-Caveat Lector-

an excerpt from:
The Arizona Project
Michael Wendland�1977
ISBN 0-8362-0728-9
Sheed Andrews and McMeel, Inc.
6700 Squibb Rd.
Misson Kansas 66202
276 pps. - first edition - out-of-print
New revised edition - available amazon.com
Paperback, 304pp.
ISBN: 0945165021
Blue Sky Press, Incorporated
June 1988
--[8b]--
Two hours after Koziol and Teuscher had returned to Phoenix and were briefing
Greene and the others on the California meeting, McCown called back. He was
true to his word. "It's set for Tuesday at 10:00 A.M. Same place," he said.
"Get a room there. I'll bring the things we discussed, including the other
guy I mentioned. He's scared but he'll talk." Koziol thanked him and hung up.
It was falling into place beautifully. There were four days until the next
meeting with McCown. Meanwhile, they had more than enough leads to start
running down.

On the morning of Friday, November 12, Koziol and Teuscher located an
accountant named Tom Wilson, whom McCown had named as one of several people
called in by Southwestern to help straighten out the confusing financial
records of the Hobo Joe's chain. They found him in the telephone book under
certified public accountants and went to see him. Wilson was a congenial man
and a close friend of McCown's. He was also a native Texan and proud to point
out to the reporters that he was not part of the Arizona power structure.
Wilson said he had had major problems with Hobo Joe's books.

"For one thing," he said, "there was evidence of criminal fraud and
misappropriation," No law enforcement agency had ever investigated the
situation, he said. Two of the owners of Hobo Joe'sGoldwater and Martori�did
not want an official probe. However, he had heard that they had hired a
private detective to see whether Applegate was stealing. Wilson had also
heard plenty of stories about Applegate's corporate party house, though he
stressed that he had never been there. "It was out in Mesa somewhere," he
recalled.

Did he know the contractor for Applegate's home? The reporters had been told
by McCown that the same man who built the home had remodeled the partyhouse.
Yes, Wilson did know who it was. His name was Ernest Byke. He lived in
Scottsdale.

Next, the reporters drove over to the headquarters of the state Department of
Public Safety, Arizona's equivalent of the state police. Teuscher had earlier
telephoned the father of the private detective killed in Las Vegas while
trying to retrieve the automobile and clothing of one of Applegate's fickle
mistresses. The dead man was Bill Kimball. The father had referred the
reporters to another son, Lt. Stan Kimball. The lieutenant, a trim
fifty-year-old, ran the records section of DPS. He was waiting for them.

"My father told me to be expecting you," he said with a smile and an offer of
coffee. "Sit down."

The reporters explained that they were interested in learning more about his
brother's death seven years ago.

"Well, I'm the only one who can tell you," he said. "There are absolutely no
more records on this. The Las Vegas authorities destroyed them all."

"They what?" Koziol had covered police news for years. Cops do not throw away
homicide records. As a young reporter in Chicago, he used to while away
boring hours reading the thirty-year-old reports of street shootings during
Al Capone's heyday. He found it hard to believe that the Las Vegas police
would not still have the original reports on the case.

"They don't. Go check and see. They were destroyed. A lot of powerful people
were involved in this. There was one hell of a cover-up. Applegate never was
exposed. His pal Goldwater was really concerned that they would all be
embarrassed."

Lieutenant Kimball then turned around and pulled a thick blue notebook from a
filing cabinet. "Here, take this and make copies or do what you want. It's
the complete police report. It's the only copy remaining. I got it right
after the case was closed from a friendly source up there. But this has
everything, everybody's statements, all the lies, the police reports, the
whole ball of wax."

The reporters thanked him.

"No, it's me who has the thanks," said Kimball, walking them out of his
office. "Not just because you're interested in my brother's case. But for
coming to Arizona. It's something this state has needed for a long time.
Maybe something will be done now." On the way back to the hotel, Teuscher,
the records man, started reading.

The report began with news clippings from the Republic. "Wound Fatal to
Private Eye," read a headline from the January 14, 1969, paper which detailed
how Bill Kimball, twenty-seven, "scion of a prominent Arizona family of
lawmen," died from a single gunshot wound to the head the night before "when
he and a friend, Phoenix restaurant operator Frank Casciola, were reported to
have attempted to force their way into the apartment of a swimming pool
attendant." In another clipping, the name of the restaurant Casciola operated
was identified as "the Hobo Joe's coffee shop at 1601 E. Camelback."

