The Yankee and Cowboy War - Chapter Six (Pt. 2)By Carl Oglesby
Hughes in Vegas
There can be no serious doubt of Hughes’ intentions of establishing a Nevada empire and of competing head-to-head with Lansky. Editor Greenspun of the Sun pushed for such an establishment from Hughes’s first day in town on the shortsighted argument that Las Vegas’s best weapon against the Syndicate was such a capitalist as Hughes – strong and independent.
And of course, ambitious. We have already cited Dietrich to the effect that in the West Coast phase, Hughes tried to buy up the entire local governing infrastructure from tax assessors to senators. In 1974, the then-deposed Maheu testified to the same ambition in Hughes: “I clearly recall explaining to [Hughes’s Nevada lawyer] Tom Bell the desire of Howard Hughes to own the state of Nevada, to own the judges in Nevada, to own all the officials of Nevada. I was concerned about the desire of Mr. Hughes to want to own the President of the United States.
By 1968, Hughes’s Nevada operations had grown under Maheu’s management to a worth estimated at well above a half billion dollars. Hughes was the state’s biggest employer with a staff of over eight thousand and a $50 million payroll and a private security force (under another ex-FBI man, Jack Hooper) easily a rival of the official and criminal agencies with which it might have to contend. He had put some $400 million into hotels and casinos. He owned the Desert Inn, the Sands, the Castaways, the Fontier, the Landmark, and the Silver Slipper. He was angling for the Silver Nugget, the Stardust, and the Dunes. He also owned Alamo Airways and McCarran Field and was on his way to getting Air West. He owned KLAS-TV. He owned the Krupp Ranch and thousands of square miles of other Nevada real estate and some $30 million in mining claims. Governor Paul Laxalt said flatly, “Howard Hughes’s operations are as important to Nevada as U.S. Steel is to the nation or General Motors to Michigan.”
Reflecting and furthering that eminence, Hughes in 1968 gave $150,000 to Nixon (two-thirds of it covertly), $100,000 to his presidential opponent Humphrey (half of it covertly), $70,000 to Senator Cannon, $50,000 to Senator Bible, and – strangely - $25,000 to the estate of the recently assassinated Senator Robert Kennedy.
Let us take a moment with this Kennedy contribution, superficially so out of character for Hughes. It has been explained as a Hughes sympathy gift to help with the costs of the funeral. But Hughes? The Kennedys? We might find a more plausible explanation if we set this $25,000 in the context of another gesture Hughes was making at the very same moment in the direction of the again-bereaved Kennedy camp.
On June 28, 1968 two weeks after Robert Kennedy’s death in Los Angeles, Maheu concluded a lengthy handwritten memo to Hughes with the following item:
Larry O’Brien – He is coming here on Wednesday next for a conference as per our request after the assassination of Senator Kennedy. He is prepared to talk employment and has received a commitment (without any obligation whatsoever) from the four or five top men in the Kennedy camp that they will not become obligated until they hear from him.
O’Brien Associates of New York and Washington did indeed subsequently sign a consulting contract with Hughes-Mahue, but my efforts to find out from O’Briens’s office and home what he was doing for Hughes were unproductive. No one better equipped to get an answer seems interested, even though as I write one of the prevailing theories of the Watergate DNC break-in is, in substance, that the Nixon people were afraid that O’Brien’s stint with Hughes-Nevada had taught him, and thus the Democrats, something useful about the Nixon-Hughes relationship, and that they sent the Plumbers into the DNC to try to find out what that could be.
But what was Hughes’s original interest in Larry O’Brien and the other superliberals of the RFK staff? What could have been O’Brien’s interest in a figure of Hughes’s far-right ideology? And was it not a little early after the prince’s murder for his ministers to be sifting job offers from a kingdom of the ideological opposition?
Investigator-journalist Jim Hougan, who has made a special study of Intertel (see below), buesses that by the phrase “the for or five top men in the Kennedy camp,” Hughes actually meant the attorneys, notably Robert Peloquin and William Hundley, who played roles in Robert Kennedy’s early 1960’s campaign against organized crime. By 1968 Hughes was moving irreversibly toward his confrontation with the Syndicate over control of Las Vegas gambling. Hougan thinks that in reaching out to the RFK anticrime staff, Hughes may have been simply seeking to strengthen his front.
We do not know whether this was the basis of Hughes’s interest in the Kennedy staff people or of theirs in him or how far any such common interests might have been realized in joint projects. We do not know how to evaluate the importance of Hughes’s now exposed special relationship to the CIA, Glomar, the Maheu-Roselli link, etc.) in terms of the antagonism between elements of the CIA and the Kennedy group. But we do know for a fact that the Hughes contact with the RFK staff was made, that it came about at Hughes’s initiation through Maheu, that Hughes did contribute the $25,000, that the job offers were made and at least in O’Brien’s case accepted, and that all this coincided (a) with Hughes’s efforts to reverse several antitrust decisions limiting his further expansion on the Lansky Strip and (b) with his tortuous payment via Richard Danner to Nixon of $100,000 in cash for which Nixon would be accountable to no one – not even Lansky.
