Dark Victory

by Moldea, Dan E. ; Miller, Mark Crispin;

  In a rare interview, Korshak told Los Angeles Herald Examiner reporter Mike Qualls, “He [Younger] can put up or shut up.… I’ve never been cited, let alone indicted, for anything. I’ve never been called before any bar association. As far as I know there’s never been a complaint against me of any kind.” Korshak added that he had contributed $3,000 to Younger’s 1970 and 1971 campaigns for attorney general and had been asked to serve on Younger’s campaign committee for his gubernatorial bid. “The damage this has caused me is irreparable,” Korshak said, “because what can I do to combat it?”8

  In the midst of charges that he had used the organized crime report as a publicity stunt for his campaign, Younger claimed that he had returned Korshak’s contributions and had instructed his staff not to accept any money from him.

  Korshak nearly became as central a campaign issue in the California race for governor as Proposition Thirteen, a state referendum for property-tax cutbacks, because both candidates had links to him. While the Republicans charged Brown with accepting $50,000 in contributions during his 1974 campaign from the Culinary Workers Union, in which Korshak exercised enormous power, the Democrats charged that Younger had met with organized crime figure Moe Morton—with whom Korshak was in business—while Younger was the Los Angeles district attorney in 1970. Morton had built a condominium unit in Mexico in 1967, called Acapulco Towers, known as a meeting place for top underworld figures. Involved in the Acapulco Towers project were Korshak, Meyer Lansky, Delbert Coleman, Beverly Hills attorneys and long-time Korshak associates Greg Bautzer and Eugene Wyman, Philip Levin of Gulf & Western-Paramount, and Eugene Klein, the owner of the San Diego Chargers professional football team.*

  A Los Angeles superior court judge had been forced to disqualify himself from a trial in which Moe Morton was involved after it was learned that the judge had met Morton while on vacation in Acapulco. The judge later said that he had been introduced to Morton by Younger—who could not recall knowing Morton. “I can’t deny it,” Younger told the press, “but I don’t know that I ever met him [Morton].”

  MCA stayed out of the fray but contributed $2,500 to both candidates. Brown was reelected, but his lieutenant governor was Republican Mike Curb, the former president of MGM Records and owner of Warner-Curb Records. Within four months of his election, Curb signed with MCA to create an MCA-Curb label.

  On the national political scene, Wasserman remained inactive but accepted an invitation to the White House for a luncheon with President Jimmy Carter. Although the event was not a fund-raiser, Wasserman contributed $100,000 to the Democratic National Committee to offset a long-term debt incurred by the party during the 1968 presidential campaign.

  Later, an unidentified informant complained that Carter had solicited Wasserman’s $100,000 contribution to the committee. If true, the alleged solicitation was a violation of post-Watergate campaign financing laws. The Justice Department opened an inquiry. In early February 1979, Attorney General Griffin Bell announced that the investigation—which could have led to a broader special prosecutor’s probe—had been dropped.

  In December 1978, NBC News reporter Brian Ross broadcast a story that Sidney Korshak had earlier served as an arbitrator between Wasserman and producer Dino DeLaurentiis in their fight over who would produce the remake of King Kong, which was released in 1976. At the meeting, which was held at Korshak’s home in Bel Air, the decision was made to allow DeLaurentiis—who paid Korshak at least $25,000 for his help—to do the film. Pictures of Wasserman’s telephone log demonstrated “frequent contact with Korshak.… The two men had been close for years.… Many people in the industry say one way to do business with Wasserman is to go to Korshak.”9

  *Sinatra performed at the Westchester Premier Theatre three times in 1976 and 1977. Regarding the photograph, Sinatra insisted to Nevada gaming authorities, “I was asked by one of the members of the theatre.… Mr. Gambino had arrived with his granddaughter, whose name happened to be Sinatra, a doctor in New York, not related at all, and they’d like to take a picture. I said, ‘Fine.’

  “They came in and they took a picture of the little girl and before I realized what happened, there were approximately eight or nine men standing around me and several other snapshots were made. That is the whole incident that took place.”

  *MCA also became involved in the publishing industry, buying G. P. Putnam’s Sons of New York, which owned Coward, McCann & Geohagan and Berkley Books, a paperback company. In 1978, MCA purchased New Times, a newsmagazine featuring investigative reporting, but allowed it to fold within a few months.

