Showing posts with label Moe Dalitz. Show all posts
Showing posts with label Moe Dalitz. Show all posts

Monday, May 01, 2017

30 Illegal Years to the Strip: The Untold Stories Of The Gangsters Who Built The Early Las Vegas Strip

30 Illegal Years To The Strip: The Untold Stories Of The Gangsters Who Built The Early Las Vegas Strip.

These are the untold inside stories of Prohibition’s most powerful leaders, and how they later ran elegant, illegal casinos across America, before moving on to build the glamorous Las Vegas Strip gambling resorts.

The seven leaders of the three dominating Prohibition gangs imported the world’s finest liquors on a massive scale. Although they conducted their business in an illegal and dangerous world, these seven espoused traditional business values and rejected the key tools of organized crime - monopoly, violence, and vendetta. This made them the most unlikely gangsters to rise to underworld leadership. But they earned every criminal’s respect, and fate made them the most powerful gangland leaders in American history.

Unbelievably, the most murderous and most psychopathic gang leaders not only admired them but supported them in gangland conflicts. In the mid 1900s, these seven leaders stood up to, and restrained, America’s worst villains. The seven prevented many gangland wars and killings.

The three dominating liquor-importers were the first gangs to work closely together in mutual interest. Joining them was the violent Chicago Capone gang, as they partnered in both illegal and legal businesses during and after Prohibition. They were also close allies in the complexities, treachery, and violence of underworld politics.

Some of these seven leaders became powerful overworld political kingmakers. Allied with them in New York City politics was Arnold Rothstein, the ultimate gambler. His murder is one of several major gangland killings finally solved here.

Great entertainment was a key part of these seven gang leaders’ illegal-casino and Strip-resort showrooms. Their biggest-drawing star was comedian Joe E. Lewis. He set the standards for excellence during the half-century popularity of nightclub and casino showroom entertainment.

The action-packed careers and relationships of the gang leaders, who together would go on to build the Las Vegas Strip, are presented for the first time in this thoroughly documented, in-depth, authentic history of how organized crime developed. It contains 546 source notes, and many addendums that expose the serious fallacies and outright fictions of previous books about early organized crime.

Monday, December 07, 2015

Frank Cullotta is At Peace with His Past

Frank Cullotta keeps reaching toward his face, trying to adjust something no longer there. His glasses.

Cullotta just finished a series of Lasik surgeries to right his vision. Gone are his recognizable, oversized frames. He now sees clearly but continues to focus his memory in the long-ago past.

Cullotta was a famous hit man for the Chicago Outfit, a self-described former “gangster, burglar, murderer, extortionist, arsonist” who admitted to the 1979 killing of con man Sherwin “Jerry” Lisner in Las Vegas. As was customary in those days, Cullotta acted on the order of Chicago Outfit overlord Tony Spilotro. The murder scene was depicted in the film “Casino.”

Cullotta was a consultant on the film, as he edged his way back into society while living under an assumed name. He spent two years in the federal witness-protection program after cutting a deal with the federal government in exchange for information about his former associates.

Today, the 76-year-old Cullotta earns a legal living as an expert in the culture that led him underground. He works as a guide for the Mob Museum, leading “Casino” tours of the primary points of interest featured in the 20-year-old mob movie, most of which was set in Las Vegas. The tours begin at the Mob Museum with a private walk-around hosted by mob historian Robert George Allen and include a bus tour of the city’s famous mob locations. The five-hour tours run monthly and cost $180, including a champagne toast and pizza dinner.

Guests visit such locations as the Casino House, where Cullotta carried out the Lisner murder; the setting for the Frankie “Blue” death scene in the film; the Las Vegas Country Club clubhouse where Spilotro and Moe Dalitz used to play cards; and the site of the Hole in the Wall Gang’s botched Bertha’s Household Products robbery on July 4, 1981, which led to Cullotta’s arrest. The bus also pulls into Piero’s Italian Cuisine, also used in “Casino.”

You see, too, the spot at Tony Roma’s on Sahara Avenue where in 1982, Lefty Rosenthal was nearly killed in a car-bomb explosion, spared by the hard-metal plate under the driver’s seat of his ’81 Cadillac Eldorado.

“I tell people that Lefty was a creature of habit,” Culotta said. “He always liked to have his ribs at Roma’s, once a week. He was an easy target.”

Cullotta is introduced to those on the tour by “Casino: Love and Honor in Las Vegas” book author Nicholas Pileggi. “He brags about me, saying there would have been no book or movie ‘Casino’ if it was not for me,” Cullotta said.

Cullotta considers the obvious: He is the rare (hopefully) person taking these tours who actually has committed a murder.

How does it feel to be walking around with that experience, even more than 35 years later?

“Honestly, it never wakes me up,” Cullotta said. “If you do think about it, it’ll put you in the (effing) nuthouse. When I do these tours, then everything pops up into my head; people want to know if it bothers me. Of course. But if I thought about it 24 hours a day, I’d wind up in my car with a gun in my mouth.”

Cullotta says he compares his experience to that of a serviceman carrying out an order for his government.

“It’s like fighting a war,” he said. “I hate to use the military as a comparison, but that’s how it felt; I was carrying out an order.

“People are fascinated by me, and I understand that, but there’s a big difference in me today than there used to be. I mean, I used to be surrounded by celebrities, showgirls, politicians, a lot of money, people wanting to attach themselves to you. But it came at a price.”

Which was?

“I lost my freedom,” Cullotta said. “I had to change my life completely. But I have paid my debt to society. I’m under no pressure. I used to have headaches all the time, from tension, and I don’t have headaches anymore. I’m clean today. I’m very clean.”

Thanks to John Katsilometes.

Thursday, July 09, 2015

Bringing Down the Mob: The War Against the American Mafia

Longtime business associates Allen Dorfman and Irwin Weiner frequently lunched together. On a day in January 1983, they emerged from Dorfman's Cadillac onto the icy parking lot of a suburban Chicago restaurant, ten minutes late for their one o'clock reservation. According to Weiner, they were walking between parked cars when two men ran up behind them and yelled, "This is a robbery." One of the men fired a .22 automatic at least half a dozen times. Only Dorfman was hit. He fell to the ground in a large pool of blood that quickly froze into red ice. When the paramedics arrived, he showed no signs of life.

At fifty-nine, Dorfman was a nationally known figure, and his death would be reported across the country. His murder was news, but it was not a surprise. He had been a key figure in the world of organized crime for more than thirty years. Beginning with Jimmy Hoffa, successive presidents of the International Brotherhood of Teamsters (IBT) had allowed him to use his position as head of the pension fund to provide sweetheart loans to mob figures, money that bankrolled the Mafia's control of several Las Vegas casinos. The union itself, which had access to top business leaders and politicians right up to the White House, was run as a virtual subsidiary of the American Mafia. A month before his murder, Dorfman, Teamsters president Roy Williams, and a top Chicago mob figure, Joe Lombardo, had been convicted of attempting to bribe U.S. senator Howard Cannon of Nevada. After his conviction in December 1982, Dorfman was released on $5 million bail pending sentencing. He stood to receive as much as fifty-five years in prison.

In addition to the bribery case, the government was also conducting an investigation of money skimming in mob-backed Vegas casinos. Dorfman knew the secrets of both the Teamsters and Vegas. If he decided to cut a deal with prosecutors, talking in return for a more lenient sentence, many gangsters-and supposedly legitimate businessmen and officials-would end up in prison. The head of the Chicago Crime Commission told The New York Times, "There's no doubt in my mind that Mr. Dorfman was killed to keep him quiet ... if he ever coughed up to investigators ... this country would be shaking for a month." Someone with access to the crime scene apparently decided to ensure that at least some of Dorfman's secrets did not die with him. He made a photocopy of the dead man's memo book and sent it to the Chicago Crime Commission.