Teuscher scanned all the clips. There was absolutely no mention of Herb
Applegate. The closest was in a January 19, 1969, story by Republic reporter
Paul Dean, headlined "Reasons for Kimball Death Remain Mystery." Dean told
his readers that Kimball and Casciola had been dispatched to Las Vegas to
repossess the automobile and personal effects of a "casino girl," who had
recently soured a "sugar daddy romance with a married, wealthy, Scottsdale
businessman. I I Dean quoted a source close to the Las Vegas investigation as
saying that "a lot of heat was applied to Nevada authorities, reportedly from
persons anxious to quell full investigation and to block all the
circumstances and names surrounding the killing." While police placed no
blame on the swimming pool attendant, Dean noted that further investigation
could result in "technical charges" being filed against Casciola or against
the businessman for forced entry or conspiracy.

On January 30, 1969, the Republic reported "Shooting Death of Private Eye Is
A 'Closed Case.'" No inquest would be held and all investigation had stopped.
The story quoted Clark County (Nevada) assistant district attorney Raymond
Jeffers as saying that lies and inconsistencies were found in statements
given investigators: "But lying or no, there's nothing to file upon ... no
evidence of criminal responsibility on anyone's part . . . we're through with
it." But according to the police reports and the statements of those
involved, the lies and inconsistencies that Jeffers spoke of emanated from
one basic source: Herb Applegate.

The facts of the shooting itself were fairly easy to discern. On January 12,
1969, at approximately 5:30 A.M., Kimball and Casciola, after several earlier
attempts had failed to find anyone home, went to the apartment of Billy Ray
Underwood, 28, a swimming pool attendant at Caesar's Palace and the new
boyfriend of Dianna Willis. Miss Willis was at the time in Acapulco, Mexico,
staying at a hotel owned by a friend of hers. But since the previous October,
after breaking up with Applegate, with whom she had had an affair for some
two years, she had been living with Underwood. When Kimball and Casciola,
both wearing trench coats and hats, returned to the apartment, they found the
lights out, indicating that Underwood was home. They knocked on the door,
roused him from sleep, and told him they had been hired by Miss Willis to
remove her clothes.

Underwood said the pair had forced their way into his apartment in a
threatening manner. Casciola denied that any entry had been made. But armed
with a .32 caliber revolver and claiming fear of his life, Underwood fired
one shot. It struck Kimball in the face. Casciola fled.

An autopsy and subsequent police investigation backed up Underwood's claim.
Kimball, at least, had indeed entered the apartment. The coroner ruled that
it would have been impossible for him to move after suffering the wound. And
the first police officers on the scene, who arrived minutes after the
shooting, found Kimball's body twothirds inside the apartment. Neighbors
awakened by the ruckus caused when Kimball and Casciola knocked on the door
verified that Underwood had not moved the body. So Underwood was in the
clear. The killing appeared to be self defense.

The case became very confusing when police tried to figure out who had hired
Kimball and why. Casciola, a boyhood friend of the dead man's who often
assisted him on cases, said that Herb Applegate, Casciola's boss, had hired
them on behalf of a third man, Jack Morton, the Acapulco hotel owner with
whom Miss Willis was then visiting. Casciola was told that it was Miss
Willis's wish to remove her items from Underwood's. Applegate, who at first
refused to return police calls and finally talked only when investigators
flew to Phoenix, insisted he was just a middleman, that it was Morton who had
requested help from him. He claimed his relationship to Miss Willis was "like
a father."

Morton denied the whole thing. It was Applegate who hired the detectives, he
told investigators during an interview. He knew nothing about it.

But the main problems came when police talked to Dianna Willis, who voiced
outrage that Applegate or Morton or anyone else claimed she wanted to leave
Underwood. She loved Underwood, she said, and was planning on marrying him in
the spring. She had no intention of moving out on him. They had gone to
Acapulco together the week before. The only reason she was there alone was
that he had to get back to work. She was planning to rejoin him after the
weekend of the killing. Applegate was lying. He was angry and dejected about
being dumped for the young, muscular Underwood, she said. Applegate had given
her a company car, a 1968 Mercury Cougar, and provided her with a gasoline
credit card and a telephone credit card. But Applegate had kept a set of the
car keys, she said. "That's the way he gave presents," Miss Willis told
police. "As long as you're my friend, I'll let you drive the car. I'll keep
the other set of keys so that if you're not my friend any longer, I'll come
get the car." It was typical of Applegate to hire strong-arm types to come
take his gifts back. "I have heard him talk about protecting his friends and
that he had friends that will break somebody's legs and would take care of
them," she told authorities.

