On February 3, the Reagan Administration announced that the President would issue an executive order combining all of the federal government’s antidrug programs under the National Drug Policy Board. Selected by President Reagan to head the board—which would be charged with developing budget priorities for every federal agency involved in the war on drugs—was Attorney General Edwin Meese.
As described in the Epilogue of this book, Reagan has been playing this game with the public ever since he was elected. He declares war on organized crime with all the tough rhetoric—and then creates a task force against drugs in south Florida, or a presidential commission against organized crime. After offering him accolades for being a crime-fighter, the public’s interest soon fades, while the task forces and commissions evaporate and are never heard from again.
In the past, red scares and terrorism have always successfully managed to get the public’s mind off organized crime and public corruption. It happened during the mid-to-late 1940s, when the Hollywood studios diverted national attention away from the Mafia’s penetration of, and cooperation with, the film industry, which is also discussed earlier in the book. Ronald Reagan, as the president of SAG, was a principal character in that charade, along with mob-connected unions, like IATSE, the Teamsters Union, and the American Federation of Musicians. The Kefauver Hearings of 1950–51 were eclipsed by the second round of hearings by the U.S. House Un-American Activities Committee and Senator Joseph McCarthy’s witchhunt. The Senate Rackets Committee, which operated from 1957 to 1960, was replaced on the front pages by the fear of nuclear war with the Soviet Union and Cuban premier Fidel Castro, who had thrown the underworld out of his country and was consequently the target of the CIA-Mafia plots to murder him. During the late 1970s—after the disappearance of Jimmy Hoffa, which sparked numerous probes of the underworld’s subculture—our attention was diverted by the Soviet invasion of Afghanistan and Iran’s taking of American hostages. We have never been afraid of the national crime syndicate—even though organized crime, which Robert Kennedy once declared “the enemy within,” is clearly the most serious threat we have to our national security.
Americans see nothing wrong with making a bet on a football game with the neighborhood bookmaker, or even just smoking a joint. The acceptance of these seemingly harmless vices can undermine the American public’s disapproval of more serious forms of underworld activities. When diversions put money in the pockets of organized crime, some of it ends up in the hands of public officials on the federal, state, and local levels. And when one level of government has been corrupted, the system simply doesn’t work right.
There are other reasons why organized crime is such an unpopular issue politically. The Left balks at any suggestion of electronic surveillance, which unfortunately is the only effective means of gathering intelligence against organized crime. In my thirteen years of investigating the underworld, I have never met a Mafioso or one of his associates who isn’t against wiretapping and in favor of strong personal privacy laws. And I have been bored for hours, listening to them whine about the alleged impingements on their rights and freedoms by the FBI and the IRS. On the other hand, the Right decentralizes power, bringing it down from the federal government to state and local levels where mobsters can corrupt public officials, with newfound power and with whom they are on a first-name basis, within common jurisdictions. Consequently, organized crime figures can be civil libertarians and support right-wing causes simultaneously.
Organized crime figures, regardless of legal or moral considerations, are the quintessential capitalists. Their goals are simple: to acquire power, to make money, and to stay out of jail. Because of the nature of their operations and their means of enforcement, they are able to move from Point A to Point Z, in any given project, in a straight line. Legitimate businessmen—who are expected to proceed by the letter of the law, and are subject to competition, government regulations, taxation, and other obstacles—often make deals with underworld figures to help cut some of this red tape. These businessmen are accountable only to their boards of directors and stockholders, who demand that they make money. Corporate leaders like Wasserman, who do business with underworld figures (such as Sidney Korshak, the link between the legitimate business world and organized crime), will be tolerated as long as they are making money and their associations are not becoming an embarrassment.
To be sure, since becoming the president of MCA in 1936, and its chairman of the board in 1983, Lew Wasserman has never been anything less than a Hollywood institution. Yet MCA’s association with organized crime figures still makes news headlines. On September 23, 1986, federal indictments of Morris Levy—the president of Roulette Records—and twenty business associates, including several top East Coast Mafia figures, were handed up in an extortion case described in my Epilogue. MCA—particularly the head of its record division, Irving Azoff—was directly linked to this scheme, although no one at MCA has been indicted. At this writing, the federal grand jury is continuing its investigation of MCA and of the mysterious relationship it has maintained with Mafia figure Sal Pisello, who was not indicted with the others but remains in jail for his previous tax evasion conviction.