The following passage from Maheu’s June 1968 memo to Hughes shows how conscious Maheu and Hughes were of the anti-Syndicate aspect of their expansion. Maheu wrote:
Howard Cannon called me this afternoon to inform that he and Senator Bible have been told all day long – by fellow Senators – that they can depend on full support and assistance in sustaining their position that we obtain the Stardust. Cannon stated that Justice was severely ridiculed for having taken action which precluded the accomplishment of what the criminal division has tried to do for fifteen years – when particularly the result was only 52 hours away.
And Hughes answered:
Now also, re the club being a gathering place for North Las Vegas’s less respectable citizens, all the more reason for us to control this very dangerous gathering place for less desirables to the result that it no longer continues to be a gathering place for the less desirable element. For this reason, Bog, I am determined we under no circumstances bring Moe [Dalitz of Cleveland’s infamous Mayfield Road Mob] or any of his group in to run it under our control. This is the very very last thing I feel we should do. So please don’t discuss the Nugget with Moe or any of his group at this time.
Hughes goes on in the same memo to approve a Maheu offer to approach the chief of the Nevada FBI. “At the same meeting, please try to arrange that Mr. FBI of Nevada will convince Dickerson [of the Nevada Gaming Commission] also of the likewise importance of our buying out the Silver Nugget of NLF because of the criminal element no gathering there and the hope that under our management this would be discontinued.”
Whether this was indeed Hughes’s purpose or just convenient rhetoric, certainly Maheu’s buying spree was having the advertised effect. As crime-writer Richard Hammer wrote a few years later, “though the Organization never completely abandoned the Las Vegas gold fields, its influence and control began to wane with the increasing dominance of Hughes. Before, there had been a widespread feeling that only the mobsters could run casinos profitably; the Hughes operations proved this was only a Mob-perpetuated myth. And the arrival of Hughes also pushed some Nevada officials out of their easy chairs to take a closer look at the casinos that they had long claimed could not be controlled.
How and why did the Syndicate let this happen? It cannot be simply that Hughes was too strong to be kept out and that Lansky had no choice but to bow before his billions. The fact is that Hughes could never have come to Las Vegas to begin with if Lansky had not decided to permit and support it. Maheu cultivated a close relationship in particular with Moe Dalitz (see Hughes’s memo to Maheu, above). Maheu actually purchased from Dalitz the hotel-casino the Desert Inn, where Hughes made his headquarters. “Not only did I depend very much upon the advice of Mr. Dalitz,” said Maheu, “but so did Mr. Hughes. Repeatedly he would ask me to get Mr. Dalitz’s advice. Mr. Hughes recognized, as I did that we had no expertise in the gambling business and that there was no one in the Hughes world at that time who did.”
Fortune speculated that the Syndicate’s earlier friendliness to Hughes was predicated on Lansky’s sense that Hughes’s “entry into gambling lent respectability to a sleazy business; stock in gaming companies enjoyed a considerable vogue at the time.” There may be something to that. It conforms with Lansky’s usual style of legitimizing previously criminal business operations. But it would not tell us why Lansky let Hughes drive him out of one of his major bases without an apparent fight.
Could Lansky in fact have been playing on a bigger field than Hughes knew? I think there is a case he was, and that Hughes was ultimately no more the victor in the struggle for Las Vegas than in the struggle for TWA. The reason I say this involves the case of John Meier.
John Meier – do not confuse with Johnny Meyer, Hughes’s aid in the Brewster episode (above) – was in his early thirties when he joined Hughes’s Nevada operations in 1968. He was diagrammatically at Maheu’s level in the organization in that he reported to Hughes through the throneroom guard, though he had none of Maheu’s power in the larger works. He had a background in ecology, systems analysis, and the Rand Corporation and had been a member of Nixon’s Resources Aid Environmental Task Force. In 1970, he ran unsuccessfully for the Senate from Nevada. With Hughes, his special province was silver mining claims and other real estate. His job was to find claims worth buying and to recommend purchases to Hughes. The altitude this had him flyin at is roughly indicated by current estimates valuing Hughes’s Nevada land and mining holdings in the $20 million range.
Two grand juries in Las Vegas later decided that what was actually happening was that Meier was in cahoots with Syndicate fronts in a massive land fraud in which Hughes was the victim. One of Meier’s confederate groups was Georgetown Research and Development, which materialized in a Watergate address one day, sold off its worthless holdings to Hughes the next, and dematerialized that night. A more constant companion was the Toledo Mining Company of Salt Lake City, whose president, Anthony Hatsis, is identified by the Senate Select Committee investigators as an executive-level officer of the Lansky Syndicate. Hughes’s losses to such Syndicate fronts on land and mining deals may have totaled as much as $10 million in the brief period, less than two years, during which Meier occupied his advantageous position.
What happened to all this money? Part of it went into a trust in the name of Meier-Callandria at Overseas, Ltd., a Swiss bank with a Robert Vesco connection. A larger part was routed out of the country through banks in the Bahamas and Montreal holding companies into a Dutch firm called Maatschappil Intermovie.
The money, thus laundered in Europe, was then funneled back to the States, where Meier and Hatsis used it to finance business ventures involving Nizon’s brother, Donald. The three men visited the Dominican Republic in September 1969. Dominican Present Juan Belaguer staged a classy public reception and sold what the Wall Street Journal termed “valuable” concessions to Hatsis’s Toledo Mining, whose stock rose to $30 per share. In a splashy public ceremony, Donald Nixon conspicuous at the side, Belaguer decorated Meier for “Hughes’s charities” in the Dominican Republic, and Meier and Hatsis scratched back by giving blocks of Toledo stock to various Dominican officials “for services rendered in regard to securing a mining concession.”
