copyright © 1996, Electric Nevada
It was FBI wiretaps
that eventually revealed how the Chicago Mob had bought Howard Cannon, Nevada's senior
senator in 1978, says Yablonsky.
"The FBI in Chicago," says
the former Supervising Agent in Charge of the Nevada district, "had an operation
called 'Pendorf', which stood for 'Penetrate Dorfman.'"
"Dorfman" was Allen
Dorfman, stepson of long-time Al Capone associate and Jimmy Hoffa friend Paul
"Red" Dorfman. He had been designated by Hoffa as his stand-in on the Central
States Pension Fund.
"When Jimmy Hoffa went to
jail," said Yablonsky, Allen Dorfman "became the alter ego for Hoffa, and he was
the one who controlled the Central States Pension Fund.
"Of course, he was controlled by
the Chicago mob, and I think the guy who had the main contact with him was Joey 'The
Yablonsky endorses the account of
researcher James Neff, author of Mobbed Up; Jackie Presser's High-Wire Life in the
Teamsters, the Mafia, and the FBI.
"It goes into the whole
shmear," says the retired agent.
According to Neff, Hoffa had given
the younger Allen control of the Central States pension fund as a payoff to the senior
Dorfman for help in getting the support of the Chicago Mob. Paul "Red" Dorfman
was a close friend of Tony Accordo, a Capone lieutenant who'd taken over when Capone had
been forced to depart.
And the Central States Pension Fund,
says Neff, "had loaned money, sometimes with disastrous results, to the neon lords of
the Aladdin, Caesar's Palace, Circus Circus, the Desert Inn, the Fremont, the Lodestar,
the Stardust and the Plaza Towers casinos and hotels, all in Las Vegas.
"In Lake Tahoe, the truck
drivers' retirement money was sunk into the King's Castle and the Sierra." In Reno,
the Riverside Hotel / Casino got Teamsters money.
By 1977, says Neff, more than 50
Central States loans -- with an original cost of $200 million -- were in default, and the
fund was losing roughly $15 million a year in annual interest payments.
"Half the loans, according to
one estimate, went to the Mob or Mob associates, earning Central States a cynical
sobriquet -- the Mafia's bank."
The man who brought what Neff calls
"the Central States honeypot and its low-interest loans" to Las Vegas was Moe
Dalitz (see Part One), who had been a member of the ruthless
Detroit Purple Gang, during Prohibition, had met Hoffa in the mid-Thirties, and had paid
him off to stop a Teamsters strike in 1949.
After opening the Desert Inn on the
Vegas strip that same year, and two years later being revealed in the televised Kefauver
Senate hearings as a top man in the Cleveland bootleggers syndicate, in 1957, seeking
social acceptance, Dalitz in decided to build a new for-profit hospital in Las Vegas. Two
years after that, he borrowed $2 million from the Central States Pension Fund, began the
construction and hired a San Francisco public-relations firm to promote the project --
and, incidentally, anoint himself with do-gooder status.
Then, a few years later, Dalitz
arranged another $8 million loan from the Teamsters -- for the purchase of the Stardust
Hotel and Casino.
About 20 years later -- long after
the Mob had seriously penetrated most of the major Las Vegas casinos, Dalitz, according to
FBI informants, was still the Mob's point man in the city.
"The individual who oversees the
operations for the LCN [La Cosa Nostra] families in Las Vegas," said a contact agent
report in 1978, "is MOE DALITZ.
"DALITZ makes certain that there
is no cheating with regard to the skim money taken out of the casinos and further, that
there is no fighting among families for control of various casinos."
By now the FBI was alert to how much
the Mob had penetrated Las Vegas under Allen Dorfman and the Teamsters pension fund.
"The agents had been compiling
intelligence from different sources," writes Neff, "that revealed Dorfman as a
hidden owner of Las Vegas casinos to which he had steered Teamster loans.
"In return for the loans, casino
owners such as Allen Glick allowed Mob associates to skin unreported cash."
Soon, says Yablonsky, "The FBI
in Chicago .. had all these wires [on Dorfman], they had his office and his phones and
everything else, tapped."
