Interference (18 page)

14 Rosenbloom in the Bahamas

INCREDIBLY ENOUGH, THE PERSON responsible for supplying the affidavits that appeared to clear Carroll Rosenbloom was Mike McLaney! Pete Rozelle told reporters McLaney “refuted the affidavits, all of them … Mr. McLaney is the one who obtained the other affidavits, and he was the one who came to me and gave me a written statement that all of them were wrong.”

And then, suddenly, after providing the NFL with evidence of Rosenbloom's innocence, McLaney, who claimed to be $164,000 in debt when he first filed his charges against Rosenbloom, was able to buy a half interest in a private club/casino on Cat Cay in the Bahamas, where Rosenbloom and Chesler had already been making substantial investments through their partnerships. In fact, they were opening a casino of their own—with the help of several top organized-crime figures.

After the loss of Cuba and the clampdown on the Mafia by the Kennedy Justice Department, Meyer Lansky and the organized-crime syndicate had targeted the Bahamas as its new off-shore gambling and narcotics empire. Gambling was illegal in the Bahamas without a “certificate of exemption” which permitted gambling under certain conditions. A faltering Bahamian economy opened the door for such exemptions to a small group of investors. With the help of the Bahamian Batista, Sir Stafford Sands, the minister of finance and tourism and the leader of the “Bay Street Boys”—the all-white United Bahamian Party (UBP)—Lansky's partners entered the gambling scene.

The 1939 law providing for the exemption, which had been proposed by Sands, gave official approval to two casinos that had been operating illegally. One was the casino on Cat Cay—one of the small Bahamian Out islands, fifty miles off Florida's eastern coast—and the other was the Bahamian Club, which was on the western outskirts of Nassau. The exemption for the Cat Cay Club expired in 1961 and was not renewed—until McLaney came along with his newfound cash.

Sands, who had a glass left eye and, like Chesler, weighed over three hundred pounds, had been bought by Lansky and the underworld with the payment of $1.8 million in bribes disguised as legal fees laundered through Bahamian land owner Wallace Groves. Interestingly, Sands was considered a lawyer, even though he had never graduated from any college.

Born in 1902, Groves was a Baltimore businessman and Wall Street broker who had studied law at Georgetown University in Washington, D.C. In 1941, he had been indicted, convicted, and sentenced to two years in prison for his role in a $750,000 stock fraud scandal. He served only five months of his two-year sentence at Danbury.

Soon after his release, Groves, with nearly $10 million in personal assets, moved to one of his houses on Little Whale Cay in the Bahamas—he had been given his own fiefdom by Bahamian government officials with whom he was friendly. He was also paying them off. Groves received 150,000 acres of land for $2.80 an acre and the rights to lease a large share of the 530-acre Grand Bahama Island. He founded the Grand Bahama Port Authority in 1955 and sectioned off over 200 acres of land, calling the area Freeport—a place where there were no taxes of any kind levied on personal or business income. However, by 1960, the Port Authority had fallen on hard times and was not attracting the tourism Groves had hoped for.

Underworld leaders had been dealing with Bahamian politicians since the Prohibition era. Among those who had been receiving payoffs for their cooperation was Sir Roland Symonette, who, at the time of Lansky and the mob's entry into the Bahamas in the early 1960s, was the Bahamian premier.

On April 1, 1963, Groves and his Port Authority, operating through Bahamas Amusements, Ltd., were granted a certificate of exemption by Sands and the Bahamian government, which they had applied for in March. They received clearance to build
and operate a hotel/casino in Freeport. Without delay, Groves then struck a deal with Lou Chesler, whom he had known since 1955. Soon, Carroll Rosenbloom and the Seven Arts film company were involved as well.

“In the beginning, it was all kind of a joke,” according to Seven Arts vice president and director Tex McCrary. “I was originally trying to get Chesler into Cuba. I owned
The Havana Times
under Batista. I wanted to take General Development into Cuba and do a job on housing under Batista. When Castro came in, we left. We had an idea, but we needed an island. And that's when we went to the Bahamas.

“I put together the Grand Bahama Development Company [Devco] for Groves and Chesler and everyone else. We ran the campaign to legalize gambling in the Bahamas—which meant dealing with the white government. And the deal I had with Stafford Sands and the white government was I wanted to build an international shopping bazaar for the development company.”
¹

The initial $12 million for the hotel/casino, which planned to hire a 103-member staff, had been raised principally by Chesler and Rosenbloom—through Seven Arts, which held nearly 21 percent of the stock in Devco, an offshoot of Chesler's General Development Corporation which had developed three Florida communities.
²
Because he held the certificate of exemption and owned the land, Groves received a 50 percent interest in Devco. Seven Arts and other investors owned 41.5 percent. Chesler held the remaining stock in his own name.