  *Acapulco Towers was eventually sold to the Gulf & Western Land Development Corporation in a deal engineered by Korshak and Levin.

  CHAPTER THIRTY-FOUR

  In January 1979, MCA bought ABC Records for $30 million. The sale price reflected the extent of losses ABC had had in 1977, which was rivaled by an equally bad year in 1978. MCA Records, on the other hand, had nearly doubled its earnings in 1978 over the previous year. The top MCA performers in 1978 were Steely Dan and The Who. Olivia Newton-John’s music was also selling well, but in early 1979 she left MCA. Lynyrd Skynyrd’s records were big sellers—especially in the wake of a plane crash in October 1977 that killed three members of the band.

  There was good news on April 9 at the Academy Awards ceremonies at the Dorothy Chandler Pavilion in Los Angeles. Universal and EMI Films shared the Best Picture Oscar for the production of The Deer Hunter, beating out Coming Home and Midnight Express.

  As MCA-Universal announced plans for a $27.5 million expansion of Universal City, MCA and Disney lost their lawsuit to Sony. A federal judge in Los Angeles ruled, in a landmark decision, that it was legal for videotape machine owners to copy television programs as long as they were for personal use, not for sale or for future viewings at which admission was charged. Wasserman and Sheinberg were reportedly shocked by the decision and immediately appealed.

  IBM and MCA-Philips announced a joint venture to build and market video discs and video-disc players. IBM’s involvement was to use its technology to place large quantities of programming on discs. Nevertheless, RCA’s SelectaVision had already begun to dominate the videodisc market and was doing well against the Sony Betamax.

  On March 2, Lew Wasserman threw another dinner for President Jimmy Carter and the Democratic National Committee—in the midst of a “dump Carter in 1980” campaign in Hollywood, which included such liberal Democrats as television producer Norman Lear and Joyce Ashley, the wife of Ted Ashley, the chairman of the board at Warner Brothers. The pro-Carter affair was a $l,000-a-plate dinner and was held at the Beverly Hilton Hotel. Governor Jerry Brown accepted Wasserman’s invitation to introduce Carter.

  The Sidney Korshak–Governor Brown relationship was again in the California spotlight in 1979 after Korshak became involved as the principal union negotiator for the Service Employees International Union, which was in the midst of a strike against the state’s horse-racing tracks. However, the behind-the-scenes drama pitted Korshak against Marjorie Everett, the owner of Hollywood Park and a long-time Korshak nemesis. Korshak had formerly represented the Hollywood Park management as the chief labor relations negotiator until Everett bought the track in 1973; then he started working for the union.

  Everett’s father was Ben Lindheimer, the overlord of Chicago’s racetracks. Korshak had been Lindheimer’s personal attorney and chief negotiator for years. When Lindheimer died in 1960, his daughter assumed control of his racing empire and released Korshak.

  “From his deathbed, Ben Lindheimer hired Sidney Korshak to head off a threatened strike at Washington Park [one of Lindheimer’s tracks],” said one report. “That time Korshak failed, and the mutuel clerks at Washington walked out the night Lindheimer died. His daughter … blamed her father’s death on Korshak’s failure and fired him when she got control of the tracks.”1

  In 1970, Everett was bought out by Philip Levin, a wealthy real estate investor from New Jersey. Before buying Everett’s racetracks,
Levin—an associate of imprisoned New Jersey mobster Angelo DeCarlo, who was later pardoned by President Nixon—attempted a 1967 takeover at MGM but failed. Levin had been the studio’s largest stockholder. The following year, he took his $22 million investment out of MGM and put it in Gulf & Western. G & W chairman Charles Bluhdorn then named Levin as president of the G & W real estate company. Among Levin’s first purchases were Everett’s two Chicago racetracks, which he merged with the Madison Square Garden Corporation, another G & W subsidiary. After that, Levin reappointed Korshak as counsel.

  Marjorie Everett was given a long-term contract to remain as the executive director of the tracks. But early in the contract period she was pushed out by Levin, after complaining about Levin’s purchase of nine percent of Parvin-Dohrmann stock and his involvement in Acapulco Towers, two deals in which Korshak was a party.

