The Bluegrass Conspiracy

by Sally Denton

Ralph obviously had a well-placed informant who was supplying him with information about cocaine use, gambling, and other drug-related activities at Lambert’s house on Old Dobbin Road. On one calendar page Ralph had written, “$15,000 changed hands—JYB present.”

  After Ralph’s arrest, both state police and Lexington police started following him, hoping they’d find out the identity of his source. But Ralph was careful not to blow the cover of Diana Hall—a lithe, thirty-five-year-old Canadian who was employed as Lambert’s housekeeper. Ralph urged her to continue working while he sorted out his legal predicament. Meanwhile, he directed her to report to him, assuring her that he would arrange for her continued payment as a state police informant, while keeping her identity a secret known only to Ralph and Don Powers.

  “You take care of her for a few weeks until you can get her hooked up with the Eye,” Ralph had told Powers. Like Ralph, Powers’ substantive days with the state police were nearing an end. His superiors had ordered him to reveal the identity of Ralph’s informant in the Lambert probe. When Powers refused, he did so at the risk of demotion and banishment. It seemed to both men that the state police had successfully thwarted both the Lambert and Vance investigations by arresting Ralph. Successful in eliminating Ralph Ross, Powers had remained an irritant to the Campbell factions. The surveillance team had been disbanded after Ralph’s arrest, and all its members who were loyal to Ralph had been exiled to remote locations, while Terry Barnes received a plum job with the Criminal Justice Division. Captain Powers was transferred to the Drivers’ Licensing Division—an innocuous department located in the basement of the headquarters annex—where he bided his time until he was eligible for retirement.

  The two men sifted through a carton of items Diana had absconded from Jimmy Lambert’s garbage. Ralph showed Powers several pages of itemized phone statements from General Telephone of Kentucky and South Central Bell. The phone bills, which detailed calls made from Lambert’s cabin at Boonesboro and his Lexington home, had been splattered by coffee grinds in the trash can.

  Long-distance phone calls had been made to New York, Miami, Chattanooga, Tulsa, and Las Vegas. Next to the numbers, Ralph had made notations identifying the subscribers. Calls had frequently been placed to numbers listed to John Y. Brown, Jr., and his wife Phyllis George in Frankfort, Lexington, Miami, and New York. Several calls were also placed to prominent Lexington and Louisville businessmen, including Paul Hornung.

  Diana had also provided Ralph with a list of people and phone numbers who were in Lambert’s personal address book. The list read like a Who’s Who in sports and local politics, and contained half a dozen unlisted numbers for Magoo and P. G. Magoo—apparent nicknames for the governor and Mrs. Brown—including residential lines to their home in Golden Beach. The home numbers of onetime NFL players—including Randy Burke of the Baltimore Colts and Sonny Collins of the Atlanta Falcons—were listed in the book, as well as other nationally known sports figures such as Newsweek writer Pete Axthelm, world poker champ Doyle Branson, and oddsmaker Jimmy the Greek. Ralph pointed out other familiar names: Dan Chandler; Phil Block—the nephew of former governor Julian Carroll and manager of Trumps; horsewoman Anita Madden; Cornelia Wallace—the wife of former Alabama governor George Wallace; thoroughbred racehorse trainer Leroy Jolley; prominent horse breeder Tom Gentry; Las Vegas designer Suzy Creamcheese; political portrait artist, Ralph Cowan; two Las Vegas casinos—Caesars Palace and the Horseshoe Club; convicted gamblers; and the names of at least three known murder victims.

  “Here they are again,” Ralph said, referring to two numbers: 202/449-9944 and 202/233-7672 listed under the heading “Tap Phone.” Ralph knew the exchanges were CIA numbers that were used by intelligence operatives in the field. When the numbers were dialed, the person calling heard an electronic signal that indicated whether or not the telephone he was using was secure. The same two numbers had been found in the personal address books of Bradley Bryant and Drew Thornton.