She summed it up quite well. "It's stupid, you know. It's such a bunch of
shit. A man's dead for no reason."

On November 13, a Saturday, Koziol and Teuscher located Ernest Byke, the Hobo
Joe's contractor. It was a scenic drive to Byke's comfortable home in the
foothills outside Scottsdale, about twentyfive miles out of Phoenix. Byke, a
mild-mannered sort, was happy to tell the reporters what he knew about Hobo
Joe's.

"Everybody in the firm was a swinger," he recalled. "I felt like a fifth
wheel because they would never include me in the parties."

The reporters asked him what he knew about the Mesa house.

"Well, I knew they had a place there," he said. "The guys talked about it in
the office after the parties. It had mirrors on the ceilings of the bedrooms
and secret passageways in the closets in case of a raid."

But it was not Byke who remodeled the Mesa house, it was an interior
decorator named Dave Stevens, an old friend of Applegate's. Byke built
Applegate's plush Camelback Mountain home, which was worth about $350,000, he
said, and later hired on with Applegate as Hobo Joe's main contractor. He
also said he was the man who finished work on the Hobo Joe's commissary. Byke
confirmed that the commissary cost $400,000.

The contractor wasn't very happy with his experience with Hobo Joe's.
"Applegate was always too busy to spend time going over construction
details," he said. "With the constant flow of women going in and out of his
office, I don't know how he got anything done."

Byke, too, had seen Pete Licavoli, Sr., with Applegate. "He'd come in about
once a month with five or six paintings under his arm," he said. "Applegate
once told me that Licavoli painted the paintings himself, but they looked
pretty cheap to me, like they were massproduced. "He said there were hundreds
of them lying all over Applegate's offices.

What Byke most wanted to talk about were the women and the constant partying
Applegate and his friends carried on at the Mesa house. "You wouldn't believe
the stories I used to hear them all tell," he chuckled. "I guess I missed
out. I was too straight."

Sandra Peterson was the main Applegate mistress, the one who actually lived
in the Mesa house. "She had all sorts of friends, lady friends, who were
always entertaining over there,"

Byke also knew Dianna Willis. "She was his Las Vegas mistress; Sandy was his
Phoenix mistress," he said. "That guy sure liked his women."

Before leaving, the reporters got the name of another contractor who had
worked on the Hobo Joe's commissary. Byke walked them to the door and shook
hands." You know," he said, "I really enjoyed this conversation."

The next day was Sunday. Koziol had been going for ten straight days. He
slept till almost noon, had a long lunch of Bloody Marys, and tried to unwind.
 Teuscher went over the growing Hobo Joe's file.

On Monday, November 15, the morning radio news was announcing an impending
strike by Air West, the only airline that flew to Ontario, California, where
their all-important meeting with McCown was to take place the next morning.
The strike was to begin at midnight. But the reporters had too much to do to
leave early. All they could do was hope things would work out.

They went to see Rich Morganson, who had supervised construction of the Hobo
Joe's commissary with Byke. Morganson said the commissary could have been
built for $200,000, but that Applegate kept coming back with changes. It
ended up costing $400,000, he said. One day shortly after the building was
finished, he said Applegate came to him. "He wanted me to verify on a note
that the commissary cost $500,000 so he could get the money from the bank."
Morganson said he refused. "Applegate wanted me to do the remodeling on the
Mesa party house but I wouldn't have anything to do with it," he said. "I had
a pretty good idea what it was going to be used for. I understand it was laid
out pretty elaborately." He, too, identified interior designer Dave Stevens
as the man who handled the decorating.

That afternoon, Teuscher tried to reach Stevens. He was out of town, his
secretary said. He would return next week. Could she ask what this was in
regards to? For a moment, Teuscher thought of telling her. He decided that
the fun of hearing her gasp would only tip their hand. He said he would call
back for an appointment next week.

The threatened Air West strike was settled at the last minute, and early
Tuesday morning Koziol and Teuscher were on the plane to California. Again,
McCown was waiting at the airport. With him was another man, younger, in his
late thirties. He looked nervous. The man was Paul Router, introduced McCown.
And, during the period that the Hobo Joe's stealing was going on, Router had
been Applegate's chief financial officer. They went to the same Holiday Inn
they had met in the week before. This time, the reporters had reserved a
room. Koziol called room service and ordered a large pot of coffee. But
before getting to new matters, they had a question for McCown.

