Supermob

by Gus Russo

  His legit businesses notwithstanding, Dalitz was never more than a wink and a nod away from his underworld roots, and when the call came to join the Supermob's first major flirtation with Las Vegas, Dalitz, who realized its vast potential, jumped at the chance. According to the late Chicago FBI agent Bill Roemer, after World War II, Lansky dispatched Dalitz to Las Vegas to check on Siegel. Bugsy's murder came soon after Moe made his report.22 As Dalitz later said, "All in all, the opportunity in Las Vegas seemed too good for me and my associates to pass up. I was fifty years old then and I could breathe easier in this climate."23

  With Dalitz's lungs thus relieved, the Supermob's thirty-year affair with Vegas had its first tryst in a getaway named the Desert Inn.

  Th e " Dl"

  The Desert Inn was the dream child of Wilbur Clark, a gambler from San Diego, California, with the personality of a showman. When Clark came up $90,000 short for the initial construction in 1947, work was halted and the wooden structure sat unfinished on the future Strip for almost two years. In 1949, a partnership bailout offer miraculously arrived from an unlikely lo­cale: Cleveland, Ohio—Dalitz's Mayfield Road Gang. The Little Jewish Navy offered to put up the outstanding $90,000 start-up, plus $3.4 million, in exchange for 74 percent ownership, and they would be more than happy to let Clark call it Wilbur Clark's Desert Inn—so much the better for the hidden owners.

  Dalitz's proposal to Clark embodied the proverbial "offer he couldn't re­fuse." Two years later, the Kefauver Committee's Senator Charles Tobey asked Clark about the men who'd come to his "rescue."

  "Before you got into bed with crooks to finish this proposition, didn't you look into these birds at all?" asked the senator.

  "Not too much. No, sir," answered Clark.

  "You have the most nebulous idea of your business I ever saw. You have a smile on your face but I don't know how the devil you do it."

  "I have done it all my life," Clark replied.

  Wilbur Clark thus became the first major front for the Vegas Supermob contingent. In short order he went from being the gregarious "Ambassador of Vegas" to a frightened shell of a man who provided cover for the man later called "the Godfather of Vegas," Moe Dalitz. When the Nevada Tax Commission hesitated to deliver the requisite license (thanks to a damning report on Dalitz submitted to the commission members by the Chicago Crime Commission's Virgil Peterson), "juice" was promptly supplied by Galveston mafioso (and DI investor) Sam Maceo to Senator Pat McCarran, and the precious document appeared as if by magic.24 Dalitz became vice president of the resort, while Ruby Kolod assumed the coveted casino manager post. Interestingly, 13 percent shareholder Sam Tucker opened an office in Chicago at 134 N. LaSalle, home turf of the Korshaks, the Supermob, and the Teamsters Pension Fund. Real estate entrepreneur Allard Roen, the son of Cleveland gambler Frank Rosen, came aboard as manager; Roen would later plead guilty to a $5 million stock swindle.25

  Finally, after an over-three-year gestation, the $6.5 million, three-hundred-room Desert Inn opened on April 24, 1950. Guests of the new resort were greeted by the DI's exterior trademark, a Painted Desert scene highlighted by a large Joshua-tree cactus. The hotel's rooms featured a modified Western decor, and the countless amenities included:

  • Five hundred air-conditioned rooms and suites

  • The luxurious 450-seat Painted Desert Room

  • A twenty-four-hundred-square-foot casino, one of Nevada's largest

  • A ladies' salon/health club

  • The Strip's only eighteen-hole golf course, situated on its 272 acres of property

  • The Sky Room Lounge

  • For those with more bizarre tastes, the hotel offered choice viewing of A-bomb mushroom clouds when the nukes were tested a mere sixty-five miles away.

  For the opening gala, Dalitz's pal Lew Wasserman sent MCA's Edgar Bergen, the Donn Arden Dancers, and the Ray Noble Orchestra. Van Heflin, Bud Abbott, and Lou Costello were among other MCA clients sent as audience shills.

  "That's when all the gangsters started coming," said Barbara Greenspun, publisher of the Tas Vegas Sun.26 She was right: also in the crowd that night to protect the interests of hidden investors were mafiosi such as Black Bill Tocco, Joe Massei, Sam Maceo, Pete Licavoli, and Frank Milano.27

  On the first Saturday after the opening, the Desert Inn casino lost $87,000 in one eight-hour shift, $36,000 to one lucky winner. But it was the best publicity any resort could ask for. People flocked to the resort, and by the following Friday, the casino had recouped its losses, with the first week's profits totaling $750,000.

