-Caveat Lector- an excerpt from: The Breaking of a President 1974 - The Nixon Connection Marvin Miller, Compiler Therapy Productions, Inc.�1975 LCCCN 7481547 --[10]-- THE ANNENBERG CONNECTION In this chapter we are going to explore the possibility that just as a large corporation might find it profitable to have a representative occupy an official U.S. diplomatic position in a foreign country, so might the National Crime Syndicate. But immediately we face a substantial legal problem, one that will be more and more present as the National Crime Syndicate evolves as a force in the political and economic life of the nation. The events increasingly will involve living persons who perform functions for organized crime without having a criminal record themselves. And unless these persons have had their day in court and been convicted, the libel and slander laws of the United States correctly prevent any journalist from labeling them as criminals or part of organized crime. When Life and Look magazines investigated organized crime several years ago and identified certain politicians as front-men, the publications soon were defendants in lawsuits totalling many millions of dollars. The expenses involved in these legal actions undoubtedly contributed to the demise of these magazines. Because of this problem, in this volume we have identified persons as being criminals only when they have been convicted in a court of law or if government agencies have identified them as belonging to the structure of national crime. Where a person has had criminal contacts, where these contacts seem to be part of a purposeful pattern, where it seems impossible that the person involved is not conscious of these contacts and their implication, but does not have a criminal record, only one course can be responsibly followed by a publication such as this. Instead of making assertions that might be interpreted as being libelous or slanderous, strong and pointed questions must be publicly asked, if it is suspected that a presumably legitimate person is doing the bidding of the National Crime Syndicate. And, even if the questions cannot be answered immediately, the public interest requires nonetheless that they be voiced so that ultimately the answers can be obtained. Is the person possibly a participant in organized crime? Does he or she maintain connections with organized crime figures that might be purposeful? These are the kind of questions that we believe must be asked in relation to President Nixon's appointment of Walter Annenberg as Ambassador to Great Britain. And if it is found true in coming years that Walter Annenberg has had purposeful relations with the National Crime Syndicate, then his appointment as ambassador will prove to be one of the darkest stains of the Nixon era. AMBASSADORSHIPS FOR SALE One of the Watergate scandals which has received minimal attention is the way the Nixon administration has paid off large campaign contributors with ambassadorships to foriegn[sic] countries. Although this is a commonly accepted practice, it is illegal if done too obviously. Herbert Kalmbach, the former presidential attorney, on June 16, 1974, was sentenced to six months in jail for soliciting a $100,000 campaign contribution in return for promising a European diplomatic post to an ambassador assigned to the West Indies. And Maurice Stans, former finance chairman of the Committee to Re-elect the President, is being investigated by a federal grand jury on the supposition that he was also too obvious in his official actions. Usually, of course, no one gets prosecuted for selling diplomatic posts. It is very difficult to prove in court that a campaign contribution was linked to the promise of a governmental job�if none of the participants have reason to talk. The record shows that of some 34 Nixon appointees to diplomatic posts, 15 were large campaign contributors and had little else to recommend them for foreign service. Henry Catto gave $25,000 to the 1972 Nixon campaign and was appointed ambassador to El Salvador. John P. Humes gave $100,000 and was awarded the top diplomatic post in Austria. Anthony D. Marshall contributed $48,000 and was sent to Trinidad as ambassador. Ruth Farkas, wife of a department store magnate, gave $300,000 to Nixon's campaign and asked to be named ambassador to Luxembourg. When the Farkas appointment was approved by the Senate Foreign Relation,; Committee, an almost automatic procedure after Nixon's nomination, Committee Chairman J.W. Fulbright just about gave the game away. As he cast the lone dissenting vote, he said: "I don't believe in paying this kind of money for these appointments. It is demeaning of the office." But Dick Nixon did not invent this game, although he plays it to perfection. One of Eisenhower's biggest contributors, Maxwell H. Gluck, the owner of a dress-shop chain, was approved as ambassador to Ceylon, even though he could not name that nation's Prime Minister or the Prime Minister of India during the confirmation hearings. The circumstances surrounding one Nixon appointment to a diplomatic post raise the question not only of concealed campaign contributions but of an improper personal payment to Nixon. Vincent P. De Roulet, son-in-law of millionaires Charles and Joan Payson, became ambassador to Jamaica after he and his in-laws gave an amount which various investigators estimate from official sources to be between $72,000 and $115,000, a substantial discrepancy right there. However, Walter Taylor II, an influence-peddling lawyer who works very closely with Nixon although is name has not come up in the Watergate proceedings, has been quoted in print as saying that Mrs. Payson actually gave $250,000 directly to the campaign fund for the ambassadorship, plus an additional $100,000 in cash which he "gave to Dick." Arthur K. Watson of the huge International Business Machine Corporation (IBM) is rumored to have spent many hundreds of thousands of the IBM fortune to obtain the prized ambassordorship to France. However, he had to resign after he got involved in a scandal involving pressing money down a stewardess' cleavage while drunk on an airplane over the Atlantic. He was replaced by his brother-in-law, John