Chapter 2 – John McCain and Organized Crime in Arizona37 min read

Ten thousand Jews are selling booze without the law’s permission

To fill the needs of a million Swedes who voted Prohibition.

—Elliott Wadsworth

The trans-generational influence of organized crime on the U.S. presidency will be chronicled in the forthcoming Criminal State series. Guilt by Association focuses primarily on the organized crime lineage that positioned the current candidates for the White House. This chapter chronicles the history of the state of Arizona as a key node in the node-and-network system of organized crime that nurtured John McCain’s political career.

This chapter opens with a rhyme comes from Assistant Treasury Secretary Elliott Wadsworth and refers to the fact that the law that made Prohibition a reality on January 16, 1920 was authored by Minnesota Congressman Andrew J. Volstead. Wadsworth understood that, in practical terms, the Volstead Act capitalized organized crime, established a continent-wide distribution network for criminal activities, and identified a network of corrupt politicians for future operations.

When the U.S. banned the manufacture and sale of alcohol, the stage was set for massive profits by those willing to operate outside the law and those willing to ship alcohol across the U.S.-Canadian border. After founding Distillers Corporation in Montreal in 1924, Sam Bronfman acquired Joseph E. Seagram & Sons in Waterloo, Ontario in 1928. That same year organized crime convened in Cleveland, Ohio.[1] By 1929, this criminal elite was ready to form the National Crime Syndicate at its first-ever conclave in Atlantic City, New Jersey. To escape prying ears, the mobsters rolled up their trousers and cut most of their deals while standing knee-deep in the waters of the Atlantic.

Conceived by New York’s Meyer Lansky and Frank Costello and by Chicago’s Johnny Torrio, conclave attendees meeting at the posh Breakers Hotel included Al “Scarface” Capone, Benjamin “Bugsy” Siegel, Charlie “King” Solomon, Max Hoff, Waxey Gordon (né Irving Wexler), “Nig” Rosen, Sam Lazar, Charlie Schwartz, Moses “Moe” Dalitz, Dutch Schultz, Longy Zwillman, Hymie Weiss, Lou Rothkopf, Leo Berkowitz, Abe Bernstein and (reportedly) Chicago’s Moses Annenberg who Torrio financially backed to buy The Daily Racing Form. [2]

Like the infamous Al Capone, Chicago mob boss Johnny Torrio moved to the Windy City from the orthodox Jewish neighborhood of Williamsburg in New York City’s Brooklyn borough where he and Capone proved themselves sufficiently violent to oversee the Chicago Outfit. At the Atlantic City conclave, Meyer Lansky emerged as syndicate chairman and chief financial officer. While in their early teens on Manhattan’s Lower East Side, he and Bugsy Siegel rose to prominence as killers-for-hire. The Polish Lansky (Mieir Suchowljanksy) and Italian Charles “Lucky” Luciano oversaw “Murder, Inc.,” a syndicate assassination affiliate that ensured the smooth operations of this nationwide network.[3]

To reduce the violence that accompanied territorial disputes and attracted unwanted public scrutiny, the Atlantic City gathering divided the U.S. into 24 exclusive markets. A syndicate member was put in charge of each territory, with the New York City area home to five territories and Las Vegas designated an open city with syndicate oversight. At the conclave, Tom Lazia represented Kansas City’s Pendergast political machine—a point to keep in mind when considering Harry Truman’s political lineage and his recognition of Israel in 1948.[4]

Psychological Profile

In the course of researching the criminality chronicled in this account, it became essential to find a psychological profile that accurately described those identified as key operatives. The online Compact Oxford English Dictionary offered an appropriate clinical definition of those morally and ethically dissociated from the society in which they live. The descriptors in bold have proven reliable in accurately describing those chronicled in this account:

psychopathy n. A mental disorder roughly equivalent to antisocial personality disorder, but with emphasis on affective and interpersonal traits such as superficial charm, pathological lying, egocentricity, lack of remorse, and callousness that have traditionally been regarded by clinicians as characteristic of psychopaths, rather than social deviance traits such as need for stimulation, parasitic lifestyle, poor behavioral controls, impulsivity, and irresponsibility that are prototypical of antisocial personality disorder.

Whether psychopathy and antisocial personality disorder share a common referent is an open question. Compare sociopathy. psychopath n. A person with psychopathy. psychopathic adj. [From Greek psyche mind + pathos suffering]

The Real Syndicate

In November 1931 Meyer Lansky convened in Manhattan’s Franconia Hotel a Jews-only sequel to the Atlantic City conclave. When Philadelphia bootleg king Waxey Gordon refused to work with the cover provided by Italians and Sicilians (aka “the Mickey Mouse Mafia”),[5] he was murdered. That risk to the Jewish-dominated syndicate was handled by replacing him with “Nig” Rosen and “Boo Boo” Hoff.[6]

Moe Dalitz attended each conclave—Cleveland (1928), Atlantic City (1929) and Manhattan (1931). Operating out of the Great Lakes area, the Cleveland node in the syndicate network prospered when “the Jewish Navy” shuttled Bronfman booze across Lake Erie for nationwide distribution. Dalitz soon became the syndicate equivalent of a regional manager.

He oversaw much of the liquor bootlegged into the U.S. across the Detroit River, a narrow strip of water separating Michigan from Ontario and from the Bronfman-owned Seagram & Sons distilleries in nearby Waterloo. Known as the “hooch highway,” the easy border crossings around Detroit led organized crime to buy the bulk of Macomb County where narrow Lake St. Clair (the sixth of the five Great Lakes) became another favored entry point.