The relationship developing between John Meier and Donald Nixon was observed from the White House with some anxiety. The president’s personal tax accountant, Arthur Blech, was told to review all of Donald’s proposed projects, including the Dominican ones. Blech is said to have turned them all down. Then White House pressure against Meier’s relationship to Donald intensified. Rebozo called Maheu in Las Vegas and told him to keep Meier away from Donald. Nixon’s famous brother-bugs were put in. Donald was put under twenty-four-hour White House surveillance. The FBI hassled Meier, Donald and Hatsis together at a Florida airport in September on one of their trips to the Dominican Republic. Maheu answered Reboxo that he too wanted to get rid of Meier, but that Meier worked for Hughes, not for him. Maheu said that Hughes liked Meier, and that all Maheu could do was to ask him to keep away.
Maheu also put a tail on Meier and thus found him and Donald Nixon trysting in October in the Orange County Airport. As a result of the intense reaction this provoked, Hughes at last cut Meier loose. Maheu said he was fired, Meier called it resigning. Meier was taken on at once by Hatsis at Toledo Mining as a $6,000-a-month consultant. IN the Summer of 1975, he was avoiding indictments in British Columbia.
The Thanksgiving Coup
The conflict developing here between Hughes and Lansky, with the Meier branch of it curving through the foreground, forms the strategic context of the events of November and December, 1970, the Thanksgiving coup of Hughes’s Nevada Operations and the overthrow of Maheu.
We are concerned in this coup with a power struggle between two parts of the Hughes empire in which various outside parties participated, not always openly. On one side, the main force was the Toolco board of directors and the main actor was Chester Davis. On the other side, the main force was Hughes’s $400-million Nevada Operations and the main actor was Maheu.
Davis and Maheu were not new men to the Hughes empire. Davis had come on to fight the TWA case in 1960 and was stilla stride it. Maheu had come in through the FBI and a private career in the security business. The hotel-dicks-at-heart who make up this insulfurated subculture must see their highest dreams realized in Maheu’s life. Before his fall, this entailed a $600,000 mansion to live in rent free and an annual salary of $520,000 to play around with, never mind the fishing and hunting lodges, the private airplanes always ready to go anywhere, the constant company of millionaires and their kind of people. He had come to Hughes in the late fifties as a security and intelligence expert with a background of FBI work in Chicago. As noted, he took charge of such seamier chores of Hughes-tending as matchmaking the CIA with the Rosselli-Giancana crowd in plots against Castro’s life and against the life of who knows who else besides. He got it on with Syndicate heavies like Dalitz in order to operate casinos successfully in Las Vegas. After the Castro work, he turned up next in the Boston interlude after the divestment of TWA when Hughes first decided to take on the Syndicate for control of Las Vegas. Maheu put together the whole secret move to Las Vegas, including the impenetrable security precautions, and allowed Hughes to arrive while Lansky slept or pretended to. He quickly became the chief officer in charge of Hughes’s boisterous Nevada expansion.
Maheu was fearful as early as March 1968 that the old Hughes guard of Houston and Los Angeles, the Toolco board, would grow jealous of his unique closeness to Hughes. The Toolco board’s authorization was still required for most of Maheu’s deals in Vegas. Although, the board would never refuse a specific order from Hughes, it could be dilatory in the absence of such an order. It could cut Maheu off. Maheu sought reassurance from Hughes in 1968 against any problems the intrinsically touchy situation could lead to. Hughes answered him as follows:
Bob, I have your message. I do not feel your apprehension in the least unjustified. If I give you my word to find a solution promptly, such as a voting trust for my Hughes Tool Company stock [which of course would have made Maheu the legal master of the whole Hughes empire], and if I put the formalities into a state of effectiveness for your scrutiny without any unreasonable delay, will you consider it done as of now, so your mind will not be filled with these thoughts in the near future? I will assume an affirmative answer and proceed accordingly.
Hughes never got around to doing that, but at the same time he stayed available to Maheu by memo and phone, sometimes (so ‘tis said) spending twenty hours a day on the phone with him.
In January 1970 Hughes put Maheu in charge of the TWA case, an act which set in train the events leading to the major climax of his career, the Thanksgiving coup, and possibly thence to Watergate. Hughes’s tone as he undertook this move was definite:
“Bob, please understand one thing which I do not think you have understood heretofore: you have the ball on the TWA situation. You do not need further approval from me to a specific settlement of a specific sum of money….If I am to hold you responsible for the overall outcome of this litigation, I must give you the complete authority to decide which law firm you want to handle each phase of it. I repeat, Bob, you have full authority.”
Maheu convinced Hughes to say this to the Toolco directors.
He did, they accepted the news with whatever inner murmurings but no recorded protest. And indeed issued Maheu “the necessary authorizations to handle all the phases and aspects of the TWA suit, including a settlement.”