N. Irwin H. Irwin gave $50,000 and Watson gave $300,000 after his resignation, to the Nixon campaign. The continuity in this appointment to Paris gives rise to the reasonable suspicion that more may be involved here than just a position of social prestige. The government has filed a large anti-trust action against IBM, and a diplomatic post conceivably could be of some use to IBM in getting favored treatment from the Justice Department. Also IBM might have some undisclosed pressing business in France which would be expedited by having a sympathetic U.S. ambassador on hand. It would not be the only. case in recent times where an American corporation with multi-national contacts sought to influence American foreign policy for its own corporate objectives. One only need recall the attempt by the International Telephone and Telegraph Corp. (ITT) to give the CIA $1 million and to put other pressure on the U.S. ambassador to Chile so that the U.S. government would intervene and protect ITT property from the Allende government. Furthermore, without implying that any U.S. diplomat has engaged in criminal activity, it must be said in examining why people want diplomatic posts that many things-legal and illegal, moral and immoral- can be done under the cover of diplomatic immunity. It is known, for example, that money owed to the Fremont and Desert Inn casinos of Las Vegas by Alexander Guterma, a notorious swindler, was illegally conveyed to the Panama branch of a Swiss bank by Panama's alternate delegate to the United Nations, Eusemio Antonio Morales. The money thus was collected from Guterma but never reached the casino's ledgers. And the Guatemalan Ambassador to the Netherlands was arrested in 1960 for transporting heroin in his diplomatic pouch. In 1964, the Mexican Ambassador to Uruguay was also arrested for smuggling narcotics. Other diplomats have allegedly smuggled diamonds for organized crime organizations. Human greed being what it is, it would be surprising if some American diplomats did not also succumb to the temptations afforded by diplomatic immunity at one time or another. WALTER ANNENBERG vs CLEMENT STONE Given these facts and reflections about ambassadorial appointments, it is now possible to consider the central concern of this chapter, the peculiar appointment of Walter Annenberg by Nixon in 1969 to the most important diplomatic post in Europe, ambassador to Great Britain-to the Court of St. James. Annenberg has the qualifications of being a very wealthy man. He is publisher of TV Guide, Seventeen--- and the Daily Racing Form. His companies earned $280,000,000 in 1969. He gave $250,000 to Nixon's campaign in 1972 and was the major individual stockholder in Penn Central, a client of Nixon's former law firm. However, Walter Annenberg was not alone in wanting the London post. W. Clement Stone, the wealthy insurance man who contributed $4.1 million to Nixon's campaigns in 1968 and 1972, is known to have asked for the ambassadorship to Great Britain and to have said: "London or nothing!" But all that Stone seems to have gotten for his money is an invitation to Tricia Nixon's wedding. The question must be raised: Why did Nixon prefer Annenberg above Stone although political logic would seem to dictate otherwise? Some additional facts about Annenberg not previously mentioned may be of help in answering this question. Annenberg's fortune and his publishing empire were inherited from his father, Moses Annenberg, a man who was tied in with the Capone mob in the early 1920's. In 1928 Walter Annenberg became one of his father's bookkeepers. In the 1930's Moses and Walter Annenberg were both indicted for criminal income tax evasion. Both were also involved in the publications Baltimore Brevities and Click, which were charged with being pornographic. Moses Annenberg eventually was convicted and sent to prison for tax fraud, after having made a deal with the government whereby charges were dropped against his son Walter. Before going to prison Moses discontinued a multi-million-dollar racing news business after American Telephone and Telegraph and Western Union were informed by the government that Annenberg's wire service was dealing directly with illegal bookmakers. Both companies were in jeopardy of being indicted for aiding an illegal operation, and immediately pulled their equipment and stopped leasing lines to Annenberg. But what intrigued the Kefauver Committee, as we shall see, was that the wire service immeidately[sic] resumed business under a new name and new owners-and the new owners were just as involved with organized crime leaders as was Moses Annenberg. By 1969, few people in the country ha I reason to remember Walter Annenberg's original contacts with organized crime through his involvement wit] his father's illegal activities. In other times, these known contacts would have been disclosed by the FBI clearance investigations conducted of all federal appointees. This probably would have prevented Walter Annenberg's elevation to a top diplomatic post. However, in this summer of 1974 it would be unintelligent not to speculate that this derogatory background might be the very reason that Nixon preferred to possibly alienate the powerful Clement Stone in favor of the seemingly less consequential Walter Annenberg. PUBLIC ENEMY NUMBER ONE When Senator Kefauver made his report to the nation in 1951 giving his conclusions about organized crime, he called the horse-race wire service "Public Enemy Number One." In explaining why he made this judgment, Kefauver said it was because the wire service "keeps alive the illegal gambling empire, which in turn bankrolls a variety of other criminal activities in America. . . " Just before the end of the Prohibition period, organized crime leaders placed on the agenda of several national conferences the question of how best to use the newlycreated disciplined structure of the underworld to make money after bootlegging ended. It is known that a decision was to be reached to concentrate on various forms of gambling as the next primary area for investment by organized crime. Also to be continued and further developed were all the profitable rackets that Arnold Rothstein had organized including labor