Supermob

by Gus Russo

  It only took two weeks for Del Coleman to knuckle under and settle with the SEC, agreeing (1) not to merge with Denny's or anyone else, (2) to testify about Korshak and others, and (3) to divulge Korshak's $500,000 finder's fee to other stockholders.73 The decision would eventually add Coleman to the growing list of Korshak's sworn enemies such as Howard Hughes and Marge Everett. Coleman's former partner at Seeburg, Herbert Siegel, recalled running into Korshak at the posh New York restaurant "21." "If your ex-partner isn't careful," Korshak intoned, "he's going to be wearing cement shoes."74

  *One source attesting to the Lansky-Aleman bribe is a well-known Mexican-American entertainer who was a frequent guest on Aleman's yacht, where he heard the former president brag about the relationship with Lansky. The entertainer relayed the information to the IRS's John Daley in L.A. and the LAPD's Frank Hronek, who corroborated the relationship.

  *Korshak friend Murray Chotiner would later arrange DeCarlo's presidential pardon from Richard Nixon.

  *Douglas was not the only Chicago-born Supreme Court justice with dubious business interests. Recall that Justice Arthur J. Goldberg was a partner with Ziffren, Drown, and Kirkeby in the San Diego Hotel investment (chapter 5).

  *Bloomingdale, who had a fetish for taping his trysts with Morgan, died of cancer in 1982. One year later, Morgan was beaten to death with a baseball bat. Three days later, Robert Steinberg, a prominent Beverly Hills attorney, said that he had received three videotapes that depicted orgies whose participants included Vicki Morgan and several other women, Bloomingdale, two high-level members of the Reagan administration, and a congressman. The tapes were reported stolen and have never surfaced.

  *Vesco, the undisputed king of the fugitive financiers, fled to Costa Rica in 1973 to avoid standing trial for the IOS theft. Shortly before Vesco left, he delivered $200,000 in illegal campaign contributions to Richard Nixon's reelection campaign. The money was stuffed in a suitcase and handed over to campaign treasurer Maurice Stans, who ended up paying a $5,000 fine for "nonwillful violation' of campaign-finance laws. Vesco was indicted in absentia. He was indicted yet again in 1989 on drug-smuggling charges. From Costa Rica, Vesco hopscotched to the Bahamas, Antigua, Nicaragua, and, finally, Cuba, where he has lived for the past two decades and, since 1995, been domiciled in a Cuban jail. Vesco was convicted in connection with an alleged scheme to defraud Cuba's pharmaceutical industry. Also arrested by the Cubans was Vesco's partner and houseguest Donald Nixon, nephew of the former president. Nixon was allowed to return to the United States, but Vesco went to the slammer. He gets out in 2009, when he'll be seventy-four. Vesco's Cuban wife, Lidia, was convicted on lesser charges and in 2005 was scheduled for release, but it has yet to occur.

  *In 1996, the author investigated this affair for Irish author Anthony Summers in furtherance of research for Summers's Nixon biography, The Arrogance of Power (Viking, 2000). Among the many interviews I conducted was the first-ever on-the-record conversation (2-11-96) with the key intermediary in the affair, Anna Chennault. Her information was corroborated by numerous other interviews and documents. (See Summers, 297-308.)

  †Hughes made certain that the previous Air West ownership would sell to him by convincing friends to temporarily dump their shares (over eighty-six thousand) to depress the company's stock. (Maheu and Hack, Next to Hughes, 229.)

  *Among the numerous credits of the Thalberg Award winner: Citizen Kane, Room Service, Top Hat, The Hunchback of Notre Dame, The Brothers Karamazov, Butterfield 8, The Prize, Sweet Bird of Youth, and Jailhouse Rock.

  †uchman's credits include Lost Horizon, Mr. Smith Goes to Washington, and Cleopatra.

  *An FBI memo notes another alleged Korshak side venture: "Korshak had a strong-room built at the home of [DELETED] in West Los Angeles. The purpose of this room, according to the police source, was for storing furs and jewelry but could also be used for the storage of papers and records" (FBI memo, DELETED to SAC L.A., 7-30-76, #90-183-172). Interestingly, Mike Brodkin, one of the Chicago Outfit's regular attorneys from the firm Bieber & Brodkin, once told a friend, "I bought a fur coat from Korshak's wife. I complained to Sidney because it was a piece of shit" (confidential int.).