Tom Wilson, the CPA who had said he found criminal evidence of fraud in the
Hobo Joe's books, had told the reporters that Goldwater and Martori had hired
a private detective at one time to look into Applegate's wheeling and
dealing. The IRE team had located the private detective, Steve Fortinos, who
confirmed the investigation. Fortinos said he had uncovered obvious signs of
embezzlement, as well as Licavoli's involvement with Applegate. He was
positive that he had reported those facts to Goldwater.

"That kind of cheating can't be overlooked," Fortinos had told IRE.

McCown was asked whether he knew of Fortino's findings.

He nodded.

"Then why didn't you try to get Applegate out of there, to move against him?"
Koziol asked.

"Nothing would have pleased me more," he answered. "But we couldn't do it. We
were the minority stockholders. The firm was controlled by Goldwater,
Martori, and Applegate."

"They wouldn't do it?"

"No. Herb was their boy."

"Okay," said Koziol. "Let's see that proof you say you have."

McCown handed over a batch of papers. They were photostatic copies of
canceled checks, hundreds of them. Router estimated that they represented
perhaps ten percent of the total issued by Hobo Joe's during the time period
under investigation. The rest of the checks were missing, McCown explain
'."So were the company books that would make more sense of them." Even so,
the checks proved many of the kickbacks Applegate had engineered, including
the payment to Licavoli.

Router verified most everything McCown had told the reporters the week
before. He too, had been threatened when he balked at making a payment to
Licavoli. "They took me outside to his car, where two oversized gentlemen
were sitting," he said. "They told me that they don't like to be
disappointed. I paid." But, said Router, just to make sure that he got the
message, a couple of days later he received a telephone threat that if he
wanted to stay healthy, he shouldn't make waves at Hobo Joe's.

Router knew all about the Mesa party house. He had actually been there. It
contained a sunken Grecian bathtub with a built-in whirl massage. "The Greek
gods didn't have one as nice as that," he said. All the towel hooks and
doorknobs in the place were in the shape of an erect penis. There was a
secret room which contained two-way mirrors, one looking out on the main
bedroom's large, circular bed, the other facing the living room. Also inside
the hidden room was expensive movie-making equipment. "I can't prove it, but
I think they were secretly taking pictures and then bribing people. You
wouldn't believe who some of their guests were. There were judges, lawyers,
businessmen, and some pretty prominent politicians."

But Router could not recall the exact address although he remembered that it
was within a mile radius of Country Club and Main in Mesa. It had been
purchased in 1968 or 1969, he said. Three $500 Hobo Joe's payroll checks were
issued to one of Applegate's woman friends, who used them as the down
payment. The original cost was around $20,000, but its remodeled value was
closer to $70,000. Sandra Peterson, Applegate's Phoenix mistress and the
woman who lived in the house, drove a car leased for her by Applegate and
paid for by Hobo Joe's. She also had a MasterCharge credit card, again in
Hobo Joe's name, which racked up several thousand dollars in bills in a
six-month period.

Router told the reporters that he was with Applegate the afternoon following
the shooting of Kimball. He said that Applegate told him to write out a
$7,000 check for Robert Goldwater, so Goldwater could settle the "Vegas
thing." Applegate didn't want the check in Goldwater's name. Router was told
to issue it on Applegate's private account. "I don't know what happened to
it, but I know it was issued." Router said that Goldwater also knew Dianna
Willis.

They talked for a couple of hours, mostly going over old ground. The
reporters tried to trip McCown, to get him to change his original story. He
stuck to it like glue, verified on many counts by Router.

The reporters ordered a drink after McCown and Router left. With the
exception of the party house, virtually every major allegation was on the
verge of being documented. "God damn," complained Koziol. "Everybody knows
all about the place, but nobody can tell us exactly where it is." They had to
find Sandra Peterson and the party house. Koziol decided to head back for
Phoenix and start work. Teuscher would stay overnight in California,
analyzing and categorizing the checks.