Dalitz also oversaw the labor racketeering most famously associated with Teamster President Jimmy Hoffa and labor lawyer Sydney Korshak whose consigliere role in positioning Ronald Reagan for the presidency will be chronicled in the Criminal State series. Dalitz also oversaw Gus Greenbaum, a key figure in organized crime in Arizona. A Lansky colleague in New York, Greenbaum migrated to the Midwest where he worked for the Chicago Outfit before moving to Phoenix in 1928.

The 1929 Atlantic City conclave also discussed the lucrative racing wire service and its delivery of real-time horse race results to bookie joints nationwide. The wire service became a key organizing mechanism around which syndicate operations coalesced not only nationwide but also in Canada, Mexico and Cuba. Bugsy Siegel ran the wire service in Las Vegas and Los Angeles while Greenbaum oversaw the Arizona operation. By 1941, Siegel became enamored with Nevada as an attractive center for gambling and prostitution. With the help of Siegel’s childhood friend Meyer Lansky, syndicate operatives advanced the funds needed to build the Flamingo, a gambling and vacation resort named after Virginia Hill, an Alabama-born dancer, mob courier and Siegel consort.

By 1947, Lansky realized that, in addition to suspect cost overruns, Siegel was skimming the casino skim and using Hill to transport the funds for deposit in Swiss bank accounts. A Murder, Inc. operative killed Siegel in Los Angeles using a high-powered rifle fired through a window from 15 feet away. Confirming by his presence it was a syndicate-approved hit, Greenbaum was on hand in Las Vegas to take over the Flamingo. With Greenbaum’s relocation to Nevada, the syndicate named Kemper Marley as his replacement to run the Arizona operation. Marley was by then a land and liquor magnate prospering as a statewide distributor of Bronfman-provided liquor in the post-Prohibition era. According to Rumrunners and Prohibition, a popular History Channel account of the era:

During the 1920s, the Bronfmans made a bonanza in bootlegging. The company may have accounted Terrarium for half of the illegal liquor crossing the border. Some claimed that Bronfman had a distribution deal for his booze with the infamous Jewish mobster Meyer Lansky….When the morally intentioned Prohibition finally ended in 1933, it left a legacy of bloodshed, racketeering, and one of the wealthiest family dynasties in the world, the Bronfmans.[7]

Marley escaped indictment on federal liquor law violations in a case that led to the March 1948 conviction of James Hensley for black-market liquor sales. He was also charged with conspiracy to conceal the names of those involved in rackets involving the liquor industry. Hensley’s six-month sentence was suspended. At the time, Marley’s United Liquor had a virtual statewide liquor monopoly dating from soon after the repeal of Prohibition. Al Lizanetz, Marley’s public relations specialist, conceded that the Bronfman family founded Marley’s liquor operation.

By the mid-1950s, Hensley controlled one of the nation’s largest Anheuser-Busch distributorships, a franchise reportedly directed to him by a grateful Marley who escaped indictment in both the 1948 case and in a subsequent case despite his dominant role in statewide liquor distribution. By 2000, Hensley & Co. was the nation’s fifth-largest wholesaler of beer with annual sales exceeding $200 million in his closely held firm.[8] On his death in June 2000, his daughter Cindy became controlling shareholder and chairman of the board.[9]

Two decades earlier Jim Hensley had hired his son-in-law, John McCain, as vice-president for public relations—a post he soon vacated, as anticipated, to begin a political career. A 1982 gift of $689,000 from a Hensley & Co. affiliate to Cindy McCain eased the son-in-law’s ability to lend his campaign $167,000.[10] A pre-nuptial agreement ensured that McCain’s financial records would omit his wife’s business interests. She reported $6 million in income for 2007 ($16,400 per day). By 2008, Hensley & Co. had become the nation’s third largest Budweiser distributor with more than $300 million in annual sales.[11]

The Arizona Connection

When Kemper Marley died in 1990 at age 83, his New York Times obituary highlighted his Phoenix police-reported connection to the 1976 murder of Arizona Republic investigative reporter Don Bolles. Articles published by Bolles reportedly persuaded Marley to resign his position on the three-member Arizona Racing Commission soon after his appointment. Bolles was assassinated while investigating statewide corruption. Mortally injured by a bomb concealed beneath his car, Bolles lost both legs and an arm. He died eleven days later.

Before lapsing into unconsciousness, Bolles mentioned, “Adamson, Emprise, Mafia.” John Harvey Adamson served a 20-year prison sentence after confessing that he had lured Bolles to a Phoenix hotel parking lot and placed a bomb under his car. Emprise has numerous connections to organized crime in Arizona. Emprise is the corporate name of the Jacobs family operation in Buffalo, New York, known nationwide as “the Godfather of sports.” After Eugene Hensley, brother of James, entered a federal prison in Texas in 1969 to serve a sentence for tax evasion, he sold his interest in Ruidoso Downs, a racetrack in New Mexico from which he’d been banned due to his conviction. After the sale, the buyer signed a 20-year concession with Emprise.[12]

The Emprise connection remains relevant to this latest presidential candidate from a state that has long been a magnet for organized crime. It was from the Jacobs law firm in Buffalo that Bill Miller emerged to run as the vice-presidential nominee along with Arizona Senator Barry Goldwater in his losing race against Lyndon Johnson in the 1964 presidential election.[13] Miller knew that he and Goldwater were not going to win so he often directed the pilots of his campaign plane to circle a few more times if he had a good poker game going.[14] Had the Goldwater/Miller ticket not lost, Lyndon Johnson would not have been in the White House when Israel staged its preemptive land grab in the June 1967 Six-Day War. The response to that U.S.-backed provocation triggered foreseeable outrage throughout the predominantly Muslim region, preparing minds worldwide for the plausibility of The Clash of Civilizations.