The federal grand jury is also investigating MCA’s earlier purchase of three small companies owned by Azoff and his associates, who received 500,000 shares of MCA stock, worth $25 million at the time of the sale. Federal investigators say that none of these companies was worth more than $5 million.
Ironically, one of these Azoff companies, Front Line Management, was a talent agency. Among its clients were rock ’n’ rollers Jimmy Buffett, Boz Skaggs, Stevie Nicks, and Dan Fogelberg. For the first time since 1962—when the federal government forced MCA to divest itself of MCA Artists—MCA is again representing talent which it also employs.*
Azoff’s growing power in MCA also manifested itself after bad blood developed between MCA president Sidney Sheinberg and Frank Price, the chairman of the Universal Motion Picture Group. Price resigned after the $34.5 million film Howard the Duck was devastated at the box office. Named in late September to replace Price as Universal’s head was Azoff’s forty-three-year-old attorney Thomas Pollock, on whose behalf Azoff had waged a vigorous campaign.
On December 14, Wasserman celebrated his fiftieth year at MCA with a huge party. Held on Stage 12 at the Universal lot, the event brought a black-tie audience of more than 1,300 of the top names in politics and show business to honor Wasserman. Johnny Carson emceed. Frank Sinatra, appearing on videotape, sang “Lew’s the Champ,” to the tune of “The Lady Is a Tramp.” Ronald and Nancy Reagan sent their greetings from the White House. The Hollywood Reporter gushed over Wasserman, saying, “His leadership has brought MCA and its many operations to great heights. Lew’s deal-making and creativity are renowned in the industry.… Hollywood would be an entirely different place were it not for this man. He restructured the motion picture industry and led it into television. His alumni are leaders throughout the industry today.”
The only thing certain at the time of this writing is that all bets are off for the 1988 Presidential election. Nobody knows for sure how George Bush will be affected by the Iranian arms sales and Coke-Run. Paul Laxalt, who has retired as the general chairman of the Republican National Committee, has kept a low profile and distanced himself from the fray. He resisted overtures to replace Donald Regan as Reagan’s chief of staff. Laxalt is still the man to be watched for the Republican Presidential nomination. He has indicated that his decision to run will not depend on the public view of his “Nevada problem,”—Nevada politicians often find it hard to avoid the taint of being associated with organized crime—but on his ability to raise $8 million to $10 million for his campaign. Until something breaks, Laxalt has become a partner in the Washington office of Finley, Kumble, Wagner, Heine, Underberg, Manley, Meyerson & Casey, one of the largest law firms in the United States. At the firm, Laxalt has been joined by Russell B. Long, the recently retired, long-time Democratic senator from Louisiana.
Another factor in Laxalt’s decision to run or not will be the final resolution of his libel case filed against the McClatchy Newspapers of California and reporter Denny Walsh, which is explained in the Epilogue. McClatchy has dropped its attorney, James Brosnahan, and retained Gibson, Dunn and Crutcher, the law firm of William French Smith and Paul Ziffren. The signal sent was that both sides were searching for a settlement.
With Gary Hart’s most visible competitor, Mario Cuomo, out of the race for the Democratic nomination, the field is filled with names unfamiliar outside their home states and Washington, D.C. Clearly, however, the Democratic politician who has taken the hardest line in Congress against organized crime—and who is a serious contender but has announced that, for the time being, he is not running—is Georgia Senator Sam Nunn, the new chairman of the Senate Permanent Subcommittee on Investigations, and a member of the Senate select committee investigating the arms–Contra aid scandal.
Meyer Lansky, the financial wizard of organized crime, knew perhaps better than anyone else that the successful annihilation of organized crime’s subculture in America would rock the “legitimate” world’s entire foundation, which would ultimately force fundamental social changes and redistributions of wealth and power in this country. Lansky’s dream was to bond the two worlds together so that one could not survive without the other. Those of us who recognize the vast power of the underworld in our nation today also understand how close that dream—and our nightmare—is to coming true.