racketeering, narcotics smuggling, hijacking, manipulation of Wall Street brokerage houses and even, as shall be seen in the next chapter, an involvement with the legal liquor indistry[sic]. But in line with the decision about gambling, post-Prohibition was most marked by organized crime's intensive exploitations of the opportunities to make money through bookmaking, including the fixing of races. Secondarily came the numbers (policy) game in the ghettos of the major cities, and the development of regional gambling and vice centers. And as the syndicate's investment shifted over the years from these regional centers to the developing opportunities for international gambling casinos in Cuba, Las Vegas, the Caribbean, etc., bookmaking and numbers became less important to organized crime, and are now farmed out to upcoming black and Puerto Rican criminals. Prior to the Kefauver hearings, however, organized crime demonstrated its 20th Century ability to run nation-wide illegal enterprises in a thoroughly business-like and competent fashion by creating a communications network which instantly and accurately transmitted to gamblers all over the country the results of horse races and the betting odds. The ability of criminals to profitably use this information, incidentally, has recently been learned by the millions of people who have viewed the currently popular Robert Redford movie The Sting. This film shows a group of confidence men successfully swindling an over-eager gambler by using the wire service report on races and delaying the information sufficiently so that they knew which horse bad won before their "mark" had even placed his bets. The Sting, of course, like the other "nostalgia" films of the 1970's, is designed to help the Watergate-weary American public to escape, for at least 90 minutes, into an entertaining past history where robbers prey on robbers. Our concern here with the horse-race wire service of the past is to demonstrate how the formation of great criminal fortunes resulted in huge campaign contributions to Richard Nixon who, in turn, was prepared to grant great favors to organized crime. CONTINENTAL PRESS SERVICE The colossus of the racing news industry in the United States at the time of the Kefauver hearing was an organization known as Continental Press Service. Enjoying a virtual monopoly in the field, Continental leased 23,000 miles of telegraph circuits from Western Union, besides extensively using telephones. Western Union alone received an annual income of almost $1 million for the use of its lines from this wire service. Continental claimed to be entirely legal. Instead of selling "news" directly to bookies, a procedure which had caused legal problems for its predecessors, Continental set up 24 regional "distributors" to whom it sold its service. These distributors would then publish racing guides and scratchsheets for the horse-players. The distributors would also supply instant news of races to thousands of illegal bookies all over the country, but the owners of Continental claimed to have no knowledge of that, nor any legal responsibility. Kefauver, however, pointed out that a good number of Continental's so-called independent distributors were dummy operations set up by the giant wire service. His hearings showed that the list of persons with whom Continental and its dummies did business read like a Who's Who of gangdom. Furthermore, Continental admitted that it got the news out of the race-tracks by methods of dubious legality. Since the wire service was forbidden by law from transmitting information directly from the tracks, as that information could be used to swindle gamblers, either an outside observer with a high-powered telescope would transmit the results directly, or the news would be manually passed out by an inside observer to someone just outside the fence, who would then transmit it electronically. Kefauver flatly charged that Continental Press, while operating under a carefully-contrived cloak of legality, was actually a powerful and indispensable ally of the underworld and by the time of his hearings was a tool of the Chicago mob which inherited the crime empire of Al Capone. As proof of this connection with the underworld, Kefauver pointed to the strange "coincidences" of the establishment of Continental Press only several days after Moses Annenberg, on the verge of going to federal prison for income tax fraud, had seemingly voluntarily "disbanded" Continental's lucrative predecessor, the Nation wide News Service. And since Moses' son, Walter Annenberg, was also indicted in the income tax case and other prosecutions launched against his father in the late 1930's, there are some strange related "coincidences" involved in Nixon's subsequent appointment of Walter as U.S. Ambassador to Great Britain. MOSES ANNENBERG Moses Annenberg created his own little niche in history by paying the U.S. government in 1940 the largest sum ever paid by an individual charged with tax evasion: $8 million in taxes, penalties and interest, plus three years in prison, C. Arnholt Smith, a San Diego multi-millionaire supporter of Nixon whose enterprises went bankrupt during the Watergate investigation and who is being prosecuted for fraud, is said to owe the government $21 million in back taxes, a new record for an alleged tax fraud assessment, but he probably won't pay anything near Annenberg's $8 million. Annenberg, an immigrant at the age of seven from Prussia, was 18 years old when he started soliciting subscriptions for the Hearst paper in Chicago. That was in 1895. By 1921 be was part of the Hearst executive team in charge of circulation for all Hearst newspapers and magazines. By then he was 44 and had acquired real estate in New York, Milwaukee and Chicago. Annenberg Senior bought the Daily Racing Form in 1922 with three other Hearst executives. In 1926 he left Hearst. By 1934 he owned and printed all the major publications involved in horse-racing "forms." Forms are not the little tip-sheets produced by mimeograph which predict, usually inaccurately, which horses will win. Forms are the exact record of the entries at all tracks, their past performances, morning workouts, personal idiosyncrasies, and