Sunday, November 18, 2007

Compromising Comps

The law-enforcement agencies tasked with bringing Spilotro down had problems of their own. The Las Vegas Metropolitan Police Department had been rocked by a scandal involving detectives providing information to the bad guys. The FBI also had some image problems.

Excerpted from The Battle for Las Vegas – The Law vs. the Mob

Starting in the late 1960s, the word within federal law enforcement circles was that agents working out of the FBI’s Las Vegas office were “freeloading” all over town. They were reportedly receiving free meals and drinks from the very individuals and casinos they were supposed to be investigating or keeping an eye on.

Richard Crane, head of the federal organized-crime strike force in Southern California and Nevada from 1970 to 1975, knew that this conduct, if true, had to be confronted and rectified. Crane complained to Justice Department officials in Washington and an inspection team was sent to Las Vegas to find out what was going on. After a couple of weeks the inspectors left, having supposedly chastised the offending agents. Crane was satisfied — until he began receiving word that the inspection team itself had taken advantage of the available comps! He heard reports that the investigators had enjoyed their stay and left without accomplishing anything; meanwhile, the agents assigned locally were continuing to take advantage of casino largesse. An Internal Revenue Service agent Crane trusted confirmed the allegations. Crane again complained to Washington, but when he left government service in 1975, the problems in Las Vegas continued unchecked.

Jack Keith, agent in charge of the Vegas office from 1974 until 1977, discussed the situation with a Los Angeles Times reporter after his retirement. “The precedent was set by one of the first agents in charge in Las Vegas. When he ate at a casino, he never even signed the check. He just got up and left.”

Keith offered an explanation of why things got out of hand. “The town was a cesspool. The atmosphere permeated everything. The old-timers were part of it and didn’t even know it. No man should have been allowed to stay in that town for more than three years. Some of the agents had been there for ten or fifteen years. I told them there was no such thing as a free lunch and that some day they’d have to pay for it.”

But allegations of taking a few meals or seeing some free shows weren’t the end of it, things got worse. When the Dunes and later the Aladdin were wiretapped, the men being taped were content to discuss golf, the weather, and women. Some of the agents working the taps believed that the lack of productivity was due to leaks originating from other agents. Similar to the situation the police found themselves in, other FBI field offices became reluctant to share information with their Vegas colleagues.

Another complaint to Washington resulted in yet another inspection team being sent to Sin City, in June 1977. This time the investigators weren’t compromised. Within a few months, a dozen local agents were censured, reassigned, or opted for early retirement. This housecleaning set the stage for the success of the battles yet to be waged.

Sunday, November 11, 2007

Tony Spilotro Keeps Busy in Vegas

Tony Spilotro found Las Vegas to be a paradise for a guy who had money to loan and the skills to make sure he got it back. But being an ambitious guy, he soon was involved with other things as well.

Excerpted from The Battle for Las Vegas – The Law vs. the Mob

In addition to loansharking, Tony had other money-producing irons in the fire, burglary and fencing stolen property chief among them. Burglars working for Spilotro eventually earned the nickname the Hole in the Wall Gang (HITWG). This handle resulted from their method of gaining entry into commercial buildings by making a hole in the wall or roof. But the thieves didn’t limit themselves to breaking into businesses; they stole from private residences and hotel rooms with equal zeal. Jewelry and cash were prime targets.

The size of the burglary crew fluctuated depending on the nature of the job. Some small capers might require only one or two men, while a major heist could need six or seven. In the latter case, extra help was sometimes imported from Chicago or elsewhere.

The proceeds from a job were split among Spilotro and the burglars. For a big haul, Tony was obliged to send some of the profit to his Chicago bosses. He also had to pay a certain amount of overhead. Valets, maids, desk clerks, and others who provided information regarding the value and activities of potential victims were compensated for passing on the information.

One of these scams was operated out of two locations, a major Strip property and a popular restaurant, and involved valet parkers. The valets identified affluent guests and struck up conversations to obtain additional information about the guest’s plans. For locals, valets could usually find address information with the registration papers in the vehicle. In the case of visitors, the name of their hotel was extracted during seemingly idle chitchat. Then, indicating long and short-term parking areas, the valet inquired as to how long the guest would be leaving their car. If the answer reflected a lengthy stay, the valet turned over the car to a burglar who, armed with keys to the residence, could conduct a leisurely burglary, using the victim’s own vehicle to transport the booty. For out-of-towners, a friendly desk clerk at their hotel was contacted for specific room information. If the target’s plans didn’t allow the time for an immediate theft, the information was filed away for possible future use.

So, depending on the size of the score and the number of ways the loot had to be split, an individual burglar might earn enough money from a job to be able to take a few weeks off and live it up. However, if through faulty intelligence or bad luck, the break-ins weren’t profitable, the thieves might be forced to strike again quickly just to maintain a basic standard of living.
Well, maybe “forced” is too strong a word. As a retired detective familiar with Spilotro’s burglars told me: “Those guys loved to steal. It was what they did. They could be sitting in a restaurant with ten grand in their pockets and they’d go across the street to a convenience store to steal a pack of gum. They wanted the big money, sure. But stealing, in and of itself, was a necessity for them. They were addicted to it.”

