Crime, Big Business & Watergate & Intertel

INTERNATIONAL INTELLIGENCE INC.

  When Mary Carter Paint Company changed its name to Resorts International, several attempts were made to give the impression that organized crime was not involved in its gambling casinos despite all that had gone on. Some well-known Lansky men were fired from the casinos, and Resorts International put up $2 million to form International Intelligence Inc. (Intertel), an agency which guaranteed to keep any legal gambling operation free from or-ganized crime influence. Heading Intertel was the same Robert Peloquin who as a Justice Department investigator had warned of the likelihood of a Lansky skim at Resorts International's Paradise Island Casino. He resigned from the Justice Department to become vice-president of Paradise Enterprises Ltd., the corporation set up by Sands, Groves and Mary Carter Paint to organize security at the new Nassau casinos. From Paradise Enterprises, Peloquin shifted to Intertel, a 91 per cent - owned subsidiary of Resorts International. It is believed that Howard Hughes owns the other 9 per cent.

Intertel describes itself as an organization devoted to "safeguarding business from the hidden risks of vulnerability to organized crime, and assisting states and cities in developing comprehensive crime control plans.
Intertel is a unique consulting organization created specifically to provide businesses, industrial concerns and trade associations with expertly designed management systems that would enable them to repel infiltration by organized crime."

In a 1970 brochure which Intertel distributed to some interested publications, the President's Commission on Law Enforcement and Administration of Justice is approvingly quoted as saying in 1967: "There is a disturbing lack of interest on the part of some legitimate business concerns regarding the identity of the persons with whom they deal. This lackadaisical attitude is conducive to the perpetration of frauds and the
infiltration and subversion of legitimate business by the organized criminal elements."

The Intertel brochure, backed by the impressive experience Robert Peloquin had acquired as one of the top governmental investigators of organized crime, goes on to say what Intertel has to offer the legitimate businessman: Wherever business succeeds, there is a threat of infiltration and subversion by organized crime. The threat to corporate giants is gigantic. The effect on
smaller business is often devastating.

Organized crime's activity in the business community is more diverse than any conglomerate's. Its members and associates are astute businessmen. They are profit-oriented; they invest and manipulate billions of dollars in business. Yet most businessmen know virtually nothing about the economic threat and danger signals of organized crime.

Until now businessmen concerned about the problem have had no wholly suitable place to turn for help. That is no longer true. A new company has been formed to give that help: International Intelligence Inc. �INTERTEL.

Organized criminals who injure business today do not look like stereotyped criminals. They are executives and technicians. Their forte is manipulation of computer information, tampering with accounting procedures, theft of trade secrets and invasion of confidential company files. They thrive on exercising dangerous influence over key employees and executives in parent or subsidiary companies, and the corruption of associates, suppliers, distributors, customers and competitors.

Those are vulnerable areas through which organized crime can penetrate and ultimately control a business or an industry. Those are the areas largely overlooked by management in many businesses.

Organized crime can not be disregarded. Its influence will not disintegrate on its own. Affirmative action must be taken by the business community.

Consideration must be given to the integrity of management and key officials in companies with whom any business relationship is contemplated. Are their money sources legitimate, or do they represent part of the $7 to $10 billion profit organized crime nets every year from illegal operations and wants to invest in legitimate business?

Intertel has the unique capability of studying your company, analyzing the potential for such losses in its various divisions or subsidiaries, and identifying the areas of vulnerability. We can recommend new management systems, or improvement of existing ones. We can provide the necessary intelligence about businesses and management with whom you are considering a merger, acquisition, joint venture or other relationship. Management thus can avoid loss of profits, dissipation of assets, and ruin of business reputation.

The Intertel brochure then goes on to detail what it can do for specific types of businesses. For professional sports organization, Intertel will provide intelligence services to prevent organized crime from influencing sport results. For stock exchanges, banks, brokerage houses and credit card companies Intertel will help prevent the theft of stocks, bonds and other securities. It will assist in the rapid identification of stolen securities and prevent the use of fraudulent or stolen credit cards. For legitimate casinos, race -tracks or lotteries, Intertel will coordinate with U. S. officials and foreign government officials to keep the gambling crime-free.

In order to accomplish all of this, Peloquin recruited an impressive group of professional crime-fighters. Peloquin's law partner, William C. Hundley, became secretary of Intertel. Hundley was formerly chief of the Organized Crime and Racketeering Section of the U. S. Department of Justice. John D.O'Connell, Intertel executive vice-president for New York operations, is a former FBI agent with 24 years of specialization in organized crime investigation.

