Unreal City: Las Vegas, Black Mesa, and the Fate of the West Read online

  Unlike Wilbur Clark, Moe Dalitz did not lose his poise before the senators. In response to Senator Kefauver’s repeated questions about “the nest egg” that Dalitz built up by investing the money from his criminal enterprises into his many legitimate businesses—laundries, restaurants, insurance, health care, real estate, ranches—Moe Dalitz retained his mordant humor: “Well, I didn’t inherit a trust fund Senator.” Kefauver was an ambitious freshman senator from Tennessee and a Yale Law School graduate who had his eyes set on his political future. Dalitz was letting him know that he wasn’t intimidated by the committee or Kefauver’s position.

  The Senate Special Committee to Investigate Organized Crime in Interstate Commerce went out of business in 1951 but not before Senator Kefauver, its chairman, published nineteen volumes of hearing testimony and a widely publicized summary report. The committee’s hearings had been a national sensation and the subject of front-page headlines, radio news programs, and live television reports. The new medium of television entered American living rooms in the early 1950s for the first time, so Americans were fascinated to see actual gangland figures appear on live television and describe the specific details of executions, extortion, illegal gambling, murder for hire, bookmaking on sporting events, fixing dog and horse racing, and the transfer of gambling operations from Havana, Cuba, to Nevada.

  This last point might not have interested the public much, but it troubled people like Meyer Lansky and other gangsters who were investing a lot of money in Las Vegas because they saw Nevada as the new Havana, the only place in the United States where gambling was legal. Las Vegas promised enormous profits. The reason Lansky ran a gambling school to train croupiers, dealers, pit bosses, and floor managers was because the cash environment and the temptation to cheat were omnipresent. Some of these men were being sent to Las Vegas. Sophisticated gambling operations had catwalks above the ceilings and two-way mirrors over the tables. Dealers were required to wear uniforms without pockets so they couldn’t palm a $100 chip into a pocket. One attraction of Las Vegas and its legal gambling was that it had none of the payoffs to the police, politicians, and judges that were required costs of doing business in the rest of American cities. The highly publicized investigations of Kefauver’s Crime Committee represented a real threat to investments from the kind of people who had no intention of losing money.

  In his summary report of the hearings, Senator Kefauver called organized crime “a phantom government,” with its own laws, its own enforcers, and its own interest in dominating politics. Kefauver cited the extraordinary amounts of money that crime families were able to leverage in local, state, and federal elections and estimated that at any given point in time organized crime controlled more than $20 billion in untaxed dollars ($280 billion in current dollars). Kefauver presented a network of links between upperworld and underworld gangsters—businessmen, organized crime syndicates, and politicians.

  Kefauver wanted to continue a second round of hearings, but in 1951 the Senate majority leader, whose office held power over all special committee appointments, fell to Ernest McFarland, the powerful and highly respected Democratic senator from Arizona. Unexpectedly, McFarland, who might have supported a second round of Crime Committee hearings, lost his 1952 election. The victor was both a Republican and an inexperienced politician.

  Barry Goldwater was a rich man’s son and considered to be something of a lightweight. He had become president of Goldwater & Sons at the age of twenty after his father, who had built the business, died of a sudden heart attack in 1929. Barry was a freshman at the University of Arizona at the time, and his formal education ended then, a decision he called “the biggest mistake of my life.” Because the Goldwater family’s department stores had professional managers, Barry had plenty of time to explore his many hobbies while he learned the retail business—flying an airplane, photography, ham radios, exploration of Arizona’s backcountry, and collecting Native American art.

  After World War II—when, as an officer in the US Army Air Forces, he had ferried empty airplanes back and forth from the United States to England and then to Southeast Asia—he took one of the first rafting trips down the Colorado River. It was an adventure that he filmed with a handheld movie camera at a time when home movies were not common and only a few white people had seen vistas of the Grand Canyon from the river. (Commercial river rafting adventures didn’t begin until the late 1960s.) The film was good enough that he toured the state, showing the film at schools, churches, and community centers, accompanying it with a lecture about the Colorado River and its canyons. Some people felt that this tour was perfect training for retail politics.