As Tony’s status grew, additional sources of income materialized, too. The Ant and his gang weren’t the only street criminals in Las Vegas, other crooks, not mob-connected, wanted to share in the bounty, and there was more than enough to go around. But Tony was running his budding underworld empire like a business. Legitimate entrepreneurs are required to get business licenses and pay related fees; if they’re caught operating without the necessary permissions, they’re subject to sanctions. Enterprising criminals wanting to get, or stay, in business also had to follow a certain protocol. They needed to get Tony’s blessing and pay him a share of their profits, known in gangland parlance as a “street tax.”

And it wasn’t wise to think you could simply ignore Tony and go about your business without his finding out about it. He knew everything that went on within the Las Vegas criminal element. No one did anything — from contract killings to burglaries, robberies, fencing stolen property, or loan sharking — without his approval and without paying him a monetary tribute where appropriate. And the sanctions for violating Tony’s procedures could be much more severe than those imposed by a governmental licensing agency.

Tony Spilotro was becoming ever more powerful, and his organization was growing.

Thursday, November 8, 2007

Tony "Joe Batters" Accardo and Joe "Doves" Aiuppa

Tony and Lefty had superiors back in Chicago they had to answer to. The two big bosses at that time were Tony Accardo and Joe Aiuppa.

Excerpted from The Battle for Las Vegas – The Law vs. the Mob.

Tony Accardo

Anthony “Joe Batters” Accardo was born in Chicago’s Little Sicily on April 28, 1906. At the age of five he enrolled in grade school, but by the time Accardo was 14 he’d become disenchanted with the education system. So had his parents, who, like many others of that era, filed a delayed birth-record affidavit, stating that their son had actually been born in 1904. The additional two years allowed Tony to drop out of school and begin working.

Accardo had several minor brushes with the law in his youth — among them a 1922 arrest for a motor-vehicle violation and a 1923 charge in conjunction with an incident at a pool hall where organized-crime figures were known to hang out — but he never spent a single night in jail.

Around this time the teenage Accardo joined the Circus Café Gang, named for its headquarters, the Circus Café on North Avenue. Among his fellow gang members was James Vincenzo De Mora, also known as Vincent Gibardi. De Mora would later make his mark as Machine Gun Jack McGurn. Under that name he became one of Al Capone’s most trusted hit men and was the reputed planner of the 1929 St. Valentine’s Day Massacre.

By 1926, the Capone organization was expanding rapidly and Big Al needed more soldiers for his army. McGurn, having experienced Accardo’s criminal abilities first hand as a member of the Circus Café Gang, recommended his friend to Capone as a possible recruit. Tony had already participated in nearly every racket and was a prime candidate for advancement. So it was that Accardo graduated from the street gangs of Chicago to Scar Face Al’s powerful Outfit. He was brought before Capone at the Metropole Hotel on Michigan Avenue and, grasping the hand of his sponsor, Machine Gun Jack, swore the oath of Omerta. Having taken the mob’s vow of silence, the 20-year-old Accardo became a made man in the Chicago Outfit.

Tony was one of Capone’s bodyguards on September 20, 1926, when eleven cars occupied by members of Bugs Moran’s rival North Side Gang attacked Capone’s Cicero headquarters, the Hawthorne Inn. Thousands of machine-gun rounds poured into the building. As soon as the bullets started to fly, Accardo pulled Al to the floor and lay on top of him to shield his boss from the onslaught. At the conclusion of the assault a couple of bystanders and several minor gangsters had been wounded, but miraculously, no one was killed.

Tony’s actions that day earned him a position as one of Capone’s regular protectors, and he soon began taking on more important assignments for the Outfit. He allegedly earned his nickname by smashing the skulls of two men with a baseball bat; when Jack McGurn told Capone about the beating, the boss was impressed and said, “This boy is a real Joe Batters.” The name stuck, and from that point on Tony was known as Joe Batters to his criminal colleagues.

Accardo also worked closely with Capone’s other top assassins; McGurn, Albert Anselmi, and John Scalise. It’s believed the four went to New York City in 1928 to kill Capone’s friend-turned-enemy, Frankie Yale, who was gunned down in Brooklyn. It marked the first time a Thompson submachine gun was used in a gang-related hit in the Big Apple.

Accardo continued to do the heavy work into the '30s. When the Chicago Crime Commission released its first “Public Enemies” list in 1931, Tony came in at number seven.

After Capone went to prison in 1931 for income-tax evasion, Joe Batters moved on to do the bidding of Al’s successor, Frank Nitti. In 1933, the new boss appointed Accardo as capo (captain) of a street crew, in command of a dozen or so soldiers. The promotion made Tony one of the top twelve members of the Chicago Mob.