Johnson was the right president at the right time and under just the right circumstances to perform as a pliable and reliable asset in the lead-up to that war. Profiling of that Oval Office occupant included the well timed servicing—in the White House­—of the personal needs of a U.S. commander-in-chief by an attractive blonde former Irgun operative the same night that the 1967 war began. (See Chapter 4.)

Committee on the Present Danger

Organized crime in Arizona also features Jon Kyl, another key component in this transnational syndicate. Second-ranking in the Republican leadership, Kyl serves as honorary co-chairman of the Committee on the Present Danger.[15] Joe Lieberman, the other co-chair, serves as McCain’s inseparable political companion and is poised to become a senior appointee in a McCain administration. Within days of wrapping up the Republican presidential nomination in March 2008, McCain announced that he and Lieberman would travel together to Israel.

The Committee on the Present Danger (CPD) was founded in 1950 with a grant from David Packard of Hewlett Packard. Envisioned as a “citizen’s lobby,” its initial goal was to alert Americans to the danger of the communist threat. To that end, CPD generated support for the military build-up advocated in NSC-68, a National Security Council blueprint for America’s Cold War strategy written in 1950 by Paul Nitze, an adviser to Dean Acheson. Truman named Acheson his secretary of state after a surprise victory over New York Governor Tom Dewey in the November 1948 presidential election. That appointment followed former Secretary of State George C. Marshall’s adamant opposition in May 1948 to Truman’s recognition as a legitimate sovereign state an enclave of Jewish elites and fundamentalists.

By 1951, CPD was sponsoring a weekly broadcast on NBC warning of the dangers of the Soviet threat. That same year saw New York investment banker Donald Stralem fund the production of Duck and Cover. The Stralem-produced film directed teachers to train their students how to duck under their desks and cover their heads with their hands in case of an “atom attack” by the Soviet Union. Shown to mandatory attendance in schools nationwide, Stralem’s brief film struck terror in the national psyche with a Truman-era Civil Defense education program tailored to the “emotion management” needs of the Cold War.

Soon thereafter, Americans began building bomb shelters and debating how best to exclude their fallout-infected neighbors should they become a target of communist Evil Doers, the present danger of that era. CPD was disbanded in 1953 but only after its leaders were given policy-shaping positions in the Eisenhower Administration. CPD II emerged in March of 1976 to influence the presidential race between Gerald Ford and Jimmy Carter. After Carter’s victory, CPD II members lobbied the “missile gap” for the next four years, the present danger of that era.

Prior to President Ford’s 1976 electoral loss, the former Michigan Congressman ordered the formation of “Team B” as an alternative threat assessment to the National Intelligence Estimate provided by the Central Intelligence Agency (“Team A”). On the recommendation of neocon Richard Perle, neocon Paul Wolfowitz was made a member of Team B. That appointment provided the future deputy secretary of defense an entry point into the upper echelon of national security politics.

Richard Pipes emerged as the primary intellectual force in compiling Team B assessments. In retrospect, it is now known that Team B exaggerated the risk to national security of Soviet military and economic strength.[16] Team B also set the precedent for what emerged 25 years later as a Pentagon operation (the Office of Special Plans) that “fixed” the intelligence to induce the invasion of Iraq. As with the inflated Soviet threat, policymakers were induced to believe that Iraq posed a far greater threat to national security than the facts warranted.

Two decades earlier, Team B’s hawkish input influenced intelligence reporting as well as Pentagon spending as its “worst case” scenarios routinely worked their way into Ronald Reagan’s campaign speeches and into administration policies. Following his election as president in November 1980, 33 members of CPD II were given policy positions, gaining this neoconservative network the power to shape legislation.

Fixing the Intelligence

The insider influence wielded by CPD II operatives ensured a highly profitable, deficit-financed binge of defense spending during the Reagan era. Revised intelligence estimates after the collapse of the Soviet Union in 1989 confirmed overstatements both in the CPD-II “missile gap” and in Team B claims of the Soviet threat. With the election in November 2000 of George W. Bush, members of CPD II and Team B moved inside the Pentagon where their operations turned to overstating the threat of Iraqi weapons of mass destruction (WMD).

Intelligence agency flaws in assessing the Soviet threat had by then fueled skepticism in the post-9/11 policy environment. When official intelligence estimates of the WMD threat posed by Iraq proved inconsistent with the present danger assessed by pro-Israelis in the Pentagon’s Office of Special Plans, the “intelligence” provided by that office was given the benefit of the doubt.

With the perceived authority of a Pentagon intelligence operation overseen by neocon Defense Under Secretary Douglas Feith (a co-author with Richard Perle of A Clean Break), pro-Israeli operatives exploited a direct intelligence conduit into presidential decision-making, bypassing legitimate intelligence agencies (subject to Congressional oversight) with the aid of Lewis “Scooter” Libby, the Ashkenazi chief of staff for Vice President Dick Cheney.[17]

Indicative of how an ideologically aligned network can leverage a few people into “virtual” control over national security decision-making, note how few operatives were required to preempt legitimate intelligence operations that cost taxpayers more than $50 billion per year.[18] That insider influence required lengthy pre-staging so that members of this pro-Israeli network were positioned to serve in the right place at the right time and under just the right circumstances.