breeding of every horse entered. The horse-race addict studies all this detailed information, arrives at an informed guess as to which horse is best in any given race, and gambles accordingly. Annenberg couldn't corner the mimeographed tip-sheet business but did gain control of the big national tip-sheets as well as the form publications. In 1927 Moses Annenberg bought from Mont Tennes a horse-race wire service called General News Bureau, with his partners. In time he and his partners began to quarrel and, while still managing General News, Moses set up Nationwide News Service as a competitor, with himself as sole owner. In the next few years General began losing money while Nationwide began to profit by amounts equal to the losses of General. Moe's partner, Jack Lynch, sued and Annenberg's defense was the extraordinary one that since he was engaged in an unlawful business, no court had any jurisdiction in a civil suit. When a Chicago newspaper began to report this defense in great detail, Annenberg's lawyers asked for an adjournment and he bought Jack Lynch out for $750,000. Meanwhile he bought out his partners in horseform publishing, who were dissatisfied because Moses was not distributing any profits and was also embarrassing them by publishing obscene magazines. Annenberg settled this out of court for $2,250,000. Moses Annenberg by this time had a monopoly on racing newspapers and on leased wires going directly to 15,000 bookmakers throughout the country. His race-wire business alone was divided into 14 corporations controlling 36 other businesses which had a monopoly of service to all horse-rooms in 223 cities in the United States and Canada. From 1933 to 1936, bookmakers in these cities paid Annenberg $20 million for his service. But besides the wire corporations, Annenberg also had 20 publishing corporations including the prestigious Philadelphia Inquirer. He had 16 other corporations involved in newspaper and magazine distribution. There were 14 additional corporations involved in real estate, insurance, theater, liquor stores and laundries. There were seven "foreign" corporations and five corporations dealing with horse-race gambling room paraphernalia. All these corporations were interlocked and frequently became non-existent when their account books were thrown off a bridge, and their assets disappeared into another Annenberg corporation. But everything thrived to the extent that Annenberg didn't know how much money he had when the IRS began questioning him publicly in 1939. And undoubtedly a substantial reason for the growth of Annenberg's net personal worth, a minimum of $20 million by 1938, according to the IRS, was the fact that from the 1920's on he was connected with Al Capone. He had a reputation that if someone did something he didn't like, he'd send a mob enforcer around to hit them on the head. When the IRS began investigating Annenberg for tax evasion, they found innumerable examples of tax fraud involving exemptions taken for alleged business expenses which were actually payments to a girl-friend or medical expenses, or simply forgetting to pay $1,642,848 in income taxes for one year. There were false stock certificates, dummy stockholders who didn't know they owned stock, erasures in the board of directors' minutes, wire-service records kept in code, etc. Finally the IRS got a look at 19 boxes of records which were mis-delivered from Annenberg's home in Long Island to the right floor of an office building but to the wrong office, and the IRS accidentally had the proof it needed. A federal grand jury indicted Moses Annenberg, Walter Annenberg, James M. Ragen Sr. and several others on charges of aiding and abetting a tax evasion of $9 million. Annenberg gasped at the amount but agreed to pay $8 million without going to trial because there was a high probability of paying even more after a court trial. As part of the settlement, the government agreed to dismiss all charges against most of the other defendants including Annenberg's son Walter. On July 1, 1940, Moses Annenberg was sentenced to three years in federal prison, where be died. NATIONWIDE BECOMES CONTINENTAL On November 15, 1939, Moses Annenberg knew he was going to prison and voluntarily disbanded Nationwide News Service. On November 20, 1939, Arthur McBride created Continental Press with a $20,000 investment. In its third interim report, the Kefauver Committee observed: "It is one of the amazing aspects of this whole story that without any break in the service, without any dislocation of the facilities used in the entire process of obtaining, legitimately or illegitimately, information from the race-tracks, and without any disruption in its distribution, one man stepped out of this complicated business and another man took it over without any formal transfer or without the passing of a single dollar." The transfer of the wire-service business from one entity to another with no visible connection becomes more understandable when we consider the background of Arthur "Mickey" McBride, who has been previously mentioned in our chapter on The Development of the Modern Mob. He was one of the circulation managers in the Cleveland newspaper war of 1913, who gathered around him street toughs who were to become rich and famous during Prohibition as bootleggers, and later to be known as national crime syndicate leaders and supporters of Richard Nixon. After leaving the newspaper business in 1930, McBride used his old connections with the Mayfield Road Gang to force Yellow Cab into a merger with a cab company operated by McBride. By 1939 McBride owned the taxi fleet, had extensive real estate holdings, owned the Cleveland Browns professional football team, and owned a radio station in Miami which later supported Meyer Lansky's legalized gambling initiative there. By the time McBride formed the Continental Press Service he was a multimillionaire. Much later McBride was to be involved with "Big Al" Polizzi, the leader in 1913 of the Mayfield Road Gang, in building Coral Gables, Florida. By his own admission McBride was a friend, one-time employer and business associate of numerous Cleveland hoodlums and the Cleveland syndicate of Dalitz and Company. In his early