In the early1940s, Accardo’s career took another giant step forward when many of his superiors were implicated in what was known as the Hollywood Extortion Case. As the men above them went to jail, Tony and others moved up the ladder. Eventually, two gangsters were in contention for the top spot: Tony Accardo and Dago Lawrence Mangano. Before the issue could be settled by a vote, the unfortunate Mangano was murdered. Unidentified assailants in a passing car fired shotguns and .45 pistols at him, riddling his body with more than 200 shotgun pellets and five 45-caliber bullets. With his competition gone, Accardo became the number-one man in the Chicago Outfit in 1945.

In 1946, Accardo’s people approached James Ragan, the owner of the Continental Press wire service that provided racing results to bookies, and offered to buy him out. It was an offer Ragan felt he could refuse, and he turned them down. To people with Accardo’s mindset, that was bad enough. But Ragan compounded his sin by bringing the Outfit’s proposal to the attention of law enforcement. Shortly thereafter he was gunned down on State Street in Chicago, then poisoned while recovering in the hospital. Ragan’s body had barely assumed room temperature before the Outfit had control of Continental Press.

In 1950, the crime commission officially recognized Accardo as the boss of Chicago’s crime syndicate. However, his reign was cut short in 1957 when an IRS investigation forced him to step down and turn control of the Outfit over to Sam Giancana. At Giancana’s request, Tony agreed to stay on in an advisory capacity. Most law enforcement personnel believe that Accardo was actually the brains behind the Outfit for the next several years, keeping a low profile behind a series of “bosses.” One such figurehead was another career criminal, Joseph Aiuppa, who ascended to the throne of the Chicago mob in 1971.

Joe Aiuppa

Joseph John Aiuppa was born on December 1, 1907, in Melrose Park, Illinois. According to a 1958 FBI report, an examination of Aiuppa’s Selective Service questionnaire submitted in 1940 showed that he only attended school until the third grade. Aiuppa’s record from the Federal Penitentiary in Terra Haute, Indiana, from which he was released on March 3, 1958, after serving a year and a day for an unspecified offense, stated that he left school in 1918, at 11 years of age.

After working for the Alming Greenhouse in 1922 and as a driver for the Midwest Cartage Company in 1925, Aiuppa purchased the Turf Lounge in Cicero, Illinois, in 1930. That same year he also became a partner in the Taylor Company, which manufactured gambling equipment.

The same FBI report indicates that Aiuppa was connected with the John Dillinger and Alvin Karpis gangs in the early 1930s. In 1935, he joined the Capone Outfit, then being run by Frank Nitti, as a muscleman and gunner. He went on to take control of the Outfit’s criminal activities in Cicero and the western suburbs of Chicago. In 1958, Aiuppa was recognized as the boss of the “strip,” a row of illegal gambling and strip joints located in Cicero.

In the mid-1950s, when the Senate’s McClellan Committee investigated organized-crime’s infiltration of labor unions, Joe Aiuppa was summoned. When he appeared to testify, the gangster exercised his Fifth Amendment rights 56 times.


In 1962, Joe Aiuppa earned the moniker “Doves” when he was arrested upon returning from a hunting trip in Kansas. Some 500 dead birds, all doves, were found in his possession, far exceeding the 24-bird limit.

Although Doves was vicious and loyal, he wasn’t considered especially bright or articulate. He rose through the ranks to become one of the top three men in the Outfit, but didn’t advance further for several years. His opportunity to move to the top came in 1971, when the current boss, Felix “Milwaukee Phil” Alderisio, was convicted of bank fraud. Backed by Tony Accardo, Joe Aiuppa was picked to fill the resulting vacancy.

So, in 1971, the two most powerful men in the Chicago Outfit were Joe Aiuppa and the behind-the-scenes “real boss,” Tony Accardo. Between them, the pair had only about 12 years of formal education, but nearly 90 years of criminal experience.

Wednesday, November 7, 2007

Lefty and Tony

Excerpted from The Battle for Las Vegas – The Law vs. the Mob

Two of the key figures on the Las Vegas scene during the mob’s heyday were Frank “Lefty” Rosenthal and Tony “the Ant” Spilotro. They were both born in Chicago and grew up in the same neighborhoods, where they met and became friends. Each became involved with the Chicago Outfit in a different capacity. Rosenthal, because he was Jewish and ineligible to become a made man, was connected simply as an “associate.” Spilotro was a full-fledged member of the organized crime family. Nevertheless, both men became highly adept in their respective areas of expertise. Following is a brief look at their lives through 1971, when Spilotro imposed himself upon Rosenthal’s relatively peaceful life in Las Vegas.

Frank Rosenthal

Frank “Lefty” Rosenthal was born in Chicago in 1929, the son of a produce wholesaler. However, his father’s business didn’t appeal to young Frank, who, as he grew up, became more interested in what was going on at racetracks and ballparks than in the price of oranges. His innate talent for sports wagering caught the attention of professionals, and at the age of 19 Frank was offered a job as a clerk with Bill Kaplan of the Angel-Kaplan Sports Service in Chicago.