The CPD emerged again after the March 2003 invasion of Iraq relied on the fixed intelligence provided through the Office of Special Plans. In its third incarnation, members of CPD III again acted as a self-appointed “citizen’s lobby” for the latest present danger: terrorism and the need for Pentagon appropriations to protect America—from “Islamo-fascism.”[19]

With the prodding of CPD operatives, the costly Cold War morphed seamlessly into a costly, borderless and endless “global war on terrorism.” As terrorists displaced communists as consensus Evil Doers, CPD III chose two high-profile Zionists as honorary co-chairs: Senator Jon Kyl, a Christian Zionist Republican, and Joe Lieberman, a Jewish Zionist Democrat/Independent. In lockstep, both lawmakers lobbied for military action against Iran as the latest present danger.

One co-chairman of CPD III is former CIA Director Woolsey, purveyor of the discredited notion that 9/11 hijacker Mohammed Atta met in Prague with an Iraqi intelligence officer. The other is George Schultz. A former president and director of Bechtel Group, a major defense contractor, Schultz was a key promoter of the discredited missile gap while serving as Ronald Reagan’s secretary of state (1982-89).

After losing the 2006 Democratic primary in Connecticut, Joe Lieberman was re-elected to the Senate as an independent. In January 2007, his Democratic Party colleagues named him chairman of the Senate Committee on Homeland Security, enabling them to maintain their slim 51-49 majority in the Senate by granting him that position. Aided by Schultz and Woolsey, Senators Kyl and Lieberman have proven themselves reliable advocates in marketing the profitable “terrorism gap” and calling for vast expenditures in homeland security.

For example, since anthrax-laced letters were sent to Congressional offices and news organizations in late 2001, almost $50 billion has been spent to build new laboratories, develop vaccines and stockpile drugs.[20] The source of that military-grade anthrax remains an open issue.[21] The cost of using private contractors in Iraq will surge past the $100 billion mark before the end of 2008.[22] Contractors in Iraq employ at least 180,000 people, larger than the U.S. military force

The Phoenix Connection

Evidentiary trails in this area seldom run in straight lines, a fact that will become increasingly apparent in later chapters. Also, “prepare-the-minds” incidents, events and relationships are often pre-staged over lengthy time periods, making barriers to transparency even more daunting. Yet the evidence becomes robust once the reader grasps how this syndicate operates across generations with a common criminal focus coordinated around a shared ideology.

For example, when Bugsy Siegel was murdered and Gus Greenbaum took over his role in Las Vegas, the syndicate required a Jewish operative to fill Siegel’s role to oversee the racing wire service in Los Angeles. That job fell to Mickey Cohen who became a reliable fundraiser for Richard Nixon, an up-and-coming Congressional candidate. In addition to helping fund Nixon’s 1946 race for the California Assembly, Cohen sponsored a mobsters-only fundraiser for his 1950 U.S. Senate race in the Banquet Room of the Hollywood Knickerbocker Hotel. The quota for the 250 members of the “gambling fraternity” was $75,000 ($544,000 in 2007 dollars).

When Cohen first asked for donations he was $20,000 short of his goal from what he described as a crowd consisting of “all gamblers from Vegas, all gambling money; there wasn’t a legitimate person in the room.” He closed the three doors to the banquet room and informed the attendees, “nobody’s going home till this quota’s met.”[23] The “fraternity” suddenly rediscovered their generosity. Nixon made a short thank-you speech and left with his campaign coffers flush with cash. As Cohen biographer Brad Lewis explains:

Not only did Mickey raise considerable sums of money for Nixon, he also ‘leased’ him his campaign headquarters in the downtown Pacific Finance Building on Eighth and Olive streets, prime business real estate. Attorney Sam Rummel handled the arrangements, and Mickey bankrolled the operation. Nixon’s people didn’t have to pay a nickel for any printed materials. Aside from the large fundraisers, Mickey arranged to funnel money to Nixon on a consistent basis. To avoid scrutiny, the money came through a variety of sources including Artie Samish, who was still one of the most powerful lobbyists in California.[24]

The following text offers an example of the overlapping relationships that typify how syndicate operations are diffused and sustained in “fields within fields…within fields” of relationships that stretch across time, distance and both major political parties. This field-based structure enables systemic criminality to proceed in plain view and oftentimes with only modest coordination around shared goals.[25] This brief yet wide-ranging account is included at this point to illustrate how this transnational phenomenon has long been deeply imbedded in American politics and how it operates without regard to political affiliation.

Fields within Fields…within FieldsIn the mid-1950s, Gus Greenbaum managed and then sold the Riviera Hotel and Casino in Las Vegas, one of the premier properties controlled by the Chicago Outfit. The buyer was Meshulam Riklis, a resident of Cincinnati and a former member of the Haganah, a Jewish paramilitary organization active in Palestine from 1920 to 1948 when it evolved into the Israel Defense Forces. Riklis tutored “junk bond king” Michael Milken, then a young bond broker, and reportedly was Milken’s first customer.

Fellow Cincinnati resident Carl Lindner emerged as a father figure to Milken who operated out of the Beverly Hills office of Manhattan-based Drexel Burnham Lambert. Milken oversaw a control fraud at Phoenix-based Lincoln Savings and Loan led by Charles Keating[26] who previously was general counsel to Cincinnati-based American Financial Group, controlled by Lindner.

Lindner boasts on the firm’s website that he is the “largest non-Jewish contributor to Jewish causes in the U.S.”[27] Keating was a major contributor to McCain’s early Congressional career. As McCain wrote to Keating in 1983 after his first Congressional victory: “Of the many things to be grateful for in this world, the friendship of the Keating family is certainly among the most meaningful.”[28] McCain’s top-tier contributors included Keating, father-in-law James Hensley and Don Diamond, a real estate developer, to whom we will return.