Cleveland days McBride had made a politically wise investment in The Brotherhood Loan Company of Frank and Tony Milano, Mayfield Road Gang members. "Brotherhood" was the word used to refer to the Unione Siciliano, a polite name for the Mafia. In brief, then, McBride the Irishman was a bridge between the Italian and Jewish criminal elements in Cleveland. He had been a lieutenant of Annenberg's in some business deals relating to the wire service, and could be trusted. The fact about which the Kefauver Committee expressed amazement�the disbanding of Nationwide News and, five days later, the creation of an entirely new entity, Continental Press, with no interruption in the wire service and not a single dollar being exchanged-can only be explained by the fact that the economics of organized crime were prevailing, not those of the ordinary competitive market-place. But the transition was still full of problems. McBride was too busy to run Continental Press. He gave the job to his brother-in-law Tom Kelley, a former employee of Nationwide who knew the business. McBride hired James Ragen Jr., son of the former general manager and vice-president of Annenberg's Nationwide News Service. Ragen Sr. was involved on McBride's side in the Cleveland circulation war of 1913, and had worked under Annenberg after that as circulation manager of the Hearst newspaper, the Journal-American. When Annenberg quit Hearst to form his own publishing empire, Ragen Sr. went along as Annenberg's right-hand man, eventually bringing his son, Ragen Jr., into Nationwide News. In 1942 McBride sold Continental Press to young Ragen. In 1943 Ragen Sr. took over control. However, the Ragens did not have any rapport with the Chicago mob, who wanted a cut of the wire-service profits now that Annenberg was out. Ragen Sr. insisted that McBride come back as an investor in Continental to mediate with the Chicago mob from his position of strength with the Celveland[sic] syndicate. McBride compromised by buying one-third of Continental Press back at a price of $50,000 as an investment for his son Eddie, then 19 years old and about to go into the Army. TRANS-AMERICAN VERSUS CONTINENTAL By 1946, the relations between Ragen Sr. and the Chicago group had deteriorated. As the Kefauver Committee reconstructed the events, Ragen Sr. met with three Chicago leaders: Jack (Greasy Thumb) Guzik, Tony (The Enforcer) Accardo, and Murray (The Camel) Humphreys. They proposed that Ragen remain as a partner, and take them in as new partners for $100,000 cash. Presumably, the Chicago group's participation would make Ragen's share more valuable and give jobs to 1000 more men. However, Ragen refused the offer. He believed that once the Chicago mob learned the business and could dispense with his knowledge, he would wind up dead in an alley. Knowing that his refusal meant trouble, Ragen tried to buy some life insurance by telling the Chicago FBI office about his problems and fears. He also left a 90-page affidavit with the Illinois State Attorney telling the whole story of the mob's attempt to take over his business. The Chicago mob retaliated against Ragen by starting their own national wire service, Trans-American. Competition between the two soon became very fierce because the Chicago group put out a persuasive army of thugs to force bookmakers to use the new service. And on June 24, 1946, James Ragen Sr. was ambushed on a Chicago street by a team of men with shotguns. Ragen didn't die immediately, however. After six weeks in the hospital, he was well on his way to recovery when suddenly he died. Despite a 24-hour police guard at Ragen's hospital room, the mob had managed to spike his soft-drinks with mercury, a cumulative poison. The autopsy report showed enough mercury in Ragen's body to kill two men. Kefauver reported that after Ragen's murder there was a period of almost a year in which Trans-American and Continental fought each other intensively and neither made any money. Then suddenly, in May 1947, Mickey McBride came back into the picture and bought Continental back from the Ragen interests. The price was $370,000, payable over a ten-year period, and the business was to be the sole and exclusive property of his son Eddie. BENJAMIN "BUGSY" SIEGEL With the Ragens gone, Trans-American folded the very next month and peace was restored-except for another gangland murder in California. Benjamin "Bugsy" Siegel, an early associate of Meyer Lansky, had been sent by the National Crime Syndicate to California in -1937 to take charge of rackets on the West Coast. Jack Dragna, the top Mafia leader, became Siegel's lieutenant in setting up a narcotics pipeline through Mexico, a system for rotating prostitutes from Seattle to San Diego, and organizing gambling so that the syndicate would get a percentage. Les Bruneman, a Redondo Beach gambler, was the only one to voice objections to this takeover, at a meeting of top criminals in the banquet room of a downtown Los Angeles restaurant. Bruneman was later gunned down in a Redondo Beach restaurant but recovered. Two months later he went to the same restaurant with his nurse, and four gunmen succeeded in instantly killing Bruneman and a bystander. When Trans-American Publishing and Wire Service was started by the Chicago mob, Bugsy Siegel, aided by Los Angeles crime leaders Jack Dragna and Mickey Cohen, succeeded in making Trans-American a profitable business in California. Moe Sedway, a. boyhood friend of Siegel's, established Trans-American in Nevada, while Gus Greenbaum, another Siegel lieutenant, did likewise in Arizona. But once the National Crime Syndicate, through the Chicago mob, had taken over Continental Press in May 1947, the need for Trans-American ceased to exist. However, at a New York meeting of the top leaders of the national syndicate Bugsy demanded $2 million to compensate him for the loss of his racing news profits. Siegel at this time was heavily in debt because of the ballooning costs of his Flamingo Hotel in Las Vegas. He had already borrowed $3 million from the syndicate. Since the syndicate leaders were suspicious that Bugsy was cheating them on the Las Vegas project, the additional $2 million demand seemed to be proof that Bugsy was