Thomas J. McKeon, vice-president, was chief of the Justice Department's Organized Crime Strike Force in Detroit. William A. Kolar, vice-president, is another former FBI agent with extensive experience in the Internal Revenue Service. David Belisle was deputy director of security for the U. S. Department of State .

Intertel's list of experts goes on and on. Sir Ranulph Bacon, former Commissioner of Scotland Yard and head of the 1967 Royal Commission of Inquiry into Bahamian gambling, is on Intertel's board of directors along with M.F.A. Lindsay, former Commissioner of the Royal Canadian Mounted Police; Mortimer Caplan, former Commissioner of the U.S. Internatl[sic] Revenue Service; Edwin McDonald, executive vice-president of the Metropolitan
Life Insurance Company; and Jerome S. Hardy, executive vicepresident of a large mutual fund that supported Nixon, The Dreyfus Corporation of New York.

And then besides Peloquin there are a whole group who have been associated with the gambling operations of Mary Carter Paint and Resorts International. James Golden, already mentioned in this chapter as a former employee of Mary Carter Paint, who also took care of security for Richard Nixon, now appears as a staff member of Intertel. He is credited with also being director of security for Resorts International. Intertel treasurer Raymond Gore, a certified public accountant formerly with Price Waterhouse, is also vicepresident of finance for Resorts International.

Warren Adams, chief casino security officer at Paradise Island, is also on the Intertel staff. Adams was officer-in-charge of the gaming squad, Clark County Sheriff's Department, Las Vegas, Nevada-not necessarily the best of credentials, since he worked in Las Vegas in the years when organized crime made some very profitable illegal skims from the casinos. Fenelon A. Richards, director of enforcement of the United States Bureau of Customs, with world-wide responsibility for 750 customs agents and investigators, became director of security for Resorts International gambling operations before joining Intertel.

WHO CONTROLS INTERTEL?

In 1971 the Las Vegas Sun did a series of articles on Meyer Lansky, international gambling, Resorts International, and Intertel. In his introduction to the series, publisher Hank Greenspun observed that his state, Nevada, has had enough experience with legalized gambling to know that resourceful organized crime often succeeds in illegally infiltrating that business despite all the efforts of government. Greenspun went on to note that when I. G. (Jack) Davis, president of Resorts International, testified before the New Jersey State Legislature in favor of legalized gambling, his testimony was echoed by William Kolar, a vice-president of Intertel. By this time Intertel had taken over the security operation for the Howard Hughes
gambling operation in Las Vegas.

Greenspun, having already had the opportunity to see Intertel in action at first-hand in his own city, then asked the interesting question: If Intertel is supposed to be protecting Howard Hughes' large financial investment in Las Vegas gambling, then why is it involved in promoting a competitor to Las Vegas in New Jersey: (Resorts International had already taken options on three hotels in the Spring Lake area, a fact which surprised the New Jersey lawmakers when they learned of it). And Greenspun anticipated the following series of articles by stating: "By whatever name the proponents, and however cloaked, the moving finger still points to Meyer Lansky."

The Las Vegas Sun series was written by Allan Witwer, a journalist who had previously written a manuscript entitled "The Ugly Bahamians." Witwer had been head of public relations for Lou Chesler and Wallace Groves' Grand Bahama Development Company. Later he was to work for Sir Stafford Sands as news-bureau chief for the Bahamas Ministry of Tourism in Nassau. Peloquin's Justice Department memorandum about a Meyer Lansky skim being implicit at Paradise Island was based on material that Witwer had given him. Witwer says of himself: "I was an eye-witness to the Mob's move from the cesspool of Havana to those 'gin-clear' waters of the Bahamas."

Unfortunately Witwer's manuscript was suppressed. It was bought by a publisher for $53,000 but never put into print. Interestingly enough, Witwer received the $53,000 from the Manhattan law firm of Simpson, Thatcher and Bartlett. Whitney North Seymour, a Wall Street friend of Nixon's when Nixon was practicing law in New York, was a senior partner of this law firm. When Nixon fired crime fighter Robert Morgenthau as U. S. Attorney for the Southern District of New York, he replaced Morgenthau with Seymour-and that change effectively ended an important federal grand jury probe into organized crime, as well as Morgenthau's exploration of Swiss bank-laundering of mob funds.