In the 1970s, Lindner and his American Financial Group began investing in United Fruit whose name was changed to United Brands and then Chiquita Brands International to escape its notorious past. After CEO Eli Black fell to his death from his 44th floor office in New York’s Pan Am Building in 1975, Lindner assumed control. In 1977, Black’s son Leon emerged as head of mergers and acquisitions and co-head of corporate finance at Drexel Burnham Lambert where he collaborated with Milken.[29]

United Fruit became a key conduit for moving Israeli arms into covert wars throughout Latin America, culminating in the Iran-Contra scandal of 1987. That scandal discredited the presidency of Ronald Reagan when he was forced to concede that his administration sold arms to Iran, an avowed enemy, and used the funds to arm Nicaraguan rebels despite a Congressional ban. The term “Banana Republic” stems from the corrupting influence of United Fruit over multiple decades as the U.S. was discredited throughout Latin American by the firm’s bribery of foreign officials and its use of armed force to discipline workers.

Along with insurance firms owned by Riklis and Saul Steinberg,[30] Lindner’s American Financial Group was an early investor in Drexel’s high-yield (“junk”) securities packaged by Milken in deals coordinated with Leon Black.[31] Riklis’ Rapid-American Corp. became an acquisition vehicle for Lerner Shops, Playtex and other companies such as RKO film studios, previously owned in part by Joseph Kennedy, father of John F. Kennedy. In 1967, in one of the first junk bond-financed leveraged buyouts (LBOs)—when Michael Milken was still an undergraduate at Berkeley—Riklis acquired Lewis Rosenstiel’s shares in Cincinnati-based Schenley Industries.

The Istanbul-born Riklis paid for Schenley with high-interest junk bonds issued by Rapid-American Corp., a firm that Riklis owned with Lindner. Under Lindner’s leadership, United Fruit’s purchase of 40% of Rapid-American reportedly provided majority owner Riklis and his pro-Zionist colleagues with sufficient resources to purchase for General Ariel Sharon his ranch in the Negev Desert.[32]

Rosenstiel’s wife, Leonore, left him to marry Walter Annenberg, Ronald Reagan’s “best friend for 50 years” (according to Nancy Reagan) and Nixon’s ambassador to Great Britain. Son of Chicago mobster Moses “Moe” Annenberg, Walter laundered profits from the family’s racing-wire service through Triangle Publications, publisher of T.V. Guide and Seventeen. As he distanced himself from organized crime, he steadily gained legitimacy and influence in Republican politics through his ownership of The Philadelphia Inquirer.

In 1989, Annenberg liquidated $3 billion of his wealth, including The Racing Form, in a sale to Rupert Murdoch, donating $150 million each to Annenberg communication schools at the University of Pennsylvania and the University of Southern California. While president, Ronald and Nancy Reagan routinely spent their New Year’s vacation at Sunnylands, Annenberg’s estate in Rancho Mirage, California near Palm Springs.

When Queen Elizabeth visited Palm Springs in February 1983 her co-hosts for dinner were Leonore Annenberg and Jean Lehman Stralem, wife of Donald Stralem and niece of New York Senator Herbert Lehman. Lehman first emerged on the national political scene in 1928 as lieutenant governor to New York Governor Franklin Delano Roosevelt. As noted earlier, Stralem, manager of Rothschild funds in the U.S., invested $350,000 to produce the 1951 film, Duck and Cover, the atomic bomb defense film shown in schools nationwide as an emotion-management component of that era’s present danger.[33]

Leonore Annenberg was raised by her uncle, Harry Cohn, head of Columbia Pictures. First married to Belden Kattleman, a Las Vegas businessman, she then married Rosenstiel. During Prohibition, Rosenstiel bootlegged liquor from England, Europe, and Canada via Saint Pierre and then by truck into Cincinnati (Lindner’s hometown), building what became Schenley Distillers. Bronfman and Rosenstiel reportedly met often during Rosenstiel’s frequent trips to Canada, where they became card-playing friends.

America’s Mobsters Go Legit

At former bootlegger Joseph Kennedy’s request, the Chicago Outfit’s Sam Giancana, with help from the United Mine Workers, arranged for Kennedy’s son John to win the 1960 presidential primary in West Virginia. West Virginia was a crucial venue for demonstrating that a Catholic could be a viable American presidential candidate. The Outfit then helped fix the general election results in Chicago, ensuring that JFK was elected president over Richard Nixon with the slimmest-ever popular vote margin in presidential politics (118,550 out of 69 million votes cast).[34]

That brings us back to Buffalo, New York’s Jacobs family members (“the Godfather of Sports”). Members of the Jacobs clan were associates of Michael Weinberg, an upstate New York bingo parlor operator whose son, Steve Wynn, has since become synonymous with Las Vegas. Michael Milken provided $160 million in junk bond financing to build Wynn’s Golden Nugget casino in Atlantic City, New Jersey.

Before that, however, Wynn became known in Las Vegas as the “adopted son” of Mormon banker Parry Thomas who served as a key conduit for labor union pension fund monies pumped into Vegas during the era of Teamster president Jimmy Hoffa. Thomas backed Wynn in several land deals and set him up in a liquor distributorship.[35] Milken also helped with junk bonds to finance the $630 million required to build The Mirage, one of the first luxury hotel/casinos. In 2008, Forbes ranked Wynn the world’s 277th richest with $3.9 billion.

The first investment in Las Vegas by Thomas (“the Mormon banker to Vegas”) assumed a $475,000 loan ($2.9 million in 2007 dollars) to acquire Paradise Valley, a golf course admired by Hank Greenspun. A casino investor, developer, publisher and ardent Zionist, Greenspun introduced the Israelis to Saudi Adnan Khashoggi (“the biggest high roller to ever hit Las Vegas”), who then was the world’s best-known arms dealer.