Dale Randles was a very close friend of Applegate's. He had been taken in by
the flashy restaurateur at the age of fourteen to wash dishes in one of
Applegate's Michigan restaurants. Later, he followed Applegate to Arizona,
where he worked for a time at Hobo Joe's. The California informants had given
Randles's name as a possible source of information on the party house. The
day after his return from Ontario, Koziol and Boston reporter Dick Levitan
drove to the Safari Hotel in Scottsdale where Randles's ex-wife worked. The
former Mrs. Randles was cooperative but curious. The reporters were
tight-lipped, saying only that they needed to get in touch with her husband.
With a shrug, she gave them a telephone number in Florida, where he had
opened another restaurant. They thanked her and left.

But on the way out of the hotel, Levitan, the weapons freak, spotted a
display in the lobby advertising "Protection Against

Intruders-Tear Gas Flashlights-Sold on Second Floor." Levitan dashed to the
small gift shop. Elated at his discovery, he paid ten dollars for a long,
four-cell flashlight that doubled as a secret tear gas gun. It was just the
thing for his car, he told Koziol.

That night, Koziol reached Randles on the telephone. He was glad to talk. He
was particularly upset that he had been left out of Applegate's will. "I was
one of the only people who cried at his funeral," he said. "Herb was like a
father to me. He took me in when I was orphaned as a child. Sometimes, I even
called him dad. It was one hell of a shock to find out I was left out of the
will. I blame all those moneygrubbers; around him. Those no-good bastards
pushed me right out of the picture. All those assholes got what they wanted
and I got shit."

Koziol, as he had been many times before, was amazed at the things some
people would tell complete strangers over the telephone. He asked Randles
about the party house.

"Yeah, sure. I remember it," said Randles. "Sandra Peterson lived there. Nice
girl. Nice place."

Did he recall its address?

"Gosh, no, I don't. But let's see. It was on a street to the right of Country
Club Lane, as you drive towards Scottsdale from Mesa. And it was painted
blue. That's right, blue."

Randles then volunteered that about two months after Applegate died, his
widow, Mae, came to him and wanted to know about all of Herb's girlfriends.
"I wouldn't tell her," he said. "I told her it was best she didn't know. But
the old man, he sure lived it up pretty good."

By this time, virtually all the reporters in the office were caught up in the
search for the Mesa house, which they dubbed "The Great Love Nest Hunt."
Despite phone directory checks going back for ten years and dozens of
interviews, nobody could find it.

"Damn it, we've got a half-dozen of the best investigative reporters in the
country and not one of them can find a house we're told was visited by half
of Phoenix at one time or another," groused Greene one night.

On November 18, with Teuscher back from California, Koziol got the name of a
former Playboy bunny who at one time worked with Sandra Peterson. They drove
out to the address they had jotted down from the phone book only to find a
vacant lot. Koziol made a call from a phone booth to the IRE office, had
someone look up the address again, and found he had transposed a couple of
numbers. They set off again, this time coming to the right address. It was
about 10:00 P.M. Koziol knocked on the door. A female voice inside asked who
it was. The two reporters identified themselves. "Just wait a minute, I've
got to get dressed." Koziol winked at Teuscher. A moment later, the front
door opened a crack. But the woman left the protective chain latched. Koziol
took his press card out of his wallet and held it up for the woman to see.

"Now let's see the other guy's," she said.

But Teuscher, fumbling through dozens of papers, cards, and pictures,
couldn't find his. Thirty seconds passed. Then a minute. Finally, Teuscher,
with a sheepish grin, said he couldn't find it.

"See," Koziol told the woman behind the door, "it's not exactly like in the
movies, is it?"

The woman, wearing a pair of tight-fitting jeans and a red bathrobe, laughed
and removed the chain, inviting them in.

Yes, she knew Sandra Peterson. But Sandy had gotten married and changed her
name. As far as the woman knew, Sandy was still in the Phoenix area. She,
too, had been to the Mesa party house.

The woman's name was Georgia Yanke, and, for a couple of years in the late
sixties, she had worked as a bunny at the Phoenix Playboy Club. That's where
she had met Sandy. "I was only out there to the Mesa place once, with a
couple of other bunnies. I don't even remember where it was, except it was
hard to find. It was a gaudy place. I remember purple furniture and blue
carpeting and walls. There was a huge mirror built into the living room wall.
And there was a sort of hidden passageway. I remember one of the girls that
lived there demonstrated it. She just disappeared into space, it seemed like.
I mean the whole wall just opened up."

Miss Yanke said that Sandy once told her that she was going with a very
successful businessman.

What was his name?