February 27, 1987
* Howard Baker replaced White House Chief of Staff Donald Regan on February 27, 1987.
* As the Reagan Administration took further steps to weaken the Justice Department’s Antitrust Division, MCA purchased the Cineplex Odeon Corporation, a theater chain, for $158 million. It also nearly purchased the World Champion New York Mets and Motown Records.
NOTES
I. THE RISE
Chapter One
1.Dave Dexter, Jr., The Jazz Story: From the Nineties to the Sixties (Englewood Cliffs, New Jersey: Prentice-Hall, 1964), p. 31.
2.Albert R. Kroeger, Television Magazine, September 1961.
3.Michael Pye, Moguls: Inside the Business of Show Business (New York: Holt, Rinehart and Winston, 1980), pp. 20–21.
4.Justice Department memorandum, November 23, 1960.
5.The New York Times, December 6, 1962.
6.Justice Department memorandum, June 6, 1961.
7.Justice Department memorandum, June 9, 1961.
Chapter Two
1.Ovid Demaris, Captive City: Chicago in Chains (New York: Lyle Stuart, 1969), pp. 120–21.
2.Pye, p. 23.
3.Hank Messick, The Beauties and the Beasts (New York: David McKay and Company, 1973), p. 87.
4.Al Stump, The Los Angeles Herald-Examiner, January 27, 1980.
5.Testimony of John Roselli, “Investigation of Organized Crime in Interstate Commerce,” October 7, 1950, p. 396.
6.Annette Carvaretta Nitti v. Commissioner of Internal Revenue Service, United States Tax Court at Chicago, Illinois (Docket Nos. 8840, 8841, 8842), September 27–October 4, 1948.
7.Author’s interview with Roy M. Brewer (tape-recorded with permission).
8.Bob Thomas, King Cohn: The Life and Times of Harry Cohn (New York: G. P. Putnam’s Sons, 1967), p. 199.
Chapter Three
1.David Gelman and Alfred G. Aronowitz, “MCA: Show Business Empire,” New York Post Daily Magazine, June 9, 1962.
2.Justice Department memorandum, October 14, 1941.
3.Re-created conversation based upon George Maury’s report on his interview with Spike Jones.
4.Telegram from Arnold to Waters, October 22, 1941.
5.Justice Department memorandum, March 28, 1941.
6.Telegram from Hollywood attorney Martin Gang, October 22, 1941.
7.Justice Department memorandum, June 16, 1961.
8.Justice Department memorandum, May 25, 1943.
Chapter Four
1.Open letter from Kibre to IATSE membership, September 15, 1938.
2.Nancy Lynn Schwartz, The Hollywood Writers’ Wars (New York: Alfred A. Knopf, 1982), p. 125.
3.Testimony of William Bioff, U.S. v. Campagna, et al., 146 F.2d.524 (2nd Cir. 1944).
4.Ovid Demaris, The Last Mafioso (New York: Times Books, 1983), p. 272.
5.IRS report, May 7, 1962.
6.Chicago Crime Commission report, June 6, 1962.
7.Messick, p. 235.
Chapter Five
1.Justice Department memorandum, May 12, 1945.
2.MCA contract with the Pacific Square Corporation, November 4, 1941.
3.Justice Department memorandum, May 12, 1945.
4.Re-created conversation based on Justice Department memorandum, May 11, 1945.
5.Re-created conversation based upon Justice Department memorandum, May 12, 1945.
6.Pye, p. 26.
7.Justice Department memorandum, February 10, 1961.
Chapter Six
1.Memorandum from Billy McDonald to Tom Kettering, January 16, 1946.
2.Finley v. MCA, District Court of the United States for the Southern District of California, Central Division, Civil Action No. 4328-M (1946).
3.Pye, p. 34.
Chapter Seven
1.Verbatim conversation between Charles Wick and attorneys for the Los Angeles office of the Justice Department’s Antitrust Division, March 5, 1946.
2.Letter from Fred Weller and Herman Bennett to Assistant Attorney General Wendell Berge, March 7, 1946.
3.Finley v. MCA, June 24, 1946.
4.Letter from George B. Haddock to William C. Dixon, August 12, 1946.