  He collected Navajo rugs, Hopi pottery, and other Indian artifacts and talked about the days when he had helped his uncle Morris Goldwater of Prescott run a trading post near Navajo Mountain. Many of his photographs appeared in glossy magazines. He was a frequent speaker for chambers of commerce, rotary clubs, and any business group interested in having him. He was a Republican and became involved in politics in a state that had a tiny Republican Party. Yet he claimed to have no interest in becoming a politician himself. (As Rick Perlstein shows in his 2009 book about Goldwater’s political ascent, Before the Storm: Barry Goldwater and the Unmaking of the American Consensus, Goldwater always described himself as a reluctant candidate who was dragged into politics by others.)

  On his fortieth birthday, in 1949, his childhood friend Harry Rosenzweig, a Phoenix jeweler, asked him to run as a reform candidate for the Phoenix City Council. At the time, Phoenix had a population of forty-eight thousand people, and the “reform” had to do with the city’s relationship with the military bases that were expanding outside the city.

  While he was on the city council, Goldwater’s speeches were legendary for their rambling syntax and non sequiturs. Even Rosenzweig, also on the council, admitted that half the time no one understood what Goldwater was saying: “He’d get wound up, and no one could understand what he was talking about.” Many Arizona business leaders and politicians did not take his candidacy seriously. McFarland was highly respected, a two-term senator, and a former attorney general in a Democratic state. The much-quoted remark of Nicholas Udall, then mayor of Phoenix, was that Goldwater was “a merchant prince who liked to fly planes and get his picture in the newspaper.”

  Nonetheless, in 1951, after eighteen months on the city council, political neophyte Barry Goldwater became the announced Republican candidate for the US Senate against the legendary longtime Democrat, former assistant attorney general, and current Senate majority leader—Ernest McFarland. Goldwater’s frequent association with Las Vegas gangsters might have proved a problem except that mass media and television were still in their infancy in 1952 and Goldwater presented a veneer of the rugged West. He was a cowboy aristocrat, a son of one of Arizona’s wealthiest families, but a privileged son who could talk about the old days with his grandfather’s freighting business and ownership of a saloon and brothel in Yuma. Goldwater’s father, Baron Sr., had invested in land, cotton, cattle, and mining, which were the engines of the Arizona economy.

  The official version of Barry Goldwater’s long-shot election to the US Senate holds that he ran at a critical moment when the conservative tide was turning in Arizona and carried him to victory on Eisenhower’s coattails. (President Dwight D. Eisenhower, the smart and popular Army general who had commanded the D-day invasion of World War II, carried Arizona in the 1952 presidential election.) Both of these interpretations are accurate. But Goldwater needed more to defeat an opponent like McFarland: he needed a lot of money and a new source of voters to provide a margin of victory.

  Goldwater admitted to outspending McFarland three to one in the 1952 Senate campaign, and rumors of Mob money included paper bags of Las Vegas cash arriving regularly at Goldwater campaign headquarters in Phoenix. (He also got money from the Hunt brothers and other reactionary Texas energy barons.) The stories of Las Vegas cash as a factor in Goldwater’s upset victory were so persistent that
twenty years later, a reporter from the New Yorker was still asking Harry Rosenzweig, Goldwater’s chief fund-raiser, about them. Rosenzweig answered, “Gus Greenbaum was running the horse-betting wire in Phoenix, and at his brother’s anniversary party he handed me a package [saying] you can get this amount of money every month for the next six months.” Rosenzweig claimed he took it once but never again. The article did not ask more questions about Greenbaum’s role in Las Vegas at the Flamingo or the Riviera or about his network of Mob connections or his long-term relationship with Meyer Lansky.

