by Gus Russo
*Davis had begun at the local level, but the horizon expanded quickly for the future governor. At home in Los Angeles, he worked on the mayoral campaign of the late Tom Bradley, then spent six years as the appointed chief of staff to Governor Jerry Brown. Davis won his first elected position in 1982 as a representative to the California State Assembly, from the Beverly Hills district of Los Angeles County. For eight years, between 1986 and 1994, Davis was state controller of California and chaired the California Council on Criminal Justice. As the state controller, Davis exposed fraud in California's medical welfare system and helped reduce a runaway budget deficit.
*Younger's aides confirmed that Korshak had received the letter, signed by campaign chairman Charles Bakaly, but explained it had been sent out in error after volunteers handling the solicitation mailing had been ordered to drop Korshak's name from their list.
†Davis was a law-and-order candidate whose views were seen as resonating with the electorate.
*The top four in order are Time Warner (which owns WB television), Disney (ABC), Viacom (CBS), and NewsCorp (Fox).
*Among Ross and Silverman's many groundbreaking disclosures: Wal-Mart's use of child labor in Bangladesh; Colombian drug-cartel links to Israeli mercenaries; Iraq's attempted purchase of nuclear "triggers" in 1990; and ABSCAM, BCCI, and Russian Mafia scandals. Ross was the first reporter to name Mohamed Atta and describe him as the ringleader of the World Trade Center and Pentagon attacks. He was also the first to report on Zacarias Moussaoui's role in the attacks and his questioning by the FBI prior to September 11. Ross's Primetime Thursday story about the hijacking of United Airlines Flight 93 featured the first airing of transmissions between the plane's cockpit and air traffic controllers. Among Ross's awards: three 2003 National Headliners Awards; three 2003 CINE Golden Eagle awards; the 2003 Gerald Loeb Award for business investigation; a 2002 Emmy for Outstanding Investigative Journalism; a 2002 IRE award for Investigative Reporting; a George Polk Award; and a 2002 Grade Allen Award.
*In 1980, Trudeau married Jane Pauley, Tom Brokaw's NBC Today show cohost. In 1984, Trudeau took on Korshak pal Ronald Reagan with his New York musical Rap MasterRonnie.
*In November 1977, Kliendienst, whom Hauser had paid $250,000 to set him up with the Teamsters, was sued by the State of Arizona for his role in the swindle. He and two others eventually agreed to settle the case and pay $150,000. However, Kleindienst's troubles weren't over yet, because the Arizona State Bar then looked into the matter, recommending in March 1981 that Kleindienst be suspended from practicing law in Arizona for a year. Although he was acquitted of perjury before the bar in October, the earlier recommendations were followed through and he was suspended in 1983, forcing him to quit the Tucson law firm where he worked. He was later readmitted to the Arizona bar.
*Margie Korshak Associates, to this day a Chicago PR powerhouse, specializes in film and theatrical work, handling many of the city's entertainment-related accounts. Margie also shares many of her uncle Sidney's former clients and associations, such as Chicago's Hyatt-Regency, Arlington Park Racetrack, the Sherman House Hotel, and the Michael Reese Hospital. She readily admits to being a frequenter of the La Costa Resort {Today'sChicago Woman, November 1989). Margie was recently remarried, to Charles H. "Corky"
Footnote cont'd
Goodman, the billionaire son-in-law of Henry Crown's brother Irving, both friends and clients of Sidney Korshak. Goodman sits on the board of Crown's General Dynamics and is vice chairman of Henry Crown & Company.
CHAPTER 21
The True Untouchables
U.S. WARNED MOB MIGHT ELECT A PRESIDENT IN 1980.
