Interference (24 page)

The Senate report concluded, “The agent was ordered to stop his investigation. The IRS agent said he believed that the Department of Justice had limited the scope of the investigation.” Another agent involved is even more succinct. “We were had,” he says. “It was fixed. Absolutely, the case was fixed.”

But federal agents had already reported the IRS intelligence data on Promuto to the NFL, and he had been questioned by NFL Security. Promuto admitted knowing bookmaker McCaleb but denied placing bets through either McCaleb or his partner, McGowan.

Promuto told me that he was friendly with McCaleb, whom he had met through his wife's family, but repeated that he had not gambled with him or anyone else. He also denied having anything to do with McGowan. “I made it a point not to have dinner with the guy. And I never went out socially with him. He was McCaleb's friend. I saw him maybe five times in my life, when he was with McCaleb—and just to say hello. That was the extent of it.

“The reason I would see them was Fran O'Brien, who was the best man in my wedding. He had a restaurant, and I would go down to see him. And in that restaurant there were people they called prostitutes, gamblers, and this and that. But my objective for going down there was seeing Fran O'Brien, whom I had played next to for six or seven years.

“If I knew anyone who was gambling while I was playing, I wouldn't tell you. On the other hand, if I thought somebody was gambling—because I was captain of the Redskins—I would have been very pissed at them. The same thing goes for throwing a game. After years of playing with injured shoulders and two knee operations, I wanted to win. If I'd heard that someone was betting, shaving points, I wouldn't have stood for it. But I would never be a snitch.”

Sonny Jurgensen's name had originally come up in the investigation after Jean Bates, an assistant television producer in New York and McCaleb's girlfriend, told federal agents that she “was present on more than one occasion when Sonny settled with McCaleb for the bets that Sonny was bringing in from the Redskins players.” Federal agents confronted the star quarterback with this information during a meeting with him in Wilmington, North Carolina, Jurgensen's hometown. Jurgensen denied any wrongdoing.

Jurgensen told me that he had been informed about the gambling probe before the grand jury was convened. “When NFL Security told me what was going on,” he says, “the government had already checked my car and my apartment, and they had come up empty. I said, ‘Hey, I'd be willing to take a polygraph test any time you want.' I took the test and passed. In other
words, in no way was I involved in gambling … What it amounted to was that some girl [Bates] had said something: that I had something to do with this gambler. That I was either running or collecting. The talk was that a big red-headed guy was collecting money for Ritchie McCaleb. I knew who that was, but it wasn't up to me to tell them [the IRS] who he was. I knew the guy's name. He was a bartender, and he worked with Ritchie.”

On May 3, 1968, Hundley and his former subordinate at Justice, Robert D. Peloquin,
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then Hundley's partner with NFL Security, sent Rozelle a confidential memorandum about the Redskins matter. The memorandum was signed by Peloquin and included in the confidential Senate report.

Peloquin wrote that he had learned that the grand-jury investigation was going to begin in four days and would primarily concentrate on McCaleb and McGowan, whose houses had been raided by IRS agents in early January. He added that both gamblers were represented by Washington attorney Edward Bennett Williams, then president of the Washington Redskins. According to Peloquin, Williams dropped the case “when he learned of the potential conflict in his interests.”

Replacing Williams as counsel was Plato Cacheris, a former chief assistant U.S. attorney in Virginia, who later became Hundley's law partner. Peloquin wrote that Cacheris “will do his best not to embarrass the league.”

Peloquin added that “potential witnesses with whom we would have concern are …” and then he listed the names of six players, including Promuto and Jurgensen. Promuto and several of the Redskins were also represented by Cacheris during the grand-jury investigation.
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Subsequently, Peloquin and Hundley met with Henry Petersen, Hundley's successor as the chief of the Justice Department's Organized Crime and Racketeering Section, who assured them “that no NFL players would be called before the grand jury without [the NFL] being advised beforehand,” according to the Senate report. Petersen became an associate in Hundley & Cacheris when he left government service.

Hundley told me that he and Peloquin had simply gone to Petersen to find out whether anyone involved in professional football was a target of the grand-jury investigation. “I told him that if the department needed anything, I would supply it. If they needed information from anyone, I would deliver them.”