not functioning properly as an organization man. So like any efficient corporation, the national syndicate relieved Bugsy of his job-but not by putting him among the ranks of the unemployed. On June 20, 1947, Bugsy Siegel was murdered in a Beverly Hills mansion by an unknown gunman who fired nine shots from an Army carbine through an undraped window. Siegel was the first member of the National Crime Syndicate's "Board of Directors" to be sentenced to death. Twenty minutes after Siegel was killed in Beverly Hills, Moe Sedway and Gus Greenbaum walked into the "fabulous Flamingo" and took over the just-opened operation. Sedway later told the Kefauver Committee that he "just happened" to be in Las Vegas that day. And shortly afterward, Mickey Cohen, a Brooklyn-Cleveland transplant, took over management of California for the syndicate. Cohen was a protege of Louis Rothkopf, Cleveland Syndicate leader, and close friends with Mickey McBride, Big Al Polizzi and Mafia leader Tony Milano. It is not necessary to go further here into the detailed history of the horse-race wire service since 1947. After the Kefauver Committee finished its investigation, the wire service was no longer Public Enemy Number One. And the only evident connection of Walter Annenberg with horse racing was through his continued publication of the legal Daily Racing Form. New legislation put Continental Press out of business. Money that used to be bet on horse-racing was channeled in baseball, football and other sports. Legalized gambling at race-tracks using pari-mutuel machines, where the state government controls the odds and takes a percentage of the total betting, pushed organized crime money into other areas of investment. And national radio and television began to replace some of the functions of the wire service. As a consequence, organized crime moved away from horse-race betting, leaving whatever remains of illegal bookmaking in the hands of independents who pay protection money to the mob as a license to stay in business. However, the National Crime Syndicate still maintains its interest in layoff betting-being the bookmaker's bookmaker-where its large cash resources can be profitably employed without much risk. WALTER ANNENBERG AS PUBLISHER Moses Annenberg bought the Philadelphia Inquirer in 1936. While not the biggest money-maker in his empire, The Inquirer was the most prestigious. Annenberg knew the newspaper business in-and-out. As circulation director for all of Hearst's publications and previous owner of a Miami daily, he knew the kind of sensationalism that makes newspapers sell. And he knew how to adapt to a community. His Miami paper had been pro-Democratic, but in Philadelphia he showed his true colors in the Inquirer as the most conservative of Republicans. By 1938, Moses Annenberg had become one of the most important powers in the Pennsylvania Republican Party, and was on the verge of electing his own man as governor. President Franklin D. Roosevelt sent his Secretary of the Interior, Harold Ickes, to combat Annenberg and, with Roosevelt's approval, Ickes made a strong attack on Annenberg's criminal connections. Ickes said in part: "I come to tell Pennsylvanians what I know about Moe Annenberg, the curse of two cities, because the prospect of turning over the public contracts of Pennsylvania and the whole law-enforcing machinery of this state over to a man of the record of Moe Annenberg is the most alarming thing that has ever threatened my native state. For Moe comes from the underworld and from the lawless tradition of Al Capone!" When Walter Annenberg took over control of the Inquirer after his father went to prison, the reputation of the Inquirer dropped to new low depths. Walter maintained a blacklist of persons and organizations whose names were not permitted to appear in the Inquirer. Included at various times on Annenberg's enemies' list was as diverse a collection as on Nixon's later list: Dinah Shore, Ralph Nader, the American Civil Liberties Union, and Gaylord Harnwell, president of the University of Pennsylvania. Editors and reporters who worked for Annenberg tell of Philadelphia Police Commissioner Frank Rizzo, now the notorious right-wing mayor of Philadelphia, having and exercising the power to kill any Inquirer story he disliked. When in 1966 Annenberg savagely opposed Milton Shapp, an eccentric radio manufacturer who was running for Governor of Pennsylvania on a program which included opposition to a proposed merger of the Pennsylvania and New York Central Railroads, Annenberg concealed from the public that he was the largest individual stockholder of the Pennsylvania Railroad and its successor Penn Central, with $8.5 million worth of stock. What many people in the community thought of Annenberg's newspaper was peculiarly revealed when the Inquirer's star investigative reporter for many years, Harry Karafin, in 1967 was exposed as a shakedown artist. For many years Karafin had been systematically blackmailing individuals and businesses with threats of unfavorable articles. It also turned out that he was the center of a bankruptcy fraud ring along with a man named Sylvan Scolnick. As the police closed in on the ring, Karafin was able to use his reputation at City Hall to monitor and block the investigation. On the same day that Karafin's misdeeds were revealed in Philadelphia magazine, Annenberg fired Karafin but refused to print anything about the matter in the Inquirer for over a month while the other Philadelphia newspapers were treating the situation as a major scandal. When Annenberg finally did give permission for an article on the case to appear, the Inquirer took credit for the exposure; assuming, no doubt, that the public had forgotten the original magazine article. But most interesting of all, when Karafin's victims, who included a number of the wealthiest businessmen in Philadelphia, were asked why they didn't report Karafin to the authorities, the victims to a man revealed that they believed Karafin when he said he was acting under Annenberg's instructions. Dozens of businessmen were quite willing to believe that Walter Annenberg was a blackmailer. One noted Philadelphia lawyer, Harry Sawyer, called the Inquirer under