Robert Kennedy vs. the mob
How Nevada threw away a chance to clean up the casinos
When Robert Kennedy was murdered 50 years ago, Nevada was one of the many secondary victims of the bullets.
In the postwar world, Nevada was not a great argument for the spread of legal gambling. The mobsters who controlled state casinos were evidence against the notion, and the state officials who failed to do anything about them were an even stronger such argument.
As organized crime infiltrated Nevada, locals became invested in the mob, or so some believed, giving state politicians little reason to clean the mess up. Although state officials rattled off claims about how well regulated Nevada casinos were, when the U.S. Senate Special Committee on Organized Crime in Interstate Commerce investigated in 1951-52, it found that the meager licensing procedures, mostly handled then by the Nevada Tax Commission, did not regulate, reform or remove undesirables but rather gave those undesirables a “cloak of respectability.”
Nevadans, like others, were victims of the mob. Whenever someone got hooked on drugs, or a sporting event was fixed, or a woman was lured into prostitution, or a gambling debt was collected with brutality, or a dedicated police officer was reprimanded for doing his job, good people paid a price for Nevada politicians turning a blind eye to the mob.
Nevada Gov. Charles Russell added a Gaming Control Board to the Tax Commission in 1955, establishing two-phase licensing. Under Gov. Grant Sawyer in 1959, the Tax Commission was dropped and a Gaming Commission added, retaining the two-phase principle. But neither Russell nor Sawyer added—or convinced the legislature to add—requirements for existing casino owners to go through the new regulatory process. They were “grandfathered in,” escaping scrutiny.
During the late 1950s, Robert Kennedy was counsel for the Senate Rackets Committee. It gave him a deep-seated dislike of mobsters and the damage they inflicted on citizens and society. When he became U.S. attorney general in 1961, Kennedy took a minor Department of Justice organized crime section and made it buzz with activity. Part of the strategy was that the DOJ would make common cause with Internal Revenue in tracking mob money skimmed by the casinos (casino winnings diverted to avoid taxes). It was almost inevitable that tax fraud would be uncovered and dangerous mobsters could be prosecuted for the most pedestrian of crimes and taken out of circulation, just as Al Capone had been.
This would require the FBI to come alive on organized crime. Director J. Edgar Hoover, accustomed to dealing directly with presidents, found himself having to deal with his supervisor, the attorney general. Hoover believed there was no such thing as organized crime, or so he said.
A national threat
It should be noted that this was a very different era, when all gambling was considered disreputable, and Kennedy, with his puritan instincts, certainly felt that way. Legal gambling was rare, and only one state offered full-fledged casino gambling. Moreover, Las Vegas funded organized crime activities throughout the nation, which was intolerable. Kennedy’s black-and-white way of looking at things also did not lead him to distinguish between legal and illegal gambling—and Nevada’s sloppy regulation gave him no reason to do so.
There was wide knowledge in Nevada that skimming happened, and state officials did little to crack down on it. Those funds were used in corrupt ways in dozens of states. Moreover, Las Vegas itself was being built up with funds from the Teamsters Union Central States Pension Fund, a virtual mob front, so the dirty money flowed both in and out of Nevada. As the New York Times later reported:
“In the 1960s and 1970s, the Teamsters’ huge Central States pension fund was a wellspring of union corruption. Tens of millions of dollars were loaned to racketeers who used the money to gain control of Las Vegas casinos … including the Desert Inn, Caesars Palace, Stardust, Circus Circus, the Landmark Hotel and the Aladdin Hotel, according to a history by Edwin H. Stier, a former federal prosecutor hired by the union as part of its efforts to clean house.”
Ronald Goldfarb, prosecutor in Kennedy’s Justice Department: “If gambling was the multibillion-dollar bank for organized crime, Las Vegas must have been its federal reserve.”
Kennedy’s views on gambling were well established. In 1961, at a news conference in Dallas, Kennedy was asked, “Do you feel that organized gambling is the biggest crime problem that we have in this country?” He replied, “That finances most all the other operations.”
• Cincinnati news conference, April 6, 1962:
Q: “Would you favor legalizing [gambling]?
RFK: No, I would not.”
• U.S. News and World Report interview, Jan. 28, 1963:
Q: “Do places like Las Vegas make the job more difficult?”
Federal officials were suspicious of Nevada law enforcement, and it was a legitimate concern. Just the name of the state regulating agencies towed a line the casinos demanded, using gaming in the titles, a casino-favored euphemism that made it clear the state promoted as much as regulated. Federal agents believed a good way to get information to mobsters was to share it with Nevada officials.
The Nevada political world’s comfort level with shady characters caused problems. Goldfarb: “The department did not feel it could sell the Las Vegas U.S. attorney’s office on an independent organized crime field office. Nor did we feel we could impose one. And we certainly didn’t trust any office that was under local control. The federal courthouse and prosecutor’s offices were firmly in the hands of members of that core community, which for all its civic and personal virtues, our sources explained, was very protective of the area’s main industry.”