This gave Maheu strength but left him exposed. There were first of all the troubles normal and natural to the TWA case itself. On April 14, 1970, Judge Metzner handed down a final judgment in favor of TWA against Hughes of $145,448,141.07. By the time the Supreme Court threw the whole thing out of court three years later, chargeable expenses had worked that amount up to about $160 million. That was what Maheu was looking at, and his job was to succeed where Davis had failed in finding a way not to have to pay it. On top of this, he had the additional problem of having to work without the sympathy of the powerful Toolco directors.
No sooner does Hughes turn the TWA problem over to Maheu than Maheu learns – this is in February 1970 – of a large-scale land fraud operating somewhere inside Nevada Operations. Now we can sense the Lansky pressure, but all Maheu had to go on then was a rumor. Taking up the TWA task with one hand, with the other hand he began to track down the silver mining swindle.
Maheu seems to have done everything you and I would have done to avoid getting shredded to pieces by the corporate violence implicit in this situation. Especially on the TWA matter, it is hard to see how he could have covered himself any better than he did, first in getting Hughes actually to tell the Toolco board that he was putting Maheu in charge, then in getting everything confirmed in explicit Toolco authorizations.
Maheu’s first step with TWA was to hear everyone out on the question of what to do. First he heard Chester Davis, whom he thought too defensive of his own role in the preceding legal defeats. Davis might well have been very defensive. These defeats amounted to the loss of a very large airline and the threatened loss of a very large amount of cash. The Supreme Court would finally agree in January 1973 that Davis was right and had been from the first day. But early in 1970, facing a damages bill for $160 million and a lost airline, Maheu thought Davis’s efforts to defend himself and his strategy too self-serving to be true.
So Maheu went to four blue-chip law firms with the question: Given everything that has happened and the situation as it is, what should Hughes do to save whatever can be saved out of the TWA mess? Maheu went to Washington to Clark Clifford’s firm of Clifford, Warnke, Glass, McIlwain & Finney. He went to New York to Welch & Morgan, the Morgan being Edward P., a close friend of Maheu’s and the Hughes lawyer whose advice originally decided Hughes on going to Las Vegas. He went to New York’s Donovan, Leisure, which represented Toolco throughout the damages hearings. And he went to the Beverly Hills firm of Wyman, Bautzer, Finell, Rothman & Kuchel, whose Gregory Bautzer was a long-time associate and Hollywood friend of Hughes.
Each one of these firms told Maheu to do the same thing; namely, get Davis off the case. This was not necessarily because they found Davis is a bad lawyer. It was because rightly or not the arguments he stood for had been rejected by the bar, and what was n ecessary for Hughes now above all was to get the case back in court. That required new arguments and new arguments necessarily required a new chief counsel. So Davis had to leave the case. One could think up the new arguments later. Perhaps there were even some good ones. It did seem strange, after all, that the largest damages claim ever yet awarded in the history of civil law should have been awarded in behalf of a company against the man who built, made, and owned that company. And it was also strange that the claim was not awarded on the merits of the case at all but because some inexplicable inner compulsion kept Hughes from appearing personally to testify in his own behalf.
What about Hughes solitude? Why could he not show his face to save $160 million? Does this not go beyond eccentricity? Sometimes it seems Hughes must have died, as so many insist, long before April 1976. The only people who claim definitely to have seen and had daily transactions with Hughes are the so-called Mormon Mafia, or the Big Five, the mostly Mormon superstraights who were said to tend him as nurses and secretaries. They were all recruited by Bill Gay of the Toolco board, and they are of course loyal to Gay. Parties to the events they served, partisans, these five men alone assured us of Hughes’s existence. That he did as they say he did, willed as they say he willed, we have no word but theirs.
But this is getting us too much ahead. We are thinking here of the standing mystery of Hughes’s reclusiveness, and we note that, come to think of it, with a tiny number of doubtful exceptions, the only people who actually saw Hughes since 1970 were Gay’s men. Maheu later took his place in the ranks of ministers who must observe ruefully, as he did, “All you have to do is control the palace guard, because that is who really controls the empire.”
But Maheu’s rue came a year later. In early 1970, armed with the best legal opinion Hughes’s money could buy, he opened his reign as strawboss of the TWA project by informing Toolco and Davis that Davis was off the TWA case. Not that he was no longer Toolco’s chief counsel; Maheu never claimed the power to fire Davis from his corporate bastion. Only that the universally recommended legal strategy in the TWA case required the use of new attorneys.
At that moment, Hughes suddenly moved Maheu in two new directions simultaneously. First, he launched him in an effort to penetrate gambling in the Bahamas. Hughes’ consciousness of what this entailed ins indicated in a fragment from an early 1970 phone conversation (taped) with Maheu: “If I were to make this move I would expect you to wrap up that government down there to a point where it will be – well, a captive entity in every way.
Hughees’ interest in the Bahamas was not new. His choice came down to the Bahamas or Las Vegas in Boston in 1966. But actually activating Maheu to start thinking of ways to take on and beat the Lansky apparatus in the Bahamas – that would look new and different from a Lansky perspective, all the more so because Hughes’s concurrent gyrations with Nixon in Washington.
And second, Hughes got Maheu going on a secret campaign to find out what Meier was up to in his theretofore secluded little silver-mining corner. In other words, Hughes was now opening two new fronts against the Syndicate on top of his already achieved preeminence on the Las Vegas Strip. He was expanding to the Syndicate’s other capital, and he was about to discover their man in his machine.