  CHAPTER 16

  Coming Under Attack

  GOVERNOR REAGAN FACED a political embarrassment. As 1970 began, his state was mired in a strike by racetrack employees demanding a $4a-day raise in a desire for parity with employees of Eastern tracks like Belmont Park in New York. The work stoppage, wFiich was costing California $300,000 a day in tax revenue, had started the previous December 2 and by mid-January 1970 had become a serious financial issue, with $2 million already lost at Santa Anita alone. That track, the main one affected, missed its December 26 opening day and feared that the entire season, which was to end in April, would be a washout.

  Sid Korshak, who represented the track owners through their Federation of California Racing Associations, told the press that his clients were firm in their position. "I am the chief negotiator for the tracks," Korshak pronounced. "There is no question in my mind that their offer of a $2-a-day raise is the last and final one, even if it means no season at all this year."1 His counterpart, Leo Geffner, attorney for the striking AFL-CIO Service Employees International Union, began meeting informally with Korshak. "There have been a number of informal meetings," Geffner told the press, "including one held this past Tuesday at the Bistro Restaurant with only Korshak and myself."2 In fact, for a two-week period, Korshak arranged for all the negotiators to take suites at the Beverly Hills Hotel, where they worked over breakfasts, lunches, and dinners in the Polo Lounge.

  Geffner recently recalled not only the strike, but also the labor prowess of his longtime friendly opposition, Sid Korshak:

  I met Sidney in 1961 during my first negotiations with the Building Services Employees Union, which represented the pari-mutuel clerks, ticket sellers, ushers. Sid represented the tracks and I represented the Unions. The Building Services Union's president came out of Chicago and was very close to Sidney. The tracks wanted Sidney not because he was a particularly skillful negotiator, but because he knew all these people and he had the best entree to them. They wouldn't strike because of their friendship with Sidney.

  Sidney always felt that he was representing management, but he was very pro-union. He never had an inkling to break a union. His whole style was that you compromise to get an agreement and avoid a strike. Sidney could get the best deal because the union leaders were friends of his. Sidney got in trouble with the ownership sometimes because he didn't always tell them what he had agreed to. He just felt it was more important to get the strike settled. Once they went ballistic and had to call emergency meetings. They had to agree to it, but they were furious at him.3

  With the crisis beginning to nip at the governor's heels, a decision was made to make a personal, and private, overture to Korshak. Accounts differ as to whether Kitchen Cabinet member (and Korshak client) Diners Club president Alfred Bloomingdale suggested the gambit to Nancy Reagan, or Nancy brought the idea to Bloomingdale, but a close Reagan aide was soon sent to call on the Fixer. ("When Mrs. Reagan told Alfred to go to Sidney Korshak if he had to, I nearly fell over," said the factotum.)

  The Reagan emissary met clandestinely with Korshak at the Riviera's booking office on Wilshire "in a room with no windows, no name on the door, no listed address." After imploring Korshak to work some sort of compromise as a personal favor to Reagan, Korshak gave his pronouncement.

  "If that's what he wants, then the employees will return to work Monday morning," a smiling Korshak decreed, but on one condition. "I just want the governor and his wife to know who did them a favor."4

  On Monday morning, as Korshak promised, the twenty-eight-day-old strike ended and the tracks opened. Bloomingdale's aide said, "I'll be damned if the union pickets didn't suddenly disappear and the deadlock that had gripped both sides for twenty-eight days didn't miraculously melt away, and lo and behold, if it wasn't post time exactly when Sidney Korshak said it
would be."

  "I just heard he had union connections," Mrs. Reagan later told reporters. "I've still never seen any proof that he's a mob lawyer. And neither has Ron."5 The Bloomingdale aide said, "I don't know if Korshak ever collected on that favor because I never asked. But since then I've always thought of Nancy Reagan as the female version of the Godfather because she's certainly a woman who knows how to get things done without leaving any fingerprints."6 Thanks to Korshak, Californians now started referring to Reagan as a "great labor peacemaker."

