by Gus Russo
On hearing of Niklas's careless cuffing of Rosselli, Korshak exclaimed, "Are you nuts? Check into a hotel and call me in the morning." When Niklas called back as instructed the next day, Korshak was at his minimalist best.
"Everything's okay," Korshak assured him.
"Are you sure?" demanded an unconvinced Niklas.
"Goddammit, what did I just say?" answered an irate Korshak. "Johnny's not going to do a fucking thing. Got it?" With that, Korshak hung up.
"Kurt's call to Sidney saved the day," Murphy said. "It was the last time we saw Rosselli." Niklas was more effusive: "I know Korshak saved my life."30 Months after the dustup, Niklas finally told Korshak that Rosselli had regularly made anti-Semitic remarks about him. "How come you never told me that?" Korshak asked. "I didn't want to cause any problems," Niklas answered.
Korshak's display of power illustrated that, although he was increasingly more "legit," he still maintained a powerful connection to old Chicago. Significantly, a 1974 FBI memo stated, "Korshak is undoubtedly best contact any LCN [La Cosa Nostra] anywhere has and conducts activity constantly for all LCN families, being in constant contact with [Gus] Alex whose assignment it is to 'handle him.' "31 On January 15 of that year, Korshak was observed meeting with Joe Batters Accardo in Palm Springs. According to an FBI informant, "The meeting concerned a liquor salesman union meetings [sic]. [Source] advised that election of officers to replace two who have recently died is to be held in future in New York. Korshak wanted to discuss with Accardo background of two candidates whom he is recommending . . . Korshak visited Accardo during the day and returned to Los Angeles in late afternoon."32
Korshak's name next surfaced that summer, albeit briefly, again in relation to his Nevada foe Howard Hughes. The Korshak linkage concerned testimony gathered after what came to be known as the Great Hughes Heist.
At one A.M. on June 5, 1974, four or five burglars entered the fortresslike office of Howard Hughes's holding company, The Summa Corporation, located at 7000 Romaine Street in Hollywood, in what was later concluded to be an inside job. The building contained twenty-five years' worth of handwritten Hughes memos, as well as personal and corporate files, and safes full of cash; it was the nerve center of his empire. In their four-plus hours on the scene, the burglars, who came equipped with acetylene torches, largely ignored the cash-engorged wall safes, more interested in a meticulous reading of the sensitive documents, occasionally remarking, according to the bound security guard's deposition, "Looky here, this is it!"
Interestingly, it was the sixth unsolved burglary of a Hughes office in the last five months. However, until this burglary, no papers had been taken—obviously the thieves were looking for something specific. This time, though, they hit the jackpot, filling up cardboard-box-loads of Hughes's personal files, and anywhere from $60,000 to $300,000, according to differing reports.33
There were many possible motives for the heist, including: with the Senate Watergate investigators hounding him, Richard Nixon had ordered the theft to destroy any evidence of the graft he had received from the billionaire over the years (on the very day of the burglary, Donald Nixon was to testify about the Hughes loans to the Senate investigators); or, Hughes himself had ordered it so that any record of the bribes and stock manipulations connected to his recent buyout of Air West would be beyond the reach of a Senate subpoena. FBI reports show that the Bureau was certain that the break-in was related either to Watergate or organized crime in Las Vegas. One Bureau report suggested that organized crime desired to steal Hughes's intel reports into the Mafia's stealing from his casinos "to maintain organized crime status in Nevada."34 The CIA even entered the investigation, the result of their secret alliance with Hughes (Project Jennifer) to raise a sunken Russian submarine from the floor of the Pacific.5' Like the FBI, the CIA also concluded that the affair had its genesis in a world very familiar to Sid Korshak. One CIA memo, based on a "fairly reliable source," stated, "The burglary in question was committed by five individuals from the Midwest and was mob sponsored . . . The contents are said to be highly explosive from a political view and, thus, considered both important and valuable to Hughes and others as well . . . Source believes [the material] is still being held in the Los Angeles area."35
Two weeks after the theft, according to later court testimony, a petty thief named Donald Ray Woolbright supposedly admitted to a witness that he held the stolen papers. Woolbright said he had been given them by "a man from St. Louis," adding that the papers, not the money, were the whole objective of the burglars, and that after the papers were lifted, they were spirited to Las Vegas.36
Vegas, the mob, the Midwest, Hughes—they all intersected the world of Sidney Korshak, whose name was first openly injected into the mystery when Woolbright showed the documents to Korshak pal Greg Bautzer and later to Korshak's nephew L.A. attorney Maynard Davis, hoping to fence them to Korshak. A witness who accompanied Woolbright testified that Bautzer expressed some interest in the papers, and Davis placed a call to "Uncle Sidney," who was supposedly out of town at the time. Davis then advised Woolbright, "If I were you, I'd drop it. You're playing with dynamite."