Though he was only an associate member, Allen Dorfman's life provided a window into the world of the American Mafia at its highest levels. Beginning in 1949, it took him just five years to rise from physical education instructor to millionaire, thanks to Hoffa's largess and the connections of his racketeer stepfather, "Red" Dorfman. At the time of his death he headed a financial empire that included insurance companies, condominium developments, resorts, and other projects, and he maintained homes in four states. He was a major contributor to various charities and was frequently honored by civic associations. Yet over his career he had been denounced by congressional committees and constantly pursued by federal law enforcement officers. He was indicted on several occasions, though he usually managed to win acquittals. In 1972 he was convicted of conspiring to facilitate a loan from the Teamsters Pension Fund in return for a kickback of $55,000, but he served only nine months in jail.

After his latest conviction, Dorfman should have been wary of his former associates. He might have known that the bosses of the Chicago mob would be worried that a man long accustomed to the affluent life might not be able to face spending the rest of his days in prison. True, Dorfman had not rolled over following any of his previous arrests. But in the Mafia world that was irrelevant. Chicago mob bosses Joey Aiuppa and Jackie Cerone, who were also caught up in the Vegas skim, had followed very different paths from Dorfman's. Their rise to the top had been slow, prefaced by years spent doing the dirty work with guns and blackjacks. Unlike Dorfman, they could not pose as businessmen and civic benefactors. Instead, they lived by a hard code that mandated that all doubts must be resolved in favor of the organization. They could not take the chance that someone who had so much potential to hurt them would stay silent. Since it was standard mob procedure to eliminate witnesses, Weiner's survival and his tale of attempted robbery caused some investigators to speculate that he had set Dorfman up.

The fact that Dorfman was not Italian had prevented him from becoming a "made" member of the Mafia. Still, he was well aware of its rules, though perhaps he did not think they applied to a big shot like him. The same lack of understanding had undoubtedly cost his old boss Jimmy Hoffa his life eight years earlier. Then again, a lot of people on both sides of the law had always found it hard to comprehend the culture of the American Mafia.

Books about mob life often end up on the true-crime shelves of bookstores, alongside biographies of serial killers and accounts of last year's "heist of the century." In some respects it is the appropriate place for the colorful criminals of the American Mafia. Each generation has brought forth an Al Capone, Lucky Luciano, Frank Costello, Sam Giancana, or John Gotti, all of whom have fascinated the public, as have their big and small screen counterparts: Scarface, The Godfather, and The Sopranos.

Yet the American Mafia is more than just another group of criminals. Since the 1920s it has been the heart and soul of American organized crime. As such it has exercised significant influence on the political and economic life of the country. In American Mafia: A History of Its Rise to Power, I told the story of the organization up to the early 1950s. I described how the Mafia managed to acquire all the trappings of an independent state, flouting the authority of the United States government. It promulgated its own laws, not infrequently imposing the death penalty; it even maintained diplomatic relations with foreign countries, such as Cuba. And perhaps most critically, in both politics and business it managed to link the underworld to the upper world. That an organization that never had more than five thousand full-fledged members could exercise such immense power is one of the most phenomenal accomplishments in the history of the United States. It was not, however, a lasting achievement. The present work, an account of events from the 1950s into the twenty-first century, is the story of a declining power. Essentially it is a domestic military history, in that it describes the fifty-year war that law enforcement has waged on the American Mafia.

Words like "organized crime" or "Mafia" lack precision. Attorney General Robert Kennedy, who crusaded against the organization, told his subordinates, "Don't define it, do something about it." Over the years, "Mafia" has come to be used as a shorthand for the leading element of American organized crime. Like "Hollywood" as a synonym for the movie industry, or "Wall Street" for high finance, it has become so embedded in the national consciousness that it is impossible to avoid using it. Attempts by official bodies to define the Mafia often fell short, or were misleading. In 1950-51 a U.S. Senate committee chaired by Estes Kefauver of Tennessee exposed the face of organized crime in a score of American cities. In its final report the committee declared that a Mafia, descended from the Sicilian original, controlled the most lucrative rackets in many major cities and tied together criminal groups throughout the country. A 1967 presidential commission described organized crime as "underworld groups that are sufficiently sophisticated that they regularly employ techniques of violence and corruption to achieve their other criminal ends." They explained that the core group of organized crime in the United States consist[s] of 24 groups operating as criminal cartels in large cities across the nation. Their membership is exclusively Italian, they are in frequent communication with each other, and their smooth functioning is insured by a national body of overseers.

In fact the Mafia in the United States was not an offshoot of the Sicilian version. While only men of Italian lineage could be "made" full-fledged members, the organization was not entirely Italian. Nor was the national "commission," as its body of top overseers was called, ever as clearly defined or powerful as it was sometimes portrayed.

In the nineteenth century, some people blamed the newly immigrated Italians for the prevalence of vice and crime in urban areas. But organized crime was well established in the New World long before Italian Americans arrived. Gamblers, saloon keepers, brothel madams, and other criminals paid off the police, who in turn funneled a large share of the take to their political masters. A few immigrants who came to the United States had been members of Old World criminal bands, such as the Neapolitan Camorra and Sicilian Mafia. It is clear, though, that the Italians who would turn to crime in this country (a tiny fraction of the whole) simply took advantage of what they found when they arrived. Even after Mussolini's crackdown on the Mafia in the 1920s propelled some genuine Sicilian mafiosi to the United States, the forms of organized crime they adopted were essentially American.

The Mafia in America produced bosses like Calabrians Frank Costello and Albert Anastasia, as well as Neapolitans Al Capone and Vito Genovese. For practical purposes it also included Jews such as Meyer Lansky and Benjamin "Bugsy" Siegel of New York, Abner "Longy" Zwillman of Newark, and Morris "Moe" Dalitz of Cleveland, and these men often exercised power equivalent to that of the Italian bosses. Lansky (nÈ Maier Suchowljansky) was generally ranked among the top three or four mobsters in the country. His success was the result of his financial skills and his ability to forge alliances with key leaders such as Lucky Luciano and Frank Costello. For similar reasons, Moe Dalitz would become a major figure in Ohio, Kentucky, and Nevada. Irish Owney Madden, though confined to the resort town of Hot Springs, Arkansas, after his exile from New York City, managed to reinvent himself as an elder statesman of the American Mafia. Welshman Murray "the Camel" Humphreys (nÈ Humpreys) was always near the top of the Chicago mob hierarchy, as were Jake Guzik and Gus Alex, who were Jewish and Greek, respectively. To emphasize the organization's American origins and its frequently multiethnic makeup, I refer to it as "the American Mafia," though to avoid constant repetition of the term, I will usually refer to it simply as "the Mafia," sometimes only "the mob(s)," or in individual cities by its local equivalent, such as "the Chicago Outfit" or the name of a particular New York family.