The NFL, IRS, and the Justice Department investigations stopped dead right there.

“What we've got here,” another IRS agent who was also involved in the NFL gambling probe says, “are connections among the Cosa Nostra, the federal government, the big attorneys in the D.C. area, sports figures, and the television news media. And it's still going on. We were getting too close to the people at the top. Nesline was being protected by people within the Justice Department.”

Brian Gettings, the former U.S. attorney who prosecuted Beckley, confirms that NFL Security intervened with the U.S. attorney in Alexandria on behalf of the Redskins players and “prevailed upon the prosecutor not to subject them to the embarrassment of the grand-jury process.”

“I was convinced that none of the Redskins players was involved in gambling,” Hundley told me. “That has been my very firm conviction.”

McCaleb, McGowan, and Corsi were convicted on conspiracy and racketeering charges and sentenced to prison. Neither Nesline nor any of the Redskins players was charged.

19 Seven Arts, Bobby Baker, and Mary Carter

IN JUNE 1967, SEVEN Arts bought the forty-four-year-old Warner Brothers studios in Hollywood in an $84-million-cash-and-stock deal. Eliot Hyman—Lou Chesler's onetime partner in Associated Artists, which had purchased Warner's film library in 1956—was selected as the chairman of the board of Warner Brothers-Seven Arts.

Carroll Rosenbloom remained the second-largest individual stockholder in the newly merged company, still behind attorney Morris Mac Schwebel. The fortunes of both men increased considerably.

Within a year of the Seven Arts takeover, Gene Klein, the owner of the San Diego Chargers, attempted to buy the newly merged company through his National General Corporation. But he was thwarted by the federal government when threatened with an antitrust action.

Klein told me, “When I couldn't get it, I helped Steven Ross get it.”
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Steven Ross was the owner of the National Kinney corporation, a funeral parlor, parking lot, and cleaning services company, which purchased Warner Brothers-Seven Arts for $400 million in 1969.
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Ross had taken over his father-in-law's New York funeral parlor business and then merged with Kinney Systems, the city's largest parking lot company, in 1962. Ross then consolidated both companies under National Kinney and sold public stock.

Schwebel told me that he was responsible for making the initial arrangement with Ross, after being introduced to him through New York Giants head coach Allie Sherman.

Kinney reorganized in 1970 and officially changed its name to Warner Communications in 1971, with Carroll Rosenbloom remaining as the company's second-largest individual stockholder. Another big winner in the deal was Clint Murchison of the Dallas Cowboys, who had also owned a chunk of Seven Arts stock and had been named as a member of its board of directors.
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Murchison also owned a large tract of property in the Bahamas.

Murchison had been implicated in the Bobby Baker scandal that rocked Washington during the mid-1960s. A close friend of Gil Beckley, Baker, who hailed from Pickens, South Carolina, was a former Senate aide to and protégé of Senate majority leader Lyndon Johnson, who was elected as John Kennedy's vice president in 1960. Many referred to Baker as “Lyndon Jr.” or even the “101st Senator.” After the election of the Kennedy-Johnson ticket, Baker became the top aide to Senator Mike Mansfield, Johnson's successor as majority leader. However, Baker remained extremely close to Johnson.

Baker and his associate, lobbyist Fred Black, were found by Attorney General Robert Kennedy to have been go-betweens for Las Vegas underworld figures and their political contacts in Washington during the summer of 1963. Two of Meyer Lansky's operations were directly involved with Baker's Serv-U Vending Corporation, which had received a major contract from NASA. Baker's partners in the venture included Black and Lansky operatives Edward Levinson, a Gil Beckley associate who operated the Fremont Hotel in Las Vegas, and Benjamin Sigelbaum, one of Lansky's bagmen.

Baker resigned from his Senate post the month before the murder of John Kennedy and the ascent of Lyndon Johnson to the presidency. Even with Edward Bennett Williams as his attorney, Baker was convicted in January 1967 on seven counts of fraud, grand larceny, and tax evasion and spent eighteen months in Lewisburg Penitentiary.

