In the early 1960’s the FBI placed bugs in several casinos in Las Vegas. In May 1963 the FBI sent the Department of Justice a two volume “Skimming Report”. The report was never released, although much of the information was leaked to the press. According to a Life article, “The Mob”, of Sept. 1967, Meyer Lansky’s couriers shipped skim from Las Vegas to Miami to the Bahamas where it was laundered through the Bank of World Commerce.
On the board of directors of the Bank of World Commerce were John Pullman, Ed Levinson and Benjamin Sigelbaum. Levinson was a major casino owner in Las Vegas. Pullman and Sigelbaum had ties to Isidore “Kid Cann” Blumenfeld of Minneapolis. The skim went from the Bahamas to Switzerland where it was laundered through International Credit Bank. Levinson and Pullman were also on the board of that bank. International Credit Bank collapsed in the early 1970’s after it was tied to Israeli arms purchases.
The FBI bugging operation came out in Washington D.C. during the trial of Lyndon Johnson’s chief aide Bobby Baker. The Baker scandal was the second of two major scandals surrounding Johnson at that time. The first involved Billie Sol Estes, whom was arrested in March of 1962 on fraud and theft charges. A major contributor to the Democratic Party in Texas, Johnson was accused of attempting to protect Estes from investigation. In 1965 Estes was convicted in one of the first trials to be broadcast on television. The Supreme Court overturned the conviction. Justice Tom Clark wrote that the television presence denied Estes a fair trial. Clark was also close to Johnson.
Adding to the Billie Sol Estes controversy was the death of an Agriculture Department official investigating Estes. The official’s death was initially ruled a suicide, but in 1985 Estes testified that Lyndon Johnson ordered his murder. Estes had recently been released from prison where he became a born again Christian. The judge did not believe Estes’ claim, but did change the cause of death to murder. The official had been shot five times with a rifle. Yet, this scandal dissipated before Johnson became President. There were also charges that Johnson received payoffs from the Dallas mob, which were also never proven.
Robert G. Baker was Secretary to the Majority Leader for eight years prior to 1963. Baker had come to Congress as a teenager, so everything he learned he learned from the politicians. Baker was instrumental in Johnson’s rise in the Senate where Johnson became the second most powerful man in America behind President Eisenhower. Baker was often referred to as the 101st Senator or “Lyndon Jr.”. Baker lived next door to Johnson in Washington as did J. Edgar Hoover. Baker took credit for convincing Johnson to accept the vice-presidential nomination in 1960.
In September of 1963 a vending machine company filed suit against Baker claiming he had forced them out of a defense contractor’s plant as a result of a dispute over kickbacks. On October 7, 1963 Baker was forced to resign his position. The first investigative report on Baker came back a week before the Kennedy assassination. Baker soon became the subject of an extensive Congressional investigation.
Johnson remained close to Baker even after becoming president. In December of 1963 Johnson summoned Edward Bennett Williams to the White House and pressured him to represent Baker. According to Evan Thomas, Johnson told Williams, “This is the most important case of your life.” Johnson later considered Williams for Attorney General, but told Jack Valenti that he couldn’t do it because of his representation of Baker. Baker was convicted of seven counts of tax evasion, larceny, and conspiracy on January 29, 1967 and was sentenced to one to three years in prison. While in Allenwood Penitentiary Baker became friends with another Williams client, Jimmy Hoffa.
The bugs that caught Bobby Baker upset Lyndon Johnson because he thought Robert Kennedy was tapping his phone. In fact, the FBI bugs were aimed not at Baker, but Ed Levinson, an associate of Moe Dalitz. Levinson invested in several Baker enterprises, including Serv-U Corporation. Ed Levinson put up the money for Serv-U while Baker provided the government connections. Within months the company had major contracts with government agencies across America. In early 1963 Baker reported a wealth of more than $2 million. He took the fifth before Congress, as did Levinson.
Baker had extensive ties to Las Vegas. In April of 1963 he chartered a plane to fly a group of eighty Washington lobbyists and congressional employees to attend a $100 a plate dinner for Senator Howard Cannon of Nevada.