Walter's management "the greatest institutional force for evil in the city." Annenberg's reputation was not increased by rumors that he was holding secret meetings with Frank Erickson, the lieutenant of crime boss Frank Costello. Annenberg sold the Inquirer when he became ambassador to Great Britain, an act which was greeted with a sigh of relief by the newspapermen and women who worked there, according to a 1970 biography by Gaeton Fonzi, Annenberg: A Biography of Power. But Nixon's appointment of Annenberg was not greeted with great enthusiasm on either side of the Atlantic. Columnist James Reston, in an article on Nixon's continued blunders, observed that: "He didn't have to appoint Walter Annenberg, of all people, to be his Ambassador to London, of all places." And when Annenberg's first official speech in Britain was an inappropriate rabble-rousing attack on student demonstrators in the United States, there was much wonderment as to what Nixon and Annenberg thought were the functions of a U.S. diplomat. In investigating Annenberg, however, this writer must admit developing a certain compassion for the man. He has suffered from birth with a bad ear, has encountered much anti-Semitism in his efforts to be accepted by high society, and has bad many personal family tragedies, including a son who was a suicide. But Walter Annenberg cannot escape the suspicion that as a high executive in his father's operations since 1928, he had knowledge and involvement in matters which eventually put his father in prison and branded him as an Al Capone associate. And Moses Annenberg was not a common criminal. Fortune magazine says he probably bad the largest annual personal income of any man in the United States in the 1930's, possibly as much as $6 million a year. So that makes him the richest criminal of that period. Finally, it can not escape notice that the present Mrs. Annenberg, a lady with an international reputation for charm, was the second wife of former bootlegger Lewis Rosenstiel, dealt with in our chapter on The Schenley Connection. And from 1946 when she married Rosenstiel, to 1951 when she married Annenberg, she must have had the same extensive social contacts with organized crime leaders about which Susan, Rosenstiel's fourth wife, complained. In fact, Leonore Annenberg, the niece of the late movie mogul Harry Cohn, probably had social contacts with organized crime figures in her first marriage, before Rosenstiel, all of which adds fuel to the suspicions surrounding Walter Annenberg. INFLUENCE SAVES A PUSHER Sometimes what a family can accomplish to protect its own children is the best indication of its power. Consider the case of Robert Friede, the stepson of William Jaffe, a prominent New York lawyer and socialite, and grandson of the late Moses Annenberg. On February 7, 1966, Robert Friede was sitting in his car in front of 167 East Second Street, New York City. Police approached him and asked for his driver's license. When he opened his wallet two packets of heroin fell out. The police searched the car and discovered the body of Friede's girl friend, Celeste Crenshaw, aged 19. Miss Crenshaw had died from a narcotics injection that Friede later admitted having given her. In March 1966, Robert Friede pleaded guilty before Justice Schweitzer to second-degree manslaughter, possession of narcotics, and violation of probation. In New York, second-degree manslaughter is punishable by up to 15 years in prison, but Friede had a previous felony conviction and faced a sentence of up to 30 years. A week before the sentencing, Nathan Voloshen, the political fixer dealt with in the chapter on The Chotiner Connection, had a meeting with Justice Schweitzer and William Jaffe, Friede's stepfather. (Schweitzer was one of the New York judiciary whom Voloshen was known to bribe, and be left the bench in 1971 under a cloud when a witness before the Senate Permanent Investigation Subcommittee told of giving Justice Schweitzer bribes totaling $50,000). The story of Schweitzer is fully told in Charles Ashman's book The Finest Judges Money Can Buy. On April 15, 1966, Justice Schweitzer gave Robert Friede a suspended sentence of seven-and-a-half years for the manslaughter conviction, a suspended sentence of one year for the narcotics conviction, and a prison sentence of from two-and-a-half to five years for violation of parole. The next year the judge met privately with William Jaffe, and afterwards recommended to Parole Commissioner Oswald that Robert Friede be given parole. On November 13, 1967, Friede was released from prison after serving 19 months. One can only wonder if a young heroin addict arrested under these circumstances would be treated leniently if he were not related to a family of wealth and connections like the Annenbergs. pps. 308-318 ===== >photo captions> Walter Annenberg was appointed by President Nixon in 1969 to be the U.S. Ambassador to Great Britain. He inherited the racing news and publishing empire of his father, Moses Annenberg, who has been identified as an associate of At Capone. Walter Annenberg was indicted in 1939 for aiding and abetting the income tax evasion of his father. He is shown here as he left the U.S. Embassy in London on April 29, 1969, en route to Buckingham Palace to present his credentials to Queen Elizabeth. At left is Marshal of the Diplomatic Corps, Admiral Lord Cairns. Herbert Kalmbach, former attorney for President Nixon, was sentenced to six months in jail for soliciting a $100,000 contribution for Nixon's campaign fund in return for promising a European diplomatic post to a U.S. Ambassador assigned to the West Indies. Charles Payson and his wife Joan may have given as much as $350,000 to Nixon's campaign funds in exchange for getting a U.S. ambassadorship for their son-in-law, Vincent P. de Roulet. Payson, whose wife owns the New York Mets, is shown here after Payson's baseball team clinched the Eastern Division title of the National League in 1969. Maurice Stans, former Commerce Secretary and fund-raiser for the Committee to Re-elect the President, was acquitted with former Attorney General John Mitchell of attempting to "obstruct, impede and influence" an investigation of New Jersey financier