One clear indicator that the American Mafia was homegrown was its organizational structure. The American gangs replicated the political machines in the areas where they operated. Chicago, for example, was dominated by the Democratic county organization, though certain ward bosses were given considerable latitude. The Chicago mob controlled the metropolitan area but allowed some of its leading figures to operate with a high degree of autonomy. New York was too large to be ruled by one political organization. Tammany controlled Manhattan, but Brooklyn, the Bronx, and Queens had their own machines. The New York Mafia's five-family structure dispersed mob power similarly across the five boroughs. In Tammany days, a "commission" made up of a powerful politician from Manhattan, another from Brooklyn, a boss gambler, and a representative of the NYPD regulated organized crime. After 1931, a local Mafia commission composed of the heads of the five families performed the same function. At the same time, a national "syndicate" also developed, directed by a commission that included the New York families and representatives from other cities. The national commission reflected prevailing political practices as well. The Republican and Democratic national committees were dominated by big states, such as New York, Illinois, Pennsylvania, Ohio, and Michigan. In the national syndicate, the New York, Chicago, Philadelphia, Cleveland, and Detroit mobs called the shots (sometimes literally).

The internal arrangements of the families (borgattas or simply gangs) also resembled that of the political machines. The Tammany and Cook County party chairmen and the Mafia family heads were all called "boss." Both Tammany and the Chicago organization often had number two men; in the Mafia they were called underbosses. Tammany had leaders over every assembly district, while Chicago had a party committeeman in charge of each ward, and the Mafia had its middle managers too. In the post-Apalachin period, law enforcement began referring to mob sub-bosses by terms such as "capo" (head). While neat on paper, it did not always conform to local practice. In Chicago, instead of being called capos, sub-leaders were usually referred to by the territory they controlled: boss of the Loop, the Near North Side, the Far South Side, etc. In other places they might be known as captains or crew chiefs. The Tammany wise men were called sachems; the Mafia families' equivalent was consigliere, or counselor, though the job began as a sort of ombudsman to whom aggrieved gang members could appeal. Since "Tammany" was an Indian name, its rank and file were accordingly known as braves. On law enforcement charts, the lowest ranked members of the Mafia were called soldiers, a term that might also encompass crew members who were not "made." While it is sometimes claimed that any Italian made man outranked any non-Italian, this was not the case. A mob soldier, even a crew chief, had to be very respectful around "Bugsy" Siegel or "Shotgun" Alex, men whose nicknames alone indicated their temperament and propensities.

Even the boss title could sometimes be misleading. Some who bore it were no more than titular leaders. Gaetano Gagliano was formally boss of what became the Lucchese family from 1931 until his death in 1951, when he was succeeded by his underboss, Gaetano "Tommy" Lucchese. Yet during the period when Gagliano was supposedly in charge, there was virtually no mention of him, while Lucchese was well known, just as European kings and presidents have often been overshadowed by their prime ministers. Sometimes it was unclear who was actually running a particular Mafia gang. In the 1980s the federal government prosecuted "Fat Tony" Salerno as head of New York's Genovese family even though he was actually the number two man.

The key to the American Mafia's success was its ability to buy or neutralize public officials. Until the 1920s, organizations such as Tammany Hall or Chicago's First Ward had the final say over organized crime. Then Prohibition- rich gangsters turned the tables and began to act as the partners or, in some instances, controllers of the politicians. As one criminal justice official told historian Arthur Sloane, "The mobsters have always been wedded to the political system. That's how they survive. Without that wedding they would be terrorists and we'd get rid of them." The decline of the Mafia began after the 1950s, when the mobs could not muster the political influence to protect themselves from the law enforcement assault led by the federal government.

In the present work I have adopted a broad approach, as opposed to a more narrow focus on a particular mob family or individual leader. Sometimes police or journalists have labeled gangs such as New York's Gambinos or the Chicago Outfit the premier mob families in America. Such assessments are like rankings of college football teams. The view of one expert is not always shared by another or borne out on the playing field. A similar practice is to designate an individual gangster such as Vito Genovese or Carlo Gambino "Boss of Bosses." For a long time, law enforcement followed the same narrow approach in its war on the Mafia: Go after an individual Mr. Big. The turning point in the war came in the 1980s, when the federal government broadened its targets and took down most of the leadership of all five New York families in one fell swoop.

Thanks to Thomas Reppetto

Tuesday, April 03, 2012

Las Vegas Mob Museum Covers American Jewish History

In the mid-20th century, a cadre of tough Jews, shedding the bookish bearing of exile, went forth to create a new society in a forbidding desert. Armed to the teeth, they lived outside the law and built their outpost by any means necessary. Against all odds, despite implacable enemies, the desert bloomed.

Think you already know this history? Think again. This is an American tale told by the National Museum of Organized Crime and Law Enforcement, in downtown Las Vegas. Open since February, and already better known as “The Mob Museum,” it is essentially an American Jewish history museum by another name.

The museum tells the story of American organized crime, from its birth in the ethnic slums of established cities like Boston, New York and Chicago to the city the mafia itself begot, the Mojave metropolis of Las Vegas. The institution is the brainchild of Oscar Goodman, the flamboyant Philadelphia-born mafia attorney whose clients included Meyer Lansky, Frank “Lefty” Rosenthal and Herbert “Fat Herbie” Blitzstein. Goodman went on to serve as mayor of Las Vegas from 1999 until 2011.

While the exhibit only breaks the code of omertà about Jewishness at the beginning of its chronological display — noting the Jewish immigration wave alongside the Irish and Italian — as visitors move through the 20th century they see a pantheon of mosaic Murder Inc. veterans, including Moe Dalitz, Gus Greenbaum and Moe Sedway, on a progression from street toughs to casino magnates to pillars of the community. The museum doesn’t pussyfoot around the brutality of Jewish mobsters’ methods; indeed, one 1930s photo shows the brutalized body of a Catskills resort slot machine operator on a gurney after he had been caught skimming profits. But it treats the mafia as an institution of immigrant social mobility, a shortcut to the American Dream.

The presentation makes it hard not to sympathize with Prohibition-era “Boys From Brooklyn” (as the Jewish goodfellas called themselves) as they are hounded by bigoted G-men and hard-drinking hypocrites in Congress. A 1939 FBI “Wanted” poster seeking fugitive Murder Inc. boss Louis Buchalter notes his “Jewish characteristics — nose large… eyes alert and shifty — has habit of passing change from one hand to another.”

Bootlegger Dalitz is celebrated for getting the best of a congressional anti-mafia probe with zingers like, “If you people wouldn’t have drunk it, I wouldn’t have bootlegged it.” And when asked about his illicit moonshine fortune, he said, “Well, I didn’t inherit any money, Senator.”

By the end of the exhibit, having built a world-famous city from scratch with their underworld capital, Sedway is receiving letters from Jewish establishment figures saluting his fundraising efforts for United Jewish Appeal, Dalitz is being presented with the key to the City of Las Vegas and Lansky is living the life of a retired real estate magnate in Miami Beach. Buchalter, for his part, has been sent to the electric chair at Sing Sing (an object that is also part of the collection). But even his death has a Horatio Alger twist: He set the record for the richest man ever executed in America.

The museum’s official slogan is, “There are two sides to every story,” and the feds are given their due. The former special agent in charge of the Las Vegas office of the FBI, Ellen Knowlton, outranks even Goodman on the museum’s board of directors. As in real life, though, it is the glamour of gangster glitter — like Benjamin Siegel’s glitzy watch, labeled “Bugsy’s Bling” — that catches the eye. Beyond a reasonable doubt, the goodfellas steal the show.