"Oh, let's see. He had a restaurant. A bunch of restaurants. Herb, that's it,
Herb was his name. Sandy said she was getting fifteen hundred a month from
him." Miss Yanke had an old telephone number for Miss Peterson. She jotted it
down on a piece of paper and gave it to the reporters as they left.

Teuscher and Koziol felt they were getting close. The next day, they made a
series of telephone calls and personal interviews, running down some of the
other information they had picked up from the California sources. From a
former Hobo Joe's store manager, they confirmed that double orders of food
were frequently delivered, one for the store and one which was mysteriously
carted away by truck for Tucson. Another former employee told of excessive
shrimp orders placed by Applegate. "He was buying mountains of shrimp from
Mexico, enough to last for years, way more than we needed," said the
ex-employee. The shrimp was brokered through Pete Licavoli, Sr., he said.
Similarly, Licavoli and Applegate made a deal for shoestring potatoes,
thousands of pounds worth, said another Hobo Joe's source. The potatoes were
poor in quality and did not cook well, he added, but Applegate kept buying
them because "he didn't want to get Licavoli mad at him."

On November 22, a Monday, they found the party house.

Koziol and Teuscher had tried just about every source they could locate who wa
s involved in the operation of Applegate's firm. Everybody had heard of the
Mesa love nest, many had been there, but no one could recall its exact
location. The reporters expected a similar response when they went to the
small office of Ed Pileto, an electrical contractor in Mesa who had done some
minor work for Applegate during the construction of the Hobo Joe's commissary.

Dressed in tan work clothes, Pileto confirmed that he had done work for
Applegate over the years.

"What we are interested in finding out is whether you know of another place
Applegate was working on about the same time the commissary was being built.
It would have been a remodeling job on a duplex," Koziol asked.

"Sure. You must mean the place over on Sixth Avenue."

Koziol and Teuscher felt their hearts skip a beat. "You know where it is?"

"Sure. Herb hired me to put in an air conditioner and a small electric
fireplace. I know right where it is. It was a real fancy place."

Pileto didn't know the address, but he could take them there. Excited, the
reporters persuaded him to get in their car and direct them. It was a short
trip, just six blocks away. When they found the house and Teuscher noticed
its address, he began cursing.

Over a week before, while searching records in the county building, he had
come across a bill for a love seat and sofa, bought on a sales contract by
Applegate, that were to be delivered to the very house they were now parked
in front of. Teuscher had driven out and looked over the building, then
scratched it from his list because it was neither blue nor a duplex. But the
stucco building had been repainted. It was now green. And instead of sitting
crosswise on the lot, it was built lengthwise, making it appear from the
street to be a single residence.

The reporters thanked Pileto, took him back to his office, and returned to
the duplex.

A man named Ed Yurgel occupied the front portion of the house. He was happy
to show the reporters the inside. Off a kitchen broom closet, they located
the secret passageway which connected the two apartments. It had since been
boarded up.

Next door, a woman named Mitzi opened the door. She too, told the reporters
to look around. Like hungry animals, they split up, going from room to room,
frantically searching for something which would indicate the building's
former use.

But a lot of time had passed since Applegate's romps. The only thing unusual
was that the bedroom doors all had special locks that locked automatically
whenever the door closed, similar to those on hotel-room doors.

They got the name of the building owner and contacted him. He had purchased
the duplex in 1971, from one of Sandra Peterson's relatives. He admitted,
however, that the elaborate furnishings had been removed by them.

"I was really pissed off about the mirrors," said the new owner. "When I
bought it there were mirrors all over the place. But they took 'em out when
they left. The only thing I found was two large vibrators in the front room
and a picture of some broad in a bunny costume.

So the Applegate love nest really did exist.

The next day, they found Sandra Peterson herself through the old telephone
number. She lived in Scottsdale in a modest house. After several knocks Ms.
Peterson answered the door. She was an attractive, well-built blonde woman of
thirty and obviously nervous at seeing two strange men standing out front.
But she invited the reporters inside and did not disappoint them.

"I never kept track of the money I got," she said. "Herb just paid the bills.
It was a good life while it lasted." She also had a leased Hobo Joe's car and
a credit card. She had been Applegate's mistress for about five years.

"Herb made a lot of promises to me," she said with a sigh, glancing about the
cluttered living room and absent-mindedly smoothing her hair. "He told me he
was going to get a divorce and marry me. But I soon realized that wasn't the
case. I wanted to marry Herb. I loved him."