With support from Meyer Lansky, Greenspun had become a gunrunner for Israel in 1948 and thereafter performed as an Israeli operative. Bugsy Siegel reportedly gave $50,000 to support Irgun while “celebrity gangster” Mickey Cohen sponsored an Irgun fundraiser in 1947. The Jerusalem Post insisted of Greenspun, “He’s like God in Israel…his contribution to the establishment of the Jewish state is widely considered to be greater than any other American.” Compared to what Greenspun did for Israel, “Jonathan Pollard’s act was pure innocence.” In October 1961 Kennedy pardoned Greenspun who was caught smuggling U.S. military hardware to Israel and convicted of violating the Neutrality Act of 1950.[36]

Nevada’s Riviera hotel and casino should not be confused with its counterpart, the Riviera Havana, owned by Meyer Lansky until its expropriation by the Fidel Castro government. Largely due to the influence of Moe Dalitz, the man who truly built Vegas (vs. Bugsy Siegel), the Teamsters lent vast sums to Nevada casinos. Dalitz later emerged as a key fundraiser for Nevada Governor and Senator Paul Laxalt who chaired Reagan’s presidential campaigns.[37]

Gus Greenbaum and Moe Dalitz remained an influential force in Arizona where they were close to Bob Goldwater, the late Senator’s brother who, as a director of the Valley National Bank, helped finance the Flamingo.[38] After the 1981 opening of a branch of Goldwater’s department store in The Fashion Show, a $74 million shopping mall opposite the Desert Inn casino, the Goldwater family traveled even more frequently to Vegas where Senator Barry Goldwater was known as a swinger. In 1958, Greenbaum and his wife were found in their Phoenix home with their throats cut. Barry Goldwater attended the funeral.

The Arizona State Republican Party presents the Harry Rosenzweig Award to the state’s top Republican fundraiser. As a child, Harry Rosenzweig’s family lived on the same street as the Goldwater family and Harry and Barry remained close throughout their lives.[39] Harry persuaded his best friend to make his first bid for public office in 1949[40] on the Charter Government Party to which “Greenbaum donated lots of money.”[41] Rosenzweig served for 10 years as Arizona’s Republican state chairman.[42] Uncle Morris Goldwater was one of the founding fathers of the Arizona Democratic Party.[43] With the help of Eisenhower’s popularity in the 1952 presidential election year, Goldwater won a Senate seat as a Republican by 7,000 votes in what was then a Democratic state.[44]


[1] William Hale (“Big Bill”) Thompson was the sole speaker at the inaugural of Louisiana Governor Huey Long, elected in 1928. Thompson served as Mayor of Chicago from 1915 to 1923 and again from 1927 to 1931 when Chicago mob boss Al Capone backed Thompson’s return to the mayor’s office. On Thompson’s death, two safe deposit boxes in his name were discovered with nearly $1.5 million in cash ($12.8 million in 2007 dollars). Franklin Delano Roosevelt was also sworn in as Governor of New York in 1928 with Herbert Lehman his Lieutenant Governor.

[2] “Chicago businessman and underworld associate Moses Annenberg was not originally invited to the conference, but after running into Capone, the well known Annenberg was most likely invited to confer with the leaders on business matters concerning the national race wire.” Jay Robert Nash, World Encyclopedia of Organized Crime (New York: Perseus Books, 1993).

[3] The “hit men” in Murder, Inc. were predominantly Ashkenazi. The most infamous of this nationwide corps of contract killers included Abraham “Kid Twist” Reles, Abraham “Pretty” Levine, Irving “Knadles” Nitzberg, Harry “Pittsburg Phil” Strauss, Jacob “Gurrah” Shapiro, Buggsy Goldstein and Allie “Tick Tock” Tannenbaum, plus the notorious Mendy Weiss and Charlie “The Bug” Workman who, on October 23, 1935, entered the Palace Chop House and Tavern in Newark, New Jersey and murdered Dutch Schultz along with three members of his gang: Lulu Rosenkrantz, Abe Landau and Abbadabba Berman. Schultz was then threatening to kill Tom Dewey, New York City’s special prosecutor on organized crime. That murder would have generated just the sort of attention that the national syndicate was created to avoid. In November 1948, New York Governor Dewey lost his Republican presidential bid in a surprise upset by the widely unpopular Truman from Kansas City in a vote decided by an electoral margin provided by Illinois and the Chicago Outfit. Albert Fried, The Rise and Fall of the Jewish Gangster in America (New York: Columbia University Press, 1963), pp. 204-205.

[4] A history of Harry Truman’s political genealogy will appear in the Criminal State series.

[5] The pejorative nickname—the “Mickey Mouse Mafia”—was used in a biography of mobster Mickey Cohen, an early fundraiser for Richard Nixon, to distinguish the Italian-branded Mafia from the Jewish core of organized crime. Brad Lewis, Hollywood’s Celebrity Gangster – The Incredible Life and Times of Mickey Cohen (New York: Enigma Books, 2007), p. 312.

[6] In addition to Lansky and Siegel, attendees included Morris “Moe” Dalitz, Louis “Lepke” Buchalter, Joseph “Doc” Stacher, Jacob “Gurrah” Shapiro, Herman “Curly” Holtz, Louis “Shadows” Kravits, Harry Teitlebaum, Philip “Little Farvel” Kovalick, and Harry “Big Greenie” Greenberg.


[8] Amy Silverman and John Dougherty, “Haunted by Spirits,” Phoenix New Times, February 17, 2000.