Not everyone is thrilled with such laudatory portrayals of the Jewish criminals the museum dubs “the other people who built America.” Jenna Weissman Joselit, Forward columnist, director of the program in Judaic studies at George Washington University and author of “Our Gang : Jewish Crime and the New York Jewish Community, 1900-1940,” (Indiana University Press, 1983) thinks the temptation to glamorize the mob ought to be resisted. Museum curators, she said via email, should “attend to America’s abiding fascination with crime with the same rigor and discernment that’s applied to other cultural and historical phenomena.” But Rich Cohen, author of “Tough Jews : Fathers, Sons, and Gangster Dreams” (Simon & Schuster, 1998), understands the appeal of Jewish mobsters — especially when contrasted with the loathsome, privileged Jewish criminals of today, like Bernard Madoff. “These were people who grew up in certain neighborhoods where [the mob] was one way to get ahead,” Cohen said via telephone from Hollywood, where he’s advising “Magic City,” a new TV drama about 1950s Miami mobsters. “These were very tough guys in a very tough world, in a time when Jews were being beaten up and even killed — and they weren’t taking s–t from anybody.”

Cohen is unperturbed by the museum’s family-friendly marketing efforts, which include offering discounted admission to children as young as 5. “I have little kids, and I try to teach them right from wrong,” Cohen said. “I don’t think there’s a danger of people coming out of a museum and it making them gangsters.”

As a whole, American Jews are probably more conflicted than Cohen about the community’s historic mob ties. When Cohen told his grandmother he was working on a book about Murder Inc., her response bespoke this communal schizophrenia. “A Jew should never be a gangster. It’s a shande,” she told him, using the Yiddish word for “a disgrace.” “But, if a Jew should be a gangster, let him be the best gangster!”

For his part, booster-in-chief Goodman, who bequeathed to the museum his “gelt bag”— a large briefcase in which his clients, wary of having their bank accounts frozen by the Feds, paid him in cash — zealously defends the institution’s unconventional take on the history of his city and his people. “These are our founding fathers,” Goodman said of Meyer, Bugsy and the gang. “We [Las Vegans] come from the mob.”

But even Goodman recalls that when he first proposed the museum a decade ago, he faced some pushback from constituents who complained that it would stereotype a particular ethnic group. “Apparently they meant the Italians,” Goodman offered, with his perennial grin and Borscht Belt timing. “I thought they were talking about the Jews!”

Thanks to Daniel Brook

Tuesday, July 05, 2011

Reputed Mob Associate Tapped to Build FBI Headquarters


He is the man who helped build a greater part of Las Vegas with millions of dollars from Jimmy Hoffa’s mobbed-up Teamsters’ pension fund. Along with his close friend and business partner, the legendary Moe Dalitz, an early associate of Detroit’s notorious Purple Gang — high school dropouts who built their fortune on murder, hijacking, and rum-running during Prohibition — he built Paradise Development, a firm that prospered mightly during the heyday of the Vegas mob. Now he is working for the FBI. His name is Irwin Molasky.

“Dalitz was one of the most illustrious figures in the annals of crime,” wrote attorney Roy Grutman in his 1990 memoir, Lawyers and Thieves. “Able to trace his mob ties back to such underworld icons as Lucky Luciano and Bugsy Siegel, he even had the distinction of having been chased out of Cleveland in the 1940s by the city’s celebrated public safety director, Elliot Ness.”

In 1962, Dalitz, Molasky, Paradise, and two partners, Merv Adelson and Allard Roen, would snap up a total of 5000 acres outside the tiny San Diego County beach town of Carlsbad. There, with funds loaned by the Teamsters and C. Arnholt Smith’s US National Bank, they built Rancho La Costa, the posh resort that became synonymous with America’s mid-century wave of organized crime, murder, and political corruption.

Today, at the age of 84, according to a signed declaration filed under penalty of perjury, Molasky is sick and infirm, requiring a cane to move about a room. He is in the painful last stages of a rare form of incurable bone-marrow cancer and is in urgent need of taking care of business now rather than later.

Once worshipped as the financial genius of the Las Vegas Strip, he has been forced to watch as his trusted elder son Steven declared bankruptcy, with $55.4 million of unsecured debts during the financial meltdown of 2008.

His son-in-law, Kenneth Collin Cornell, who pled guilty to fraud charges resulting from a telemarketing boiler-room swindle in 1994, is being sued for breach of contract in a case arising from a Mission Beach condominium project he developed with his wife, Molasky’s daughter Beth. But despite the maelstrom of his later years, Molasky has vowed to complete one project above all: a new San Diego headquarters for the Federal Bureau of Investigation.

Incredible as it seems to some old bureau hands, Molasky, loyal friend and associate of Moe Dalitz and a litany of other gamblers and bookies, has won a 20-year, $223.4-million lease from the U.S. General Services Administration to construct a 248,882-square-foot field office and campus overlooking Interstate 805 on Vista Sorrento Parkway in Sorrento Mesa.

The financing method the government is using to construct the project is itself controversial. By agreeing to lease the building from Molasky at $11.2 million a year, rather than paying $100 million up front to build it, critics say taxpayers will end up paying more than double.

The project was announced to the public this January as a fait accompli. But since then, a major complication has arisen. Molasky does not yet actually own the property, and he can’t obtain a loan with which to buy or build on it. A neighboring landowner filed suit against him in March, charging that the old Las Vegas hand, true to form, is trying to strong-arm his way to the capstone of a legendary career.

In a May 4 filing, lawyers for SN Investment Properties LLC, a Portland, Oregon–based development firm that owns the property adjoining the FBI site, charged that Molasky and his companies “are some of the largest real-estate developers in Las Vegas, Nevada” that “believe they can utilize their significant wealth and power to do whatever they want, wherever they want.”

At issue is a vehicle-access easement, granted in 1984, that runs across the land Molasky wants to use for the project. Molasky and his fellow defendants allegedly “knew months before the contract was awarded by the GSA, and even while they were bidding the contract and seeking approvals from the City of San Diego to develop the project, that the proposed FBI Building was to be built directly on top of an express deeded easement owned by SNI and running over the site of the FBI Building.”

“The current effort to expedite the trial date, despite the fact that Defendants have known since August 2010 of SNl’s easement,” the May filing says, “is just one further part of their strong-arm tactics.”

For their part, Molasky and his lawyers insist that the Portland firm is trying to waylay the FBI building for selfish financial gain at the expense of the public. “Upon learning that the tenant would be the FBI, Plaintiff began protesting that the development and construction of the FBI project would allegedly ‘diminish the value’ of Plaintiff’s property,” according to a response by Molasky and company filed May 4.

The filing added that Molasky had obtained documents showing that the strategy of its foe was “simply to stall and thereby obstruct the development of the FBI project in its entirety or receive a large payment from the Molasky Defendants.”

Any delay in San Diego would be costly, Molasky’s attorneys say. “The Molasky Defendants are currently developing three other FBI office projects for the GSA in Minneapolis, Portland, and Cincinnati, and this existing relationship could be damaged solely because the adjacent property owner claims it would like a different tenant, when in fact Plaintiff simply wants a huge payday for a long abandoned and never used 1984 easement. In addition, the Molasky Defendants have built up goodwill and a relationship of trust with the GSA, the FBI, builders and lenders, all of which is likewise threatened by Plaintiff’s attempt to belatedly assert rights that remained dormant for 26 years.”

Molasky himself filed a personal declaration, dated April 29, implying that, because his days were numbered, the court should hasten to hear the easement case: “I have…Waldenström’s Disease. This disease is a rare form of cancer that affects the bone marrow space in the human body. That disease is treated by chemotherapy and a drug called Rituxan. This disease was diagnosed approximately 15 years ago and I have been treated since that time.

“There is no cure for Waldenström’s Disease. I am in stage 4 of this disease, which is the last stage of the disease. I have received numerous chemotherapy treatments over the years and I am being treated by Dr. Allan Saven at Scripps Clinic in La Jolla, California. Because of my age and health issues, the importance of this case being quickly tried, and the importance of this new FBI project to the City of San Diego, I request that this Court set the earliest possible trial date.”