It was about that time that Nevada
Senator Howard Cannon decided to ask Dorfman for a favor.
The senator, who not only had
business partners active in Teamsters-financed casinos, but also had a daughter working at
the Stardust as a secretary to the Mob/Dorfman-installed duo of Frank "Lefty"
Rosenthal and Allen R. Glick, had raised eyebrows just two years early with his 1975-76
campaign finance reports.
Thirty-three of his contributors had
been involved in or associated with organized crime, or were top officials of firms linked
to organized crime. A Cannon aide pooh-poohed it as routine in Nevada -- saying one
couldn't run for Nevada office without taking contributions from the gambling industry.
"The senator," writes Neff,
"lived in the exclusive Las Vegas Country Club Estates, which, like much of Las
Vegas's choice real estate, abutted a vacant 5.8-acre parcel owned by the Teamsters
Central States Pension Fund."
But by that November of 1978, the
fund had a new government-appointed assets administrator, the Victor Palmieri Company, and
the company had solicited bids for the land.
"The winning bidder wanted to
build three nine-story condominium buildings on the land," says Neff, but "the
last thing" Cannon and his wealthy neighbors wanted "was hundreds of new
residents spoiling their view and property values."
Banding together, they vowed to stop
the high rises. Cannon, for his part, offered to call Dorfman.
"He knew Dorfman was the man to
see about getting a Teamsters favor," writes Neff.
But it turned out the Mobbed-up
Teamsters also had a favor to ask. The Carter administration was seeking the deregulation
of interstate trucking, which -- with its fixed rates and closed access -- had long been a
cash cow for the union.
"The Teamsters did not want
trucking to be deregulated," says Yablonsky, "because obviously the competition
would have driven the rates down." In addition, the legislation was being pushed in
the Senate by Sen. Edward M. Kennedy, brother of Teamsters bete noire Bobby Kennedy.
"On Wednesday, January 10,
1979," writes Neff, "in his private Las Vegas office, the senator sat down with
Allen Dorfman and Roy Williams and a Teamster lawyer named Ed Wheeler...
"As a key participant later
admitted, Williams and Dorfman asked Cannon to oppose Kennedy's proposed trucking
deregulation bill after it was introduced. Cannon asked about buying the 5.8 acres
Top of page
abutting his fancy home. Williams then promised the senator that he and
his neighbors could buy the property if Cannon would tie up the deregulation legislation
in his Commerce Committee."
Less than two weeks Teddy Kennedy
unveiled his deregulation bill in the Senate Judiciary Committee.
"Cannon immediately insisted
that the bill -- which proposed to outlaw rate-setting -- belonged in his Commerce
Committee," says Neff. "Kennedy's bill was snagged and was never even
Dorfman, Roy Williams and other
mobbed-up Teamsters soon found that the cleaned-up Palmieri administration of the Pension
Fund, now using sealed bids to sell real estate, was making it difficult to put the fix in
But the Nevada senator, unaware of
the Mob's problems, was busy holding up his end of the conspiracy, says Yablonsky.
"He was going through with it,
and what happened, the Bureau had those wires there."
Cannon's son-in-law, a realtor named
Robert Bjornsen, and Dorfman employee William E. Webbe, were recorded on the FBI tapes
discussing the transaction in veiled terms.
A hidden microphone was also in
Dorfman's office on May 21, 1979 when Senator Cannon personally called to ask about the
"Dorfman apologized for the
delays and told Cannon to have his son-in-law resubmit their $1.4 million bid,"
"'After he hung up, Dorfman
announced, "Senator Cannon."
"'How's he doing?' Peters asked.
"'Huh? We fucked him around like
no man has ever been fucked around. Get Bob Borgensen ... on the phone.'
"'Bjornsen?' Webbe said.
"'Bjornsen, what the fuck ever
his son-in-law's name is,' Dorfman said.
"'He took care of deregulation,
didn't he?' Peters asked. The entire Teamsters executive board seemed to know about the
"'Huh?' Dorfman said.
"'Did he take care of
deregulation?' Peters repeated.