Robert Vesco, but may stand trial again for selling U.S. ambassadorships to Nixon campaign contributors., Senator Estes Kefauver investigated the horse-race wire service started by Moses Annenberg and mysteriously transferred to Continental Press after Annenberg's operation was declared illegal. Moses Annenberg had the largest annual income in the United States during the 1930's. He had to pay the government $8,000,000 in back taxes, penalty and interest after being convicted of income tax evasion. He is shown here in June 1940 just prior to sentencing. Al Capone (center), who headed Chicago crime for many years, is believed to have supplied strong-arm men to Moses Annenberg as Annenberg was consolidating his racing-news empire. Walter Annenberg worked for his father in an executive capacity, during much of the period that the claimed relation with Al Capone and his successors took place. Capone is shown here in 1931 talking with his defense attorneys, Michael Ahern (left) and Albert Fink, in the U. S. District Court in Chicago on the second day of his trial for income tax evasion. James M. Ragen Sr., former vice-president of Annenberg's Nationwide News Service, took over control of Continental Press in 1943 from Arthur McBride but didn't have the proper contacts with the Chicago mob. He was murdered in 1946. Ragen once testified about carrying $100,000 from Moses Annenberg to Frank Nitti, enforcer for the Capone mob, for "services rendered." Arthur McBride, Cleveland businessman with links to organized crime, took over the racing wire service industry after Moses Annenberg was forced to dissolve his original wire service organization. Annenberg got into trouble because he was directly dealing with illegal bookmakers, McBride, with the aid of some clever crime syndicate lawyers, found a legal way to insulate his wire service from the illegal gambling industry it kept alive-until Senator Kefauver exposed the new operation in 1951 as "Public Enemy Number One." McBride is shown here at a government hearing in Washington, denying that he ever told former Governor James Cox of Ohio that he believed Al Capone was a "fine fellow." Benjamin "Bugsy" Siegel (right), shown here with his attorney, Jerry Giesler, was put in charge of West Coast rackets by the National Crime Syndicate in 1937. After abortive attempts to find a $90,000,000 buried treasure on a remote Pacific island and to sell alleged atom-bomb secrets to Italian dictator Mussolini, Siegel settled down and helped organize a wire service for the syndicate on the West Coast. Motion picture magnate Jack Warner took credit for persuading Bugsy not to assassinate Mussolini, Goering and Goebbels after the atom-bomb sale fizzled. But Meyer Lansky, whom Siegel contacted by transatlantic telephone to get the names of Italian Mafia gunmen for the planned assassination, told Bugsy that the Mafia had stopped fighting Mussolini in 1927 and wasn't about to start again. Siegel is shown here in 1942 after Los Angeles Superior Court Judge A.A. Scott dismissed a murder indictment against him. Siegel has just contributed $30,000 to the campaign fund of the L.A. district attorney who recommended the dismissal. It has been claimed that Richard Nixon, who was then a prosecutor in the city of Whittier, had something to do with this dismissal of murder charges against Siegel. The body of Bugsy Siegel lies on a sofa in a Beverly Hills mansion after he was murdered on June 20, 1947. It is claimed that the National Crime Syndicate ordered his murder because Siegel would not listen to NCS orders about horse-race wire service operations on the West Coast and or because the NCS believed that Siegel had to be removed from the operation of the Flamingo Hotel in Las Vegas, to save the $3, 000, 000 NCS investment there. Moses L. Annenberg bought the Philadelphia Inquirer in the 1930's and became a dominating power in the Pennsylvania Republican Party. President Franklin Roosevelt sent his Secretary of the Interior, Harold Ickes, into Pennsylvania to make speeches warning voters in 1938 that a victory for Annenberg's candidate for governor would be a victory for the Al Capone mob. Moses and Walter Annenberg believed that their indictment in 1939 for income tax evasion was inspired by President Roosevelt. Michael "Mickey" Cohen (left), Los Angeles gangster, helped Bugsy Siegel set up the Trans-American Publishing and Wire Service throughout California. Mickey Cohen used to boast that he contributed $25,000 to Nixon's campaign fund when Nixon first ran for Congress, an allegation that Nixon has never denied. Cohen is shown here in Los Angeles County jail with bail bondsman Irving Glaser in August 1947, when Cohen was being held during a murder investigation. He was released in a few hours. Charles Payson (left) and his wife Joan (right), owners of the New York Mets, sit with friends at the 1969 National League playoffs. The late Frank Erickson (left), the National Crime Syndicate's biggest lay-off bookmaker, explains racing information in a newspaper to Senator Homer Capehart (R-Ind.). At the time, in April 1950, Erickson was testifying before a Senate Commerce Subcommittee interested in stopping the movement of gambling information across state lines. Later that same year, the Republican candidate for mayor of New York City claimed during the election campaign that Walter Annenberg was holding secret meetings with Erickson in New York. --[cont]-- Aloha, He'Ping, Om, Shalom, Salaam. Em Hotep, Peace Be, Omnia Bona Bonis, All My Relations. Adieu, Adios, Aloha. Amen. Roads End Kris DECLARATION & DISCLAIMER ========== CTRL is a discussion and informational exchange list. Proselyzting propagandic screeds are not allowed. Substance�not soapboxing! These are sordid matters and 'conspiracy theory', with its many half-truths, misdirections and outright frauds is used politically by different groups with major and minor effects spread throughout the spectrum of time and thought. That being said, CTRL gives no endorsement to the validity of posts, and always suggests to readers; be wary of what you read. CTRL gives no credeence to Holocaust denial and nazi's need not apply. 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