These were Maheu’s preoccupations as Davis mobilized his response to the TWA dismissal notice. Davis informed Maheu that his notice naturally meant nothing to him or to Toolco, and would Maheu please stay out of matters lying far outside the scope of his contact as a consultant on gambling and hotel security.
Maheu answered:
To date you have lost this case at every level with catastrophically adverse financial and other injury to the defendant….You were previously before the Second Circuit on this case and sustained a crushing defeat. This must not be repeated. You have repeatedly assured me that no antitrust violations were involved and that in consequence TWA could prove no damages. I must conclude that you were either wrong or wholly ineffectual, for the judgment now stands at a staggering figure. The time is at hand for other counsel to endeavor to achieve a favorable result….I deeply resent your presumptuous request that I “cease interference with the counsel in charge and responsible for the case.” There has been no interference on my part other than taking steps to accord other counsel an opportunity to salvage a case which you have tragically lost.
The Toolco directors behind Davis were meanwhile taking four concrete steps.
1: They voted the dismissal of Maheu.
2: They mandated Director Bill Gay to have the Mormon Mafia cut off Maheu’s communications. Maheu was from now on losing this particular game.
3: They ordered the two chiefs of the throneroom guardsmen, Howard Eckersley and Levar B. Myler, to enter in unto Hughes with a one-sentence proxy conferring full powers to the Davis group. This proxy was signed by Hughes, according to Eckersley who notarized it and Myler, who witnessed it. Hughes had now assigned to the Toolco board the right to run a large section of his empire.
This was November 14. Myler took the signed proxy to the Nevada State Bank in Las Vegas and put it in a strongbox.
4: Toolco promoted a whisper-in-Hughes’s-ear campaign against Maheu. “No outsider so far is privy to the exact details,” writes Tinnin, “but in essence, the reports informed Hughes that Maheu had developed into a disloyal and avaricious employee, who was taking his trusted employer for all he was worth.” The story on Maheu was that he was pocketing part or all of the finder’s fees for everything Hughes was buying in Nevada. These charges were never proved. It now is clearer that what was happening was that Toolco was accusing Maheu of the crimes that the Syndicate was committing and that maheu had begun to stumble onto.
Hughes’ Nevada security chief, Jack Hooper, left un-guarded the back stairway leading down from Hughes’s Desert Inn penthouse to a backdoor opening onto a parking lot, Hooper had taken off the door handle and assumed the doorway was now permanently closed. On November 26, 1970, the palace guards, the Eckersley-Myler group, took Hughes down nine flights of back stairs, out that door, and into one of several waiting station wagons. IN a variation on the Boston departure of 1966, a decoy caravan of black sedans with California plates was dispatched to Hughes’s McCarran Field, while the actual Hughes party drove to Nellis Air Force Base. There they were met by a Lockheed JetStar, leased from the Lockheed Aircraft Corporation, come to carry Hughes away to the Bahamas.
Hughes was met in the Bahamas on Thanksgiving Day by an Intertel official named James Golden, whose presence in the melodramatic escape episode is interesting because of his reputation as “Nixon’s man.” Secret Serviceman Golden was assigned to Vice-President Nixon in 1957. He accompanied Nixon to Russia and Central America. They got stoned together in Venezuela. They grew close. When Nixon left the White House in 1960, Golden left the Secret Service to take a job as security chief for Lockheed. In 1968 Lockheed gave him a leave of absence to join Nixon’s campaign as director of security. After Nixon’s election he became Resorts International’s deputy director of security on Paradise Island. He was a founding officer of Intertel and one of its vice-presidents at the time of the events of November. He later joined the Hughes Las Vegas staff. As of summer 1975, he was at the Justice Department as chief of the Organized Crime Strike Force of the Law Enforcement Assistance Agency.
Golden’s presence in the coup raises the question of a Nixon influence, since “Nixon’s man” either means nothing or something. Could Nixon have been involved in the plot of Thanksgiving 1970 to overthrow Maheu, abduct and confuse Hughes, and radically change the nature of the crime-connected, FBI-connected, and CIA-connected Hughes empire? Was the motive to protect the Meier-Donald Nixon racket against exposure? Was it to resolve the tensions of the Hughes-Lansky conflict within the Nixon coaliton? Golden’s possible role constitutes a workpoint for further investigations.
For the next four days, Hoopers’s guards kept routine vigil at their closed-circuit TV displays which showed every means of access to Hughes except the one actually used by the intruders. Then Greenspun got a tip from a Syndicate friend at the Desert Inn to the effect that Hughes’s suite had been strangely quiet lately. Greenspun got his intelligence to Maheu. Maheu tried to put through a call to Hughes. A second-level aide finally answered and told him Hughes was no longer there.
The next day, December 3, the Sun headlined, “Howard Hughes Missing.” A Toolco director later said that Hughes saw this headline on December 4 on Paradise Island and was infuriated. Throneroom guardsman Levar Myler claims to have heard Hughes say that Greenspun by himself would never have dared print such a headline and that Maheu therefore had to be behind it, and thus that Maheu should be fired at once. Myler said Hughes then told him to release the November 14 proxy.