On June 20, 1963 Baker introduced Ed Levinson to the chairman of the board of Intercontinental Hotels, a subsidiary of Pan American World Airlines. Intercontinental wanted to build casinos in its hotels in Puerto Rico and the Dominican Republic and Baker had ties to political leaders in these countries through Lyndon Johnson. Intercontinental did not want to run the casinos themselves, which is why he brought Ed Levinson.
Around the same time Bobby Baker made a deal in Puerto Rico for the Murchison brothers, major supporters of Johnson. Baker arranged for government inspectors to approve Murchison meat that came from a substandard slaughterhouse in Haiti. Much of the meat ended up in Chicago where it was ground into hamburger. Baker received a substantial fee for setting up this transaction.
Early in the Baker investigation charges emerged that he provided prostitutes for powerful politicians. The Senate decided not to pursue these charges, but one woman whose name appeared in the press at the time was Ellen Rometsch. Years later it emerged that John F. Kennedy was one of the men involved with her. This was particularly controversial because Rometsch was from East-Germany and there was concern she might be a Communist agent.
Lyndon Johnson was dragged into the scandal through insurance agent Don Reynolds. Lyndon Johnson bought a $100,000 policy from Reynolds in 1957 after he suffered a heart attack. Baker told Reynolds that Johnson wanted a kickback so Reynolds purchased advertising at one of Johnson’s television stations. During the Roosevelt era New Dealers like Johnson dominated the FCC. Johnson was careful how he used his influence by avoiding voting on issues involving radio or television controversies. He also avoided dealing directly with the FCC in regards to his station, but developed important contacts within the organization.
The involvement of politicians in radio was so common Johnson’s friend, Justice William O. Douglas wrote, “Among the great plums in the Washington D.C. pudding has been the granting of radio and TV licenses. The contests have been tremendous and many political allies have been marshaled in the cause. Even some members of Congress obtained licenses for themselves or their families while in office- a practice that should be forever barred as being beyond the ethical line.”
In 1943 Johnson acquired Austin radio station KTBC through his wife, Lady Bird. According to Johnson’s biographer, Robert Dallek, the price was only $17,000. The previous owners were denied permission to increase the wattage, but within a year of the purchase Johnson received permission to do so. Lyndon Johnson personally visited William Paley to arrange affiliation with CBS.
In 1948 Lady Bird Johnson applied for a VHF television license for KTBC. KTBC would enjoy a rare monopoly as the only VHF (channels 1-13) station in Austin. Meanwhile, Dallas received five VHF stations, Houston four, and San Antonio four. Johnson also arranged for KTBC to have affiliations with ABC, CBS andNBC at the same time. According to Robert Dallek, by 1952 KTBC was worth $488,000.Johnson had become a U.S. Senator in 1948 by defeating Coke Stevenson by 87 votes in what many consider a fixed election.
In 1955 Johnson bought a UHF station in Waco and merged it with neighboring station KWTX. Johnson would own 30% of the new company. KWTX soon bought KBTX-TV, an educational station that the FCC in an exception to its rules allowed to be converted to commercial use. In 1956 Johnson also bought KRGV in the Rio Grande Valley and acquired both ABC and NBC affiliation. According to Dallek, “cooperation of high CBS and ABC officials was essential” to the deal.Of course, owning all these television stations in Texas gave Johnson an advantage over political rivals, whom could not expect fair treatment in news coverage.
By 1959 Johnson’s radio and television properties were worth $2,596,503. By the time he became President the Johnsons were worth about $15 million. In the early 1970’s Johnson sold the broadcasting properties to Chandler controlled Times Mirror Company when Johnson decided to get into the cable business. The executive in charge of Lyndon Johnson’s station, Tom Johnson (no relation), would succeed Otis Chandler as the publisher of the Los Angeles Times in 1980. He later became head of CNN.
At the time of John Kennedy’s assassination he was reportedly considering dropping Johnson from the re-election ticket because of the Bobby Baker scandal, although he denied this publicly. The fatal trip to Dallas was designed to test Johnson’s support. Kennedy needed Texas for the coming election, as he was worried about Barry Goldwater’s potential strength there. John Connally insisted on arranging the trip by claiming as governor of the state it was his right. This was not typical of Presidential visits, and the arrangements caused major conflict.