According to an LAPD report of August 25, 1976, Hughes's security chief Ralph Winte, who had earlier assisted the Watergate burglars in a Las Vegas burglary, said he had "received information that there were possibly two attorneys involved, Sidney Korshak and [Hoffa's St. Louis lawyer] Morris Schenker . . . if a sale [of the Hughes papers] was made, it would be through these attorneys." Schenker denied involvement, while Korshak, typically, refused comment.37
Although Woolbright was eventually charged in the crime, he profited from two hung juries in 1977 and 1978, leaving the break-in forever unsolved. Although the Senate Watergate Committee originally wrote a forty-page report that stated that the motive for the Watergate break-in was the NixonHughes bribery, that document was suppressed at the last minute. Committee chairman Senator Sam Ervin said, "Too many guilty bystanders would have been hurt."38 Committee member Lowell Weicker added, "Everybody was feeding at the same trough."'*
On April 5, 1976, Hughes died at age seventy aboard a plane en route to Houston, ostensibly of kidney failure. However, his dehydration, malnutrition, and the shards of broken hypodermic needles buried in his thin arms suggested other factors to many. In the ensuing years, over forty wills and four hundred claimants surfaced to vie for part of Hughes's $2 billion estate, which was eventually settled with twenty-two cousins in 1983.^ One year after Hughes's death, author Michael Drosnin was allowed to see and photograph the explosive papers purloined from the Romaine office, which filled three steamer trunks and numbered some ten thousand pages. The documents, which became the basis for his 1985 book, Citizen Hughes, in fact showed that Hughes had bought countless U.S. politicians, lock, stock, and barrel.
In 1974, Jerry Brown, the thirty-six-year-old San Francisco-born son of Korshak pal, and former governor, Pat Brown, made his own bid for the governor's mansion. Although Jerry's political beliefs were complex at best, one aspect was a given: his potential for success would be predicated on a continued relationship with Supermob powers. In his youth, Jerry began to display a more complex understanding of government's social contract than his father. Not only was he skeptical of the "backroom deal" style of his Democratic Party, Brown was, like Ronald Reagan, equally dismayed with exaggerated New Deal handouts and the concomitant explosion in the size of government. Young Jerry was actually naive enough to believe that individual responsibility and altruism could overcome all the ills that infected the American system. California historians Kotkin and Grabowicz wrote, "Brown's revulsion against the consumption-oriented, materialistic world of his father at first drove him away from politics."39 Indeed, Brown spent four years in a Spartan Jesuit seminary before gaining a degree from Yale Law School in 1964. (Years later he would spend two years working with Mother Teresa in India.)
After a brief stint on the Los Angeles Community College Board, Brown ran for statewide office, becoming sec
retary of state in 1970. Almost immediately after assuming office, Brown admitted to confidants that his ultimate goals were, as Reagan's had been, not only the governorship, but the U.S. presidency. And in a state where media savvy and access to deep-pocket donors were more important than experience, anything was possible. When the 1974 contest rolled around, Reagan chose not to run again for governor in order to focus on his White House aspirations, prompting Brown to throw his hat in the gubernatorial ring, opposing a weak Republican candidate, state controller Houston Flournoy.
Although Brown had some philosophical differences with the world in which his father operated, he was also well aware that he could never afford the cost of a campaign without going to the same gentry and Supermob that had supported his father. When Brown enlisted electronics mogul Richard Silberman, the son of a Russian-Jewish immigrant junkman, as his chief fund-raiser, it quickly became apparent that the same Chicago money that had transformed California in the forties would continue to play a key role in the seventies. (Silberman would be convicted in a 1991 FBI drug-ring money-laundering scheme.) Thus, with a brilliant media campaign, massive contributions from the likes of Lew Wasserman, Jake "the Barber" Factor,40 and later Sidney Korshak, Brown defeated Flournoy by 175,000 votes. When he would run for reelection, his association with Korshak especially would become a major point of criticism and even mockery.
