Top FBI Agent Describes:
    Nevada Pols and Mob Links

  by Del Tartikoff
  copyright 1996, Electric Nevada

Nevada's casino business has a corrupting effect on the state's politicians, says the former top FBI agent in the state.
 Joseph Yablonsky, agent in charge of the bureau's Las Vegas district office from 1980 through '83, is writing a book on his experiences in pursuit of organized crime during his four year tenure in the Silver State.
And it's not a book intended to warm the cockles of gaming advocates' hearts.
"I wrote an op ed piece for the Cincinnati Post," the retired FBI veteran told Electric Nevada, "and one of the things I refer[red] to is the fact that the relationship between politicians and the mob [in Nevada] was incestuous."
For example, says Yablonsky, much of the mob activity that he and his agents in Las Vegas and throughout the state worked on and brought to prosecution in the 1980s was a direct legacy of actions by Nevada Senator Pat McCarran decades earlier.
"Back in 1946," he said, "FBI agents in New York were investigating Bugsy Siegel and Frank Costello and a few of those who were getting together to come up with the financing for the Flamingo."
But the New York FBI agents soon received an order from Truman's Attorney General, Tom Clark, to cease the investigation on the grounds it "lacked federal jurisdiction."
"Well, they later found out," says Yablonsky, "that Pat McCarran had interceded in behalf of his newly emerging constituency" in Las Vegas.
McCarran -- a powerful member of the U.S. Senate -- was raising a ruckus, charging that the FBI investigation had been designed to "damage the economy" of Nevada.
It was a defensive refrain that has often been trotted out by Nevada politicians over the decades since, notes Yablonsky.
He focuses in tightly on the McCarran incident and others like it, characterizing them as "In other words, 'We let the wiseguys take over, as long as it's good for our economy,' right? We get a piece and they get a piece."
Nevada's effort to "tame" a historically disreputable and illegal vice like gambling has been dubious from the beginning, Yablonsky says.
One reason he gives is that throughout America, before being legalized in Nevada, the casino business was always based on the bribery of public officials. That was because only through large-scale corruption of officials could large illegal gambling operations exist.
But since large-scale corruption is also the province of organized crime, illegal casinos and organized crime have always been linked.
Thus it wasn't a coincidence, says Yablonsky, that "The guys who came out there [to Vegas], from Bugsy Siegel on, up into the 50s and the 60s, were outright guys with mob ties and serious records for illegality in other places."
Nor was it a coincidence that their illegal behavior continued.
"They didn't lose that habit; what they would do is take advantage beyond" says Yablonsky.
"In other words, you don't change someone overnight because he's involved in an illegal activity somewhere else and he comes to a place where it's legal. If he's a criminal, he's going to act that way forever."
Thus what Nevada politicians soon began coming to terms with, says Yablonsky, was a constituency of mobsters.
"To the degree that Nevada politicians had to go to casinos for their money to run for office, [and] to the degree that the casino was organized-crime controlled, in effect, their constituency became organized crime.
"It's just that simple, isn't it?" he asks.
It wasn't only McCarran who, in Yablonsky's eyes, got compromised. With the exception of U.S. Senator Dick Bryan, when he assumed the governorship in 1980, Yablonsky says he didn't see a lot of integrity among the state's major politicians -Senator Paul Laxalt, Republican; Senator Howard Cannon, Democrat; then-Gaming Control Commission chairman, and now U.S. Senator, Harry Reid, and powerful state senator Floyd Lamb.

The Republicans
"When I got to Nevada in '80," he says, Reagan was President and U.S. Senator Paul Laxalt "was his closest personal friend."
"He had the Teamsters backing him in Nevada, because of their loans and the casinos skimming for the mob. The amount of power that Laxalt had was enormous. Everybody acknowledged that. He was epitome of Nevada 's power in Washington."
It was because Laxalt became "sort of the liaison guy between the Congress and Reagan" that he had so much power in Washington, says Yablonsky.
When the FBI investigations in Las Vegas started upsetting organized crime, he says, Senator Laxalt tried to do what Pat McCarran had done, thirty years before -- to get the FBI, in this