When Witwer took the $53,000 he knew it meant suppression of his manuscript, and he had every reason to suspect that the money came from the Ugly Bahamians themselves. The deal had been put together with the non-publisher, Exposition Press, by Hill and Knowlton, the large public relations firm. Hill and Knowlton had a $5 million contract with Sir Stafford Sands, then Minister of Finance and Tourism for the Bahamas, to publicize the islands. Witwer was also still working for Sir Stafford Hill and Knowlton told Witwer that actual publication of "The Ugly Bahamians" would topple the government of Sir Stafford and perhaps even inspire a revolt by the black majority. When others threatened his life if he published the book, Witwer found that the Hill and Knowlton proposal was an offer he couldn't refuse. In Witwer's own words: "Valor dictated the publication of 'The Ugly Bahamians.' Survival said, 'Take the money and run!'"

However, the manuscript didn't stay buried very long. Four months after the deal set up by Hill and Knowlton, Robert Morgenthau subpoenaed both the manuscript and Allan Witwer before a federal grand jury investigating organized crime. Morgenthau may have learned about the material from Peloquin, who had interviewed Witwer while still in the Justice Department, or from John Reagan ("Tex") McCrary.

TEX McCRARY

McCrary had been a publicist for Lou Chesler, first he protected Chesler from the charge that he had improperly taken $5 million from Seven Arts Productions Ltd. to invest in the Grand Bahama Development Company without notifying Seven Arts stockholders. Then McCrary did the public relations work for Chesler to obtain the Certificate of Exemption permitting gambling on Grand Bahama Island. Chesler put together a tour including Wallace Groves, Chesler, and Sir Roland and Lady Symonette, which visited the Chesler-built cities in Florida and ended with a party at the Fountainebleau Hotel in Miami Beach. Sir Roland Symonette, soon to become Premier of the Bahamas and a key factor in the Groves-Chesler plans, was so impressed with Chesler that after the tour was over Groves exclaimed: "We're home free!"

After Chesler was removed from the Grand Bahama situation and the Bay Street Boys failed to fulfill some promises they had allegedly made to McCrary, he switched political sides and began supporting the ppositionist party of Lynden Pindling. As mentioned previously, even Lansky wanted Pindling as Premier by this time. McCrary began feeding documents on the corruption of the Groves-Sands regime in Grand Bahama to Allan Witwer, the U. S. Justice Department,, the New York Times, the Wall Street Journal and anyone else who would listen. When Pindling was elected, McCrary got his reward. He and his associate Bill Safire (later to become a speech-writer for Nixon) eventually took over the large public relations contract previously held by Hill and Knowlton for the Bahamas. Because of these intrigues, Witwer's manuscript and information was not to be buried in the vaults of Exposition Press, even though payment had been made for Witwer's silence. And Witwer found an interesting ally in Hank Greenspun, who was by no means an innocent.

Greenspun had been Bugsy Siegel's publicity man atone time, and then was publicist for and shareholder in the Desert Inn when the Cleveland Syndicate controlled it.

In his series of  Las Vegas Sun articles in 1971, Witwer chronicled the corruption of the Bahamas by U. S. organized crime, from the Bay Street Boys to the Pindling regime, from the Groves Chesler gambling operation on Grand Bahama to Mary Carter Paint on Paradise Island. And he pointed that although Resorts International and Intertel claimed to have gotten rid of the Lansky. men running the casinos, this did not really happen. When Dino Cellini left the Bahamas, his brother Eddie took charge of the Paradise Island Casino and operated it for two years under Peloquin's "security." And when publicity forced Intertel to fire Eddie Cellini, the Dade County Sheriff's Offfice[sic] verified that he continued to operate tours by gamblers to Paradise Island out of Resorts International's Miami office, and on an almost daily basis continued to check the credit given to gamblers at Resort's Nassau casinos.

The Lansky influence may have become less visible under Intertel, but many competent journalists and investigators believe that organized crime still continues to dominate the Bahamian gambling operation. They point out that many gamblers in the Bahamas, particularly those who come on the supervised tours arranged by Lansky men, do not pay their gambling debts with money but with -markers," a form of IOU bookkeeping. These "markers" are often not recorded on the account books of the casinos, but are transported to the mainland U. S., where Syndicate men arrange for their collection. The "markers" that do get put on the casino books are often written off as uncollectable even if they are collected. This is one of the Syndicate's "skimming" procedures which does not involve the well-known false count at the end of the gambling day.