  “What do you think of this?” Ralph said, handing Powers a copy of an internal Criminal Justice Department memorandum relating to election fraud. Powers shook his head as he read the memo marked Confidential, which had been sent by Neil Welch to the governor. In the memo, Welch outlined the details of an ongoing investigation into statewide vote buying. Ralph wondered aloud if Lambert had been kept apprised by Brown of all investigations conducted by Justice Secretary Welch.

  Another memo they found, written by Brown’s personal secretary and directed to Lambert, inquired about the status of a pending lawsuit involving Trumps—the Cincinnati nightclub in which Brown had claimed not to have an interest.

  Diana had also told Ralph that she had seen a check stub revealing a thousand-dollar payment to Brown for “partnership interest in Trumps,” and a checking account deposit slip which showed a thirty-thousand-dollar payment to Lambert from Anita Madden.

  Since it is not illegal to retrieve trash, or to read anything that has been left in plain view on desks, tables, or countertops, Diana had legal access to Jimmy Lambert’s innermost secrets. Her duties as a housekeeper included cleaning the house and disposing of items in trash containers.

  Diana had also told Ralph a bizarre tale of the entrails of Lambert’s personal life: That Lambert routinely snorted cocaine with his morning coffee; that cocaine and Quaa-ludes were common staples around his house; that there was a drug laboratory in his basement, where Diana had seen football-sized packages of pure, unprocessed cocaine; that she had witnessed Lambert vomit and dry heave for three days straight because of “roller coasting”—getting high on cocaine and then taking Quaaludes to mellow out; that Lambert transported his cocaine in large Thermos bottles; that Lambert regularly hosted flamboyant parties attended by Playboy bunnies, mobsters, politicians, and businessmen at which large amounts of drugs were consumed; that she overheard daily conversations about cocaine and that trays of cocaine were regularly placed throughout the house for consumption by Lambert’s steady stream of guests; and that Lambert stored a cache of weapons in his house. Lambert had given Diana full access to the house, she told Ralph, and did not attempt to hide anything from her.

  Though Diana was interested in financial compensation for her role as an informant, and had long fantasized about working for the FBI, she insisted to Ralph that her motivation in busting Jimmy Lambert was spawned out of concern for him and, especially, the young women in his life. Diana had known Lambert for many years, she claimed, during which time she had grown fond of him. But she feared Lambert would die of a drug overdose unless something drastic occurred, such as his arrest. Of even more concern to her, Diana claimed, was the fate of Jimmy’s young female escorts. In them she saw herself at an earlier age—naive, vulnerable, impressionable, intrigued by the glittery fast-lane world of Jimmy Lambert, and totally oblivious to the dangers of that universe.

  To Ralph, Diana was the mother lode. For a decade, he had waited for such a source. Betty Gee hadn’t quite cut it, for she bent with a shove from any direction. Lambert trusted Diana with every aspect of his life. She cooked his meals, washed his clothes, cleaned his house, planted his flowers, took his messages, protected his house when he went out of town, made his bank deposits, and paid his bills; she babysat and chauffeured his two children when they occasionally visited. The job was perfect for Diana. As a part-time student at Transylvania University, as well as a part-time horse trainer, the hours of 10 a.m. until 2 p.m. allowed her time to pursue her academic and professional interests. Ironically, Ralph thought, now that he finally had an informant who could infiltrate Lambert’s infamous horse and sports crowd, Ralph was impotent.

  Ralph had confidence in his friends in the FBI, and he knew that he could count on them to treat Diana right. The FBI had been interested in Jimmy Lambert since the mid-1970s; but the fact that Lambert enjoyed a personal and financial relationship with a sitting governor who had made no secret of his intended bid for the U.S. presidency could no lon
ger be overlooked. Ralph was certain the FBI would make the penetration of Lambert’s criminal network a top priority. Bolstered by their state-of-the-art investigative techniques, the FBI would surely be able to bring Jimmy Lambert’s free-wheeling days to an end.

  Unfortunately, Ralph didn’t have the same confidence for the conclusion of Henry Vance’s illegal activities. Ralph was damned certain that neither the Kentucky State Police nor the Lexington police were continuing the pursuit of Vance. With Bonnie Kelly’s conviction in

  Florida, there seemed to be little incentive to continue a probe into her accomplices. Federal agents in Tampa kicked around the possibility of indicting Vance for violating Berry’s constitutional rights, but Ralph had little faith in their efforts. They had enough of their own criminals in Florida without having to worry about a preppy gangster from Kentucky.