  In the coming years, the DI featured some of the most exciting acts in show business, among them one Frank Sinatra, who made his Las Vegas debut in the DI's Painted Desert Showroom on September 13, 1951. "Wilbur Clark gave me my first job in Las Vegas," the Voice recalled in 1992. "That was in 1951. For six bucks you got a filet mignon dinner and me."*

  The Supermob's presence at the DI was not limited to Moe Dalitz. TheGodfather movie producer Gray Frederickson said there was at least one more notable stockholder. "Sid Korshak owned a piece of the Desert Inn," Frederickson said recently. "We went to Vegas one time, and I remember that Johnny Rosselli was running the hotel the time Sid introduced us."28

  "Korshak knew Rosselli very well," said former DI public relations man Ed Becker. "He was working with Korshak. They were part of the same crime family, with the tough guy. Rosselli told me this personally." Becker remembered that it was Rosselli who first introduced him to Korshak. "Rosselli said to me, 'Sid is the labor guy. I'm the guy who makes the decisions, and the labor problems are up to Korshak.' Of course, he took care of Korshak. Rosselli also said, 'I'm this representative of the motion picture industry. And Korshak is the labor organizer.' "29

  Luellen Smiley, the daughter of Bugsy Siegel's L.A. partner Allan Smiley, also remembered Korshak with Rosselli. "I met Sid at La Costa [Country Club in California] when we went down with Johnny Rosselli. Sid helped my father, who they tried to scapegoat after Ben was killed. They wanted to deport him. I also remember that Gus Alex was a good friend of both Dad's and Sid's."30

  The FBI reported that when he was in Vegas in those early years, Korshak stayed either at the DI, or at Dalitz's home. When at the DI, both Korshak and his friends were comped.31 Dalitz himself, in a moment of candor, admitted to the FBI that Korshak not only represented some of the "big name acts" that played the hotel, but he also "represents some of these Chicago hoodlums."32

  MCA's Lew and Edie Wasserman were frequent guests at the Desert Inn, where, according to MCA executive Berle Adams, Lew was a big gambler. According to Wasserman's former son-in-law Jack Myers, Dalitz used to bounce Lew's daughter Lynne on his knee. "Lynne used to call him Uncle Moe," said Myers.33

  The money came so easily now to Dalitz that he reached out to his old distillery partner for an offshore expansion of the business. In 1956, Meyer Lansky, who had been functioning as Cuba's gambling czar for its dictator, Fulgencio Batista, since the midthirties, gave Dalitz the stewardship of Havana's Na­cional Hotel and Casino, a jewel of the Kirkeby-Hilton empire.34 And like many other Supermob associates, Dalitz would be among the first to hide his vast casino skimming profits in an untouchable offshore Caribbean bank, the notorious Castle Bank in the Bahamas (account number 50436), also a favorite of Abe Pritzker and his partner Stanford Clinton—Pritzker's lawyer Burton Kanter had founded the tax-dodging institution (see chapter 19) ,35

  After years of watching Dalitz, and compiling a 2,729-page file on him, the FBI described his Las Vegas career thus: "Dalitz has long been one of the top hoodlums directing Las Vegas operations and allegedly may be a front for various other top hoodlums throughout the United States and elsewhere . . . It is noted that he is allegedly in close contact with numerous national and international hoodlums such as Meyer Lansky, Doc Stacher, Sam Giancana and others."*'36

  Soon, more gang-controlled facilities such as the Sands (owned by numerous New York Commission members, the Outfit, Frank Sinatra, and Korsh
ak's mentor Abe Teitelbaum) and the Sahara (Al Winter of Portland) opened for business. In most cases, the hotels were owned, or fronted, by an upperworld consortium, while the hoods managed the all-important casinos. "The hotels and the lounges were just window dressing," said one Outfit member. "All that mattered were the casinos." The FBI was fully aware of the sham ownerships, describing the owners of record in one memo: "These men have been or are acting as fronts for certain unnamed and undisclosed owners in these hotels and casinos. The fact that these men can meet either at Palm Springs or in Beverly Hills in relative privacy gives them the opportunity to plan further moves, move funds, and work out financial and real estate plans with their attorneys."