  Although the California tracks were back to normal, the Illinois race venues controlled by CTE and its new parent, Transnation, were soon to enter a period of turmoil. The problems started when Korshak pal Phil Levin fired Marge Everett from her "golden parachute" management position on March 4, 1970. Over the last few months of the new relationship, Everett and Transnation fought bitterly over finances and other managerial decisions, with one CTE officer referring to the opinionated Everett as "a bitch."7 That is the well-known version of the story, but according to one Everett confidant, there was more. "Right after they made the deal to buy CTE, Marge met with Bluhdorn [of Transnation's parent, Gulf & Western] in New York," said the friend. "And Bluhdorn said, 'I got some bad news for you. These guys really don't want to be in business with you.' She said, 'What do you mean?' He explained that they, meaning the mob, had used Transnation to get the tracks. Even Bluhdorn had been used in the scheme. He told Everett that he had been threatened after the purchase and said that he was warned, 'You spin this off, you motherfucker, or we'll kill you.' "

  Lest Bluhdorn doubted their seriousness, Phil Levin let him have it. "Levin told him, 'The people I deal with don't fool around.' Adding salt to the wound, Bluhdorn said that her enemy Sidney Korshak was involved in throwing her out of Arlington Park. Then Bluhdorn tells her, 'These guys are buying out Gulf & Western's interest, spinning off to a company called Recrion.' "8 Recrion, it turned out, was the new corporate name of Parvin-Dohrmann, which had adopted the moniker to avoid the stigma attached to Parvin's SEC indictments.* If the source is correct, then a new picture emerges of the Korshak-Levin grand scheme: the original intent of the Parvin takeover was for Levin and Korshak to end up with not only four or more Vegas casinos, but control of Chicago racing, and a getaway retreat in Acapulco to boot. It is unknown how much of the enterprise would have involved silent investors from Levin's and Korshak's underworld connections, but it is hard to imagine that some form of tribute could have been avoided.

  After her dismissal, Marge Everett promptly sued Levin, pointing out his purchase of 79,200 shares for himself at $32 the previous summer, knowing that Transnation was going to make the CTE purchase at $46. Everett settled with Transnation when they awarded her 5 percent of Hollywood Park Race Track.9 (She eventually purchased another 64,000 shares to become the track's largest shareholder.) But Everett's need for vengeance was un-satiated. She brought in Chicago iiberdetective Jack Clarke to investigate Levin to try to have CTE's racing license revoked. What follows is Clarke's own description of his investigation:

  Jack Clarke (Courtesy Jack Clarke)

  I had been retained by Marjorie Everett to take over the security at Arlington Park.

  After she was fired, I got a phone call from her, and she said, "I want to investigate these people. They have broken their word with me." Her husband, Webb Everett, was still alive at the time. He was a terrific guy and he had warned her against it, but, as always, she knew it all. The idea being that she could expose them so they couldn't get a license. So I started to do an investigation of Phil Levin.

  I went to New Jersey and found out that Phil Levin, the shopping-center king, had been caught on a federal wiretap with the two top hoods [DeCarlo and DeCavalcante] in New Jersey.

  After New Jersey I found out that Levin spent a lot of time in Acapulco. So I went to Acapulco. When I went down there and checked into the Hilton, which was owned by the ex-president of Mexico, Miguel Aleman and Arnold Kirkeby, by sheer coincidence, I ended up with the room next door to Meyer Lansky and his attorney Moses Polakoff. They're in the next room. [Lansky in Room 993, Polakoff in 994.] So I'm on the wall listening to their conversation, and of course I didn't get most of it because they spoke Yiddish.

  Now along comes the federales and they go through the room and they're questioning Lansky and Polakoff.

  I wanted to see where he would go next. Lansky said to them, "Let me make a couple of phone calls and we can get the fuck out of here and figure out where we're gonna go."

  They got their bags, they got everything, and they're driving. I followed them and it was the strangest thing; they made a left turn on a road and went up the road. I did the same thing. It was toward a mountain, and this is about a half a mile or a mile from the Hilton, which is on the main strip. This is off the strip, but you go off the side of a mountain and you get up there and all of a sudden they disappeared. I found out later I drove right by the place, didn't even know it was there. Then I came back and I see a tiny sign, ACAPULCO TOWERS, and sure enough, there's their Jeep. They had moved from the Hilton to the Acapulco Towers.