On that same day, December 4, Toolco battle commander Davis summoned his adversary’s friend and lawyer, Ed Morgan, to a meeting in Beverly Hills. Morgan had been active that summer in the transfer of the Danner-Rebozo money (and would be again active in its return three years later). On this trip to face Davis, in fact, Morgan brought Danner along. Danner’s reputation is that of an intimate of Nixon’s. He was also at this time a manager of one of Hughes’s hotels in Las Vegas.
Morgan and Danner found Davis awaiting them in Beverly Hills with Toolco directors Bill Gay, Calvin Collier, and Raymond Holliday. Davis told Morgan that Morgan’s client, Maheu, was thereby formally and officially fired by Davis’s client, Toolco, which was sole representative of Hughes. Davis flashed the November 14 proxy to prove it. Hughes had lost confidence in Maheu, said Davis. Nevada operation were not doing well. Earnings were less than 5 percent on a turnover of about $5 million. Only the Sands was showing a good profit. (And Danner was also fired, screamed Holliday, “number five on a list of 155,” This was a mistake soon corrected. Holliday had perhaps not appreciated the importance of Danner’s relationship with Nixon. Danner is last seen, post-Watergage, running the Sands.) Both groups flew back to Las Vegas that same day.
December 4, 1970, transfigured Vegas night. In swooped the Davis command – secretaries, files and telephones going full speed from first landing. Davis commandeered the penthouse at the Sands. The Sands was at that time managed by Maheu, but like the rest of Hughes’s Nevada holdings, it was actually owned in the name of Toolco. The Sands and the rest fell within the legal authority of the Toolco board and Davis.
Davis liberated and occupied his chosen headquarters swiftly. He installed a tough-looking security guard and announced that he alone spoke for Hughes, that Maheu was now out, and that a whole new order reigned.
Simultaneously, Davis commanded his “small army of special agents form Intertel,” flashing their mysterious credentials, to move with no more than necessary force into the sacrosanct cashiers’ cages in all the Hughes casinos. The Intertel men stuffed the cash into paper bags and boxes with no explanation other than their story about “a new management” and no credentials other than their advantage in surprise and force. They could as easily have been robbers as cops. They completely succeeded in putting the law’s first nine parts to work for Toolco. Subsequent discussion about who actually should boss the casinos was much influenced by the fact that Davis did.
We noted above that Maheu had feared something like this all along and had repeatedly sought Hughes’s reassurances that he was doing just what Hughes wanted him to do. Now he had no access to Hughes and therefore no reassurances and therefore nothing. The lawyers Morgan and Bell were loyal to Maheu, as were Greenspun with his paper and Hooper with his shamefaced security force. These people gave Maheu some capability for tactical defense but not enough. Without Hughes’s voice to animate it, Maheu’s world turned back into a pumpkin.
But Maheu did make a good argument of it. He gave four solid reasons in support of his outrageous theory that Hughes had actually been abducted by his enemies.
1: Hughes’s health was too poor for so sudden and hurried a trip. Newsweek reported on these events in its issue of December 21, 1970. This story scornfully informed its readers that “Maheu’s group spread another story that Hughes had been visited by a heart specialist (or in one version, three heart specialists) in November, that he was too ill to be moved anywhere but to a hospital, and that he had been kidnapped.” But actually, one of the few hard facts in this case accepted by all sides is that in the early part of that month, Hughes’s health had so sharply declined that Hooper’s security agents and Gay’s throneroom guards were compelled to open the airlock and let a doctor-human from the normal world, Dr. Harold Feikes, come into the innermost bubble to examine Hughes in the flesh, forbidding task. Davis quickly got a court order shutting Feikes up on what he had observed behind the screen at Oz, but in the split second before the order fell, Feikes said enough to confirm the general lines of Maheu’s claim.
According to Feikes, Hughes stood six feet four inches and normally weighted about 150 pounds. Now, said Feikes, he weighed 97 pounds and was suffering from an active heart condition, pneumonia, and anemia stemming from chronic malnutrition. (Malnutrition in one of the world’s richest men? His routine lifelong diet was cookies and milk.)
Feikes gave him immediate blood transfusions and said later that he was still on transfusions at the time of his sudden departure for the Bahamas, a departure carried out so hastily, however long it may have been considered, that he actually left behind his till-then precious or even indispensable life-support equipment. Maheu may well have found this sufficiently improbable to raise doubts about Davis’s claims.
2: Maheu thought it was strange that Hughes should choose Davis and Gay as his personal trustees in a matter as sensitive as this. Maheu said he once suggested to Hughes that Davis be brought to Las Vegas for a certain legal task, and that Hughes answered, “God damn it, Bob, you must be losing your mind. If we allow this man to come to Las Vegas, in 24 hours the whole city will be devastated, and in 48 hours the entire state of Nevada will be in chaos. This is of course self-serving on Maheu’s part, but it was apparently ture that Davis had been in bad standing with Hughes. Hughes had tried to take Davis off the TWA case and may easily have sensed and resented his resistance. The Toolco directors of course knew all about this, having gone through the ritual transfer of authority from Davis to Maheu earlier in the year.