Another subtle "skim" method involves the payments of bonuses to Lansky men, who then kick back a substantial part of the "bonus" to Lansky. And it is known that when Lansky associates Courtney, Ritter and Brudner were deported from the Bahamas, arrangements were made by Resorts International to continue a $2 million payment to them for the next ten years, on the basis that they had presumably left behind some of their private credit files necessary for the casino operations on Paradise Island.

The day after Witwer's articles ended in the Las Vegas Sun, publisher Greenspun wrote a strong concluding editorial entitled: "Warning to Hoods: We Don't Want You in Our State!" The conclusions that Greenspun published after the investigative articles by his newspaper are so startling that they are worthy of at least partial reprint here so that the reader can have at hand his opinions: 

A WARNING TO HOODS

There was a time when the underworld attained its ends by violence and payoff. Then, seeking respectability, organized crime looked for legitimate fronts, but the take never really stopped.

"Now it has reached a new cycle ... Slick public relations, respectable front men, new secret private policing is the pattern. The goal: an extension of legalized gambling throughout the Western world ...

"I believe we are on the brink of the most ambitious and cleverest ploy of all: the creation of an nternational Gambling Cartel with its own intelligence service ... The Sun's series has revealed the complex pattern, and what has emerged from this very complicated puzzle is that Intertel has become the chosen instrument for the International Gambling Cartel.

"It has a good start. Staffed by the very people who were in the law enforcement agencies designed to combat organized crime and using the knowledge and prestige gained in these agencies, Intertel now represents the other side. Financed by a corporation which is rooted in the suspect history of gambling in the Caribbean, Intertel now operates a network of security for gambling operations in such widely separated locations as the Bahamas, Netherlands, West Indies and Nevada.

"Intertel executives have testified before the New Jersey Legislature in behalf of legalized gambling. We have examined that testimony, laundered as it was to serve their own purposes. They will certainly be on hand when states like New York, Florida, Hawaii and possibly California are hypnotized by the promises of fiscal Utopia.

"The International Crime Syndicate has Iong had the biggest cash flow of any of the world's businesses. It does not give up easily, as we in Nevada know from long experience. If Intertel's ambitions are realized, they will be supervising that cash flow. They are willing to take risks, promise anything for that prize. But an organization like Intertel can so cover its tracks that none of its activities or interests can be learned unless it is willing to make them public.

"Intelligence is power. It can be used for good or evil. Intertel executives have had, and presumably continue to have access to the files of many law enforcement agencies here and abroad. Its agents have worked for the FBI, the IRS, the Royal Canadian Mounted Police, Interpol and even the Clark County Sheriff's Office. But where do their loyalties lie now?"

INTERTEL'S STRANGE CLIENTS

Resorts International and Intertel have repeatedly denied all allegations of involvement with organized crime. The reader must be the judge of whether or not the facts linking these groups with Meyer Lansky are mere coincidences or represent a pattern. And the reader must judge too if the prominent appearance in the Bahamas of Richard Nixon and some of his wealthiest backers is also mere coincidence, or part of a more sinister pattern showing the desire of organized crime to involve itself with the highest reaches of political power.

However, it is an undoubted fact that Intertel hires itself out to strange clients for strange purposes. When Jack Anderson was exposing the Dita Beard memo on ITT's volunteering of financial support to the Republican National Convention in exchange for favorable action on an anti-trust suit by the Nixon administration, ITT hired Intertel to snoop on Anderson. When Howard Eckersley, one of the five men in regular attendance upon Howard Hughes, got involved in a fraudulent mining deal in Canada through a broker with Mafia connections, Robert Peloquin personally took him to the Securities Exchange Commission and obtained immunity for Eckersley even though the head of the Canadian stock exchange was suspended for the scandal.

And while not being so bold and direct as Las Vegas publisher Greenspun, a Department of Justice spokesman was quoted in the Los Angeles Times of December 14, 1970 as saying: "They [Intertel] are becoming the spokesman for organized gambling. I just wonder if that's a good thing; not that those boys don't have impeccable credentials, they do; I just wonder how much temptation a man can stand."
  
 

pps. 330-344
The Mail Archive
an excerpt from: The Breaking of a President 1974 - The Nixon Connection Marvin Miller, Compiler Therapy Productions, Inc.


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