HEADLINE FROM A 1969 NEWSPAPER ARTICLE1
IN 1980, sixTY-NiNE-year-old Ronald Reagan made his second run at the U.S. presidency, using his tried-and-true anticommunist polemic, and attacking incumbent Jimmy Carter for a "weak" foreign policy. With the man he called his "best friend," Senator Paul Laxalt, as campaign manager, Reagan was especially critical of Carter's handling of the Iranian hostage crisis, in which revolutionaries had held sixty-six U.S. citizens and diplomats at the U.S. embassy in Tehran since November 4, 1979. (In later years, rumors surfaced that Reagan had reprised Nixon's 1968 "October Surprise" tactic to ensure his victory—this time the candidate's team was said to have secretly met with Iranians and promised to supply them with weapons if they would just wait until Reagan was elected to release the hostages.)*2
Supermob watchers took note that the first major union to endorse Reagan was the two-million-member, and highly corrupted, Teamsters. It turned out that there was good reason to be suspicious of the endorsement. Allen Friedman, uncle of Teamster Cleveland boss and future national president Jackie Presser, later wrote that he had given Reagan aide, and his future attorney general Ed Meese, a suitcase full of money for the campaign war chest, the payment made at the behest of Jackie's father, Bill Presser, the often-convicted former Cleveland Teamster head.3 In his autobiography, Friedman wrote, "[Presser] had a suitcase that he said was full of money. He told me to take it to Edwin Meese for Ronald Reagan. This I did, meeting both Meese and another man only long enough to pass on the case, explaining who sent it."4
The problem was that any alliance with the likes of the Pressers was fraught with corruption traps. An FBI report noted that Cleveland Mafia underboss Angelo Lonardo was heard in a wiretap saying that after Jackie Presser's eventual ascension to the union's presidency, his status in the Teamsters was in fact a boost for the mob. The report summarized, "They felt it was better to have someone in office that they knew, and besides, it would add prestige to the Cleveland family to be in control of the head of the Teamsters." 5 Interim Teamster boss Roy Williams, himself under the umbrella of the Chicago Outfit via its subsidiary in Kansas City, later said that Presser told him of his long-standing alliance with the Cleveland Mafia: "He told me that the mob was split in Cleveland, and he's afraid he picked the wrong side."*6 Practically at the same time that Reagan's team received Presser's cash-filled briefcase, Jimmy "the Weasel" Fratianno, as part of his witness protection deal, was telling a federal grand jury that Presser told him that he took his orders from James Licavoli, the boss of the Cleveland Mafia.
Soon thereafter, at a meeting at La Costa, the Teamster board voted for the Reagan endorsement.
In addition to his traditional anticommunism themes, Reagan campaigned on his anti-FDR and anti-LBJ platform—against both New Deal and Great Society federal assistance programs—as he insisted that, in essence, if the rich got richer, the spoils would "trickle down" to the masses.
"How do you tell the Polish one at a cockfight?"
"He's the one with the duck."
"How do you tell the Italian one?"
"He's the one who bets on the duck."
"How do you know the Mafia is there?"
"The duck wins."
JOKE TOLD ON THE CAMPAIGN TRAIL BY RONALD REAGAN*
On November 4, Reagan-Bush trounced Carter-Mondale with a 489-49 electoral college majority. (In the subsequent 1984 contest, the Reagan-Bush ticket easily outdistanced the Democratic ticket of Mondale-Ferraro with nearly 60 percent of the popular vote and an electoral margin of 525 to 13.)
On December 12, 1980, Paul Ziffren's law partner—and Reagan's attorney general-elect—William French Smith attended Sinatra's sixty-fifth birthday bash in Palm Springs, also attended by Sid Korshak.7 Two weeks after the Sinatra gala, advance copies of Jimmy Fratianno's biography by Ovid Demaris (The Tast Mafioso) began to circulate, describing in vivid detail the organized crime connections of Sinatra, Korshak, and Reagan Teamster ally Jackie Presser, among others.8
Despite heavy interest in Hollywood, Demaris told the press his book's film potential was being sabotaged by the likes of Frank Sinatra and Sidney Korshak, noting that the pair were "killing me in this town." He told Chicago's Channel Two that Bob Evans had been "eager" to buy the book, but that Korshak had stopped it. Referring to Hollywood, Demaris added, "Sinatra's very powerful in this town. He h