  Through a private detective, Everett discovered that Levin’s real estate company—which had been renamed Transnation—had been involved in the purchase of Acapulco Towers. The subsequent federal investigation of Acapulco Towers led to the arrest of mobster Meyer Lansky, who had been hiding out there, forcing him to flee to Israel. But Israel refused to provide him permanent asylum because of his criminal background, forcing him eventually to return to the United States, where he was apprehended. It was Korshak who had persuaded Levin initially to buy into Acapulco Towers as a private investor, and then Korshak advised him to buy it outright for Gulf & Western.

  In 1971, Levin testified before the Illinois Liquor Control Commission about a decision he had made to contribute $100,000 to some Republican candidates for office, based on advice he received from Korshak about who should receive the money and how it should be delivered. Levin wrote nine checks, totalling $100,000, taking the money from several of his companies, such as Western Concessions, the Arlington Park Jockey Club, and the Washington Park Jockey Club, among others.2

  Levin died later that year but not before Korshak personally engineered a $16 million loan for Levin from the Teamsters Central States Pension Fund for a Transnation construction project—which was also owned by G & W’s Madison Square Garden Corporation—near O’Hare International Airport in Chicago. “Gulf & Western officials acknowledged …,” it was reported, “that Korshak had received a $150,000 finder’s fee from Transnation for arranging the pension fund loan. But that fee, the Gulf & Western officials said, was apparently not recorded by Transnation.”3

  While the May 1979 strike negotiations between the service workers’ union and California’s racetrack management continued, Korshak, in a rare loss of cool, threatened to shut the track down. But after other unions crossed the Korshak-inspired picket line, Hollywood Park remained opened. Interestingly, at the time of the strike, Everett and Hollywood Park were in the midst of discussions for a possible takeover of the racetrack by Madison Square Garden Corporation, which was then being run by former MCA executive Sonny Werblin.

  Suddenly, seemingly out of nowhere, Governor Jerry Brown stepped in and tried to shut Hollywood Park down, claiming that it posed a safety hazard. The California racing board, which heard the request, turned the governor down, even after its chairman received several telephone calls from Brown.

  “I think he [Brown] was under tremendous pressure from Sidney Korshak as to the conduct of it,” Marjorie Everett told NBC reporter Brian Ross.

  “Governor Brown was under pressure?”

  “Yes,” she replied, “possibly disturbed but under tremendous pressure.”

  “Do you see the hand of Sidney Korshak in all of this …?”

  “Not only do I see the hand, I see the total image of Sidney Korshak.”4

  Charles Chatfield, the chairman of the California Horse Racing Board, told Ross, “We heard from both sides that Mr. Korshak was involved.… [H]e was the man behind the scenes directing the negotiations.”5

  The strike ended soon after Korshak took himself out of the negotiations.

  That same month, Korshak was a topic of discussion among Teamsters insurance man Allen Dorfman, Mafia capo Joseph Lombardo, syndicate executioner Tony Spilotro, and two other associates; the exchange was secretly taped by the FBI. Dorfman was discussing the problems they were having with West Coast Teamsters leader Andy Anderson.* “You know, an’ he’s as absolutely an eighteen-carat cunt, but he belongs lock, stock, and barrel to Sidney.”

  “All right,” Lombardo replied.

  “That I can tell ya.”

  “How old is Sidney?”

  “Ah, Sidney is 70.…”

  “Sidney Korshak. Well, if Sidney dies, who’s got Andy Anderson? Nobody?”

  “Nobody,” Dorfman replied. “Nobody. He belongs to him lock, stock, and barrel.”6

  Perhaps the worst humiliation for Korshak and Governor Brown came in mid-July when cartoonist Garry Trudeau did a satirical series on their association in his Doonesbury comic strip. Several California newspapers, including The Los Angeles Times, refused to run Trudeau’s work because they thought its contents were “unsubstantiated and possibly defamatory.” Also referred to in the series was Lew Wasserman. In one of the strips, the Brown character said, “Okay, so I may have run into him [Korshak] a few times at Lew Wasserman’s parties.… Lew Wasserman. He’s a movie mogul. He has to deal with Korshak to get his movies made.”7

  Brown, who was actively challenging Jimmy Carter’s reelection bid for president, shrugged the whole matter off, saying that he was “flattered” by Trudeau’s attention, even though the series was “false and libelous.” Unfortunately, Korshak’s and Wasserman’s reactions were not recorded.