Lefty developed his oddsmaking skills with the help of Kaplan and some illegal bookmakers, and he did so quickly. He was a natural when it came to formulating betting lines on sporting events. As the years passed, Rosenthal gained a reputation as one of the premier handicappers in the country, and a top earner for the Outfit’s illegal gambling operations. Lefty was on top of his game, but fame and fortune had their price.

In 1960, Rosenthal’s name appeared on a series of lists of known gamblers produced by the Chicago Crime Commission, and he decided it was time to get out of town. The following year Frank moved to Miami, hoping to keep a lower profile.

But his reputation and known affiliation with organized-crime had preceded him to Florida. It wasn’t long before the numbers guru came to the attention of the Senate’s McClellan Committee on gambling and organized crime.

In 1961, Attorney General Robert Kennedy asked the Permanent Subcommittee on Investigations to look into illegal gambling activities. Lefty was called to testify before Senator McClellan’s committee. During his appearance, the bookmaker was less than candid, invoking the Fifth Amendment 37 times. A few months later, Rosenthal was among a large number of bookies and players arrested as part of an FBI crackdown on illegal gambling. The Miami police then got in on the act and were soon arresting the 32-year-old on a regular basis. The same cops who had initially turned a blind eye to his bookmaking activities were now putting on some big-time heat.

Things got worse for Rosenthal in 1962 when he was indicted for attempting to bribe a college basketball player. Although he maintained his innocence, he eventually pled no contest to the charges.

Despite his altercations with the law, Lefty persevered, and was still in Miami when his old buddy, Tony Spilotro, arrived in 1964. However, the FBI was keeping an eye on Rosenthal and the presence of Spilotro, a suspect in multiple murders in Chicago, only increased the gambler’s unwanted visibility and made his public life more difficult.

By 1966, Lefty had his fill of Miami and decided to move to a location where people in his line of work were treated with a little more respect. He settled on the booming gaming city in the desert, Las Vegas. Not long after his arrival in1967, he bought into the Rose Bowl Sports Book, later relocating on to the Strip and the mob-controlled Stardust. Lefty was moving up fast and his future looked bright. But in 1968, something happened that had a major impact on his life, and eventually the lives of several others. He fell in love.

Geri McGee moved from California to Las Vegas in the late 1950s. An attractive woman, she worked as a topless showgirl at the Tropicana and Dunes and as a cocktail waitress and hustler around the casinos. When Lefty met her it was love at first sight, at least on his part. He was in a hurry to tie the knot, but Geri had reservations about settling down. Her concerns faded when Lefty placed a hefty stash of cash and jewelry in a safe deposit box for her to keep if the marriage didn’t work out. The two were wed the following year.

Initially, everything went well for the newlyweds. Geri liked to spend money and her husband made plenty of it. But in 1970, Lefty was indicted again for bookmaking. This was the kind of thing that could jeopardize his eligibility to be licensed as a casino manager. His links to organized-crime figures posed a similar threat, since the Nevada Gaming Control Board was likely to deny licensing upon learning of such relationships Consequently, in 1971, as Lefty ascended to a manager’s position at the Stardust and struggled to keep his nose clean, it came as an unwelcome shock when his lifelong pal, the increasingly notorious Chicago gangster Tony Spilotro, moved into town.

Anthony Spilotro

Tony Spilotro was born in Chicago on May 19, 1938. He was the fourth of six sons born to Italian immigrants Patsy and Antoinette Spilotro. Patsy opened Patsy’s Restaurant at the corner of Grand and Ogden avenues. Although the eatery became a hangout for members of the Outfit, there’s no evidence that Patsy had any involvement in criminal activity.

Like Lefty Rosenthal, young Spilotro shunned involvement in his father’s business. The street interested him more than spaghetti. In school, he developed a reputation as a tough kid, bullying and intimidating classmates and teachers alike. Several of his fellow students said he exhibited the “little man’s syndrome.” Some speculate that his diminutive size, around five-feet-five, may have earned him the nickname “the Ant.” Others say it was simply short for Anthony. Nancy Spilotro isn’t sure where the name came from, and thinks it was a creation of the press. Another relative believes it’s a derivative of “pissant,” an epithet assigned to Tony by a Chicago cop. In any case, it was a handle Spilotro didn’t like.

By 1955, his father had passed away and Tony was thrown out of school for continued misconduct. Now on the streets full-time, Spilotro took up with other kids in the same situation. He was soon the scourge of the neighborhoods, stealing cars, robbing stores and developing a reputation for viciousness. When Tony was 18, his actions caught the attention of Sam “Mad Sam” DeStefano.

DeStefano was connected to the Outfit, and operated a loan-sharking business. He was known to friend and foe as being completely insane. When he dealt with his enemies, his depravity knew no bounds. Mad Sam preferred to use an ice pick on his victims, but wasn’t above slicing, shooting, or incinerating them, depending on his mood. Although he was unstable, the bosses kept him around; he was a good earner. In addition to being an accomplished torturer and killer, Sam had another talent. He could spot street kids who demonstrated the same capacity for brutality that he had. DeStefano liked what he saw in Tony Spilotro and recruited him as an enforcer; Spilotro accepted.