as friends, he makes phone calls. And Korshak is tight with heads of studios. A lot of people in this city are afraid of him." On cue, Irv Kupcinet rose to Korshak's and Sinatra's defense, noting that Evans told him his alleged interest was a total fabrication, "which is how some critics have described the book," Kup added.9
LAXALT TO HAVE A KEY ROLE IN REAGAN'S WASHINGTON
NEW YORK TIMES, NOVEMBER 28, 1980
Within minutes of Reagan's January 20, 1981, inauguration, the Americans held hostage in Iran were released, after 444 days in captivity. As president, Ronald Reagan moved quickly, despite the revelations of Fratianno, to repay the Teamsters by appointing Jackie Presser as senior adviser to his economic affairs transition group, prompting outgoing attorney general Benjamin Civiletti to remark that he could not fathom "how anyone trying to develop a new government could conceive of making this [Presser] selection." The icing on the cake was Reagan's appointment of William French Smith as attorney general, and Paul Laxalt as the new chairman of the Republican National Committee, nominations that were met with a degree of disbelief in law enforcement circles.* Allen Friedman later wrote, "[Under Carter] we didn't dominate White House labor policy as we had under Nixon and as we were about to under Ronald Reagan."10
Once installed, Reagan decreed massive budget cuts at the Justice Department, reductions that meant, according to the FBI, that "no new undercover operations would be authorized in fiscal 1982 against organized crime or White Collar crime." As painstakingly recounted by Dan Moldea in his books Interference and Dark Victory, Reagan weakened the Organized Crime Strike Force, a prelude to its complete destruction in 1989.11 With supporting legislation introduced by Senator Laxalt, new attorney general Smith set to reshuffling the Department of Justice staff so as to shift priorities to "street crime." Interestingly, D.C. U.S. Circuit Court judge David Bazelon claimed that Reagan's self-proclaimed war on organized crime was actually too tough, and that his measures would jeopardize the targets' civil liberties.12
Sidney's " Son " Takesa Fall
All the while that Reagan had been beating up on Jimmy Carter on the campaign trail, Carter's DEA was fixing its sights on Korshak's protege Bob Evans, whose drug problems were known throughout the film community. On Memorial Day weekend, 1980, Bob Evans and his brother Charles were busted in a DEA sting for attempting to purchase five ounces of pure pharmaceutical cocaine, and Charles's attorney forbade Bob from bringing in Korshak: "He's too highly profiled" was the dictum.13 Reluctantly, Evans agreed, but going along with his brother's advisers would widely be perceived as one of the most nonsensical things Evans would ever do.
According to various Korshak acquaintances, the Fixer had been distraught over Evans's lifestyle for years. "Sidney was like a godfather to him. I think he was trying to set him on the straight path," said Jan Amory. "I think Sidney liked the glamour and the girls at Bobby's, but Sidney was not into any of the drugs or any of that stuff. He would have two whiskeys and that would be it." Johnny Rosselli's goddaughter Nancy Czar recalled that Korshak had been running the gauntlet for Evans with his employers. "Sid saved Bobby Evans's ass," Czar said. "Bobby had a coke problem, and it was because of Sidney that he was allowed to stay on the Paramount lot. I saw Bobby sitting with Sidney at the Bistro, saying, 'Yes, yes, yes,' as Sidney was advising him." One friend, who wished to remain anonymous, recalled that during this period Korshak had told his wayward friend, "You don't come around. You're not a good man; you're not good to your family What kind of a Jewish man are you, drinking and putting this stuff up your nose? Promise me you'll never do it again." To which Evans was alleged to have said, "I promise. I promise. I promise."
Despite his failure to call in Korshak, word traveled fast, and Evans's mentor was soon calling his wayward sybarite.
"I hear you're in trouble," said Korshak. "What's going on?"
"Nothing's wrong," Evans lied.
"If I find out different, I'll break your head" came Korshak's retort.
Evans was next summoned to Bluhdorn's Connecticut estate, where he was practically ordered by the Mad Austrian to enlist Korshak.
"You dumb idiot," Bluhdorn bellowed just inches from Evans's nose. "Korshak could settle this sitting on the toilet."
In California, Evans's Hollywood crowd was equally dumbfounded. "You didn't bring in Korshak?" asked a dumbfounded Greg Bautzer. "I'm not hearing right. Do you know who his closest friend is? A top guy at the DEA. They go back more than thirty years. Went to college together, schmuck."