  At some point, reality set in, and Ralph understood that all aspects of his former life had come to a standstill. Even worse than the end of his law enforcement days was the emasculating divestiture of his constitutional rights. Never again would he be able to vote. It came as a surprise to Ralph—the most apolitical person he knew—that being stripped of that right was the most dehumanizing feeling. His family worried as they watched Ralph mope about, devoid of the drive and sense of purpose that had characterized his lifestyle for the past fifty years. He pretended to live a normal life, carrying out necessary daily duties such as paying bills, going to the post office, watching television news, reading the paper. Yet his only connection to his former life was the fear he carried with him every day that Drew Thornton’s group would try to kill him. He never left his house without his gun, and slept with one within reach. On the surface, it seemed that Ralph was a free man. But those who knew him recognized the cage within which he was trapped. The phone calls from reporters asking if he intended to appeal his conviction were petering out. Everyone advised him against appealing, the judge had practically set him free anyway. What could be gained? he wondered. Ralph had no guarantee that another judge, another jury, would be any better. When he received a thirty-thousand dollar bill from Bill Johnson for “services rendered,” he tossed it into the trash. He knew Johnson would submit the same invoice to the state police.

  Ralph sought out no one and few people called on him. He spoke frequently to Powers, whose refusal to identify Diana Hall had resulted in his exile to the Drivers’ Licensing Division. Diana was now being controlled by the FBI, who, at Ralph’s behest, had initiated a top-secret investigation of Jimmy Lambert. Though Ralph and Powers had initially consulted with the FBI on a regular basis about the case, they knew it was impolitic to maintain closeness with the federal agents working the case. Federal prosecutors directing the Lambert investigation feared that Ralph’s involvement would weaken their legal position. While understanding the lawyers’ assessment of the situation, the FBI agents knew that Ralph alone possessed a unique and thorough knowledge of the players—an inside track without which the success of the probe could not be guaranteed.

  There came to exist, then, a latent agreement that Ralph Ross was the primary “source” for the FBI’s most politically sensitive criminal investigation in Kentucky history.

  Ralph, for his part, was less concerned about the perceived impropriety of his involvement. The once-workaholic cop suddenly had an abundance of time on his hands: He had lost his job, his marriage, his youth. His pride and reason for living depended upon his exoneration. His obsessive quest for justice would be mistaken by many as a pursuit for vengeance.

  Because of the incestuous local relationships, the FBI operation was kept secret from the Lexington police, the state police, and even from some FBI agents assigned to Lexington. Despite the extreme sensitivity, Ralph was able to monitor the progression of events through his own network of sources.

  From his unusual vantagepoint, Ralph knew as much, or more, about the Lambert investigation as the FBI agents assigned to the case. Ralph knew when the FBI received a court order to install electronic eavesdropping devices inside Lambert’s home and a wiretap on Lambert’s phones. Ralph knew as it occurred that bugs were being placed in Lambert’s living room, bedroom, and basement, and that the FBI had established a monitoring post in a neighboring residence.

  Ralph knew that when Lambert became suspicious that he was the target of an investigation, he hired Drew Thornton to “sweep” the Old Dobbin house in search of a bug. Ralph also knew that FBI agents monitoring the equipment listened with relief as Drew assured Lambert that the house was “clean.” Ralph knew that the FBI was monitoring the conversations of everyone in contact with Jimmy Lambert.

  It came as no surprise to Ralph, then, those conversations between Jimmy Lambert and Governor John Y. Brown, Jr., were intercepted in the normal course of events.

  By April 1983, Ralph had lost his patience with Governor Brown. Since his sentencing three months earlier, Ralph had nurtured the belief that Brown intended to grant him a pardon. But as the Lambert investigation reached its culmination, with less than a week to go before agents planned to raid Lambert’s house, Ralph decided that if Brown had planned to give clemency, he would have done so by then. “That S.O.B.’s not going to come through for me,” Ralph told Powers one day during the second week of April. “I think it’s time to do a number on him,” Ralph said, thinking of his bag full of micro-cassettes.