Kennedy wanted Lyndon Johnson to ride with Senator Yarborough in the second car, but Johnson and Yarborough hated each other. Yarborough felt insulted by the way Connally had planned the trip and he complained that Lyndon Johnson was behind the whole thing. Two nights before the assassination Kennedy called Johnson into his room to discuss the problem. According to Kennedy biographer William Manchester, several people heard President Kennedy shouting and saw Johnson walk out angrily. If Yarborough had switched seats with Connally then he would have been shot along with Kennedy.
A second conflict was the location of Kennedy’s planned speech on the day he was shot. According to Kennedy’s advance man, Jerry Bruno, he wanted Kennedy to speak at the state fairgrounds, but Connally insisted on the Trade Mart location. If Kennedy had chosen the fairgrounds he would not have passed the Texas State Book Depository. It is hard to imagine Connally being in that seat if he knew bullets were coming, but it is possible Senator Yarborough was right and Lyndon Johnson manipulated Connally.
Connally later joined the Nixon administration and became an expert fund raiser. He was charged with bribery during the Watergate trials, but acquitted through the efforts of Edward Bennett Williams. In 1980 he ran for President as a Republican. Connally received a donation of $1,000 from Moe Dalitz, which he returned under media pressure.
In 1964 during a dispute at the Beverly Rodeo Hotel in Los Angeles, Moe Dalitz warned boxing champion Sonny Liston, “Nigger, if you touch me you’d better kill me, because if you don’t I’ll make one phone call and you’ll be dead within 24 hours.” This was just months after the Kennedy assassination. The Mike Tyson of his day, prior to his February 1964 fight with Muhammad Ali he was considered unbeatable. In their May of 1965 rematch Ali knocked Liston out in the first round in what many thought was a fixed fight. Liston was known to be associated with gangsters, and would die under mysterious circumstances.
Sonny Liston’s manager, Bernie Glickman, was close to Chicago boss Tony Accardo. Glickman testified about the mob’s control of boxing during that era. Liston also had ties to Roy Cohn whom promoted his 1962 fight with Floyd Paterson. Cohn was acting as a front for “Fat” Tony Salerno, who would later become the New York boss. Investigations of Salerno’s involvement in boxing led to the bugging of the William Morris agency.
Supposedly, Moe Dalitz gave the order to desegregate the Las Vegas casinos even though the Mafia didn’t want to. Dalitz likely knew that any jury brought against him would include African Americans. In fact, when his friend Jimmy Hoffa went on trial that year it was arranged for Joe Lewis to walk in and give him a hug. Edward Bennett Williams was heavily criticized for this tactic, but he insisted it wasn’t his idea.
In 1965 Dalitz was indicted by a Los Angeles federal grand jury on tax evasion charges involving profits for arranging a $50,000 loan of Panama based funds to a company owned by Roy Cohn. The FBI had placed a bug in Moe Dalitz’ office in 1962. In response, Dalitz sued the government for illegal bugging. In 1965 he agreed to drop his suit in exchange for the IRS dropping charges against him.
In May 1967 several of the Las Vegas casino owners were indicted for skimming from their own casinos based on evidence from the bugs. After a six-month grand jury probe the owners, including Bobby Baker’s business partner, Ed Levinson, agreed to plead guilty to tax evasion and received minor sentences. The next day the casino owners dropped their suit against the FBI for illegal bugging.
The assistant in charge of the civil division responsible for defending the FBI agents was Edwin Weisl Jr., whose father was an old friend of Lyndon Johnson. It does not seem likely that Robert Kennedy would have let the casino owners off so easily had his brother not been assassinated. A likely reason Johnson was eager to close the issue is he wanted to avoid a controversy and investigation of the bugs, although they were likely legal.
In July of 1965 Lyndon Johnson publicly ordered all Federal government agencies to stop using bugs and taps, legal or illegal. In fact, both the FBI and the CIA continued using bugs, most notably against anti-war protesters. (It was not revealed until the 1990′s that the NSA had its own bugging system.) On Johnson’s orders Hoover had the FBI bug Martin Luther King Jr. at the Democratic convention in 1964. The FBI also tailed Robert Kennedy even though he was still Attorney General.