According to Evans, Bautzer was not yet finished with his rant. He told Evans a typical Korshakian tale wherein two well-known performing brothers were busted for cocaine possession the previous year right in the middle of their show in Anaheim. From jail, one of the brothers made his only allowed phone call—to Korshak. "Twenty minutes later he was out and the big man hardly knew him," said Bautzer. "And you didn't call him?" An incredulous Bautzer, who feared his prestige would be tarnished because he had brought Evans to Bluhdorn years earlier, sighed in disbelief, "And you're the guy who made Paramount number one."
But Evans was committed to his brother's legal strategy, which in fact gained him a mild sentence. Instead of receiving a possible one-year prison term, Evans was put on probation and ordered to pay a $5,000 fine and produce a thirty-second antidrug public service announcement (PSA) film, which came to be entitled "Get High on Yourself," a pre-"We Are the World" chorus of ninety-three celebrities trying to sing in tune.14 But the video nonetheless garnered White House backing from new first lady Nancy Reagan and convinced the NBC brass to devote an entire week to antidrug programming* However, the man who was now known as Bob "Cocaine" Evans had done irreparable harm to both his career and social life. As he wrote in his autobiography, "Gone now were the sacred embrace of Kissinger, Korshak, and Bluhdorn, three of the five fingers that made my life singular. Never to return again."15 Bluhdorn and Korshak had left of their own volition; Evans purposely cut off Kissinger so as to not cause him embarrassment. ^
Four months after Reagan's inauguration, the man who had done so much to create his career—and bail him out financially—passed away. On April 28, 1981, two days after his eighty-fifth birthday, MCA founder Jules Stein died of a heart attack following gallbladder surgery. Stein's eighty-six-page will provided for his $200 million estate to be divided among his wife, his children and grandchildren, and his Jules C. Stein Eye Institute, endowed at UCLA. Among the honorary pallbearers were President Ronald Reagan (unable to attend), Lew Wasserman, Alfred Bloomingdale, Irving Lazar, and James C. Petrillo.
Just a week after Reagan's January 1981 inauguration, Jeff Gerth and Lowell Bergman decided that they had thrown enough good money after bad and chose to extricate themselves from the costly La Costa-Penthouse fracas, which was still four years away from a resolution. On January 28, after a prearranged bargain, the duo wrote a conciliatory letter to the La Costa partners, extolling the charitable works of the DRAM group. Supermob watchers especially perceived the last paragraph to be overly obsequious (writer Dan Moldea called it "groveling"). It read, in part, "In summary, we feel it right to acknowledge the positive information we have received about you in recent years and, accordingly, to express regret for any negative implication or unwarranted harm that you believe may have befallen you as a result of the Penthouse article."16Penthouse attorney Roy Grutman wrote that the departure of Gerth and Bergman "created a huge hole in the Penthouse defense."17 In March 1985, after ten years and $14 million in legal fees, both sides agreed to walk away from the suit.*
The next Supermob entity to take its place on the investigative hot seat was the Pritzker dynasty. Prompted by the July 1981 collapse of the Kansas City Hyatt Hotel's sky walk, which killed 114 people, journalist Knut Royce, then working for the Kansas City Times, delivered an exhaustive report on the complete history of the notoriously secretive family. Over three installments on March 8, 9, and 10, 1982, Royce exposed much more about the labyrinthine Pritzker business dealings to the light of da
y than the New YorkTimes had done in 1976. Among the many disclosures were:
• The SEC had recently completed a two-year investigation of the Pritzkers' $54 million in loans from the Teamsters Pension Fund, beginning in 1959, for the purchase of casinos in Las Vegas and Lake Tahoe. The investigation ended with the findings that Hyatt from 1969 to 1978 had made inadequate public disclosures to stockholders about transactions between the corporation and the Pritzker family and between the corporation and the pension fund. Hyatt agreed to a consent decree, which forced the Pritzkers to make a full disclosure to the stockholders without admitting or denying any of the allegations. The Pritzkers reacted by arranging a private takeover of the Hyatt Corp., thus eliminating future requirements for filing with the SEC.
• During the SEC's investigation of Hyatt, they'd looked into Melville Marx, who was instrumental in the purchase of two Hyatt Nevada casinos. Royce learned that he was also the director and a partner at Hollywood Park racetrack, where Korshak had acted as a labor lawyer during the recent strike at the track.