On January 15, 1961, Tony took a break from his normal activities to marry Nancy Stuart. Born in Milwaukee in 1938, she was living in Chicago when they met. According to John L. Smith’s book Of Rats and Men, while the Spilotros were on their honeymoon in Belgium, Tony was thrown out of the country for possession of burglary tools.

Back in Chicago, Tony continued to work as one of Sam’s heavies until 1962, when he got his big break. On May 15, two minor hoodlums named Billy McCarthy and Jimmy Miraglia committed a fatal offense. They killed a couple of Outfit-connected guys — the Scalvo brothers — without permission, and they did it in a mob-inhabited residential area that the bosses had declared off-limits for murders. The powers-that-be weren’t happy and wanted the culprits found and taken care of. The man who accomplished that task was bound to achieve an elevated status within the Outfit. Allegedly, Mad Sam suggested that Tony take a stab at it.

Opportunity had knocked and Tony wasn’t shy about opening the door. In short order, he and his associates picked up McCarthy, but they still needed the name and location of the other condemned man. Their prisoner declined to cooperate, despite a severe beating. Surely, they thought, an ice pick to the scrotum would loosen the stubborn man’s tongue, but it didn’t. Getting frustrated, Tony decided it was time to quit playing nice and really apply some pressure. For McCarthy, it proved to be an eye-opening experience.

Putting McCarthy’s head in a vise, Tony resumed the questioning. Unfortunately for his victim, Spilotro didn’t allow Fifth Amendment privileges during his interrogation sessions. Each time McCarthy refused to respond, Tony turned the handle on the vise, compressing McCarthy’s skull. He finally obtained a breakthrough when one of McCarthy’s eyeballs popped out. This was too much for the tough and loyal McCarthy to bear; he gave up Miraglia. The bodies of both men were later found in the trunk of an abandoned car in what became known as the M&M Murders. After this successful debut, Tony became a made man in the Outfit.

In 1963, Mad Sam got into a dispute with Leo Foreman, a real estate broker and one of his collectors. Not long after, Spilotro and an associate named Chuck Grimaldi reportedly lured Foreman to the home of Mario DeStefano, Sam’s brother, in Cicero. The two beat Foreman, then dragged him into the cellar, where Mad Sam was waiting. Skipping an exchange of pleasantries, Sam got right down to business. He took a hammer to Foreman’s knees, head, groin and ribs. Next came twenty ice-pick thrusts, followed by a bullet to the head. The realtor’s battered body was later found in the trunk of an abandoned car.

In 1964, with the heat mounting over the growing number of unsolved homicides in Chicago, the Spilotros spent some time in Miami. They had many friends and acquaintances there, including Frank Rosenthal. In 1966, they adopted their only child, an infant son, Vincent.

As the 1960s came to an end and the ´70s began, the Chicago bosses initiated a cash-skimming operation involving the Las Vegas casinos under their control. They covered themselves by installing a front man as the gambling establishments owner, and appointing Lefty Rosenthal to manage the properties and keep an eye on things. This ensured that the casino count rooms could be accessed and cash removed before ever being recorded as revenue.

Having businessmen in place was great in theory, but there was a lot of money involved, and Las Vegas was growing by leaps and bounds. What if somebody tried to skim the skim, or otherwise rocked the boat?

To protect its interests from such problems, the Outfit needed someone on the scene with special talents, someone whose reputation served to discourage anyone from pilfering or causing other difficulties. And if intimidation wasn’t enough, it had to be someone who wouldn’t hesitate to take any action necessary to resolve the situation.

There was no need to recruit for the position; one of the Outfit’s current members fit the criteria perfectly. Tony Spilotro was on his way to Sin City.

Tuesday, November 6, 2007

Along Comes Moe

Not long after Bugsy Siegel’s death, another mob-connected guy arrived on the Vegas scene. The new guy had an asset that Siegel hadn’t. He knew Jimmy Hoffa and eventually brought Teamster Pension Fund money to Sin City.

Excerpted from The Battle for Las Vegas – The Law vs. the Mob

Morris Dalitz

Morris “Moe” Dalitz was born in Boston in 1899. His father, Barney, operated a laundry and taught Moe the business as he was growing up. The family moved to Michigan where Barney opened Varsity Laundry in Ann Arbor, catering to University of Michigan students.

As time went by, Moe opened a string of his own laundries in Michigan before branching out to Cleveland in the 1930s. Once there, he expanded his earning potential by getting involved in the bootlegging business and becoming associated with the Mayfield Road Gang. By the time prohibition ended, Dalitz had opened several illegal gambling joints. His two careers — legitimate business owner and criminal bootlegger and casino operator — would combine to lead him to Las Vegas.