Predictably, Governor Brown's terms were typified by seeming contradictions. On the one hand, he clung to his Jesuit training and refused the trappings of his office—canceling a raise for himself, refusing to ride in limousines, and failing to occupy the ultramodern, new governor's mansion, which he referred to as the "Taj Mahal." With his chief of staff, Gray Davis, whom some referred to as having been mentored by his Bistro lunch companion Sid Korshak, Brown adopted some standard liberal positions, such as vetoing the death penalty (overridden), favoring the right to choose abortion, strengthening environmental regulation and conservation, and protecting the rights of migrant workers. Brown's populist style proved popular with voters, and by 1976 his approval rating was 80 percent. Brown attempted to cash in on this popularity with a last-minute run at the Democratic presidential nomination, but he started too late, and Georgia's Jimmy Carter took control of the presidential national stage.
Curiously, Brown soon evolved into what Kotkin labeled a "born-again capitalist," courting not only Asian businesses, but also American titans such as Bank of America, ARCO Oil, the Irvine Corporation, Pacific Lighting, Kaiser Steel, Warner Brothers Records, and even some subsidiaries of the Howard Hughes empire. Brown even infuriated his environmentalist base when he championed the refining of Indonesian liquefied natural gas at a facility located on a pristine section of central-California coastline; and the company involved was represented by father Pat Brown's law firm. The overtures led one crestfallen Brown aide to say of his boss, "He's gone to the corporations because that's where Jerry thinks the power is at."
Reagan's New Teammale
Jerry Brown was not the only California pol to recognize the importance of maintaining good relations with former residents of 134 N. LaSalle Street. Brown's gubernatorial predecessor, Ronald Reagan, who had eyed the White House for years, chose as his 1976 presidential campaign chairman a man who maintained intimate associations with numerous individuals who once kicked up their heels at the infamous Chicago address. Although he was already friendly with 134's Sid Korshak, Reagan reached out for more support from those connected to the Chicago seat of Supermob power.
Fifty-three-year-old Senator Paul Dominque Laxalt (R-Nevada) had first met Reagan in 1964 when the two worked on the presidential campaign of Senator Barry Goldwater, himself no stranger to the Vegas gambling venues controlled by the mob and Supermob. The two men went on to become best friends when both became new governors of neighboring states (Laxalt in Nevada) in 1966. Chief among Laxalt's campaign policy planks was his defense of those in the state's casino industry; his mantra on the stump was a denunciation of the feds, whom he accused of harassing the good men purveying Las Vegas gambling. It was therefore little surprise that his staunchest supporters became those with the most to lose from the "harassment."
The first inklings of Laxalt's curious coterie surfaced that year, when he chose as his fund-raising chief one Ruby Kolod, a former member of Moe Dalitz's Mayfield Road Gang and Cleveland Syndicate (see chapter 9) and Dalitz's partner in the Desert Inn. Just one year before his fund-raising assignment, Kolod had been convicted in a murder-extortion plot in Denver, Colorado—his appeal was pending during the 1966 campaign.41 Others who were close to Laxalt were Moe Dalitz, Sid Korshak, Allen Dorfman, Lefty Rosenthal, and Hoffa's attorney Morris Schenker.
When Laxalt's term expired in 1971, he turned to real estate speculation as his next venture, despite that his net worth was only just over $100,000.
Laxalt's chief goal was to construct a first-class, multimillion-dollar casino-hotel in Carson City, to be named the Ormsby House. The proposal called for a 237-room "gambling palace" to be built on seven acres directly across from the state capitol; a secret part of the proposal was that Laxalt invest none of his own money in the project (although he ended up contributing just over $900). Although initial loans were secured from Nevada banks, Laxalt was well short of his financial goal. Thus, according to Las Vegas FBI agent Joe Yablonsky, Laxalt chose, as so many had before, to meet with the Fixer, Sid Korshak, who brought along Del Coleman for the strategy session. But before Korshak agreed to help, he wanted a couple political favors up front: Laxalt proceeded to accompany Del Coleman to Washington for his ongoing SEC Parvin testimony (see chapter 16), and to write a letter to President Nixon on behalf of Jimmy Hoffa's pending early parole. Laxalt's January 26, 1971, letter to "Dear President Dick" extolled the virtues of both Hoffa and "Al Dorfman, with whom I've worked closely the past few years." Laxalt laid it on thick, writing that "Hoffa and Dorfman and their activities here have been aboveboard at all times, and they have made a material contribution to the state."