Molasky’s lawyers have argued that he has the public interest at heart, claiming that the fight over the easement threatens “to thwart years of work by the federal government to create a new FBI building in San Diego. In such an event, the federal government will likely have to start the process all over again — resulting in the delay of much needed space to the FBI and much needed economic stimulus to the City of San Diego and its citizens. The City of San Diego will lose the immediate value of 700 new construction jobs and 500 permanent jobs, new revenue from property taxes, additional protection and security from the FBI facility and a new office development in Mira Mesa/Sorrento Valley area.” They add that “prominent members of the City Council of San Diego are fully behind the project as it directly impacts the citizens in this City.”

In order to build that support, Molasky — no stranger to the uses of politics and politicians — has launched an all-out blitz on San Diego’s city hall, quietly retaining Paul Robinson, the high-priced dean of the city’s lobbying corps, a former aide to GOP mayor Pete Wilson, informal advisor and fundraiser for current mayor Jerry Sanders, and a member of the San Diego County Regional Airport Authority board. Robinson has deep ties to some of the city’s most sacred institutions, including county Republicans and San Diego State University. Through the first quarter of this year, Molasky has paid Robinson’s law firm a total of $63,000 for its services, according to disclosure documents on file at city hall.

An appointment calendar on the website of city councilwoman Marti Emerald shows that Robinson sat down with her on April 15 to lobby the FBI project with Molasky executive Rich Worthington. Campaign records show that Robinson contributed $270 to Democrat Emerald in January 2009, having previously backed April Boling, Emerald’s failed Republican foe, the year before. On April 25, Robinson and Worthington also paid a visit to first district councilwoman Sherri Lightner, according to her official calendar posted online.

According to his disclosure filings, last year Robinson and associate Neil Hyytinen lobbied city councilman Carl DeMaio; Sanders assistant Phil Rath; city development services division director Kelly Broughton; assistant director of development services Cecilia Gallardo; and assistant city attorney Donald Worley about the Molasky project, and the Robinson law firm was paid a total of $9000. During the first quarter of this year, his firm received $54,000 from Molasky; it lobbied Worley, DeMaio, Broughton, Sanders chief of staff Julie Dubick, and deputy city attorney Debra Bevier, among other city staffers.

According to a source familiar with the project, the Molasky forces want the city to condemn the disputed easement, claiming that public safety demands that the FBI field office be expedited.

On Monday of this week, a source in the office of Councilman DeMaio said that an internal memo from Mayor Jerry Sanders was expected to be sent to City Attorney Jan Goldsmith requesting that condemnation be undertaken by the city.

Will it happen? Molasky’s alliance with the government is astonishing to many who know his history. But to others, it is not unsurprising, given the rise of the national power and influence of Las Vegas over the last 30 years. One of Molasky’s favored politicians, Democrat Harry Reid — once city attorney of dusty Henderson, Nevada, and ex-chairman of the state’s Gaming Control Board — is now majority leader of the United States Senate, where he controls a vast network of campaign contributions and federal patronage.

“In an America so widely dominated by corporate and individual wealth, the Strip’s once disreputable Mob ethic of exploitation and greed has become in large measure a national ethic,” wrote Sally Denton and Roger Morris in The Money and the Power, their 2001 history of post-war Las Vegas. “To chart its rise is far less a walk on the dark and aberrant side of American life than a way to see the larger history of the nation more completely, and without illusion.”

The Molasky File

Irwin Molasky was born in St. Louis in 1927 and grew up Dayton, Ohio. He put in a year at Ohio State University before heading to Los Angeles, where, according to testimony he gave in January 1982, he helped his parents build and run a small hotel on Wilshire Boulevard’s Miracle Mile. At the age of 20, he said, he built a five-unit apartment house in Westwood. He later moved to Las Vegas and started building small houses, as well as the 18-room Pyramids Motel on the Vegas Strip.

His uncle, William Molasky, of St. Louis, had been indicted by a federal grand jury for tax fraud in August 1939, along with millionaire Moses “Moe” Annenberg, publisher of the Philadelphia Enquirer and owner of Consensus Publishing Company, tied to Pioneer News, a racing wire primarily patronized by St. Louis bookies. In November 1940, William, president of Consensus, pled guilty to a single charge of evading $57,800 in personal income taxes. He was sentenced to 18 months behind bars.

When William testified before the organized-crime investigating committee of Senator Estes Kefauver in June 1950, he issued a statement: “I have never engaged in bookmaking or in any commercial gambling. I have never had a financial interest in any gaming establishment; and my personal and business associates do not include bookmakers or professional gamblers…There are no gangsters, mobsters, racketeers, or other persons of questionable character connected with, interested in, or employed by Pioneer News.” William was represented before the committee by St. Louis attorney Morris Shenker, once referred to by Life Magazine as the “foremost lawyer for the mob in the U.S.,” whose most prominent client was to be Jimmy Hoffa.

Irwin Molasky ended up in Las Vegas in the early 1950s, he later recalled, where he met future business partner Merv Adelson, a Beverly Hills grocer’s son who was then-owner of Market Town, a 24-hour-a-day supermarket on Las Vegas Boulevard. Among their other ventures was the Colonial House, a bistro that enjoyed an edgy reputation as a haunt for high-class hookers, recounted Ovid Demaris and Ed Reid in 1965’s The Green Felt Jungle.

They soon linked up with Moe Dalitz, who had become one of the richest and most powerful denizens of the underworld after expanding the base of his hometown Detroit empire of gambling and other assorted rackets to Cleveland. Dalitz, it’s been said by some, first arrived in Las Vegas in the late 1940s, on a mission for the East Coast mob to keep track of Bugsy Siegel and the construction of his over-budget Flamingo hotel.

An example of how Dalitz did business is recounted by Michael Newton in his 2009 Dalitz biography, Mr. Mob. In September 1947, four men carrying submachine guns held up the Mounds Club casino outside of Cleveland, fleeing with between $250,000 and $500,000 in cash and jewelry. Another heist followed at the Continental Club. Cops took no action, but, according to Newton, “Moe Dalitz used his influence to learn the bandits’ names. A trial of sorts was held, sentence was passed, and manhunters hit the ground running. By March 1948, it is said, every one of the robbers was tracked down and killed.”

Molasky testified in January 1982 that he was introduced to Dalitz by Allard Roen, a Dalitz protégé, general manager of the Desert Inn, and convicted stock manipulator who was the son of notorious Cleveland gambler and bookie Frank Rosen. Molasky said Dalitz wanted him to build houses on the new golf course at the Desert Inn, which Dalitz controlled.

Shortly after that, according to Molasky, he and Adelson began building the for-profit Sunrise Hospital on Maryland Parkway. Its construction had been financed by loans from a savings and loan, but “we ran out of money and had to take in some investors,” Newton quoted Molasky as saying. When the deal was finally worked out, Molasky later testified, he and Adelson owned 45 percent of the stock, another 45 percent was held by Dalitz and Roen, and the remaining 10 percent by a doctor who put up the original $40,000 to help get Molasky and Adelson off the ground.

The first 62 beds of the hospital opened on December 15, 1958. Senator-elect Howard Cannon, cozy with Dalitz and his friends, cut the ribbon. Another prominent financier of the project remained low profile: Jimmy Hoffa’s Teamsters Union pension fund, which had advanced a million dollars at 6 percent interest in a complicated deal that obscured the origin of the money.

The loan was just the beginning of an exceedingly profitable relationship between the Teamsters, Dalitz, Molasky, and their partners. To guarantee patients, Hoffa ordered that all members of the Teamsters’ and Culinary Unions’ medical plan be forced to use Sunrise if they required hospitalization. It was “an early form of managed care,” Molasky later said.

