reagan Administration in the United States.
On November 17, Reagan lied during a press conference about the extent of his knowledge on this matter, saying, among other things, that no third country had been involved in the arms deal. When it became evident that Reagan was concealing the truth, his aides scrambled to provide clarification and cover. His lies were portrayed by them simply as innocent misstatements. They protected Reagan, who was loyal to them when their resignations were demanded by congressional leaders in the aftermath.
As during his 1962 appearance before the federal grand jury, when asked tough questions about possible wrongdoing by him or his friends, Reagan claimed that he couldn’t remember, or simply refused to tell the truth. Reagan had again used the illusion of his ignorance of—or his inability to recall—important events as weapons for his personal survival.
On November 25, Attorney General Edwin Meese announced that as much as $30 million in profits from weapons shipped to Israel and sold to Iran were deposited in Swiss bank accounts (laundered through a network of dummy corporations), and “made available to the forces in Central America” at war with the Sandinista government. However, Contra leaders denied having had access to any Swiss bank accounts. In the wake of Meese’s statement, and after numerous documents about the matter had been destroyed, Reagan dismissed his chief National Security Council advisor, John M. Poindexter, and Colonel Oliver L. North, an NSC aide, who had been implicated in the scheme.
When Poindexter and North were called to testify before Congress and took the Fifth Amendment, they did so with the President’s support. Ironically, when members of the Screen Actors Guild had been called to testify before the House Un-American Activities Committee while Reagan was SAG president, as described in Chapter Nine of this book, Reagan had insisted, “It is every member’s duty to cooperate fully.”
On December 12, in the midst of a suspected cover-up, two members of MCA’s board of directors, former senator Howard Baker* and former Democratic national chairman Robert Strauss, met with Reagan at the White House and implored him to take stronger actions to rescue himself from further damage.
Because of their far-reaching national and international consequences, the charges stemming from an arms scandal, of course, are more serious than those discussed in Dark Victory. But when all the facts about Contragate have finally been chronicled, they will dovetail with what has been described in this book.
When there is an issue involving missing millions of dollars, laundered money, dummy corporations, and Swiss bank accounts—all in the same breath—the real subject is drugs and organized crime. I am convinced that much of the Contragate affair is going to wind up as a series of multimillion-dollar drug deals involving right-wing ideologues who sold drugs to raise money for the Contras as part of their eleemosynary activities. But more prominently, there were those who were even more mercenary, selling drugs for profit, using the Contras as a cover for their illicit operations. Planes containing arms for the Contras landed in friendly Central American countries, unloaded these weapons, and instead of deadheading to the United States, they were loaded with drugs, particularly cocaine. I have been calling this “Coke-Run.”
According to a January 20, 1987, report in The New York Times, “When crew members, based in El Salvador, learned that Drug Enforcement Administration agents were investigating their activities, one of them warned that they had White House protection.” In October, Colonel North asked the FBI to cease its investigation of one of the air-freight companies involved in the Contra arms supply operation. On October 30, Meese ordered the FBI to delay the probe. Meese claimed that he had acted for “legitimate national security reasons.”
If all this is true, how will the American public respond to a massive government-authorized program to conduct a covert war, which is funded, at least in part, by drug money? How will the public be able to believe that the Reagan Administration’s war on crime and drugs is a sincere one? Will the public believe the fact that the same thing has been going on for years, not only in Central America but in Southeast Asia and the Near East?
The evidence supporting all of these items is mounting. On January 13, 1987, The New York Times reported, “Some senators say that any official inquiry [into Coke-Run] and how much if anything American officials knew about it, at this time would create such an uproar that it could derail the main thrusts of the Senate inquiry: to sort out the Reagan Administration’s secret arms sales to Iran and diversion of profits to the Contras.”
In an interview published in the
August 11, 1986, issue of Newsweek, President Reagan said, “The polls show that [drugs are], in most people’s minds, the No. 1 problem in the country. It is not only necessary to step up our efforts to make it difficult to get drugs, but the main thrust has got to be to get the people themselves to turn off on it.”
After Ronald and Nancy Reagan appeared on national television on September 14 to announce their “Drug-Free America” program, the White House called for additional funding in the new federal budget to further combat the nation’s drug problem. The theme of the project was embodied in the slogan “Just Say No.”
On September 19, a week after the U.S. House passed a sweeping antidrug bill, ten Senate Republicans, who were seeking re-election in November, unveiled a federal antidrug package at a news conference. “I don’t think there is any turning back,” said Majority Leader Robert J. Dole of Kansas. Senator Strom Thurmond of South Carolina added, “This bill is going to separate the talkers from the doers on the issue of drugs.” After passage by Congress, President Reagan signed the $1.7 billion antidrug package on October 27, declaring that this was a “major victory” in the war against drugs. “The American people want their government to get tough and go on the offensive, and that’s what we intend with more ferocity than ever before.” But after the Democrats took both the House and the Senate in the midterm elections, President Reagan said little more about his drug campaign.
On January 7, 1987, Reagan proposed dramatic cuts in the war against drugs, asking that more than $913 million be eliminated from drug education, enforcement, and prevention. These funds had been stipulated in the antidrug bill cheered and signed by Reagan. Grilled about the cuts on Capitol Hill, White House budget director James C. Miller said, “No one in this administration is in favor of drug abuse.” Representative Charles B. Rangel lamented that the cuts proposed by Reagan and the White House “seriously call into question the depth of their commitment to an effective drug-abuse strategy.” House Speaker James Wright said that Congress would not approve the reductions.
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