  The second intriguing aspect of Goldwater’s victory was how and where he found the margin of new voters. In 1952 Arizona was still a Democratic state. The hundreds of thousands of midwesterners who poured into the massive retirement communities that Del Webb would build were still a phenomenon of the future. Where could Goldwater’s winning votes come from?

  The majority of Arizona voters were still Democratic largely because miners and farmworkers outnumbered the mine owners, growers, and land developers. The entire state had a population of considerably less than 1 million. (Total Arizona population in 1950 was 749,587.) An important question for Goldwater campaign strategists was how to find enough new votes to squeak out a victory. What about the Hopi and Navajo Indians in northern Arizona who would be voting for the first time in the 1952 presidential election? Arizona Indians were prevented from voting by Arizona’s constitution. This exclusion from voting rights was successfully challenged only in 1948 when Felix Cohen, the solicitor for the Interior Department, sued the state and succeeded in amending the state constitution.

  “That part of Northern Arizona,” Goldwater wrote to the National Republican Senatorial Election Committee in Washington, asking for funds to help secure the Navajo and Hopi Indian vote, “comprises three counties [and] is occupied by the Navajo and Hopi Indians. All that is required to vote in this state is to be able to read and sign one’s name. The Indian Traders . . . will register these Indians, but it will take some money as these Indians are semi-nomadic in their living and one has to gather them in by the use of sings or barbeques as you and I would call them. Trucks and gasoline have been contributed for this effort. I feel that this might well be the margin of victory in this state.” As it turned out, he was right.

  Indian traders were largely white men who had political connections. They had to apply for a license from the Bureau of Indian Affairs (BIA) and submit character references, often supplied by local landowners or politicians. In the past, many were Mormons who saw the trading posts as a way of converting the Indians to Mormonism. Unlike Indian agents, who were federal employees and prohibited from commerce with the tribes, the traders controlled all commercial goods sold on the reservations. From the 1850s on, a pattern of collusion developed among the Indian agents, traders, and politicians. Known as the Indian Ring, it involved local politicians who colluded with the traders and Indian agents to defraud the Indians of payments, supplies, livestock, sheep, goats, tools, land, mineral leases, or whatever Washington had promised through treaties and agreements. The government agents tipped off the traders as to when annuities were due to be paid to the Indian tribes; the traders provided credit in advance at inflated prices; the trader kept much of the money or stole many of the supplies and gave a cut to the agent and the politician. One historian characterized the arrangement as “a more perfect recipe for corruption could not be found.” Unlicensed traders set up trading posts at the edge of the reservation to sell illegal whiskey and guns. Over time the licensed trader’s role was enlarged to include postmaster, banker, and creditor, especially for trade goods that Indians pawned, such as rugs, jewelry, basketry, and pottery. Although some traders, such as Lorenzo Hubbell and John Wetherill, learned Indian languages and successfully promoted economic activities that benefited the Indians, the overall pattern was one of dishonesty or lethargy about Indian economic well-being. The Indians were a captive market. (In 1969 the Southern Indian Development Institute did a study of the size of the traders’ market on the Navajo reservation and found that the gross annual income of licensed traders was $17,223,338, at a time when the average Navajo family income was $1,500.)

  The servant class in Arizona was Native American. Goldwater’s childhood nanny, for example, came from the Indian school in Phoenix, as did Harry Rosenzweig’s. Indian teenagers from Arizona’s many reservations were sent, often forcibly, to high school at the Indian boarding school in Phoenix to learn English, Christianity, and skills for earning a living, including child care and domestic skills for girls and carpentry and machine maintenance for boys. It is true that unlike a lot of Arizona’s new residents, Goldwater did know something about life on the Navajo and Hopi reservation, and for his own benefit he made a good case for helping to get them to vote. The Republican Senate Election Committee sent him money for organizing the “sings” and getting out the votes on the Hopi and Navajo Indian reservation.