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case Yablonsky and his men, reined it.
"Fortunately, William French Smith, who was the Attorney General at the time, didn't buy it, as far as what he was trying to do to me," says Yablonsky.
"I think Smith was basically honest, although he was not hip to the jive as far as organized crime and all that other stuff. When Laxalt came to him, I'm sure he read through it. There were others though, in the administration, who acquiesced to [Laxalt's] desires."
Yablonsky attributes much of the spread of gambling nationwide to the national power Laxalt was able to bring to the casino industry.
"Now, what I see is -- what have we got, casino gambling in 25 states? Look how many-fold that influence has increased. And you know, it's a sellout, it really is."
Laxalt, he charges, was "in the pocket" of organized crime from the very start of his political career.
"Particularly with [Moe] Dalitz, who he's never forsaken, according to remarks he's made.
"In fact, I think it was a Los Angeles Times reporter, when he was exploring [pursuit of] the Presidency, [who] asked, "Would you invite Moe Dalitz to lunch at the White House?" and he said 'Yes.'"
According to The Black Book and the Mob; The Untold Story of the Control of Nevada's Casinos by Ronald A. Farrell and Carole Case, published by the University of Wisconsin Press in 1995 and based upon records of the Nevada State Gaming Control Board, Morris "Moe" Dalitz was head of a group which had purchased 59 percent of the Desert Inn stock in 1947.
Called before the televised Kefauver committee hearings into organized crime in 1950 and '51, Dalitz was asked about his and his partners' illegal gambling activities in Ohio and northern Kentucky, and reported links to New York organized crime figures Lucky Luciano, Benjamin Siegel, and Meyer Lansky.
Yablonsky acknowledges Dalitz "was a guy who had a certain amount of charm and grace," but also says "he was what you might call the point man for the mob."
By acquiring the image of the patron saint of the community, says Yablonsky, "Moe Dalitz was an important figure in terms of acquiring political power and influence [for] the mob's objectives."
Dalitz became "Mr. Las Vegas," says the ex-FBI agent, by completing the Desert Inn, building the city's first shopping center and building the Sunrise Hospital.
"It makes him sound like he was doing this because of civic spirit -- as opposed to the money that was being taken out of there."
Dalitz, he says, was probably "the one who influenced Jimmy Hoffa into the Teamster loans, [which] built a lot of the early casinos, and also [provided] the basis for the skim, and the mob having their foothold there."
Not only was Laxalt tight with Moe Dalitz, says Yablonsky, but he also became good friends with Allen Dorfman, the Chicago mob's man in charge of the Teamster's Central States Pension Fund.
While Nevada governor in the early 70s, Laxalt attended Dorfman's 50th birthday party in Chicago. He also met with mob-linked Teamster representatives in Palm Springs and, at their behest wrote then-President Richard Nixon a letter asking him to let Hoffa out of prison, arguing the charges against Hoffa had merely been part of a Bobby-Kennedy "political vendetta."
Yablonsky acknowledges he wasn't popular in Las Vegas. The reason, he says, is that he wouldn't subscribe to the community party-line -- the civic-booster pretense that corruption, organized crime, and skimming weren't linked to the casino business.
"One of the things that bothered them was that I was outspoken. If I were asked to speak -- and you know the Agent In Charge of a field office of the FBI is always invited to speak before different organizations [like] Lions, Kiwanis, etc. -- I always found that my topic, unless it was specified by the group, was the crime problems indigenous to where I operated.
"The problems in Nevada were corruption, organized crime and skimming. I'd talk about these things, [though] not specifically naming things, and they must have thought, 'This guy's out of his friggin' mind.' You don't talk about this stuff.
"And that's partly what pissed them off. My outspokenness."
Yablonsky was especially unpopular, he says, with the late Hank Greenspun, publisher of the Las Vegas Sun.
"I got a lot of press there. There was a campaign being waged by Mr. Greenspun of the Las Vegas Sun. We had a political corruption undercover operation, [and] that was when he first started his attack."
Nevertheless, says Yablonsky, "we nailed five of the politicians."

Greenspun and the Democrats

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