In the first instance, Moe’s laundry business resulted in his developing a close relationship with a very important man: Jimmy Hoffa. This happened in 1949, when the Detroit Teamsters local demanded a five-day work week for laundry drivers. Laundry owners, including Dalitz, strongly opposed the union’s position. Negotiations reached an impasse, with each side unwilling to budge.

Dalitz, the shrewd businessman, saw a way around the issue. He had the owner representatives bypass the local’s negotiator, Isaac Litwak, and reach out directly to its former business agent and current leader of the Detroit Teamsters, Jimmy Hoffa. Agents of the laundry owners asked what it would take for Hoffa to intervene on behalf of the owners. Hoffa’s man said $25,000 would do the trick. The owners agreed. Neither side bothered to inform Litwak of the developments.

During a subsequent bargaining session, Litwak was confident he had the owners on the ropes. Late in that meeting the door opened and in walked Jimmy Hoffa. He told the group there would be no strike and he wanted the contract signed on the owners’ terms, with no five-day work-week provision. The stunned Litwak had no choice but to comply.

In the great scheme of things, this transaction wasn’t a particularly big deal. But it did open the door for something much bigger ten years later: multi-million-dollar loans from the Teamster Pension Fund to finance the mob-controlled casinos of Las Vegas.

Also in 1949, Moe Dalitz found a business opportunity in Vegas similar to Bugsy Siegel’s Flamingo experience. Another Strip hotel and casino construction project had been abandoned and was available to anyone who could come up with the right money. Dalitz, casino-savvy from running his own illegal businesses, and three of his cronies from Cleveland raised the funds and purchased the Desert Inn. The Strip’s fourth resort opened on April 24, 1950.

The 1950s saw seven more casinos added to the Strip, all allegedly backed by mob money from the Midwest and East Coast. The Sands and Sahara opened in 1952, the Riviera and Dunes in 1955, the Hacienda in 1956, the Tropicana in 1957, and the Stardust in 1958. One existing property changed names when the Last Frontier became the New Frontier in 1955. During that same time period the population of the Valley grew from 45,000 to 124,000.

The '50s also saw an increase in the number of celebrity weddings held in Las Vegas. Among the more notable, Rita Hayworth and Dick Haymes were wed in 1953, Kirk Douglas and Ann Buydens in 1954, Joan Crawford and Alfred Steele in 1955, Carol Channing and Charles Lowe in 1956, Steve Lawrence and Eydie Gorme in 1957, Paul Newman and Joanne Woodward, and David Janssen and Ellie Graham exchanged vows in 1958.

Moe Dalitz and Jimmy Hoffa combined to bring the first installment of Teamster Pension Fund money into Las Vegas in 1959. But the $1 million loan didn’t help to build a hotel and casino. It financed the Dalitz-controlled Sunrise Hospital.

To help assure that the new medical facility would have some business, Hoffa worked out a deal between his union members, their employers, and Sunrise for the provision of medical treatment. The employers agreed to pay $6.50 per month for each union employee into a fund that paid the provider of the medical services; Sunrise Hospital. In turn, the hospital promised to set five beds aside specifically for union members and provide basic medical care.

After this successful beginning, more Teamster money found its way to Vegas in the 1960s and beyond. The millions of dollars in loans were used to build or expand casinos, shopping malls, and golf courses. This was at a time when most lending institutions wanted nothing to do with entrepreneurs from notorious Sin City.

In 1966, the Aladdin and Caesars Palace joined the growing number of Strip resorts. The Teamster-financed Circus Circus opened in 1968.

More big-name celebrity weddings took place in Vegas in the ´60s. Mary Tyler Moore and Grant Tinker were married at the Dunes in 1962 and Betty White and Allen Ludden said their vows at the Sands in 1963. The Dunes hosted its second big marriage of the decade when Jane Fonda and Roger Vadim tied the knot in 1965. The next year, Xavier Cugat and Charo were hitched at Caesars Palace. Two mega-nuptials occurred in 1967, between Elvis Presley and Priscilla Beaulieu at the Aladdin, and Ann Margret and Roger Smith at the Riviera. Wayne Newton and Elaine Okamura were wed at the Flamingo in 1968. By the end of the decade, the valley’s population had reached 273,000, more than doubling in ten years.

As the years passed, Moe Dalitz continued to use his friendship with Jimmy Hoffa to facilitate loans sought by Las Vegas businesses. In spite of his power, Dalitz kept a low profile, remaining an intensely private man. He became heavily involved in charity work and in 1976 was named Humanitarian of the Year by the American Cancer Research Center and Hospital. In 1982 he received the Torch of Liberty Award by the Anti-Defamation League. Moe Dalitz died in 1989 of natural causes.

As the ´60s came to a close, Las Vegas was booming. It was an “open town” for organized-crime families nationwide, many of which had already established their presence. But one of them held a position of dominance — Chicago.

Monday, November 5, 2007

Podcast Interview

My interview with The Vegas Tourist can now be accessed on my new site at:

A Las Vegas Mob Pioneer

Excerpted from The Battle for Las Vegas – The Law vs. the Mob.