She also found out about Applegate's other mistress, Dianna Willis, in Las
Vegas. When she confronted him with it, Applegate vowed that he would never
see the other woman again. "He was such a good liar. I almost believed him,"
she said.

She broke up with him in late 1972, met another man, quickly got pregnant,
and married. "He knows about Herb and I," she said. "But please don't use my
married name in the papers. I've got a kid now. I've tried to put it all
behind me." She confirmed that the party house was paid for by Applegate and
that it was wildly decorated. "You should have seen my bedroom, it was
painted pink and red." But she said she would be surprised if movies had been
made at the parties. "They could be embarrassing, you know?"

She also knew Pete Licavoli, Sr. She had driven with Applegate to Tucson,
where they had stayed overnight as Licavoli's house guests at his Grace
Ranch. She said that Applegate had told her that "Pete used to be involved in
the Mafia but was clean now." There had been other trips, once to Vegas, once
to Los Angeles, San Francisco, a vacation together in Mexico, she couldn't
remember them all.

The interview lasted less than an hour. She talked with resignation, as
though she had expected someone to come to her eventually. All she asked in
return was to avoid publicly identifying her husband. She had done nothing
criminal. All she wanted now was to bury the past. The reporters left,
feeling slightly depressed.

There was just one more interview to do-David Stevens, the interior designer
who had remodeled the Mesa party house. Stevens, a prosperous businessman in
his mid-forties, was not hesitant in talking. "My instructions in remodeling
the Mesa place were to make it look like a million dollars for $10,000," he
said. "And it was really something, like a vision from a fantasy nightmare,
all in hot pink. There was even a secret passageway connecting the two units.
It was in case somebody knocked on Sandy's apartment. That way Herb could
slip out through the back apartment. I I
Stevens said that Applegate used to carry around newspaper clippings of
Kimball's death in Las Vegas and that he used to brag about how his name was
never publicly connected. "But I'll tell you, Applegate didn't have the juice
to keep his name out of the newspapers. That power could only have come
through Bob Goldwater or old man Martori." He, too, knew all about the
payoffs to Licavoli. "The paintings Herb got from him were really junk. After
Applegate died and Hobo Joe's changed hands, I got stuck with them for a
while. They were cluttering up my garage. So one day, I loaded them all up
and drove them to Tucson and gave them all back to Licavoli."

Stevens had one conclusion he wanted to share with the reporters.

"I'll tell you," he said. "There was a lot of money that changed hands during
those days. Okay, Herb is dead now. So he's going to take all the heat 'cause
he's not here anymore. Just remember though, Herb wasn't the only partner in
that firm."

The Hobo Joe's fiasco was just one more piece in the increasingly
intelligible jigsaw portrait of Robert William Goldwater, Jr., being
assembled by IRE.

Known in and around Phoenix as an amiable and shrewd businessman, the sixty-
six-year-old Goldwater, one year brother Barry's junior, was also a man whose
connections with persons of more unsavory background had never been examined.
By the end of November, IRE had documented the terrible exploitation of
illegal aliens at his citrus ranch, his involvement in a company apparently
being shaken down by a notorious hoodlum, and his friendships with at least
three major underworld figures-Moe Dalitz, convicted stock swindler Allard
Roen, and Lou "The Tailor" Rosanova.

Back in the early fifties, Barry was said to have told brother Bob something
to this effect: "You manage the money, I'll handle the other end. Then, when
it's all over someday, we'll combine what we've learned and we'll do what no
Goldwater has ever done-we'll make a fortune."

In 1976, Bob Goldwater, a suntanned, soft-spoken man who once won the amateur
golfing championship of Arizona and the Southwest, was indeed a millionaire.
Although he and Barry had long since sold their interest in the family
business, a chain of department stores which still bear the Goldwater name,
Bob appeared to be a self-made man as the chairman of the huge Goldmar firm
and co-owner of a number of other investment and real estate companies.

Given the degree of prominence attained by the Goldwater brothers, one of
whom, after all, had been nominated by the Republican Party for the
presidency of the United States, the series of associations and dealings
involving the Goldwaters and the mob uncovered by IRE reporters should have
raised a lot of eyebrows.

In Arizona, eyebrows don't raise easily.

pps.108-138
--[cont]--
Aloha, He'Ping,
Om, Shalom, Salaam.
Em Hotep, Peace Be,
Omnia Bona Bonis,
All My Relations.
Adieu, Adios, Aloha.
Amen.
Roads End

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