  In late July, Korshak associate Delbert Coleman and casino manager Ed Torres bid $105 million for the Aladdin hotel/casino in Las Vegas. Both had earlier been investigated by the SEC, along with Korshak, for their roles in the Parvin-Dohrmann affair. At the time of the Coleman-Torres offer, law-enforcement officials had been threatening to shut down the Aladdin after it was proven that Detroit mobsters had taken hidden control of the casino. Simultaneously, the U.S. Strike Force Against Organized Crime began looking into allegations of hidden mob interests at the Riviera. The targets of the investigation were Korshak, Coleman, and Torres, who had run the Riviera until 1978. Federal investigators believed that the Riviera was controlled by the Chicago Mafia, with Korshak acting as its conduit. Other casinos being looked into were the Dunes, the Fremont, the Stardust, and the Tropicana.

  Back in California, Korshak’s old friend from Chicago, Paul Ziffren, and his brother, Lester—the founders of Ziffren and Ziffren in Beverly Hills—had a serious split with their attorney/sons, who were also working in the family business, forcing the firm to dissolve. Paul Ziffren found a new home at Gibson, Dunn and Curtcher when senior partner William French Smith, Ronald Reagan’s personal attorney, invited Ziffren* into the Los Angeles firm.

  “Paul and I used to be on the political debating circuit together,” Smith told The Los Angeles Times. “This goes back to the Eisenhower campaigns. We debated on radio, on TV, all around. It was during that period I developed a high respect for his talents.”8

  *Andy Anderson was also the president of Teamsters Local 986, Los Angeles’s largest Teamsters local, which is heavily involved in the entertainment industry.

  *Simultaneously, Ziffren and travel company chairman Peter V. Ueberroth were named by the U.S. Olympic Committee as permanent chairman and president–general manager, respectively, of the Los Angeles Olympic Organizing Committee for the 1984 Olympic Games.

  CHAPTER THIRTY-FIVE

  In March 1979, Nevada senator Paul Laxalt formed the Reagan for President Committee, saying that Ronald Reagan “is the man who pioneered the concept of putting responsible restraints on government—an idea whose time has come today with the public’s resistance to excessive taxation, irresponsible spending, and oppressive regulation of our lives.

  “We pledge our support and commit our efforts to Governor Reagan because we believe he is the most able man in America today to inspire our peo
ple, to deal with problems and not shrink before them, and to restore the United States to a respected role in the affairs of the world.”

  Financially, Reagan was in good shape. He was worth over $4 million and was making nearly $500,000 a year from his lectures, charging as much as $10,000 per booking, and radio and newspaper commentaries. To provide additional income during the campaign, Reagan sold off nearly $234,000 in stocks.

  Jules Stein had also helped Reagan to obtain a tax shelter for his growing fortune while Reagan was still the governor of California. Stein introduced Reagan to Oppenheimer Industries, Inc., a little-known, Kansas City-based land and cattle-breeding company run by Stein’s stepson, Harold L. Oppenheimer, a retired brigadier general in the Marine Corps. The firm was owned by Stein, his wife, and his stepson, and catered to wealthy investors, like Reagan, who were seeking to shelter their money.

  All Reagan had ever said about the transaction was that he had invested $10,000 in cattle on a ranch in Montana. “I knew this guy who does this, bought a herd of bulls,” he said. “What do you do with them? They’re out on lease for breeding.… I made a little money.”

  But as a result of the Stein-orchestrated shelter, Reagan paid no state income tax in 1970, nor had he paid virtually any state income taxes from 1966 to 1969. This unsettling fact was not disclosed voluntarily by Reagan. Throughout the late 1960s, Reagan had repeatedly refused to make public his tax returns, insisting that it was a private matter even though he had become a public official. The closest he came to a disclosure occurred in April 1968, when he stated at a press conference, “I just mailed out my own tax return last night, and I am prepared to say ‘Ouch’ as loud as anyone.”

  However, in 1970, an inquiry by The Sacramento Bee revealed that Governor Reagan had paid an average of only $1,000 per year in state taxes from 1966 to 1969, on annual earnings of more than $50,000, which did not include the separate capital gains taxes paid on the earlier sale of his ranch.