Nevada went after crime figures like Sam Giancana, true, and even listed them in its List of Excluded Persons. But that did little to slow down the mob, which was a national syndicate. Meanwhile, both sides needed better communication to be more effective against mob ownership, and that was not helped by state politicians arguing that federalism should keep the national government from any role in policing casinos. Nevada officialdom was willing to do anything to improve the state’s image—except get rid of the mobsters.
Nevada had startled many in voting for John Kennedy over Richard Nixon in 1960. Gov. Grant Sawyer was a lot of the reason. Early on, Sawyer became enamored of the Massachusetts senator. He worked hard during the campaign, and Nevada in November was an island of Kennedy support completely surrounded by Nixon states. (In half a century covering Nevada politics, Sawyer is the only figure in the state I ever saw wearing the coveted JFK gift—a PT boat tie clip.)
Sawyer, the most dynamic and progressive governor the state had ever had, also accepted the parameters of the industry he found when he took office. There was nothing illegal or unconstitutional about increasing requirements for licensure of existing owners, but he never called for it.
Soon after the Kennedy administration took office, Nevada mob casinos were feeling the heat, and so were state politicians.
There was certainly a level of zealotry on the part of RFK and his team, and it sometimes led them across some legal and constitutional lines. The Kennedy “toughness” did not allow for much sensitivity to civil liberties. Some cases were so tainted by fanatical intent that they could not be taken to court because of constitutional violations. Some that were taken to court were thrown out for the same reason. And the danger of leaks flowed both ways. In 1963, a reluctant J. Edgar Hoover delivered a confidential report on skimming in Las Vegas casinos to an insistent Robert Kennedy, and five days later a federal wiretap overheard mobsters reading the report.
A few months into the Kennedy administration, Sawyer heard from Nevada Attorney General Roger Foley that the U.S. Department of Justice had asked him to provide 65 agents for a raid on mob-owned or influenced Las Vegas and Reno casinos, to gather ledgers and evidence.
It was a great opportunity to clean up the casino industry, but Sawyer was shocked and angered. He and Foley flew to D.C. for a meeting with Robert Kennedy but got no satisfaction. Sawyer then turned to the president for help and, for whatever reason, the raid was never held.
It was one of Sawyer’s biggest mistakes. The federal government was planning a bold stroke to remove organized crime from the state. If Sawyer or his agencies had their own plan for the same ends, it was worth discussing. But they did not.
In some ways, Sawyer was the perfect governor to go after the mob. He was a former rural district attorney who beat a favored candidate anointed by auto magnate E.L. Cord for governor in the primary, then beat the incumbent Republican. The result was Sawyer had come out of nowhere, was underestimated by everyone, and so owed no favors to anyone in the casino industry. His changes in the regulatory process were fine, but they failed to solve the problem of mob ownership. In addition, the governor seemed to consider it part of his job to defend the casinos, notwithstanding that he had no depth of knowledge about their operations, and the D.C. investigators and prosecutors knew he was doing it. It made him suspect to them. Sawyer said he felt after his meeting with RFK that the attorney general suspected him of being mob-connected. He seemed not to realize that he had helped plant that notion in Kennedy’s mind by serving as messenger for the industry.
While it was unlikely that the state could supply 65 agents for the raid, it could have supplied some, including highway patrol officers, and the state’s participation in the raid would have eliminated most of the public relations problems Sawyer foresaw—indeed, it would probably have gone a long way toward improving the state’s reputation if it was seen trying to stamp out the mob.
Sawyer’s obstruction of the raid sowed the whirlwind. As reporter Robert Sam Anson described it, RFK eventually decided to go after “the mob on its home ground, and that was Las Vegas. By the fall of 1963, the attorney general had begun laying plans for a massive, frontal assault on the entire state of Nevada. No weapon would be spared. All the investigative resources of the federal government, from FBI to IRS, would be enlisted in the effort.”
A few weeks later, President Kennedy went to Texas, and all hope of the Nevada mob being thrown in the slammer died with him. A few days after the assassination, a Chicago mobster was heard on a federal wiretap telling Nevada crime figure Sam Giancana, “In another two months from now, the FBI will be like it was five years ago.” So it was. Hoover stopped reporting to RFK and formed an independent relationship with the new president, Lyndon Johnson. The FBI now would do about the mob only what Hoover allowed it to do.
Robert Kennedy was in no condition to fight another bureaucratic war with Hoover. Anguished by the loss of his brother, he eventually resigned to run for the Senate from New York.
The Nevada Project died aborning. Organized crime as a concern at the Department of Justice may have lost its momentum and its principal driver, but there was no turning back on its continued activities. It was now a part of national policy to stamp out the mob, and there was a whole generation of rising prosecutors who Kennedy had inspired—and Sawyer still had to deal with them.
While RFK may not have been able to do all he wanted in Nevada, he accomplished a lot. Reno’s Nevada State Journal once editorialized skeptically, “Sure, he ’got the goods’ on a few gangsters in Las Vegas—for they were there, and probably skimming.”