If John Kennedy had not been assassinated Robert Kennedy certainly would have asked Hoover to retire after his seventieth birthday on January 1, 1965. Johnson and Hoover were old neighbors in Washington, and Hoover had allegedly prevented investigations against Johnson over the years. Hoover was also close to Johnson’s early backers and fundraisers, Clint Murchison and Sid Richardson.
Robert Kennedy stayed on as Attorney General just long enough to see Jimmy Hoffa sentenced to jail. Hoffa was convicted of jury tampering on March 4, 1964 and received eight years in prison. He quickly appealed, and Robert Kennedy pressed for another conviction. On July 26, 1964 Hoffa was convicted of defrauding the Teamsters Pension fund of over $20 million. Hoffa received five more years in jail. Kennedy resigned as Attorney General and announced his run for Senate, which he won.
Jimmy Hoffa was not a big spender so any money defrauded from the pension fund likely went to the Mafia and/or various politicians. Supreme Court Justice Earl Warren later called Kennedy’s pursuit of Hoffa an “affront to the quality and fairness of federal law enforcement.” Warren had ties to the Teamsters union since the 1940’s when as Governor of California he personally welcomed the Teamsters to their convention in Los Angeles, which was considered significant at the time because of Los Angeles’ long-term hostility towards unions.
Jimmy Hoffa was close to Moe Dalitz and had connections to Carlos Marcello and Santos Trafficante as well. According to a Hoffa aide, Ed Partin, Hoffa also made threats against the Kennedys. Of German-Irish descent, Hoffa’s father died when he was a young boy and he was forced to go to work during the depression unlike the wealthy Kennedy heir. The Riddle family had left Ireland generations previously and had come up for the Appalachian region like many in Detroit.
According to Ed Partin, in June of 1962 Jimmy Hoffa told him “I’ve got to do something about that son of a bitch Bobby Kennedy. He’s got to go.” Looking out a window at cars passing below Hoffa also mentioned that the Kennedys like to drive convertibles. Partin’s allegations were relayed to the FBI that September and his testimony helped send Jimmy Hoffa to prison.
In an attempt to slander Robert Kennedy after he had been assassinated, Roy Cohn pressured New Jersey Congressman Neil Gallagher to make a speech regarding Kennedy’s alleged illegal uses of bugging devices. Prior to the 1968 election Life magazine printed a story about an alleged relationship between Gallagher and a gang figure. Gallagher threatened to use his remaining time before Congress to read into the record that J. Edgar Hoover and his male aide, Clyde Tolson, “have been living as man and wife for some twenty-eight years at the public’s expense”. The FBI denied the authenticity of the articles about Gallagher, but was later sent to jail for tax evasion.
Lyndon Johnson named Ramsey Clark as the new Attorney General in 1967. Clark’s father, Tom Clark, resigned from the Supreme Court to avoid a conflict of interest. Clark’s positions often contradicted one another as he allowed all sorts of bugging even as he let the casino owners off he hook. Clark later became more radical, involving himself with Saddam Hussein.
In August of 1967, during the “Summer of Love”, under the direction of the White House the CIA began Operation Chaos, which compiled files on thousands of U.S. citizens who protested against the Vietnam War. These operations began under Richard Helms, who was appointed CIA director by Johnson in 1966. Johnson also had Richard Nixon’s campaign plane bugged in the days before the 1968 election because he thought they might be interfering in the Vietnam War. Nixon continued Chaos and fired Helms when he refused to go along with H.R. Haldeman’s plan to use the CIA to blame the Watergate burglary on the FBI.
Under Lyndon Johnson the Democratic Party came under influence from Hollywood unlike ever before. According to Dennis McDougal, Lyndon Johnson considered Lew Wasserman for Secretary of Commerce, but after an FBI background check the White House feared embarrassing details would emerge in confirmation hearings.