"'Of course,' Dorfman said. 'But
we ain't fulfilled our commitment to him yet. You know, I'm surprised he still even talks
"A few minutes later, Dorfman
told Peters that he had to meet Cannon on June 1 in Las Vegas to make another request.
"'You know why I gotta meet the
senator on June 1st? This is even funnier. Gotta go for another favor. A favor for Dusty
Miller. You know, I'm gonna wear out my welcome with this guy. I keep going to him for
favors, he keeps performing, we keep delivering him shit.'"
Nevada's senior Senator never did get
the real estate parcel he wanted, notes Neff. And, as the Chicago Strike Force leader,
Doug Roller, would later point out, it was the Mob mentality that had defeated the Mob.
"'If Dorfman hadn't been such a
cheap motherfucker, they wouldn't have even had this case,' Roller would say, noting that
the price being asked for the property by the Victor Palmieri Company was $1.6 million.
"'All Dorfman had to have done
was come up with that $200,000 for the senator through other machinations.' The Teamsters
would have had him in their pocket and not left a steady six months of telephone calls for
the FBI to intercept and interpret.
"'To Allen Dorfman and the Mob,
$200,000 was nothing,' Roller went on. 'But that would have been too easy. They'd have to
front their own money. That's a total antithesis to the mentality of organized crime. They
don't give, they take. So they go get themselves in a jam for $200,000.'"
"When that investigation become
public a few months later," says Yablonsky, "Cannon went the other way on [the
Yet all of the evidence indicated
that the quid pro quo with the Mob had been, he said, "a done deal."
"So they were indicted --
Dorfman and Lombardo and a couple of others -- for, quote, attempting to bribe Senator
Cannon. And Mr. Cannon was left out of the indictment."
The original memo to the Justice
Department in 1980 from the Chicago Strike Force had sought permission to also indict
Senator Cannon, but the Justice Department hadn't seemed particularly keen on that idea,
"It was explained privately to
Chicago Strike Force chief [Doug] Roller that the FBI had intercepted only one telephone
call -- fairly innocuous on its face -- between Cannon and Dorfman.
"The Justice Department and the
Chicago Strike Force haggled for a while over indicting Cannon, and eventually Roller was
Interviewed by Neff years later,
Roller said, "In my fifteen years in the Department of Justice, I have never seen any
response by my superiors to political pressure.
"The closest thing was the
decision not to indict Cannon. This is speculation. It was summer of an election year. It
wouldn't have done the Democrats any good to have a powerful senator linked to
organized-crime figures. I don't know if there were other factors at work."
"Cannon escaped that
situation," says Yablonsky, "but interestingly, when he came up for reelection
in '82, he was defeated. A lot of it might have had to do with that situation."
Running down the list of well-known
Nevada politicians active during Yablonsky's 1980 through '83 tenure in Nevada, Electric
Nevada asked the former station chief about Senator Harry Reid.
The reaction was quick and blunt.
"Harry Reid is a mealy-mouth,
and he was in their pocket just like the rest of them.
"Of course, there's certain
things I know I can't speak about because of Privacy Act considerations. But he's a worm,
and he was a Congressman, back there, representing Mr. Greenspun, you know, trying to
agitate in terms of my removal.(see Part Two).
"But all you've got to do is
read the poem he read when they had that phony Sinatra licensing."
EN: He wrote a poem?
Yablonsky explained that, even though
Frank Sinatra had lost a gaming license
in the state of Nevada back in 1963 after evidence surfaced that mobster Sam Giancana was
the real owner of the Cal-Nevada Lodge at Lake Tahoe and that Sinatra was merely a
mob-friendly figurehead, Sinatra was back before the state Gaming Control Board in the
late '70s, seeking a gaming license again.
"After this ridiculous
hearing," he said, "when Sinatra went up for licensing -- [in a hearing] which
had no adversary witnesses -- McNeil-Lehrer played a half-hour of it on their program
without even making a comment, it was so obvious."
"And when it came up to the
Gaming Commission, which you know is [the top tier of] a two-tiered system, Reid was the
chairman, and he read this kiss-ass poem.
"He's a faker."
§ § §