  I see all these people meeting at the Acapulco Towers and at the pool and so on. And it's the Canadian Mafia, and Lansky was meeting with them. I literally burglarized the Acapulco Towers and found papers, and the registry, which showed quite a few people from Chicago being there. I did a background on them and they were all connected people—Jews and Italians.

  So I called a Mexican federaie and laid the story on him, that these two guys in room so and so in the Acapulco Towers had a collection of artifacts in their room—like historic relics and things, without permission of the government, which is a big deal in Mexico. It was a lie, but I knew it would get their attention.

  And then all of a sudden, Lansky disappears. I get the tip that he's left Acapulco. The maitre d' of the Acapulco Towers and I became good friends. He literally told me that when Lansky had to get out of town—Moe Morton called and said, "We got to get this guy out of town and we can't let anybody know"—he'd say, "No problem." He went over to the airport and spoke to his friends at the airport, who all loved him because he provided them with rooms sometimes. They said, "Sure, we'll put him on a plane." He personally drove Lansky out to the airport with Moe Morton or someone from the hotel and put him on a plane to Florida unmanifested.

  Within a half hour I found out that he was in fact gone and on a plane to Miami. And then I found out that about an hour into his flight he was put on the manifest in Acapulco. So I made a call to the DEA in Florida there and told them he'd be coming in and he was carrying drugs—another lie.

  I came back and gave my report to Marge Everett. So then she went to Governor Ogilvie and said, "We got these guys tied in with mobsters. Guys from the northwest side, mostly Jews." These were bookmakers, gamblers, shady guys. The report leads to the investigation of Arlington Park by the Illinois Board of Investigations [IBI].

  So they come up with an idea that I take [IBI investigator] Dick Gliebe and two other agents to Mexico and take them through everything I did. On that trip I found out where the corporate record-keeping was—in an open room—so we went in there and made copies of all the documents of who went there all the time, and there's Sidney Korshak, his brother Marshall. They all owned a piece of the Acapulco Towers. It was Moe Morton, Sidney Korshak, and eight others. That's what the papers stated—those were the original incorporators. They had two Mexican fronts, because you always had a Mexican have and buy property there.

  We brought back the documents and got all the names in the documents, and of course, Lansky's name is in there and Polakoff 's name, and some other interesting characters.

  Sidney Korshak became aware of Clarke's sniffing around, as Clarke later found out when he was asked by Marshall, "Why doesn't my brother want me to talk to you?"

  The period of upheaval for the Korshaks was made more pronounced by recent events within the family: on September 17, 1970, brother Bernard Kor­shak died,
and one year later, in September of 1971, brother Ted Korshak passed away, after years of battling drug demons. All that remained of the Korshak nuclear family were Sidney and Marshall, and by all accounts they cherished every moment they were able to spend together.

  Bringing the Moblo Paramount

  While Levin and Korshak were expanding Charlie Bluhdorn's investments in Acapulco and Chicago, the Mad Austrian himself was busy making his own controversial business deals. Although he was awaiting the SEC's pronouncement, Bluhdorn boldly continued to make inroads with organized crime as if he were immune to prosecution. The New Jersey hoods already had hooks into Gulf & Western via Phil Levin and Sid Korshak, but the Italian Mafia would soon join the G&W party, thanks to a stock swap made in the spring of 1970 by Charlie Bluhdorn. This time, Paramount Pictures would serve as host for the mob infestation.

  That spring, Paramount production executive Peter Bart saw an obvious early manifestation of the tawdry alliance. "When I was a young executive at Paramount, I noticed a sudden change in the type of people frequenting the lot," Bart wrote in 2000. "The diners in the commissary looked like a casting call for The Godfather."10 What Bart was witnessing was the effect of a new partnership between Bluhdorn and his mysterious Italian alter ego, Michele "the Shark" Sindona. Like Bluhdorn, Sindona was a high-flying, conglomerate-building businessman and student of Machiavelli (the subject of his thesis at the University of Messina). By the time he met Bluhdorn, Sindona had vast holdings in pharmaceuticals, textiles, publishing, metals, real estate, etc.