The Teamsters also loaned $1.2 million to Dalitz, Roen, Adelson, and Molasky, along with fifth partner, Bernie Rothkopf, to build the Stardust Golf Course and Country Club and the nearby Paradise Palms housing development. “If Moe told them to make a loan,” said one observer quoted by Sally Denton and Roger Morris, authors of 2001’s The Money and the Power, “they made the loan.”

All along the way, FBI agents dogged virtually every movement of Dalitz, Molasky, and their associates, taking copious notes and filing voluminous reports. According to Newton, in February 1961 G-men wanted to charge Dalitz with “bribery, labor racketeering, and Mann Act violations (transporting women across state lines for ‘immoral purposes’),” but bureau director J. Edgar Hoover killed the idea.

In February 1962, writes Newton, the FBI followed Dalitz and his friend, entertainer Phil Harris, to San Diego, where they had “quite a party” with unidentified women before heading for Mexico in Dalitz’s yacht. The same month, Dalitz and New York mob kingpin Meyer Lansky were listed by FBI agents as being among ten mobsters “marked for ‘intensified investigations.’”

Somehow, though, charges were never filed. Then along came the flamboyant publisher of a glossy skin magazine to do what federal authorities never had. Bob Guccione, the owner of Penthouse, was in the midst of taking on Hugh Hefner’s Playboy for the pinnacle of the nation’s men’s publishing business, and the Brooklyn-born Guccione was ready to get down to some serious muckraking.

“I first met Bob Guccione at the London Penthouse Club in 1970,” wrote attorney Roy Grutman. “Dressed in a white suit and an unbuttoned Hawaiian shirt and sporting an array of gold chains, he looked like a psychedelic Beau Brummel.”

“After years of selling soft-focus crotch shots, Guccione wanted to do something more important, something Hugh Hefner would never try,” added Grutman. “If the Washington Post could bring down Richard Nixon, he would go after something even bigger.” The target was La Costa.

Headlined “La Costa: The Hundred-Million-Dollar Resort with Criminal Clientele,” the story ran in March 1975. “The primary founders of La Costa were syndicate ‘bluebloods,’” Penthouse charged. “La Costa has been controlled by the Moe Dalitz mob, which includes Dalitz, Allard Roen, Merv Adelson, and Irwin Molasky.… It was Dalitz who persuaded then-president of the Teamsters Union, James Riddle Hoffa, to finance Las Vegas casinos, starting with [Dalitz’s] Desert Inn and related properties, with Teamsters retirement cash.”

That May, Dalitz and his partners filed a $630 million libel suit against Guccione and his magazine.

By coincidence, Grutman, who handled the case for Guccione, had earlier been a guest at La Costa: “A vast complex of white motel buildings and a golf course that looked like a semi-arid cemetery, it reminded me of Las Vegas. There were fountains, doormen who looked like ex-boxers, and many peculiar guests. I realized how peculiar when the tennis pro arranged a doubles match for me, and one member of the foursome was a recently convicted recipient of bribes, former New York state senator Bert Podell.”

The libel case dragged on for seven years before it finally reached a jury. By then, “Roen and Dalitz dropped out as plaintiffs when it was decided they were public figures and could not prove malice against Penthouse,” wrote Grutman.

“In my opening statement, I told the jury we would prove La Costa was built and maintained for the benefit of the mob,” he recalled. “I explained how the resort was designed as a safe haven for criminals on working vacations. Since Mafia members prefer to conduct their business in person rather than over the telephone or by mail, La Costa, far from the cops and other cares of the world, was the perfect place to relax and make deals.

“‘People who are the heads of rackets not only go [to La Costa] but are given the run of the place,’ I said.

“The resort provided complimentary accommodations to mobsters of all persuasions, from Louis ‘the Tailor’ Rosanova...to the legendary Meyer Lansky, who explained in a deposition that he had gone to La Costa only twice to take walks and visit a sick acquaintance.”

Of Penthouse’s publisher, Lansky opined, “I’d rather be counted a pal of Moe Dalitz than that fucking Guccione, who peddles slime and pornography to the youth of the country.”

“In court,” said Grutman, “both Molasky and Adelson denied that Dalitz had opened the door to the Teamsters’ pension fund. The evidence showed otherwise. Since the two had begun a business relationship with Dalitz and Roen, the fourway partnership had been one of the pension fund’s best customers, accounting for millions of dollars in loans and additional millions in equity deals. As part of its loan agreement with La Costa, the Teamsters bought 15 percent of the resort at a bargain price, and later sold the same shares for a profit of millions.

“Not surprisingly, the Teamsters’ loan came with strings attached. The union demanded the right to appoint three members to the La Costa board of directors. One of them was Teamsters’ consultant Allen Dorfman, later indicted for accepting kickbacks. Adelson testified that all he really knew about Dorfman was that he was a decorated war veteran. Dorfman was murdered in Chicago in a gangland-style execution in 1983.”

The trial featured a sworn affidavit on behalf of Molasky and his partners by their friend, San Diego sheriff John Duffy, who maintained that “no evidence of criminal activity by La Costa or the management of La Costa…has ever been detected.” It later came to light that Duffy had privately expressed his own doubts about Dalitz and company and had received campaign contributions from La Costa and three of its principals, including Molasky, but not Dalitz.

There was also testimony on behalf of Penthouse by Mafia hit man Aladena “Jimmy the Weasel” Fratianno, who was barred by the judge from telling the jury about a meeting Fratianno claimed he’d had at La Costa with Chicago mob boss Sam “Momo” Giancana and San Diego hit man Frank “the Bomp” Bompensiero to plot the murder of TV star Desi Arnaz. To discredit Fratianno, La Costa’s attorneys dug up a deposition from six years earlier in which he said he’d never been to the resort. Fratianno responded that he’d lied “maybe 100 times” in the sworn affidavit, of which he said 90 percent “are [sic] lies.”

In May 1982, after 15 days of deliberation, the jury decided in favor of Penthouse, but Judge Kenneth Gale quickly overturned the verdict, ordering a new trial. Grutman discovered that Gale had once been Fratianno’s lawyer and eventually got the judge removed from the case. More than three years later, in December 1985, just as a second trial was to finally begin, the exhausted litigants announced a settlement. Only words, not money, changed hands.

Guccione and his magazine were praised by Molasky and partners for their “many personal and professional awards and distinctions.” For his part, Guccione said, “Penthouse…did not mean to imply nor did it intend for its readers to believe that Messrs. Adelson and Molasky are or were members of organized crime or criminals.

“Penthouse acknowledges that all of the individual plaintiffs, including Messrs. Dalitz and Roen, have been extremely active in commendable civic and philanthropic activities which have earned them recognition from many estimable people. Furthermore, Penthouse acknowledges that among plaintiffs’ successful business activities is the La Costa resort itself, one of the outstanding resort complexes of the world.”

Molasky — who did not respond to a request for an interview for this story relayed through Richard Worthington, president and chief operating officer of Molasky’s Paradise Development Company — survived and prospered. Today he remains one of only two La Costa case principals still standing. Moe Dalitz died in August 1989 at 89. Allard Roen died in 2008, age 87. Guccione succumbed last year at 79. Besides Molasky, only Merv Adelson, who was once married to TV news personality Barbara Walters, lives on at 81.

“Shored up by the Teamster underwriting at Sunrise and eased by governmental concessions and favorable contracts at every turn, the trio’s Paradise Development Company shaped the emerging commercial and residential map of the city,” Denton and Morris wrote of Molasky, Dalitz, and Adelson in 2001.