Gay was also on the outs with Hughes. In 1965, Hughes backed a new major corporate undertaking on Gay’s recommendation. This was a computer company, Hughes Dynamics, aimed at capturing a piece of IBM’s action. Hughes Dynamics collapsed within a year with a loss of about $9 millioin. When Hughes was preparing his clandestine entry into Las Vegas, he turned to Maheu for security, Gay’s former preserve. According to Maheu, Hughes also gave instructions that Maheu was “not to invite Bill… and not to permit him to be privy to our affairs….I no longer trust him. My bill of complaints against Bill’s conduct goes very deep.”
I explained this to bill Gay in great detail. But he resented it to the extent that he began to move into areas of my domain…Shortly after we had arrived here [in Las Vegas], I asked [Hughes] if, on land problems, I was to take instructions from Bill Gay. Whereupon he literally went into a tirade and explained…that Bill Gay was less important in his world than his aides [i.e., than the throneroom guard]. He said that Bill Gay’s only assignment in life was to keep his relationship with Mrs. Hughes intact…and to keep Mrs. Hughes’s name out of the newspapers. He said Bill was just a baby-sitter for Jean.
Maheu, then cited a passage from a later Hughes memo on Gay: “Bills total indifference and laxity to my plea for help in my domestic area, voiced urgently to h im week by week, throughout the past seven or eight years, have resulted in a complete, I am afraid irrevocable loss of my wife. I blame bill completely for this unnecessary debacle. I feel he let me down – utterly, totally, completely.” (Hughes and Jean Peters were formally divorced in 1970.)
3: Maheu argued that it was certainly peculiar for a man like Hughes, engaged as he was at that exact moment in a battle for control of the Las Vegas-Bahamas gambling axis, suddenly to abandon old friends and helpers in the game, people like Maheu himself and Hooper, and to leap headlong down the spiderhole of an organization like Resorts International, “a company which operates a casino in the Bahamas…in direct competition with those in Nevada.” This in spite of bad health and only on the counsel of formerly dispirited executives. On top of all, what would possibly lead him to employ as over-all manager of this trip a security organization, Intertel, 94 percent of which was owned by Resorts International?
So even if Intertel was not the CIA or the Lansky Syndicate, it was still the least the CIA of Resorts International, and that Resorts International, whether it was a Syndicate front or not, was still Hughes’s chief competion.
4: Lastly, Maheu raised the question: If Hughes was so down on him, why not simply terminate his contract? Why so much fuss? Why the seemingly deliberate attempt to provoke a public controversy? And was it not another stupendous coincidence that Hughes should have closed himself off to Maheu at the very moment the Toolco board felt most threatened by him? One moment Maheu is a good guy with Hughes doing a hard job honestly and well. His communication lines are open to the top. He bends over backward to keep his face and hands clean. He is studiedly correct in all things. Then, pop! The mandate he won by that very competence, the TWA mandate, brings him up against the power of Davis and Toolco. So Gay tells the throneroom guard not to carry Maheu’s memos to Hughes anymore, not to put his phone calls through, to tear up his Valentines and badmouth him to Hughes – and thus lead Hughes to the belief that Maheu was responsible for the Syndicate’s silver-mining swindle.
The force of Maheu’s self-defense grew with developments, the following two in particular.
First, after years of digging in the records of Maheu’s Nevada administration, Toolco attorneys were unable to find a single fault to stick him with. Then in July 1974, in Los Angeles, Maheu won a jury verdict in his multimillion-dollar libel suit entered against Hughes in 1972 after Hughes told reporters (in a telephone interview growing out of the Clifford Irving “hoax” biography affair) that Maheu was a “no-good, dishonest son of a bitch and he stole me blind,” a view Hughes held on the strength of information he got from the Toolco throneroom guard service, the Mormon Mafia.
The Las Vegas battle was finally resolved not by the force of anyone’s arguments or by the integrity of either side, but by the Eckersley-Myler proxy of November 14. Myler got it from the strongbox and presented it to the court on December 10. Eckersley arrived the same day from Paradise Island with a long letter purportedly from Hughes in support of Davis. Two days before, phoning from the Britannia Beach Hotel, Hughes spoke to Governor Laxalt and District Attorney George Franklin. Both of them said they were positive the person they heard calling himself Hughes over the phone was the same person they had heard every other time they believed themselves to be talking to Hughes. Hughes told them he was alive and reasonably well, that Maheu was a disloyal employee and had been fired, and that Davis spoke from him in all matters.
Maheu produced a handwriting expert who swore that the Hughes signature on the proxy was a fake. Davis produced another handwriting expert who swore it was genuine. The court found Davis’s expert the more convincing one. Maheu lost his job.
In the aftermath came a complete reconfiguration of the over-all Hughes empire. In place of the old Toolco, a new creature materialized, the Summa Corporation. And stock in the drillbit company from which it all had started was publicly traded on the New York Stock Exchange. The CIA relationship was continued within the structure of Summa and the Hughes Medical Institute of Miami.
Something had come full-circle. Hughes, the individualist tycoon had now disappeared altogether behind exactly the kind of closet corporation that had been hounding him all of his life – perhaps the master, but perhaps after Thanksgiving 1970, the slave and victim of an ambitious and resourceful staff in revolt.
The Greenspun Caper
Maheu could not prevail against Davis, but he protected himself against annihilation by stashing away, in the safe of his ally Greenspun, his large private collection of Hughes documents and tapes. It contained memorable items not only from the teeming four years of happiness in Las Vegas, but also from all Maheu’s adventures with Hughes before that, such as the time Maheu got the CIA and the Syndicate together. Since Maheu was at one time or another immersed in these activities, his documents presumably painted an insider’s picture of the larger relationship emerging between Hughes, Toolco, the CIA, and the Syndicate.