[9] Sharon Theimer, “Beer Executive Could Be Next First Lady,” Associated Press, April 3, 2008.

[10] Ibid. at p. 13.

[11] David M. Halbfinger, “For McCains, a Public Path but Private Wealth,” New York Times, August 23, 2008, p. 1.

[12] Amy Silverman and John Dougherty, “Haunted by Spirits,” Phoenix New Times, February 17, 2000.

[13] A member of that same law firm induced John Doe into several business transactions that were pre-staged frauds.

[14] See Goldwater/Miller 2008:

[15] Jon Kyl has long been a key recipient of campaign contributions coordinated by the Israel lobby that supported his election both as a four-term Congressman and as a three-term U.S. Senator first elected in 1994.

[16] Son Daniel Pipes is director of the Middle East Forum and a professor at Pepperdine University in Malibu, California. Invited by Chairman Gary Ackerman of New York to testify in February 2007 before the House Foreign Affairs Subcommittee on the Middle East on the subject “Next Steps in Israeli-Palestinian Peace Process,” Pipes observed: “Israel’s success in crushing the Palestinians’ will to fight would actually be the best thing that ever happened to them…Palestinians need to experience the certitude of defeat to become a normal people.” Pipes’ web site offers a Boston Globe comment: “If Pipes’ admonitions had been heeded, there might never have been a 9/11.” A Harvard graduate, Pipes also taught at the University of Chicago and the U.S. Naval War College. His Middle East Forum sponsors Campus Watch, an organization that dispatches personnel to influence debate by disrupting and heckling lecturers on campuses who are either supportive of Palestine or critical of Israeli policies. On July 5, 2004, Pipes appeared on CNN urging that Sheik Moqtada al-Sadr be granted immunity (after his Mahdi rebels killed dozens of Americans) in order to bring him into the Iraqi government, a stance also supported by Ahmad Chalabi whose activities have enjoyed the support of John McCain since 1991. Harvard University recognizes Professor Pipes as one of its 100 most influential living graduates. His organization qualifies for tax-exempt status under U.S. law. In September 2007, Pipes became an adviser to the presidential campaign of former New York mayor Rudy Giuliani who thereafter recommended that the U.S. attack Iran in order to protect Israel (“we will prevent them or we will set them back five or 10 years”). Giuliani quoted in Toby Harnden, “We must bomb Iran, says US Republican guru,” Telegraph, January 11, 2007.

[17] General Tommy Franks called Feith “the [expletive] stupidest guy on the face of the earth.” Al Kamen, “In The Loop,” Washington Post, June 20, 2008, p. A17.

[18] Spending on intelligence has nearly doubled since 1997. The 2007 intelligence budget totaled $43.5 billion. The overall cost for fiscal 2007 exceeded $50 billion when the cost of intelligence by the military services is added. Walter Pincus, “Intelligence Budget Disclosure Is Hailed,” Washington Post, October 31, 2007, p. A4.

[19] Based on the rhetoric posted on its web site, CPD III is the likely source of the conflict-of-opposites characterization (“Islamo-fascism”) that worked its way into the commander-in-chief’s rhetoric after he ordered the invasion of Iraq. See

[20] “Eric Lipton and Scott Shane, “Anthrax Case Renews Questions On Bioterror Effort and Safety,” New York Times, August 3, 2008, p. 1.

[21] In July 2008, Dr. Bruce E Ivins, an anthrax specialist at Fort Detrick’s Army medical lab, committed suicide. As this account was being completed, commentators were still speculating on what, if any, conclusions to draw from his death. Scott Shane, “Evidence in Anthrax Case Is Said to Be Primarily Circumstantial,” New York Times, August 4, 2008, p. A13.

[22] James Risen, “Use of Contractors in Iraq Costs Billions, Report Says,” Washington Post, August 12, 2008, p. A 13.

[23] Brad Lewis, Hollywood’s Celebrity Gangster – The Incredible Life and Times of Mickey Cohen,” (New York: Enigma Books, 2007), p 148-149.

[24] Ibid., pp. 149-150.

[25] Julius Stulman, president of B’nai B’rith, sponsored the publication of a series of books that helped explain how this phenomenon operates through overlapping fields of relationships that stretch across time and distance. Showcasing pioneers in psychology such as Abraham Maslow and Ervin Laszlo, Stulman served as editor and publisher. Similar to a “Venn Diagram” of overlapping circles, this fields-within-fields framing offers a means to visualize how this field-based phenomenon is sustained. Fields Within Fields…Within Fields (New York: The World Institute Council, 1968-1972). Stulman’s New York Lumber Exchange reportedly imported large amounts of Russian lumber during the corrupt Yeltsin era. Stulman presented this multi-volume set of materials to Dr. Glenn Olds who was then U.N. Ambassador (1969-1971). Dr. Olds gave the materials to John Doe from whom the author received them.

[26] See William K. Black, The Best Way to Rob a Bank is to Own One (Austin: University of Texas Press, 2005), pp. 64-65.

[27] Great American Insurance Company, a division of Lindner’s American Financial Group, funded a delegation to Poland in 1995 to establish a mutual fund based on Corsi’s experience in creating two mutual funds in Israel for B’nai B’rith (both funds reportedly failed). E.J. Kessler, “Campaign Confidential,” The Jewish Daily Forward, September 10, 2004. The strategic import of that Lindner-financed, Corsi-assisted effort will be described in the Criminal State series.

[28] Sasha Issenberg, “McCain’s identity formed as first term Congressman,” Boston Globe, May 30, 2008.