Steven Brill has written of “Kennedy’s unparalleled effectiveness as attorney general in fighting organized crime. Kennedy obtained, in addition to the Hoffa case, about two hundred indictments against Teamsters officials, and more than half resulted in convictions, though only a few were sentenced to prison.” According to Goldfarb, the organized crime office had 30 grand jury investigations going on in 26 cities. Little wonder that some mobsters were heard talking assassination on wiretaps
Sawyer was in a very difficult political position. He was a JFK ally who despised RFK. He targeted RFK and Hoover as partners. He attacked a Democratic administration and its FBI while his expected 1966 Republican opponent, Lt. Gov. Paul Laxalt, defended the FBI. And throughout the combat, the political heat kept rising. More to the point, once Kennedy was gone, Sawyer had to fight the Johnson administration’s Justice Department, and he did—while seeking reelection.
In the Senate, after he regained his emotional equilibrium and his grief diminished, RFK was able to understand nuance better. His views on civil liberties, including wiretapping, changed to become more protective of rights and personal privacy. He still had his fierce loathing for organized crime, and as president he would have been a major problem for the Nevada mob.
When Kennedy announced his candidacy for president in 1968, the assumption was that his candidacy was dead in the water in Nevada. Sawyer, still one of Nevada’s most admired figures, chaired Hubert Humphrey’s Nevada campaign. In his oral history, Sawyer said, “My relationship with Bobby Kennedy never improved. I hadn’t particularly cared for him before this incident—his arrogance and his cavalier attitude turned me off even during the 1960 campaign—and after our confrontation I had no use for him at all.”
Word about the intransigence of most Nevada Democratic leaders toward him must have reached Kennedy, because he took time out from campaigning in the Indiana primary to write up a statement, and on May 3 he had U.S. Rep. Teno Roncalio of Wyoming, one of his Western representatives, release it in Indianapolis.
“The economy of Nevada has developed gambling as a major industry,” Kennedy said in the statement. “Nevada enforces a strict standard of regulation over gaming activities within its own borders. While I have personal views on this subject which I have held throughout my life, I would not presume, if elected president, to try to impose them on the people of Nevada. Basically, the state’s people should decide for themselves what the main business and source of revenue should be. I know the people of Nevada are concerned with protecting their legitimate gambling industry against encroachment by organized criminal elements. I will try to cooperate with them in this effort so that the industry can continue to be conducted in an orderly manner.”
Kennedy offered the state assistance with economic development if it wished to diversify its economy. He also said he had for several years supported limits on wiretapping both by private industry and government.
His critics in Nevada were not impressed. The Reno Journal said, “If the mop-haired Mr. Kennedy ever became president, and decided that the best political stance of the moment was to wipe out gambling, it wouldn’t take him five minutes to switch his ’philosophy’ and move toward its elimination.”
With RFK’s murder, 50 years ago this week, Nevada drifted. Paul Laxalt replaced Sawyer as governor, and Laxalt’s pals included organized crime figures like Moe Dalitz, Allen Dorfman and Delbert Coleman, and Laxalt said he would not discard friends.
Laxalt’s notion of how to drive out the mob was not by cracking down in regulation but by encouraging the casino-buying spree of reclusive billionaire Howard Hughes, who brought his own baggage and seamy associations with him and who bought out so many mobbed-up casinos in Las Vegas that it distorted the market and threatened federal anti-trust action. Nor was Hughes anyone’s idea of a permanent solution.
Meanwhile, the U.S. Justice Department continued its steady, methodical efforts against organized crime and against Nevada’s funding of the national crime syndicate.
After Hughes’s departure from Nevada, his casinos were slowly sold off. And the mob moved back in behind front man Allen Glick and his Argent Corporation. The feds knew it was happening; state regulators did not. (State legislators still claim Nevada regulation is the “gold standard” of state scrutiny of casino owners and managers.) “Why they didn’t just pick up the phone and tell us, I will never understand,” attorney general and governor Robert List later said. But the years of Nevada winking at the mob had taken its toll on the state/federal relationship.
It took years to pry the mob out again.
Sawyer once said of Robert Kennedy, “I wouldn’t have supported him under any conditions, even if it meant I had to support a Republican instead [laughs]. The thought that Bobby might become president of the United States was frightening.”
That was in the 1990s. It was striking that Sawyer was unable to reconcile himself to someone so similar to himself. Sawyer was a conservative, small-town prosecutor who became a liberal governor. Kennedy was a conservative congressional staffer who became a liberal senator. Both men changed their minds about issues like the death penalty and Vietnam. But Sawyer’s dislike of Kennedy blinded him to RFK’s evolution.
As the post-Kennedy casino ownership events unfolded and the new federal anti-mob campaign took hold, views of Kennedy in Nevada started to change. His anti-mob drive began to be viewed as a missed opportunity. In addition, a new generation of politicians emerged. Mob lawyer Oscar Goodman, who had made a good thing of organized crime clients in Las Vegas, was always around to give a good anti-RFK quote, but his time was passing, though he did a turn as Las Vegas mayor that seemed more like a circus act, show “girls” perpetually on his arms.
In 1993, Las Vegas Mayor Jan Jones was warming up to run for governor. She spoke in the state capitol to a banquet of public employees one evening, and her speech contained an inspiring quote from Robert Kennedy. I could not quite believe my ears—a Las Vegas politician was quoting RFK!