Laxalt was soon jetting off to Switzerland with Del Coleman on Coleman's dime before visiting the First National Bank of Chicago, where they met with VP Robert Heymann, personal banker to Korshak pals Coleman and Joel Goldblatt—both had been set up with Heymann by Korshak, who was close friends with Heymann's father, Walter, also a VP of the bank. As promised, Heymann gave Laxalt a nonsecured $1 million loan, followed by three more loans totaling $8.3 million. The FBI said that the Outfit was "instrumental in the loans."42
"It was astonishing," the FBI's Joe Yablonsky would say later, "but while governor, Laxalt had a meeting with Dorfman, Korshak, and Coleman and then wrote a letter to President Nixon extolling the virtues of Jimmy Hoffa, and Korshak arranges his Chicago loan right after that. It was pretty blatant. Laxalt began to emerge in my mind as a tool of organized crime."43 In a secretly recorded conversation made a decade later, Laxalt's former sister-in- law said that her husband, Peter, who was also a partner in the Ormsby venture, accompanied his brother Paul to Palm Springs for the meeting, and that he told her "every hood in the nation was there."44
Not surprisingly, the largest individual investor in Ormsby House was another Korshak neighbor from 134 N. LaSalle, Hoffa pal Bernard Ne-merov, also an investor in and operator of Korshak's Riviera. Nemerov chipped in some $550,000 to Laxalt's casino, but according to Las Vegas FBI special agent Joe Yablonsky (1980-84), Nemerov had reason to know it was a sound investment. "Nemerov was there to get the skim out," Yablonsky said.45
More T i e s lo Ihe O u l f i l Are S e v e r ed
As Sid Korshak's favored California pols such as Reagan and Brown continued their ascendance, his own independence from the Chicago bosses became complete with the June 18,1975, murder of Sam "Mooney" Giancana in the basement of his Chicago home. A year before Johnny Rosselli met a similar fate, Mooney had placed himself in an impossible position, and thus, to those on the inside, the clipping of the sixty-seven-year-old former boss came as no surprise. Almost a yea
r earlier, Giancana had been booted out of his Mexican exile by local authorities and handed over to the Chicago FBI. Thereafter, he attempted to lie low in his small suburban house, making the occasional trip to Santa Monica to squire his current love interest, Carolyn Morris, a former wife of Broadway composer Alan Jay Lerner, and also a former roommate of actress Lauren Bacall.46
This seeming serenity did nothing, however, to mollify Joe Batters Accardo and his current street boss, Joey "Doves" Aiuppa, who had two major disputes with the aging don: Giancana continued to ignore Accardo's demands that Chicago be cut in on the vast profits he had accrued in Mexico (the result of offshore gambling operations with Hy Larner),47 and the fear that Giancana, who was extremely ill, would likely testify before the Senate in the coming weeks, as per a subpoena.* It was well-known that Giancana would do anything to avoid going to prison again, especially in his frail condition. Thus it was decided that, for the good of all, he had to go. Recent interviews with a close personal friend of Aiuppa's driver Dominic "Butch" Blasi (previously Giancana's driver) indicate that Blasi late in life admitted to the shooting, as so ordered by Accardo.
On July 30, less than six weeks after Mooney's whacking, former Teamster boss and Korshak associate Jimmy Hoffa disappeared forever. His fate, like Giancana's, was sealed when he refused to toe the line of the new Teamster powers—in this case, President Frank Fitzsimmons, who had, during Hoffa's incarceration, forged real Mafia alliances with the likes of East Coast bosses Tony Provenzano of New York and Russell Bufalino of Pennsylvania. Not only had Hoffa recently declared his desire to retake the union, ahead of the timetable implicit in his early parole, but he had also, like Giancana, given signals that he would "sing" to the feds, in this case, the FBI. Both the feds and outside Hoffa experts came to believe that Provenzano and Bufalino used a trusted Detroit mobster named Anthony Giacalone to lure Hoffa to his fatal encounter. The FBI called Giacalone's propensity for violence in Detroit "legendary."48