Mr. Cleanface’s Dirty Laundry: Harry Reid’s Mob Money

“I’ve gotta Cleanface in my pocket,” boasted Kansas City Mafia representative Joe Agosto, unaware the FBI was monitoring his conversation (reproduced loosely in the movie Casino). FBI surveillance of Mafia gambling operations in Las Vegas in the late 1970s picked up Agosto making references to an individual he codenamed “Mr. Cleanface” and “Mr. Gillette”. Agosto’s conversations mentioned Mr. Cleanface was close to Nevada Governor-Elect Robert List. After turning state’s evidence, Agosto claimed that Mr. Cleanface was Harry Reid, then chairman of the Nevada Gaming Commission and sporting a cleanshaven, boyish look. Agosto’s claims were echoed by former Tropicana Hotel part-owner Deil Gustafson, who testified about Reid’s relationship to Tropicana attorney Jay H. Brown.

Agosto’s testimony led to the conviction of several top Midwestern Mafia bosses, but failed to touch Reid. When questioned after Agosto’s surveillance became public knowledge in mid-1979, Reid admitted to being the subject of the “Mr. Cleanface” references, but denied being paid for any favors. The Justice Department investigated whether Mafia funds had been funneled to Reid through Brown and Mafia attorney Oscar Goodman. A five-month investigation cleared Reid, and 25 years later, Reid is attacking political opponents with slogans like “If we can beat mob, we can fight DeLay-style politics”, and claiming in the process that he “kick[ed] the mob out of Las Vegas in the 1970s”.

Did Harry Reid really kick the mob out of Las Vegas in the 1970s, as he claims? Or was he in the Mafia’s pocket, as Joe Agosto claimed? What are the real facts about Reid’s relationship to organized criminal elements in the gambling industry? Is he Mr. Cleanface, or Mr. Dirty Laundry?

Reid has been using the same tactics to project an image of being Mr. Cleanface since the beginning of his political career. He started as a protege of Donal “Mike” O’Callaghan, who served as Governor of Nevada from 1970 to 1978. Reid was elected as O’Callaghan’s Lieutenant Governor in 1970. With support from O’Callaghan, he ran for Senate in 1974 against Republican Paul Laxalt. Reid’s campaign rhetoric accused Laxalt of profiting from association with billionaire Howard Hughes, who had a long relationship with Capone mob representative Johnny Rosselli and had recently secured Rosselli’s assistance in acquiring Las Vegas’ Desert Inn from associates of Cleveland mobster Moe Dalitz in 1967.

Laxalt had indeed taken contributions from Hughes. But what Reid failed to mention was, so had his own former running mate O’Callaghan. And so had Reid himself.

Hughes, like the Mafia, hedged his political bets by adopting a nonpartisan policy towards graft. He sold Laxalt, O’Callaghan, and other politicians on his move into Las Vegas by portraying it as a broomstick for sweeping the Mafia out of the casino business. Then “reformer” Hughes turned around and paid Johnny Rosselli a finder’s fee. Meanwhile handsome profits from the deal went to Moe Dalitz, then a partner in developing Rancho La Costa in the San Diego area. From bases outside Las Vegas the Mafia maintained a lower-profile presence in the city, and the Chicago Outfit and its Midwestern partners were soon creeping back into town by 1974--just in time for Mr. Cleanface to “kick the mob out of Las Vegas”, again.

O’Callaghan replaced Nevada Gaming Commission Chairman Peter Echeverria with Reid in mid-1977, in the midst of the new Chicago Mafia move into town spearheaded by Agosto. As chairman, one of Reid’s first acts was to approve the sale of the Hacienda hotel-casino (now the site of Mandalay Bay), controlled by a Chicago Mafia front company called Argent Corporation, to former lounge musician Paul Lowden. Reid approved the sale despite objections from the state’s Gaming Control Board alleging the involvement of Lowden with hidden associates from a company based in San Diego. Also in 1977 Reid and the Nevada Gaming Commission initially approved the deal that allowed Agosto’s associates to skim funds from the Tropicana for two years before Reid decided to “kick the mob out of Las Vegas”. In 1978 Reid’s commission approved applications for new Reno and Lake Tahoe ventures by the Del E. Webb Corporation, named for Del Webb, a Phoenix construction contractor whose Las Vegas buildings had been used by Bugsy Siegel and Meyer Lansky for skimming funds. After the use of Reid’s name by Agosto and his associates was reported by papers in mid-1979, Reid and the Gaming Commission approved transfer of control of the Tropicana from Agosto’s group to the Phoenix-based Ramada hotel chain, which had been founded with initial investment input from Webb.

By 1980 Reid had been cleared of Agosto’s allegations by the Carter Justice Department (then also in the process of bringing about virtually no successful prosecutions in Billygate, Koreagate, ABSCAM, BCCI, or the investigation of cocaine use by Treasury Secretary Hamilton Jordan). Since then Reid has received contributions from various donors connected with the gambling industry, including:

--Moe Dalitz, associated with the Cleveland mob, the Desert Inn, the Stardust Resort & Casino, and Rancho La Costa.