As the years went by Molasky built Nevada’s first enclosed shopping mall, the first high-rise office building in Las Vegas, and its first high-rise luxury condominium complex. He was hailed as one of the town’s biggest philanthropists, with gifts of acreage for the University of Nevada and construction of the Nathan Adelson Hospice, named in honor of Merv Adelson’s father.

He became a close friend of Jerry Tarkanian, whom he helped recruit from Long Beach State with a big-money contract to become head basketball coach at UNLV in 1973. “It would have taken 50 years for the university to become the Harvard of the West,” Molasky told the New York Times in July 1991. “We felt it would be a lot easier to achieve it by getting a renowned basketball program and then gradually going into the academics.”

The first chairman of the UNLV Foundation, Molasky skirted controversy in May 1990, when the Washington Post reported he had bet on college football, pro football, and baseball games in the 1980s in partnership with Las Vegas physician and bookie Ivan Mindlin, leader of a national sports betting operation.

Mindlin was indicted in January 1990 after the FBI shut down his computerized betting operation in a nationwide raid on the eve of the Super Bowl, January 19, 1985. Molasky testified before the federal grand jury that indicted Mindlin and avoided being charged in the case. In 1992, in a major embarrassment for the FBI and U.S. prosecutors, the defendants were acquitted in federal court in Las Vegas.

Later, in April of 2002, federal prosecutors in Chicago accused Mindlin of attempting to hire a lieutenant in the Chicago mob’s Elmwood Park street crew to wipe out a former gambling partner. Defense attorneys for a Chicago cop, alleged to have been the go-between in the plot, denied that it had happened, according to an Associated Press report.

As his power over Las Vegas grew, Molasky and his wife Susan became heavy donors to Democratic causes, including, in the 1990s, the Searchlight Leadership Fund of Senator Harry Reid, which Reid used to distribute campaign contributions to curry favor among Reid’s Senate allies, with the aim of ultimately electing him majority leader.

In May 2007, Molasky was an honored guest at a lavish tribute to Reid; that November Molasky was named to the Nevada Business Leadership Council of then–presidential candidate Hillary Clinton. (Molasky’s most recent federal contribution was $500 this May 12 to Democratic congressional candidate Kate Marshall.)

During the same period, Molasky began an aggressive push into the financing, construction, and leasing of office buildings for the federal government. The deficit was growing out of control, and officials wanted to push capital expenditures into future years in the form of lease payments, rather than pay for buildings up front, a much cheaper alternative in the long run.

With close ties to Reid and other Democratic and Republican power brokers, Molasky was well positioned to take advantage of the trend. Ironically, sources say, Molasky’s many contacts with federal law enforcement agencies over the years also may have put him on the inside track to build a series of FBI and IRS regional headquarters.

“The competitive landscape was changing. The returns from our traditional line of work were less, so there was a conscious decision to diversify our focus,” Richard Worthington, Molasky’s right-hand man, told the Las Vegas Business Press in June 2005.

Molasky has also successfully leveraged his political relationships with local governments; in Las Vegas, the redevelopment agency gave him a bargain on downtown land. “Three years ago, Molasky responded to a request-for-proposal for a new Internal Revenue Service headquarters in the region,” the Business Press reported. “He beat out six competitors by securing a five-acre parcel of city-owned land in downtown Las Vegas for $2,000. The property has been valued at $2 million.”

“It’s outrageous,” an anonymous Las Vegas developer told the paper. “I can fully understand the need for economic development and the need to generate jobs and redevelopment for downtown. But when you’re doing a build-to-suit and the land is donated, it eliminates all the risk. How can anyone else compete?”

“Public-private partnerships make-up 10 to 15 percent of our overall portfolio, but it’s growing. And we want it to play a larger role,” Worthington was quoted as saying at the time. “These projects are all about the economics. But whenever there is a leap of faith, there is an advantage if you’re a proven commodity. And when you’ve been in town for as long as we have, there’s credibility.”

Today Molasky is counting on many of the same factors to give him an edge in the fight over San Diego’s FBI project. As Molasky’s legal battle with his Sorrento Valley neighbor approaches an early trial next month, Worthington said in a telephone interview last week, ongoing settlement negotiations have proved fruitless.

Worthington wouldn’t provide any further details, saying the case was still being litigated, but other sources say that Molasky has been vigorously lobbying both the FBI and the city of San Diego to condemn the disputed easement and turn it over to Molasky on the grounds that prompt completion of the new FBI building is vital to public safety. That would require hearings by the city council, which might shed new light on Molasky’s operations here.

What the FBI’s options are if its deal with Molasky unravels aren’t known. Neither the General Services Administration nor the FBI responded to requests for comment regarding the situation. What is almost certain, based on his sworn declaration last month, is that the FBI project, just a few miles down I-5 from the legendary La Costa resort where the Mafia came to play, is Irwin Molasky’s last hurrah.

Thanks to Matt Potter

Tuesday, May 31, 2011

Peter Bart's "Infamous Players: A Tale of Movies, the Mob (and Sex)"

He was a tall, silver-haired man, square-jawed with a military bearing, always impeccably attired in a dark blue suit. It was only a few weeks into my Paramount job when I came to understand that His visits were a daily occurrence, but did not linger or chat with anyone other than (Paramount head of production) Bob Evans, nor did anyone on staff ever refer to him or acknowledge his visits. Korshak was the ghost who was always there but never there.

Evans had talked earlier about him once or twice, always in a manner that betrayed not only respect but near-reverence. Sidney Korshak was not so much his personal attorney (he never paid him) or even his mentor as he was his consigliere. And when Korshak arrived for an Evans audience, all other plans would be set aside. Whoever happened to be in the reception room would have to wait until the big man had come and gone from Evans' sanctum sanctorum. And this procedure was replicated by other power players at other offices in town, as I was to learn.

Sidney Korshak, it seemed to me, was the man who knew everything -- the big corporate deals as well as the personal peccadilloes. It was some time before I also realized that Korshak was the man who knew too much.

It was Korshak's role in life to dwell simultaneously in two separate and distinct worlds which, in his grand design, would remain hermetically sealed against each other. There was his celebrity world -- he liked to drop names like Kirk Douglas or Dinah Shore or Debbie Reynolds, or to casually mention that he'd just had dinner with Sinatra in Las Vegas, or with Nancy and Ronnie Reagan in Beverly Hills. But he would never mention his other friends, like Tony Accardo or Sam Giancana from the Chicago mob or Jimmy Hoffa from the Teamsters or Moe Dalitz from Vegas.

Korshak would allude to the corporate deals he made on behalf of Lew Wasserman or Howard Hughes, but he never confided what he knew about Bugsy Siegel's murder or Hoffa's disappearance.

Korshak's life was built around a web of secrecy, and he was convinced that he would always be able to move effortlessly from one world to the next. It was only later in his life that he, too, found himself trapped. As the dangers in his nether life became more ominous, Korshak was unable to extricate himself from his underworld bonds. The celebrities would continue to decorate his life, like glitzy toys, but the bad boys would always be hovering out there with their furtive demands and threats. …

Over the years my relationship with Korshak remained distanced but cordial. He never directly asked anything from me nor subjected me to his power games. When his son, Harry, began to produce movies at Paramount -- I never figured out precisely how this deal came about -- Korshak said to me he would "appreciate it" if I were to "look out" for Harry and provide advice if he began to stray. But when young Harry's career did not go well, Korshak was the first to inform his son that he would do well to pursue other career possibilities.In observing Korshak's superbly surreptitious maneuverings over time, I began to accept a reality none of us wanted to openly address. Sidney Korshak was a gangster, albeit a very civil and well-groomed gangster. The bad boys had achieved major clout in the entertainment industry, and Korshak, despite all his secrecy, represented the embodiment of that clout.