Murchison was questioned by a U.S. Senate committee in 1965 about his relationship with Baker, particularly after federal investigators discovered that Murchison paid for Washington parties thrown by Baker, who had arranged for dates between Capitol Hill women and wealthy businessmen. Baker had also
owned the Carousel Motel in Ocean City, Maryland, which had been built with loans from the Teamsters' pension fund. Baker used the location as a party spot for his clients. Murchison had offered to buy the motel from Baker for $1.5 million.

After Murchison failed to obtain approval from the Food and Drug Administration (FDA) to import products from his Haitian meat-packing business in Port-au-Prince, Baker intervened on Murchison's behalf and received the necessary FDA approval. Baker had also tried but failed to use his influence on Murchison's behalf to shift the home-mortgage-guarantee business of the Veterans Administration and the Federal Housing Administration to private insurance companies owned by Murchison's associates and other close friends.

When one of Murchison's top assistants was asked where he had met Baker, the assistant replied, “It was in the office of Lyndon Johnson.” Baker later claimed that he had made a $25,000 payoff to a top Washington politician to help Murchison secure his Dallas franchise in the NFL.
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In 1961, the Mary Carter Paint Company, after being charged with deceptive advertising by the Federal Trade Commission, moved into the Bahamas and eventually purchased thirty-five hundred acres of land on Grand Bahama Island.
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The property was acquired from Wallace Groves, who later introduced company officials to Sir Stafford Sands when the company became interested in building a casino in the Bahamas.

During 1964 and 1965, Mary Carter paid Sands no less than a $240,000 in legal fees to help the company purchase Paradise Island, a resort across the bay from Nassau, which was owned by A & P chain-store heir Huntington Hartford.

Hartford told me in 1980 that he had purchased Paradise Island in 1959 for $11 million and then spent another $19 million to develop the area. He added that he had “hosted and entertained Richard Nixon at Paradise Island” after Nixon's defeat in the 1962 California gubernatorial election. “Nixon was a charming man, who, along with Jim Crosby [the owner of Mary Carter], ended up giving me the shaft,” Hartford says.
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Meantime, the government permitted Mary Carter—through Wallace Groves—to construct a gambling casino on Paradise Island. The casino license was placed in the name of Groves's wife. She was to own five ninths of the casino. Hartford was to receive his 20 percent interest out of Mary Carter's four-ninths
interest. With Groves assuming control of the Paradise Island casino—through his Bahamas Amusements, Ltd.—the way was paved for Mary Carter to obtain the operating license of the Bahamian Club, which had been open since 1939.
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By May 1967, Groves had been crippled by a series of Bahamian Royal Commission hearings on illegal gambling. The scandal had caused the fall of the corrupt all-white Bahamian government and led to the election of black leader Lyndon O. Pindling as the new president of the Bahamas. Subsequently, Mary Carter bought out Groves's interests on Paradise Island.

Meantime, Strike Force prosecutor Robert Peloquin had insisted in a January 1966 memorandum to William Hundley—who was in his final days with the Justice Department, just before he took over NFL Security—that the conditions in the Bahamas provided an “atmosphere ripe for a Lansky skim.”
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During the Royal Commission of Inquiry's investigation, Chesler, Carroll Rosenbloom's partner, testified that he had contacted Lansky about setting up the Bahamian gambling operations. Chesler admitted that he had gone to Lansky and “consulted him on the staffing of the Monte Carlo casino even before the certificate for that casino was granted.” Chesler identified Lansky during his testimony as “the dean of gambling.” Representing Chesler was Washington Redskins president Edward Bennett Williams.

According to testimony before the U.S. Senate, a government witness, Louis P. Mastriana, alleged that “Meyer Lansky had given one Michael McLaney one million dollars and Mr. McLaney was to turn this money over to … Lyndon O. Pindling for a gambling license.”
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During an interview on February 9, 1967, McLaney, another former partner of Rosenbloom, told Sargent E. W. McCracken of the Miami police intelligence unit that he had been libeled in a February 3
Life
magazine piece about his alleged role with Lansky and Pindling in the Bahamas and planned to file suit.
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In his report of the McLaney interview, McCracken wrote, “Mr. McLaney is in fact negotiating at this time in order to build a gambling casino and hotel in Paradise Island in the Bahamas. He stated that he is definitely not associated with any mobster here or in the Bahamas and that he is opposed to the mobster element. He desires, if and when he is permitted to go into business, to run a legitimate business.”