  When the votes were counted, Goldwater won by 4,600 votes out of 260,000, less than two percentage points. It was a thin margin of victory, but nonetheless it was a victory, and he was soon on his way to Washington to replace the legendary Ernest McFarland. Despite Kefauver’s repeated requests, there would be no more Senate investigations into organized crime. The new majority leader, Lyndon Johnson, who had his own knowledge of Texas crime syndicates, never took the possibility seriously.

  Once in Washington, Goldwater hung a Hopi kachina doll on the door of his Washington apartment and told friends about his Navajo name—Chischilly, “Man with Curly Hair.” He decorated his Senate office with photographs of Arizona, many of which he took himself. He was in the Arizona Air Force Reserve and a military buff. He was a great talker, and he became a strong supporter of anticommunist Republicans such as Joe McCarthy, who was ferreting out communist infiltrators—real and imagined—in the US government, labor unions, and Hollywood. His wife and children stayed behind in Phoenix, so he was seen at many Washington watering holes and parties, often telling people that he had once run an Indian trading post on the Navajo reservation near Navajo Mountain. “When I think of the area that I had my trading post in,” he later told the House Indian Affairs Committee, “the Paiute Mesa only supported about 1,500 Navajos who had their summer hogans on top of the mesa and their winter hogans in the canyons.” He maintained he knew as much about American Indians as anyone in America, and since Indian policy had been omitted from American history books, most people believed him.

  When Barry Goldwater came to the US Senate in 1953, it was still the most exclusive men’s club in America, an all-white institution of ninety-five men and one woman. (Alaska and Hawaii were not yet states; as a widow, Margaret Chase Smith of Maine took her husband’s seat in the House and ran for the Senate in 1948. The first African American, Edward Brook of Massachusetts, wasn’t elected until 1966.) Although Democrats had held the majority in the Senate for years, no civil rights bill had ever come up for a vote. All the waiters in the Senate dining room were African American, or “coloreds,” as they were then called; the elevator boys were African American or Filipino or patronage appointments; and women were in support positions as secretaries. By virtue of southern senators’ seniority, the bureaucratic machinery of the Senate, all the top administrative jobs as well as committee assignments were controlled by southern men who exercised power behind a scrim of elaborate protocols, overblown courtesies, and ruthless gentility.

  Although Barry Goldwater was a Republican from the western state of Arizona, he felt comfortable with the conservative southern Democrats. Like them, he came from a state with a troublesome minority population that had to be managed with a minimum of federal interference. Like the southern senators, Goldwater believed in states’ rights, no government intervention, anticommunism, right-to-work laws (no unions), and a strong military.

  The colorful West that Goldwater merchandised when he arrived in Washington in 1953 was part of American mythology—an imaginary place of Indian warriors in feathers a
nd war paint, Remington cowboys, flaming sunsets, exquisite Indian crafts, dusty cattle trails, and virile men of action. It is actually a vision of the West that was invented by eastern authors such as Owen Wister, Teddy Roosevelt’s Harvard friend, and maintained by Hollywood writers such as Goldwater’s friend Clarence Budington Kelland. In a “Dear Bud” letter to Kelland written during his campaign, Goldwater thanked him for all his help: “I don’t know what the hell I’d do without you.” Kelland was the prolific author of many western novels and dozens of short stories published in the Saturday Evening Post. His full-time job, however, was as a campaign consultant for the Republican National Committee. He became Goldwater’s friend and a key adviser.

  Goldwater had run an imaginative campaign against a formidable opponent and squeezed out his election victory in a Democratic state. In Washington he became the spokesperson for a new hard-right, anticommunist, conservative, small-government agenda that linked western conservative Republicans with southern Democrats. He believed and said publicly that this coalition could wrest control of the Republican Party out of the hands of the eastern moderate Republicans and energize a movement with the goal of repealing all the programs of the New Deal. He was greatly disliked by moderate Republicans and lost the support of President Eisenhower after he called the Eisenhower administration a “dime store New Deal.” He was a great supporter of Joseph McCarthy’s anticommunist crusade and was conspicuously absent when the vote to censure McCarthy was taken.