Johnson became much closer to United Artists head Arthur Krim, the head of the President’s Club, which raised $10 million for Johnson’s 1964 run.Johnson offered Krim cabinet positions, but Krim declined although he did accept the designation of Johnson’s special consultant. Krim’s role in the Johnson administration was kept quiet. When the New YorkTimes sought him out for a profile Krim avoided the reporter because he felt “his effectiveness would be destroyed if he ever gets into major stories about his political activities,” according to Ronald Brownstein. Although Krim was the first studio head with a first rate education his ties to Johnny Rosselli and others likely would have surfaced.
According to White House records, in the last year of Johnson’s presidency Krim spoke with Johnson on at least 151 days. Krim vacationed with Johnson in Texas 12 times and even bought property next to Johnson’s Austin ranch. Krim had dinner with Johnson 11 times in the month before Johnson decided not to seek re-election. Krim and his wife also often spent the night at the White House where they had their own room, according to Brownstein. According to Jack Valenti, Krim’s close ties to Johnson made him the second most influential man in America. Krim would only speak directly to Johnson, so it’s not clear what he advised.
Among other things the Johnson administration created both the American Film Institute and the Corporation for Public Broadcasting, which includes PBS. Johnson appointed Arthur Krim’s law partners Robert Benjamin and Louis Nizer as two of the first board members of the organization while another board member was Jack Valenti. Benjamin also served as a delegate to the UN under Johnson’s ambassador Adlai Stevenson.
Jack Valenti became know for the MPAA rating system and for his role in fighting film piracy, but he was involved in much more. Valenti first met Lyndon Johnson in 1957 after the Houston advertising executive wrote a flattering column about Johnson in the Houston Post. Over the next few years Valenti courted and married Johnson’s secretary. In 1960 Johnson asked Valenti to manage the Kennedy-Johnson advertising campaign in Texas.
In The Death of a President William Manchester refers to Valenti as “the real mastermind” for being able to sneak into Kennedy’s motorcade in Dallas on November 22, 1963. Within minutes after Kennedy was assassinated Johnson appointed Valenti as his first aide. Valenti became “everything from a ‘glorified valet’ to a chief of staff. He did ‘whatever needed to be done.’ According to Robert Dallek, Valenti “kept the President’s calendar, coordinated work on presidential statements, prepared LBJ’s correspondence, and oversaw ‘special presidential projects’” In a sense Valenti replaced Bobby Baker whom resigned his position two weeks before Valenti was appointed to his.
The 1964 Johnson campaign was the first television campaign and also the first dirty television campaign. Goldwater won a bitter primary against Nelson Rockefeller in which Rockefeller called him an extremist. Jack Valenti told Johnson, “We ought to treat Goldwater not as an equal, who has credentials to be President, but as a radical, a preposterous candidate who would ruin this country and our future.” Valenti’s idea was to portray Goldwater as “ridiculous and a little scary: trigger-happy, a bomb thrower, a radical.” according to Dallek. When the Goldwater campaign gave out bumper sticker reading, “IN YOUR HEART YOU KNOW HE’S RIGHT!” the Johnson’s campaign responded with “IN YOUR GUT YOU KNOW HE’S NUTS”.
Johnson’s biographer Robert Dallek would write, “No political operation in history was ever conducted with such secrecy.”He describes the campaign as both “covert and overt”. For the covert, “They fed hostile questions to reporters traveling with Goldwater, they wrote letters to popular columnists like Ann Landers; they made lists of columnists they knew and lobbied them regularly for articles critical of Goldwater; and they pressured mass magazines like Saturday Evening Post, and Parade to attack Goldwater’s views on nuclear weapons.” Goldwater later commented, “If I hadn’t known Barry Goldwater in 1964 and I had to depend on the press and the cartoons, I’d have voted against the son of a bitch.”
The overt included controversial television ads paid for with money raised by Arthur Krim and Lew Wasserman, including the famous “Daisy” spot. It featured a little girl picking flowers while counting down while the girl’s eye dissolved into an atomic explosion. While the mushroom cloud rose Lyndon Johnson’s voice intoned, “We must love each other or we must die.” Although he attacked Goldwater for his support of nuclear testing Johnson would escalate the tests in the desert outside Las Vegas.