  During this period, Chicago's interests, as coordinated by Korshak mentor Curly Humphreys, were limited to minor investments in the casinos. In partnership with the New York Commission, the Chicagoans began investing in other Sin City casinos, such as the New Frontier (formerly the Last Frontier) and the Thunderbird. By 1952, with newly empowered local crime commissions placing gangsters in many major cities under the microscope, the hoodlum exodus to Nevada increased dramatically. The Kefauver probe only fueled the hoods' desire to go more legit, except now the Chicagoans coveted an increasingly bigger piece of the pie than they enjoyed at the DI. They got it when they built the Riviera Hotel in 1955, arguably the hotel where Sid Korshak's presence was most strongly felt.

  " T h e R i v"

  / have all the big bosses at my place.

  SIDNEY KORSHAK37

  At the very time they were looking to expand, the shady Midwestern investors descending on Las Vegas were given an unlikely boost by the Nevada statehouse. In 1955, in an attempt to create a public relations blitz extolling the beauty of "gaming," the legislators passed a regulation that barred large publicly held corporations from owning stock in the casinos. Las Vegas historian Hal Rothman described the consequences, writing that "[the regula­tion] had a dramatic unintended consequence. Instead of freeing gaming from the influence of organized crime, the state inadvertently strengthened „ TO its power.38

  The Chicago Outfit and the Supermob rushed through the opening created by their new best friends in Carson City. With a group of Miami investors such as Sam Cohen as fronts, the Chicagoans secretly financed the $10 million Riviera Hotel & Casino, which opened next to the Thunderbird on April 19,1955. The Riviera's ostensible Miami backers formed the Riviera Hotel Company, which in turn leased the land from the Gensbro Hotel Company, a corporation operated by the Gensburg brothers of Los Angeles and Greg Bautzer's law partner Harvey Silbert, also from Los Angeles. Lesser L.A. stockholders included Arthur "Harpo" Marx (5 percent), Milton "Gummo" Marx (3 percent), Julius "Groucho" Marx (percentage un­known), and former Chez Paree singer Tony Martin (2 percent). All were close friends of Sid Korshak's, and all believed him to be a senior partner, albeit one with no written record to prove it.

  "The Riv" represented the Strip's first high-rise resort, its nine stories comprising the casino, shops, three hundred deluxe rooms, and a style that changed the desert skyline radically. An architectural departure for Las Vegas, the neomodern Riviera looked as if it belonged on Collins Avenue in the Miami Beach home of its "investors." Besides the requisite casino, the Riv showcased the Starlight Lounge, with a 150-foot, free-form stage bar, and a ceiling from which hung brass lighting fixtures in a starburst design set against a teal-blue sky canopy. With Sid Korshak's "intervention with the Chicago Family," singer Dean Martin would be given points in the Riv and his own lounge, Dino's Den, from where he would hold court in his inimitable style.39 There was the ten-thousand-square-foot Clover Room—the largest Vegas showroom yet—with six separate elevations and a forty-by-eighty- foot stage, the first to use four large, revolving turntables. On opening night, the Clover Room, which sat five hundred for dinner and seven hundred for the late show, featured pianist Liberace, who was being paid a whopping $50,000 a week (an unheard-of sum at the time, considering homes could be bought for less than $10,000). Liberace's absurd paycheck established a precedent that would forever alter nightclub economics, setting a benchmark that world-famous haunts such as the Copacabana in New York, the Coconut Grove in Los Angeles, and even the Chez Paree in Chicago, without the gaming tables to underwrite the entertainment packages, couldn't approach.