--Irwin Molasky and Merv Adelson, who partnered with Dalitz in developing Rancho La Costa but deny any criminal associations.

--Morris Shenker, an attorney associated with the St. Louis Mafia, Meyer Lansky, Jimmy Hoffa, and the Dunes Hotel.

--Paul Lowden, who after purchasing the Hacienda in 1977 from Argent Corporation purchased the Sahara Resort and Casino in 1982 from Del Webb.

--Ed and Fred Doumani, associated with the Tropicana Hotel, the El Morocco casino, Agosto, and Joey Cusumano, former lieutenant of Chicago Mafia representative Anthony Spilotro; Agosto’s infiltration of the Tropicana was facilitated in 1975 when the Chicago and Kansas City Mafia families conspired to block a Teamsters Central States Pension Fund loan to the Doumanis; when Argent Corporation’s gambling license was revoked in 1979 Argent initially agreed to sell its holdings to the Doumanis; later in 1983 the Doumanis loaned funds to the now-bankrupt Agosto.

--Bart Rizzolo, who along with his son Rick Rizzolo operates the Crazy Horse Too strip club; associated with the Doumanis and Joey Cusumano.

--Kirk Kerkorian, owner at various times of Caesar’s Palace (built with financing from the Teamsters Central States Pension Fund), the Flamingo Hotel (sold in 1970 to the Hilton Hotels Corporation, partly financed in the 1940s by Henry Crown, who also financed Chicago mob associate Jacob Arvey, and later associated with mob lawyer Sidney Korshak), and the MGM Grand Hotel and Casino (built on the heels of Kerkorian’s acquisition of controlling MGM shares from Edgar Bronfman, son of Lansky bootlegging associate Samuel Bronfman; Bronfman’s son Edgar Jr. has also been a Reid contributor).

--Steve Wynn, a casino developer who used profits from a 1970 deal involving Howard Hughes and Caesar’s Palace to purchase the Golden Nugget; described in a Scotland Yard report as a front man for New York’s Genovese Mafia family.

--Joseph Alioto, a San Francisco politician related to Milwaukee Mafia boss John Alioto; alleged by informer Jimmy “the Weasel” Fratianno to be associated with San Diego Mafia boss Frank “the Bomp” Bompensiero, a charge Alioto denied; implicated in the Koreagate Congressional bribe scandal.

--Tony Coelho, a corrupt former Congressman who in 1997 at the time of his donation to Reid was involved in a business venture with El Rancho, a Las Vegas casino formerly run by Ed Torres, an associate of Meyer Lansky.

While receiving donations from such sources, Reid has remained associated with the two attorneys involved in the Justice Department probe of Agosto’s allegations, Jay H. Brown and Oscar Goodman. Brown has been a regular contributor to Reid’s campaigns since 1982, and his law firm Singer & Brown lists Reid as a reference in one online profile. In January 2006 Reid and Goodman--now the Mayor of Las Vegas--discussed the possibility of Goodman running for Senate, with Reid describing Goodman to the press as “a very, very strong candidate”. Meanwhile Goodman had recently created a local scandal by throwing a party with a guest list which included Joey Cusumano, legally barred from Las Vegas casinos for his ties to the Chicago Mafia. Goodman’s open association with Cusumano was called by former Las Vegas FBI chief Bobby Siller “an embarrassment to the state, an embarrassment for Las Vegas and an embarrassment for gaming”. Another former Las Vegas FBI chief, Joseph Yablonsky, said of Goodman, “'Mob lawyer' is a title Goodman has relished and promoted over the years, although it's contradictory to his sporadic and inane denials that organized crime exists in the United States. The 'boys' in Chicago, Kansas City and elsewhere must be elated about their guy in Vegas. They're probably thinking 'we'll have some political juice there again.'”

Yablonsky’s last comment could also be applied to Harry Reid. So did Mr. Cleanface really kick the mob out of Las Vegas, or did he just help them move to Washington?

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#51: Fedora: Any connection between Reid and the late Alan Dorfman (Las Vegas casino skimmer from the mob), who ended up with two to the head or back in a car trunk in Chicago?

You’re right about the Chicago and Kansas City mob having direct ties to the Vegas Mobe. That is what later involved the casino skimming of Dorfman and his execution, among other activities.

Any investigation by Carter’s Attorney General (Ed Levi), then Griffin Bell and Asst AG Ben Civiletti (later AG), would be an effort in futility or coverup. Civiletti later tried to let two indicted Soviet spies come back into the US and avoid a trial (Martha Dodd Stern and Alfred Stern, in “The KGB against the ‘Main Enemy’: How the Soviet Intelligence Service Operates Against the United States”, Herbert Romerstein and Stanislav Levchenko, Lexington Books, 1989. Levi was just a dumb Chicago schmuck.

Wonder if any of Reid’s land-deals/schemes in Nevada involved the Mustang Ranch? That would be a logical place for him to have earned the nickname “Little Harry” Reid or “Dingie Harry.”

His son escaped, barely, a major investigation into illegal donations/work re the real estate scheming of his father, as you mentioned. The whole story was never told to the public.