Ironically, while Korshak yearned for the trappings of "respectability," his pals in Hollywood venerated him, not for his cool or his great wardrobe or even for his lawyering skills, but rather for his fabled underworld ties. …Bob Evans, for one, had always romanticized the lore of the gangster -- hence his lifelong ambition to make the movie about the mythic, mobster-owned Cotton Club, which ultimately came to haunt him. Charlie Bluhdorn,founder of Gulf + Western, which owned Par, had a longstanding flirtation with the shadow world out of fringe financiers in Europe and ended up doing deals that resulted in prison sentences for his partners and almost for himself. (Paramount president) Frank Yablans subscribed to mobster mythology to such a degree that he even agreed to play the role of an underworld thug in a movie titled "Mikey and Nicky." He was in rehearsal on the film before an apoplectic Bluhdorn vetoed his participation (even the often reckless Bluhdhorn realized the potential jeopardy to his corporate image).

Thanks to Peter Bart

Friday, September 12, 2008

Chicago Outfit and New York Families Stretch their Connections Beyond Las Vegas to San Diego

On August 31, the Union-Tribune printed an obituary on the death of Allard Roen, one of the original developers of Carlsbad’s La Costa Resort and Spa. He was living there when he died August 28 at age 87.

The U-T’s obituary was a typical, dutiful encomium. It did not mention the background of one of Roen’s major partners in La Costa and other projects, Moe Dalitz. He was among the 20th Century’s most notorious gangsters, as the Senate Special Committee to Investigate Organized Crime in Interstate Commerce, known as the Kefauver Committee, pointed out in 1950 and 1951. In fact, a book that is now a best seller, T.J. English’s Havana Nocturne: How the Mob Owned Cuba and Then Lost It to the Revolution, notes that Dalitz, then 47, attended the famed Havana Conference at Cuba’s Hotel Nacional in late December 1946. According to English, a select group of 22 dignitaries caucused to strategize the American mob’s plan to make Cuba a Western Hemisphere vice haven. The group included Giuseppe (Joe Bananas) Bonanno, Vito (Don Vito) Genovese, Meyer Lansky of Murder Inc. and the Bugs and Meyer Mob, Charles (Lucky) Luciano, Luciano’s sidekick and “Prime Minister of the Underworld” Frank Costello, Carlos Marcello, Santo Trafficante Jr., Joe Adonis, and Tony (Big Tuna) Accardo, former bodyguard for Al (Scarface) Capone and later head of the Chicago mob. The book points out that Dalitz had been a partner with Lansky in the Molaska Corporation.

Timothy L. O’Brien, author of Bad Bet : The Inside Story of the Glamour, Glitz, and Danger of America's Gambling Industry, writes that Dalitz had run “the Cleveland branch of Charlie ‘Lucky’ Luciano and Meyer Lansky’s nascent Mafia.” Decades later, Dalitz was known as the caretaker “of underworld investments in Las Vegas.”

A Federal Bureau of Investigation official said in 1978, “The individual who oversees the operations of the La Cosa Nostra families in Las Vegas is Moe Dalitz,” according to James Neff’s Mobbed Up: Jackie Presser's High-Wire Life in the Teamsters, the Mafia, and the FBI.

After Prohibition’s repeal knocked out his bootlegging business, Dalitz went into the illegal casino business in southern Ohio and Kentucky. He then became the Big Boss in Vegas, arranging casino financing from the mob-tainted Teamsters Central States, Southeast and Southwest Areas Pension Fund and keeping track of the books at such spas as the Desert Inn, where Roen was also a key figure. In the late 1940s, Dalitz resurrected crooner Frank Sinatra’s sagging career by giving him gigs at the Desert Inn.

Roen, who in the 1960s pleaded guilty in the United Dye and Chemical securities fraud, joined with Dalitz, Irwin Molasky, and Merv Adelson to build Las Vegas’s Sunrise Hospital with Teamster funds. They tapped Teamster funds for other investments. That Central States fund was essentially a piggy bank controlled by Jimmy Hoffa.

The fund played a key role in San Diego. It loaned $100 million to San Diego’s Irvin J. Kahn, a mobbed-up financier who used the money to develop Peñasquitos. He also got a concealed loan of $800,000 from a tiny Swiss bank named the Cosmos Bank, which made other mob-related loans before being closed up by joint action of the United States and Switzerland in the 1970s.

But the Central States Teamster fund’s big investment was La Costa. The interim loans were made by U.S. National Bank, controlled by C. Arnholt Smith, named “Mr. San Diego” by the Downtown Rotary Club and “Mr. San Diego of the Century” by a reporter for the San Diego Union. Following the interim loans, the Teamster fund would assume the U.S. National loans. There was a cozy relationship. Frank Fitzsimmons, who became head of the Teamsters after Jimmy Hoffa was exterminated, used to come down to watch the Smith-owned minor-league Padres play. And Fitzsimmons would play golf in San Diego with politician Richard Nixon.

The Union-Tribune’s recent panegyric to Roen mentioned that in 1975 Penthouse magazine ran an article charging that La Costa was a hangout for mobsters, and the founders sued for libel. Here’s how the U-T summed up the result: “A 10-year court battled ensued until La Costa accepted a written apology from the magazine.” This is a rank distortion. A joke.

“San Diego leadership has a tendency to fall in love with people with big bucks who come into town,” says Mike Aguirre, city attorney. The La Costa founders “were one of the first big-bucks boys who rode into town, and the welcome wagon was driven by C. Arnholt Smith.” The U-T then, and to this day, protects the roughriders who bring their sacks of money to San Diego.

Aguirre was one attorney representing Penthouse in the suit. He and his colleagues parsed every sentence in the article. The Penthouse trial lawyer rattled off to the jury the names of those who had shown up at La Costa, including Hoffa, Dalitz, Lansky, and many other hoods. And here is the key: the jury exonerated the magazine, agreeing that it had proved that everything it said was true.

It turned out that the judge, Kenneth Gale, had formerly been a lawyer for Jimmy “the Weasel” Fratianno, a notorious mob hit man who had begun cooperating with the government. Fratianno was to testify for Penthouse about the mobsters who habituated La Costa. Gale wouldn’t let the magazine’s lawyer question Fratianno. Judge Gale had also previously represented an infamous union racketeer, as related by Matt Potter in a 1999 Reader story.

After Gale threw out Penthouse’s victory, the magazine thought it could win a retrial, but after ten years and $8 million in legal expenses, Penthouse issued an innocuous statement, saying that it “did not mean to imply nor did it intend for its readers to believe that Messrs. Adelson and Molasky are or were members of organized crime or criminals” (italics mine). Note that Dalitz and Roen were not included in that statement. The magazine praised Dalitz and Roen for their “civic and philanthropic activities.”

Then La Costa owners lauded Penthouse for its “personal and professional awards.” It was a détente sans sincerity.

Dalitz died in 1989 at age 89, leaving a daughter in Rancho Santa Fe. She is involved in many peace and politically progressive activities. Her attorney was once San Diego’s James T. Waring, who didn’t last long as Mayor Jerry Sanders’s real estate czar.

The information on Waring ran in detail in the Reader in early 2006. San Diego’s leaders, always friendly to moneybags, didn’t appreciate the story.

Thanks to Don Bauder

Wednesday, November 16, 2005


Crime Family Index