Benjamin Siegel

The first Strip casino appeared when the El Rancho Vegas, opened on April 3, 1941. The Last Frontier followed on October 30, 1942. The next Strip property to arrive on the scene was the one that is acknowledged as the first of those backed substantially by mob money: Bugsy Siegel’s Flamingo in 1946.

Benjamin Siegel was born in Brooklyn in 1905. While growing up he developed a reputation for having a vicious temper, which earned him the nickname of “Bugsy.” As a teenager in New York, Siegel befriended Meyer Lansky and, with a group of other young tough guys, operated the Bug and Meyer Mob. Eventually, they teamed up with future New York City crime boss Charlie “Lucky” Luciano. In spite of alleged involvement in crimes ranging from bootlegging to murder, Siegel was able to avoid being convicted of any serious charges.

Bugsy had the looks of a Hollywood leading man and made frequent trips from New York to Los Angeles. He enjoyed the company of famous entertainers, many of whom liked the idea of socializing with the increasingly powerful gangster. His infatuation with Hollywood led him to move west to help establish the mob- controlled Trans-America wire service to compete with the Continental Press Service, which provided bookmakers with the results of horse races from across the country.

In that regard, Siegel made an appearance in Las Vegas in 1942. His enterprise was legal in Nevada, where all potential clients held county licenses. He signed up a number of subscribers to the service, each paying a hefty fee. It’s estimated that Siegel’s income from the Las Vegas bookies was about $25,000 per month. During this brief visit, Siegel came to appreciate the tremendous earning potential of the Las Vegas casinos.

In early 1946 Siegel saw an opportunity to establish himself in the Las Vegas gambling business. A Hollywood nightclub owner named Billy Wilkerson had attempted to build a casino in Vegas called the Flamingo. The effort faltered and the partially completed resort was sitting idle. Bugsy packed his clothes and money and headed back to Vegas to take over the Flamingo project. He was confident that if his personal finances weren’t enough to finish the job, his hoodlum friends could be convinced to invest in his dream: building the first truly posh hotel and casino in the Las Vegas desert.

Bugsy hired the Del Webb Construction Company of Phoenix to complete the Flamingo. According to the book The Green Felt Jungle, the cost had initially been estimated at $1.5 million, but it ballooned to $6 million. The many reasons cited for the huge cost overrun included Siegel’s insistence that the Flamingo be built like a fortress, constructed of steel and concrete where less expensive materials would have sufficed. He also wanted the best in furnishings, importing wood and marble at exorbitant costs. Each guest room even had its own sewer line, adding $1 million to the bill.

So soon after the end of World War II, not all of the supplies Siegel ordered Webb to use were readily available; such circumstances proved to be only minor annoyances to Bugsy, who simply turned to the black market for his needs. He got whatever he wanted, but had to pay outrageous prices. To make matters worse, the illegal suppliers sometimes delivered a load of expensive merchandise during the day, then returned at night to steal it back. Finally, they showed up at the site the next morning to sell Siegel the same items all over again.

The black marketeers weren’t deterred from their larcenous actions by Bugsy’s fearsome reputation, and Las Vegas police officer Hiram Powell was equally unimpressed with the gangster. The bronco buster from Texas arrived in Vegas in 1941 to compete in a rodeo and never left. He was hired as a cop in 1942 and recalled his first encounter with Siegel in a 2002 interview.

“It was a winter morning in the mid-1940s. I pulled Siegel over for a traffic violation at East Charleston and Fifth Street [now Las Vegas Boulevard]. When he handed me his license there was a hundred dollar bill folded up with it. That was a lot of money at the time, but I let the bill drop to the ground. The last I saw of it, it was blowing down Charleston. I gave Siegel his ticket and let him go. Back then he had a reputation as a tough guy, but as far as I was concerned he was just another punk.”

Bugsy may have been just another thug to Powell, but the cop soon learned he was a well-connected one.

“About an hour after I stopped Siegel, I got a radio message to return to the station. The chief asked me what had happened between Siegel and me. I told him the story and then he fired me,” Powell recalled. The officer was reinstated a day later, but Siegel was never one of his favorite people.

Bugsy’s political clout, however, wasn’t able to help him when it came to his financial woes at the Flamingo. Quickly running out of his own estimated $1 million, he made numerous trips back to the Midwest and East Coast in search of additional funding. Over time, he was able to get his gangland associates to invest $3 million, but that still left him a couple million in the hole.

Seeing the Flamingo project as a bottomless pit, Bugsy’s hoodlum friends cut off their largesse. Some even began to wonder whether Siegel was really just an incompetent businessman or if something more sinister was behind the burgeoning cost of the Flamingo. Was it possible that Bugsy had sticky fingers and was stealing from his friends? Coming under that type of suspicion from his investment partners didn’t bode well for the would-be gambling tycoon, neither financially nor physically.