The Daisy ad was the idea of Bill Moyers. Moyers began his career as a journalist at Johnson’s Texas television station, KTBC. He became Johnson’s chief of staff and later press secretary. Johnson would say, “He works for me like a dog, and is just as faithful,” according to Dallek.
According to Dallek, another Johnson campaign ad featured a KKK member burning a cross while quoting, “I like Barry Goldwater. He needs our help.”Ironically, Barry Goldwater was the only major Presidential candidate ever to come from a Jewish background, although his family had become Christian. The ads were similar to those used produced by the MPAA (then MPPDA) for the 1934 campaign against Upton Sinclair in California.
Yet, according to Jack Valenti, “Even when the campaign was at its height, I never regarded Goldwater as the enemy. Somehow I never lost my sense of affection for him”, but “the president was determined to win as hugely as he could, and in a political fight, particularly for the presidency, you go for the jugular.”The Republicans in turn portrayed Johnson as immoral and focused on the Bobby Baker and Billie Sol Estes scandals.
While serving as Johnson’s closest aide Valenti organized the President’s dirty deals with congress. Robert Dallek describes Senate Republican Minority Leader Everett Dirksen “through Jack Valenti, sending the President sheaves of paper about appointments to judgeships, ambassadorial offices, and administrative posts”. Johnson “would pretend mock outrage” but by the end of the meeting “a deal had been sealed. Dirksen would have an appointment of one of his friends and the President would have a commitment on some piece of legislation.”
Johnson’s great strength was considered to be his close ties to Congress, which allowed him to pass the Civil Rights Act and other legislation. According to Valenti, Johnson was committed to “the shattering of the political and social structure”.The justification of this was to help “the poor, the aged, the blacks”.
In the Kennedy administration big media fundraisers were the silent partners, but during the Johnson years they became the center of the party while weakening the influence of traditional working class Democrats. They created new minority alliances similar to the old Tammany Hall, but unlike the old neighborhood alliances the new alliances would be held together primarily through the media.
Halfway through Johnson’s second term Valenti accepted the position as head of the MPAA at the urging of Wasserman and Edwin Weisl Sr. The position had been briefly occupied by Louis Nizer who became the MPAA General Counsel instead. In 1967 Valenti switched from the Production Code to the present rating system. This system was based on the system designed by the National Catholic Office of Motion Pictures (NCOMP), which was created after the passage of Vatican 2 in 1965.
Valenti often claimed he did away with the old code, but by the time he stepped in the Production Code was already vastly liberalized. Movies approved in the early 1960’s included the James Bond films with their provocatively named heroines. The MPAA’s rating was contractually required on every print of film and every advertisement produced by the major studios, while the NCOMP rating became harder to find before it dissolved in 1980.
Although the rating system attracts the most attention Valenti did not really involve himself in that. From the start he involved himself in bigger issues. LBJ was reluctant to see Valenti go so Valenti “had the pleadedge of the movie industry chieftains to insert into my contract a clause that gave me the right to serve him (LBJ) on specific occasions.” Valenti pretended this sort of “service” was patriotic, but it meant that Valenti was serving as the President’s aide and heading the movie industry lobby at the same time.
As an official duty Lyndon Johnson asked Valenti to arrange a secret meeting between the President and Pope Paul VI at the Vatican in 1967. To accomplish this Valenti called his contact, Monsignor Paul Marcinkus of Chicago. Best known as the man who was supposed to be overseeing Michele Sindona, Marcinkus was from Cicero, Illinois, once the base for Al Capone. Since Marcinkus was not Italian he was not considered to have Mafia ties, although the Chicago “outfit” was never completely Italian.
After Valenti’s death the FBI released the results of an investigation done at the time he became Johnson’s aide. The FBI was concerned he might be a homosexual, which they decided against. They did note that he had ties to Mafia leaders in the Dallas area. This is plainly significant considering all the Mafia ties to Jack Ruby. Valenti used his position in the MPAA to discourage the media from investigating the Kennedy assassination. He openly attacked the movie JFK, and towards the end of his life filed suit against an author that suggested Johnson was behind the assassination.