I personally think that Dingy, like Mohammed Ali, took too many punches to the head during his boxing days, which would explain his political-babble and incomprehensible mumblings. Or, he could just be a shrewd politician who got lucky by playing dumb. OR he could just be dumb, and lucky.

Either way, he is a blithering idiot who should be investigated as a threat to the nation’s sanity.

I’ll buy his first straight jacket.

As I'm reviewing my notes, Dorfman did come up briefly in relation to some of the backstory mentioned here. Though his mention is brief, the context is significant. I'll quote from my original personal notes I created when compiling this article:

* * *

May 1979: Nevada Gaming Commission revokes Glick’s/Argent’s license; Las Vegas papers carry reports that group of investors headed by Tropicana attorney Jay H. Brown are planning to bid for Glick’s properties, but bid is allegedly (per affidavits filed by Kansas City organized crime strike force) withdrawn because it fails to win approval of Chicago underworld; according to affidavit second buyout plan involving Teamsters associate Allen Dorfman and Civella family is approved by Mafia but falls through; affidavit also alleges third plan is arranged by Agosto to work out compromise involving Briggs and Rosenthal; Glick eventually agrees to sell Stardust and Fremont to Doumanis (who by now own Tropicana—when did they get it?), with provision that if sale to Doumanis fall through first right of refusal to buy belongs to Allan D. Sachs (associated with Herbert Tobman), who has been licensed by Gaming Commission despite FBI informer Fratianno’s allegation that Sachs has organized crime connections

For future reference, here is some information for anyone who is interested in the brief mention of BCCI in the article. And before I even address this, I want to emphasize that this brief aside was merely meant to highlight corruption in the Carter administration and raise some questions about why some of the Nevada corruption described here was not addressed effectively at a federal level. My intent was not to provide a detailed chronology of BCCI. The most relevant aspect of Carter-era corruption in relation to Reid would be to get into how federal regulatory and law enforcement bodies handled some of the Nevada developments described in the article. BCCI is a tangent to this. That said, for those who are interested in BCCI chronology, here is an online copy of the report on that:

The BCCI Affair

The full report is about 583 pages when converted into PDF format. To save reading time, regarding BCCI's activity during the Carter administration, relevant sections include Chapters 1-3 with the Executive Summary and overview of BCCI's early history, Chapter 13 on Clark Clifford and Robert Altman, Chapter 16 on BCCI and Georgia politicians, and Chapter 17 on BCCI's lawyers and lobbyists.

The key development documented here that I was alluding to occurred during the 1977-1981 period. It began in 1977 with BCCI's initial approach to Bert Lance. Lance had manipulated loans at the National Bank of Georgia to finance Carter's election and had been forced to resign as Carter's OMB Director as a result. BCCI's approach to Lance alerted banking officials and regulatory authorities early on about BCCI's predatory intentions, blocking an early BCCI attempt to take over Financial General Bankshares.

To counter this early alert, BCCI then recruited Lance's lawyer Clark Clifford in February 1978. Clifford subsequently helped convince regulatory authorities that BCCI was not behind a follow-up takeover attempt that employed a front company, CCAH. Authorities suspected CCAH was a BCCI front, but Clifford convinced them otherwise by recruiting a group of key Democratic Party insiders for an April 1980 CCAH shareholders meeting and follow-up lobbying, to give the appearance that CCAH was controlled by individuals of known reputation and not BCCI. The final review filing for the takeover was submitted in November 1980 and completed in April 1981.

These key developments were completed during the tail end of Carter's administration and the transition to the Reagan administration, and it is quite just to lay some of the blame on Carter's doorstep (along with many others too numerous to list in this brief summary--BCCI was a more tangled web than I care to try to unravel in one post). Lance, Clifford, other Carter officials, and Carter himself subsequently received various forms of compensation from BCCI. Lance, who continued to remain a key Democratic Party financial figure into the Walter Mondale and Jesse Jackson campaings, put BCCI's Agha Hasan Abedi in direct touch with Carter as well as Andrew Young after Carter left office. As the report summarizes in Chapter 16 on BCCI and Georgia politicians:

President Carter was used by BCCI to enhance its credibility around the world and particularly in developing countries. President Carter travelled to a number of these countries with BCCI's president, Abedi, increasing Abedi's status and helping Abedi gain access and entry to political leaders from those countries. At the same time, the former President became beholden to the bank for its generous contributions to his charities. While President Carter did not show sufficient interest in establishing the bona fides of the bank, the CIA, which had substantial negative information on BCCI, failed to provide him with that information. When a President of the United States becomes a private citizen, it is obviously his choice with whom he associates. Nevertheless, former Presidents are afforded physical protection, and should be afforded, to the extent possible, protection of their reputation. As a result of his own lack of diligence in seeking information on BCCI's poor reputation, and the CIA's lack of diligence in telling President Carter what they knew, President Carter became closely associated for a decade with a bank that constituted organized crime. This outcome was not in the interests of the United States.

While the summary here tries to portray Carter as a witless dupe, it is difficult to reconcile this with Carter's full history of involvement in similar activity, which was evident in Billygate and continued up through the Oil-for-Food scandal at least. But that is another story.

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