5.Martin A. Gosch and Richard Hammer, The Last Testament of Lucky Luciano (Boston: Little, Brown and Company, 1975), p. 312.
6.David G. Wittels, “Star-Spangled Octopus,” Saturday Evening Post, August 24, 1946.
7.Schwartz, p. 239.
Chapter Eight
1.Ronald Reagan and Richard G. Hubler, Where’s the Rest of Me? (New York: Dell Publishing Company, 1965), p. 154.
2.Lou Cannon, Reagan (New York: Perigee Books, 1982), pp. 47–48.
3.Clark R. Mollenhoff, Strike Force: Organized Crime and the Government (Englewood Cliffs, New Jersey: Prentice-Hall, 1972), p. 39.
4.Reagan and Hubler, p. 91.
5.Bill Boyarsky, The Rise of Ronald Reagan (New York: Random House, 1968), p. 64.
6.Reagan and Hubler, p. 121.
7.“Fifty Years in Motion,” Screen Actor, August 1984.
8.Tichi Miles and Marcia Borie, The Hollywood Reporter: The Golden Years (New York: Coward-McCann, 1984), pp. 200–205.
9.David Thomson, A Biographical Dictionary of Film (New York: William Morrow and Company, 1976), p. 466.
Chapter Nine
1.Author’s interview with Richard Walsh.
2.Interview with Roy Brewer.
3.Schwartz, p. 221.
4.Interview with Brewer.
5.David Caute, The Great Fear (New York: Simon and Schuster, 1978), p. 489.
6.Author’s telephone conversation with Roy Brewer.
7.Interview with Brewer.
8.Reagan and Hubler, p. 179.
9.George H. Dunne, Hollywood Labor Dispute: A Study in Immorality (Los Angeles: Conference Publishing Company, n.d.), pp. 40, 44.
10.Reagan and Hubler, p. 208.
11.Dunne, p. 32.
12.Reagan and Hubler, pp. 199–200.
13.Reagan and Hubler, p. 167.
14.Seymour M. Hersh (with Jeff Gerth), The New York Times, June 28, 1976.
15.Interview with Irving Allen.
16.Interview with Brewer.
17.Dunne, p. 19.
18.Reagan and Hubler, p. 229.
19.Arthur Miller, “The Year It Came Apart,” New York, December 30, 1974, pp. 43–44; quoted in Victor Navasky’s Naming Names (New York: Viking Press, 1980), p. 213.
20.Interview with Brewer.
21.Vance King, The Hollywood Reporter
, October 26, 1953.
22.Navasky, p. 165.
Chapter Ten
1.Lou Cannon, Reagan (New York: Perigee Books, 1982), p. 64.
2.Scott Herhold, San Jose Mercury News, August 25, 1985.
3.Justice Department memorandum, December 27, 1943.
4.Justice Department memorandum, April 4, 1947.
5.Justice Department memorandum, December 3, 1947.
6.Reagan and Hubler, p. 243.
7.Justice Department memorandum, March 22, 1962.
8.Nancy Reagan (with Bill Libby), Nancy (New York: William Morrow and Company, 1980), p. 110.
9.Mervyn LeRoy, Take One (New York: Hawthorn Books, 1974), pp. 192–193.
Chapter Eleven
1.U.S. Senate Special Committee to Investigate Organized Crime in Interstate Commerce, Third Interim Report, April 17, 1951, p. 51.
2.Chicago Crime Commission memorandum, June 6, 1962.
3.Demaris, p. 109.
4.Demaris, p. 46.
5.The New York Times, June 27, 1976.
6.FBI report, September 17, 1963.
Chapter Twelve
1.Leonard Katz, Uncle Frank: The Biography of Frank Costello (New York: Drake Publishers, 1973), p. 140.
2.Hearings of the U.S. Senate Special Committee to Investigate Organized Crime in Interstate Commerce (hereafter referred to as Kefauver Committee Hearings), October 6, 1950, p. 369.
3.Ibid., October 7, 1950, p. 394–395.
4.Ibid., September 9, 1950, p. 106.
5.The New York Times, June 27, 1976.
6.Lester Velie, “The Capone Gang Muscles into Big-Time Politics,” Collier’s, September 30, 1950.
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