[29] Leon Black is founder and head of New York-based Apollo Management, L.P., a private equity firm, specialists in leveraged buyouts (Black was head of leveraged buyouts at Drexel). In one three-day period in December 2006, Apollo Group struck $37 billion worth of deals when it closed a new $12 billion LBO fund, acquired Realogy (owner of Coldwell Banker, Century 21 and Sotheby’s International Realty) and bought Harrah’s Entertainment, the world’s largest casino company, in conjunction with David Bonderman of Texas Pacific Group. Harrah’s operates 39 casinos in the U.S., including Caesars Palace in Las Vegas and the Showboat in Atlantic City. The complicity of Black’s father in a Chiquita-related Honduran bribery scandal was the reported reason for his suicide. Andrew Ross Sorkin and Michael J. de la Merced, “Deal Maker’s 3-Day Tally: $37 Billion,” New York Times, December 20, 2006. By 2007, Black was 82nd on the Forbes 400 list with personal wealth of $4 billion.

[30] Steinberg used the cash flow from Reliance to fund numerous acquisitions, including Flying Tigers, Days Inn, Pargas and others. He sold his 34-room triplex apartment at 740 Park Avenue in Manhattan for $37 million to Stephen Schwarzman of Blackstone Group. John D. Rockefeller, Jr. was the resident’s former owner. Schwarzman sold his previous duplex residence to Tyco executive Dennis Kozlowski for $18 million. Deborah Schoennman, “Schwarzman Redux: Manufacturing Exec Signs $18 Million Deal,” The New York Observer, April 16, 2000. In September 2005, Kozlowski was sentenced to 25 years in prison for his part in stealing hundreds of millions of dollars from the manufacturing conglomerate. Grace Wong, “Kozlowski gets up to 25 years,”, September 19, 2005. In April 2008, firms led by Schwarzman, Bonderman and Black purchased from Citigroup $12.5 billion in distressed leveraged loans. That portfolio reportedly included loans extended to them by Citigroup to finance leveraged buyouts. Michael J. de la Merced and Eric Dash, “Citi Is Said to Be Near Deal to Sell $12.5 Billion of Loans,” New York Times, April 9, 2008.

[31] See James B. Stewart, Den of Thieves (New York: Touchstone, 1991).

[32] Riklis and his colleagues reportedly funneled hundreds of thousands of dollars to General Ariel Sharon to use in his legal battle against Time magazine when the Nakash brothers, owners of Jordache Enterprises (makers of designer jeans) reportedly paid a retainer to the law firm of Shea & Gould and thereafter paid the bulk of his legal expenses. New York District Attorney Robert Morgenthau appeared as a character witness for Sharon. Riklis was the husband of Hollywood actress Pia Zadora. Robert I. Friedman, “Who’s Paying Ariel Sharon’s Bills,” Journal of Palestine Studies, Vol. 14, No. 3 (Spring 1985), pp. 181-184.

[33] For more than a half-century, John Doe’s step-uncle worked with Donald Stralem in Manhattan where both resided. In response to his step-uncle’s request Doe once picked up his step-uncle at the Stralem estate in Palm Springs and drove him to a friend’s house in Malibu.

[34] “Campaign of 1960” JFK+in+History/Campaign+of+1960.htm

[35] Julie Creswell, “So What if the Chips Are Down?” New York Times, August 3, 2008, p. BU 1.

[36] “Greenspun Wins ’50 Case Pardon: Nevada Editor Convicted in Israeli Arms Case,” New York Times, October 28, 1961.

[37] In the 1964 presidential race, Republican nominee Barry Goldwater carried only six states and 36 percent of the popular vote. A 1964 speech delivered on behalf of Goldwater at the presidential nominating convention in San Francisco’s Cow Palace brought Ronald Reagan to national prominence. Reagan was then co-chairman of the California Republicans for Goldwater. Contemporaneous news reports claimed that Reagan’s speech drew more campaign contributions than any speech in political history. Bart Barnes, “Barry Goldwater, GOP Hero, Dies,” Washington Post, May 30, 1998, p. 1. When Senator Russell Long retired in 1987, the author joined him in a law practice with retiring Senator Paul Laxalt.

[38] Stephen Lemons, “Goldwater Uncut,” Phoenix New Times, October 19, 2006.

[39] “He was the eldest son of Baron and Josephine Williams Goldwater, and the grandson of ‘Big Mike’ Goldwasser, a Jewish immigrant from an area of Poland that was then ruled by the Russian czars. Although Jewish on his father’s side, Mr. Goldwater was raised in the Episcopalian tradition of his mother.” Bart Barnes, “Barry Goldwater, GOP Hero, Dies,” Washington Post, May 30, 1998, p. 1. Goldwater’s, the family department store chain, would remain in family hands until 1962 when the company was sold to Associated Dry Goods, Corp. of New York for $2.2 million in stock.

[40] Dean Smith, “Young Arizona shaped a young Goldwater,”, January 18, 1987.

[41] “Goldwater’s closest friend, Harry Rosenzweig, would be linked by more than one publication to prostitution in this state.” Stephen Lemons, “Goldwater Uncut,” Phoenix New Times, October 19, 2006.

[42] Ira Morton, “Time Capsule – A legend in his time,” Jewish News of Greater Phoenix, March 25, 2005.

[43] The 1964 election marked the beginning of the fracturing of the Democratic Party in the South and a takeover of Arizona by the Republican Party when Goldwater carried the traditionally Democratic states of South Carolina, Georgia, Alabama, Mississippi and Louisiana. The only other state he won was Arizona.

[44] During the Reagan Administration, Goldwater served as chairman of the Senate Armed Services Committee (1981-1987) and the Senate Intelligence Committee (1981-85).