  On the night of April 11, thanks to Ralph Ross, Lexington’s CBS-affiliated television station scooped the rest of the state’s media when it broadcast an explosive tape-recorded conversation. Brown’s inner circle cringed in shocked disbelief as they listened to the report on WKYT-TV’s six o’clock news broadcast:

  “Newscenter 27 has learned that former Transportation Secretary, Frank Metts, secretly tape-recorded a conversation between him and Frankfort engineer Bill May in Governor John Y. Brown’s Florida home.

  “May, former Chairman of the State Racing Commission… made statements during that conversation that he had contributed $23,000 to the Brown campaign, and had been told that he was guaranteed future state highway contracts by so doing.

  “May told Newscenter 27…that he was shocked that the governor would allow Metts to wire Brown’s Golden Beach, Florida, home in order to monitor the conversation. May admitted… paying $23,000 in campaign contributions, but insisted they were donations to a cause and not to individuals. He said he felt entrapped by the governor and Metts.

  “The governor was unavailable for comment.”

  The airing of the Metts/May tape, as it came to be known, signaled the beginning of the end for John Y. Brown, Jr. Fulminating, the governor called an impromptu press conference the following day, at which he announced that he had fired Neil Welch for Welch’s role in the clandestine taping. ‘I’m just not going to tolerate secret taping in my administration,” Brown declared angrily. He adamantly claimed that he knew nothing about the taping incident until the moment he heard the tape played on the air, and then launched into a tirade against the “sensationalist journalism” practiced by WKYT’s reporter.

  Calling himself a soldier in the war against crime, Welch convened a news conference the day after the broadcast to defend himself and to challenge Brown’s contention that he had no prior knowledge of the taping. Accusing the governor of lying, Welch told the mob of reporters that Brown had known about the incident for the past sixteen months. Welch said that such consensual taping was a routine law enforcement practice performed hundreds of times a year by FBI agents investigating white-collar crime.

  “I don’t know anything about frying chicken,” Welch said, “and he doesn’t know anything about being a cop!”

  Responding to Welch’s allegations, Brown reversed himself and suddenly recalled having been told several months earlier about the taping. But Brown said he assumed Metts had recorded the conversation using a pocket recorder. It was, therefore, the sophistication of the equipment and techniques that
angered the governor and made the operation smack of the greatly feared Abscam-type “bugging.”

  Within hours of the television broadcast, reporters who were playing catch-up to the television story bandied about Ralph Ross’s name. The Louisville and Lexington newspapers quoted “unnamed sources” who said Ralph was the one who had wired the governor’s house. The mere mention of Ralph Ross—the notorious, convicted wiretapper— sent Brown into a rage. The thought of an expert sound man such as Ralph invading the governor’s residence and planting electronic transmitters sickened Brown who thought tapping an invasion of privacy.

  At this point in time, Brown’s intentions to enter the Democratic presidential primaries were no secret. The national media, including the New York Times, as a hopeful regularly mentioned his name; and he was unabashedly using his role as chairman of the Democratic telethon as a pole vault for a nationwide campaign. The Golden Beach house was the base of operations where Brown’s political brainstorming and fund-raising efforts occurred. Hundreds of privileged strategy discussions about Brown’s presidential aspirations and the activities of the Democratic National Committee had been held at the beachfront property. Had any of the conversations occurring at that location been secretly recorded it could prove devastating beyond belief for Brown’s political future.

  Speculation bubbled that Neil Welch—the man known as Jaws— had pulled off the ultimate sting operation. Perhaps Welch and Ross were working from within, infiltrating the Brown administration in an Abscam-type operation. Perhaps Welch had never really retired from the FBI. Perhaps he was part of an FBI intelligence-gathering operation into a U.S. presidential contender whose known associates included organized crime figures and drug dealers. Does the FBI routinely investigate contenders for such high-level government positions? observers wondered. Is that why Welch had wormed his way into Brown’s cabinet? To keep abreast of the activities of Brown and his allies?