Rumor of the scope of Maheu’s document trove finally prompted Robert Bennett, president of the CIA-linked public relations firm of Robert Mullen and Company, to convene a meeting in Washington between himself, Howard Hunt and Ralph White. White was the new Hughes-Nevada security chief after the coming of Toolco. He has an Intertel background. Bennett assembled this group in order ot discuss “the communality of interests” among them in the contents of Greenspun’s safe. Bennett is the son of Utah Senator Wallace Bennett, a high official of the Mormon Church. He joined Mullen and Company as its president early in 1971, bringing the Toolco-Davis account with him.
Mullen and Company was incorporated in n1959. According to Senator Baker’s special report on the CIA and Watergate (July 2, 1974), Mullen “maintained a relationship with the CIA” from then on and was providing cover for agents in Amsterdam and Singapore at the hour of the Watergate break-in. Besides Hughes, Mullen was also close to ITT and CREEP. Douglas Caddy worked out of Mullen offices during the halcyon days of the Huston Plan.
Hunt told the Ervin Committee what he had told McCord, that there was some scandal on Muskie in Greenspun’s safe. Hunt’s tenacity in struggle is better than this story. Greenspun’s denial, the partial revelation of the Maheu papers, and the whole subsequent flow of the situation persuade us that McCord’s estimate the following December was better; that Nixon and Mitchell thought “Greenspun had other material which would personally incriminate the President and his friends.” We need only wipe away the dust to see that this material was the Maheu collection.
The February 1972 meeting at Mullen’s Washington office determined upon a straight-ahead, Liddy-style approach to the problem, i.e., burglary, a Plumber favorite. McCord’s testimony is that Liddy told him that he, Liddy, shortly thereafter handled a first-installment Hughes contribution of $50,000 to CREEP, the money flowing from Hughes through Bennett. In November, also flowing between Bennett and Liddy at the Mullen/CIA office, another Hughes cash dose for CREEP came through, this one for $100,000. Was Toolco hiring the services of the White House Plumbers?
In April, Liddy went to Las Vegas (again according to McCord) to case the layout of the Sun a second time. McCord does not say the break-in was actually attempted, but his account indicates that plans and preparations were carried to extensive detail. The Maheu documents and their White House thieves were to have been flown out of the country to a Central American haven in an airplane provided for that purpose by Toolco.
An unsuccessful attempt to open the Sun’s safe was reported that month. It has never been conclusively linked to the Plumbers. But whether the Greenspun document heist was abandoned in the planning stage or muffed in the attempted execution, it remains an abiding fact of American history that it did not end the interest of the Nixon people in the contents of Greenspun’s safe or the Hughes problem. The best current explanation of the actual Watergate break-ins of June 1972 is that they were motivated by fear that something on Hughes and Nixon – possibly on the whole question of Cuba, the CIA, and the attempted Castro assassination – had fallen into the hands of the McGovernites of the Democratic party. Even in the glaring publicity of the Senate Watergate hearings, the Nixon people still could not resist a last little try to get these papers back to Toolco. On May 23, 1973, the day after McCord told the Ervin Committee and the world of the Greenspun break-in plot, two IRS agents showed up at Greenspun’s office with a pretext for demanding the Maheu material. Greenspun went to court and got that stopped. The safe remained inviolate, and Maheu’s treasure helped serve him a victory in his Los Angeles libel suit against Hughes.
The Hughes-Nixon Connection
We opened this exploration of the political-economic Hughes with the words that first brought his name into Watergate, those of McCord to Ervin on May 20, 1973. In view of the specific light cast by the story just reconstructed, I think we now know how to decode the McCord statement. He is telling us the technical truth, but he is also telling us that a significant detail is wrong, that something else was afoot, that we should look for a twist. He is saying through clenched teeth that Nixon was the presidential figure whome the Maheu-Greenspun documents posed a threat to, not Muskie. Decoded, his original statement would then read:
Liddy said that Mitchell told him that Greenspun had in his possession blackmail type information involving NIXON [not Muskie] and Mitchell wanted that material, and Liddy said that this information was in some way racketeer-related, indicating that if this candidate, NIXON [not Muskie] became president, the racketeers or national crime syndicate would have a control or influence over him as president.
I submit that this is the “other motive” McCord hinted of, the unnamed motive he thought might actually have prompted the Greenspun caper. The link between the “presidential candidate” and organized crime existed, but if I am ever to be too obvious, the motive oof the attempt on Greenspun’s safe was to protect that secret, not to acquire it, because the link did not run between Lansky and Muskie, it ran between Lansky and Nixon and Hughes.
Theory: Hughes and Lansky both had a piece of Nixon.
When Hughes and Lansky got along, as they did so well on the Cuban question, things went well. They went badly after about 1968, when Meier appeared. The Hughes-Lansky conflict over Nevada was a conflict internal to the Nixon coalition, essentially a conflict for control of the presidency and the president.
The Cowboy’s need to protect that secret and the Yankee’s ability to penetrate and manipulate it constitute the inner drive of Watergate.
To be continued...
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