  For evening dining, the wormwood-paneled, Western-styled Hickory Room Restaurant offered an open hickory fire and a large rotisserie blazing in view of the diners. Less formal fare was afforded in the coffee shop, later called Cafe Noir.40

  What all these rooms had in common was that Sid Korshak, when in town on one of his frequent trips from Beverly Hills, was a fixture in each. Hollywood screenwriter Tom Mankiewicz recently described Korshak's Vegas world. "Sidney would hold court in his booth in the Riviera coffee shop, a wonderful restaurant which served great Chinese food," said the successful movie scribe. "It was like a bad scene out of The Godfather; people would stop by the booth to talk to him and move on. He did business from booth one in the Cafe Noir coffee shop. He'd sit down, and for an hour and a half people would come and pat him on the arm, or someone else would come sit down. He was quite genial."41 Legendary Riviera lounge singer Sonny King, w7ho worked the Starlight Lounge from the opening days, remembered Korshak calling the shots at the Riv. "Korshak was the 'head administrator' of the Riviera," King recalled in 2004. "He was too expensive a lawyer to pay him hourly. So he got this sort of VP job."42

  The Riviera (courtesy John Neeland, the Riviera Hotel)

  Dean Martin (center) at a Riviera roast (John Neeland, the Riviera Hotel)

  Korshak soon began referring to the Riv as his "club," becoming, according to a government source, "boastful about his wealth and influence . . . stressing to his friends how he hires and fires most of the entertainers at the Riviera."43 Korshak's clout at the Riv also served to demonstrate his increasing hold over the Teamsters and its new president, Jimmy Hoffa. In October 1961, when Korshak checked into the Riviera unexpectedly during the conference of the International Brotherhood of Teamsters, he was quickly given the presidential suite of the hotel, necessitating the unceremonious removal of Hoffa from said suite. An irate Hoffa was relocated into smaller quarters down the hall.44 That same month, Korshak repaired Hoffa's bruised ego when he arranged for Hoffa's stay at the Beverly Hills Hotel.45

  Korshak's string-pulling at the casino-resort was well-known to law enforcement personnel, although finding proof of the financial kickback was something else again. Dean Elson, the retired FBI special agent in charge (SAC) of the Bureau's Nevada outpost, remembered the cat-and-mouse game he played with Sidney. "I ran the Nevada office for eight years in the sixties, and we never got any directive from Chicago that we should surveil him," Elson said recently. "But my friends always informed me when he was coming and going. When a guy like Sid Korshak comes to the Riviera and they move Jimmy Hoffa out so that Korshak can have his suite, you realize his importance. I had friends who informed me when it happened. If I had to bet on it, I would say that Korshak was a silent partner in some casinos. But he was bright—I couldn't catch him."46 Despite Washington's seeming lack of interest, Elson's field office generated a memo that stated, "The Las Vegas Office believes that Korshak is one of the keys to the Riviera Hotel and Casino operation . . . any investigation of Korshak should definitely be discreet and circumspect in every detail.47

  Connie Carlson of the California Attorney General's Office had a source close to Riv investor Harvey Silbert, who told him, "A syndicate headed by Sidney Korshak leased the casino at the Riviera Hotel." Silbert added that since he was the attorney for the hotel ownership, "he was in a position to know."48 Senate investigator Walter Sheridan heard the same thing from a Vegas source who told him, "Sidney Korshak has become the front man for the Riviera Hotel in Las Vegas with the title of executive director or man­ager." 49 The FBI noted, "Telephone calls made in 1960 indicate the probability that the undisclosed owners in the Riviera were James Hoffa through Allen M. Dorfman
and Paul Dorfman and Sidney Korshak."50 Lastly, the Bureau had two other sources that named Korshak as one of "the behind-the- scenes operators of the Riviera.51 These sources also witnessed Kor­shak attending Riviera board meetings.52

  Often, Korshak's position at the Riv enabled him to bail out friends who were tanking at the tables. One such Hollywood pal, Paramount's production chief Bob Evans, recalled a night when he was down a bundle at the craps tables, when Sidney showed up and called the bloodletting to a halt. Evans wrote that Korshak, "the silent owner of the Riviera," first asked the croupier how much Evans had lost.

  "Forty-three thousand, Mr. K.," came the answer. With that, Korshak lectured Evans about the stacked odds at the craps tables.

  "I could take the markers and use them for toilet paper," Korshak said. "But you're payin' every fuckin' cent. Before you shaved, you shot crap better than you do today. No one stands at the table all night and ends up winning."

  "Cut it out Sidney, will ya?" Evans pleaded.

  "Listen, schmuck," Korshak continued to lecture, "if I didn't brass knuckle ya now, within a year you'd not only be out of a job, you'd be on the lam from the collectors. Flicks is a tougher gamble than craps. Instead of doing your homework, you're standin' here like a pigeon.53