In June of that year, an incident took place that convinced Siegel’s New York pals that his ego was growing as fast as the Flamingo’s debt. James Ragan, the owner of Continental Press Service, was gunned down in Chicago in an attempted hit. Surprisingly, the man survived the attack and was recovering in a hospital six weeks later when he suddenly died. An autopsy revealed that Ragan had enough mercury in his body to kill him twice over. In spite of an around-the-clock police guard, the Chicago Outfit had apparently found a way to spike the dead man’s soft drinks with the poison.

The Chicago people quickly took over Continental Press, eliminating the need for the mob-owned Trans-America. Still, Bugsy needed his income from the wire service and figured his colleagues liked the extra cash, too. He also needed more money for the Flamingo. He flew to New York to discuss the situation with the board of directors of the Combination.

In a stunning presentation, Siegel told some of the most dangerous men in America that if they wanted Trans-America to stay in business, they’d have to give him $2 million, which happened to be the amount he owed Del Webb. That was the deal, take it or leave it. With that he walked out, leaving a room full of gangsters looking at each other in open-mouthed amazement.

Back in Las Vegas, Siegel was like a man possessed in trying to get the Flamingo ready for opening. He ordered everyone on twelve-hour shifts and seven-day work weeks. With the Vegas valley’s population at around a meager 40,000, additional craftsmen were flown in from Los Angeles, Denver, San Francisco, and Salt Lake City to supplement the local labor pool. Construction continued to be plagued by design flaws and poor workmanship.

Trouble was also brewing in Los Angeles, where the bookies were looking for relief from being forced to pay fees to both Chicago’s Continental Press Service and the still-operating Trans-America. They didn’t like it, but knew it was dangerous to cease doing business with either one. Siegel told them to go to hell. As the dissatisfaction grew, his attitude placed the local people running Trans-America in an increasingly tough spot.

Though unfinished, the Flamingo opened on December 26, 1946. The casino, lounge, theater, and restaurant were ready to go, and that was enough for Bugsy. Dressed in a white tie and swallowtail coat, his Beverly Hills girlfriend Virginia Hill by his side, the handsome gangster was ready for his big night. Unfortunately, it proved to be a disaster, a flop that was not well-received back east.

The day started out bad when planes Siegel had hired to bring in specially invited guests from Los Angeles were grounded due to poor flying weather in California. Even so, some entertainers and celebrities did make it to the Flamingo that night. They included Jimmy Durante, performing the leadoff act, followed later by the Xavier Cugat Band. Actors George Sanders and George Raft also appeared.

Siegel’s run of bad luck continued in the casino: It lost money. As word of the losses made their way to Bugsy during the evening, he became irate. He reportedly took his anger out on some of the guests, becoming verbally abusive and throwing out at least one family.

Two weeks later, as the losing streak continued, Bugsy closed the Flamingo’s doors. He decided to wait for the hotel to be finished to reopen, hopefully with better results.

As Siegel cooled his heels waiting for his next chance at gambling stardom, he received disturbing news from New York. Lucky Luciano, who had been exiled to Italy as part of a deal he made with the government to get out of prison after a racketeering conviction, had convened a meeting of the Combination in Havana and Bugsy wasn’t on the list of invitees. In Siegel’s world, a snub like that could bode ill for the person being excluded.

Sensing that he might be in trouble, Bugsy flew to Havana on his own to see Luciano. Meeting in the headman’s hotel suite, the talk eventually turned to the Flamingo. Siegel sang its praises, but Lucky was unimpressed with his underling’s descriptive phrases of glitz and glamour. He was more interested in where his partner’s $3 million investment stood. Siegel pleaded for more time, a year, to get the Flamingo open again and turn it into the revenue producer he was sure it could be.

Luciano dismissed Siegel with the admonishment that he should go back to Vegas and behave himself. The boss also ordered him to give up the wire service and let the Chicago Mob have the operation to itself. With that, the famous Siegel temper kicked into high gear. In no uncertain terms, Bugsy told Lucky what he could do with his orders, then stormed out of the meeting.

Few if any men talked to Lucky Luciano the way Siegel had and lived very long to tell about it. Bugsy would be no exception.

The Flamingo reopened on March 27, 1947. For the first three weeks it continued to operate in the red, and then things began to turn around. In May it was $300,000 in the black. Bugsy had been apprehensive after his return from Havana, but the positive financial reports calmed him down. His vision was finally being realized. The Flamingo was on its way to becoming the gold mine he’d predicted. He was sure Lucky and the others would be pleased they had listened to him. In fact, the Flamingo’s success was a case of too little, too late for Siegel.

On the night of June 20, a now-confident Siegel was relaxing in the living room of Virginia Hill’s mansion in Beverly Hills. Conveniently for her, she was away on vacation in Paris, but his trusted friend Al Smiley was with him. Suddenly, rifle shots rang out from outside the living-room window. Two slugs struck Siegel in the face. One of them ejected his left eye, which was found on the floor some 15 feet away from his body.

Benjamin Siegel had been murdered at the age of 41. Bugsy was dead, but Las Vegas was just coming to life.