The legal paperwork securing another $5 million of Devco stock was listed in the name of S. Rosenbloom.
³
Carroll Rosenbloom, whose family corporation had been named S. Rosenbloom, Inc., was as involved in the construction of the hotel/casino as were Chesler, Groves, and Sands. And the latter three were working in concert with Meyer Lansky, according to both the U.S. Justice Department and an official Bahamian inquiry.

Chesler's partners included Lansky associate Max Orovitz, who was later indicted because of a General Development stock fraud scheme,
⁴
and New York lawyer Morris Mac Schwebel, who was indicted in a separate securities case in February 1961 while president of Universal Controls.
⁵
Schwebel resigned his post in the wake of his indictment, and Chesler resigned as Universal's board chairman to concentrate on his Bahamian interests.

Consequently, Rosenbloom became the chairman of the board and the president of Universal Controls. During his tenure on the board, Rosenbloom had sold a great deal of stock in the pari-mutuel tote board company to Colts head coach Weeb Ewbank and to Colts players. Ewbank told me, “I had some money in it. Carroll recommended we go into it. In fact, he guaranteed my investment.”

As part of their $23 million total investment in the Bahamas, Chesler, Rosenbloom, and their syndicate built the Bahamas' first casino, the Monte Carlo, at the 250-room Lucayan Beach Hotel in Freeport on Grand Bahama, which opened in January 1964. Chesler personally put up the casino's initial $600,000 gambling stake. The casino staffed six roulette tables, six crap tables, and six blackjack tables.

Airline junkets from south Florida carried gamblers, who paid $18 for a round-trip ticket, to Grand Bahama Island on eighteen flights each day; charter flights were also arranged from Chicago and New York at equally rock-bottom prices. The casino was an immediate success.

Chesler had promised that there would be “no invasion of Grand Bahama Island by the underworld. No North American personnel will be used as croupiers or as supervisory personnel.” However, Lansky and his associates were permitted to skim 30 percent of the net profits from travel packages, as well as their portion of the skim from the casino. The Justice Department estimated that the Lansky group illegally received no less than $6 million from the Monte Carlo in its first year.
⁶

Also, Chesler and his partners immediately hired three of the syndicate's top sports bookmakers—Charles Brudner, Max Courtney, and Frank Ritter—to operate the Monte Carlo. All three had fled the United States to escape prosecution in New York, but of all America's high rollers they had the best credit records in the country. The Miami Crime Commission had described the three men as the “biggest, heaviest bookmakers and sports bookmakers in the country.” Chesler referred to them as “my bookmakers in the United States. That's how I happened to hire them. I had a great deal of experience with them.” Chesler admitted that he had been gambling with Ritter since 1946.

Chesler was later described by a Bahamian investigative panel as “a compulsive gambler … not confined to casinos. He bet on horses, football, baseball, jai alai—almost anything.”
⁷
The panel also noted that Chesler had “lost as much as $200,000 at
one time to the casino. Indeed, he told us he had lost ‘much more.'”

McCrary agreed, saying, “Chesler bet like hell on everything.”

Casino records showed that two other big-money losers were Mafia capo Mike Coppola and Carroll Rosenbloom. Both lost at least $100,000 each. Another NFL owner with a $100,000 line of credit was Art Modell of the Cleveland Browns. However, Modell drew only $5,000 against his account in February 1964.
⁸

Mike McLaney, the engineer of the gambling charges against Rosenbloom, found himself with a half interest in the Cat Cay Club, operating under a similar certificate of exemption as Chesler and Rosenbloom were. The Cat Cay had been a nongambling resort since the 1961 death of its owner, Louis R. Wasey. In the midst of the NFL's investigation of Rosenbloom, McLaney suddenly and inexplicably obtained a 50 percent interest in the casino with Wasey's daughter and came up with enough money for the casino's gambling bankroll—just days before McLaney told Rozelle that Robert McGarvey and others had recanted their affidavits against Rosenbloom.

While the preparations for the opening of the Monte Carlo were being made, the NFL's gambling investigation had reached its climax with the suspensions of Karras and Hornung. The investigation of Rosenbloom's gambling activities was still continuing.

On July 16, 1963—three months after the players' suspensions—Rozelle officially cleared Rosenbloom, saying that there was “no proof whatever” against him. “In light of all available information, the investigation of Mr. Rosenbloom's case has been completed and the commissioner concludes that the charges were unfounded.” Regarding charges that Rosenbloom was a heavy gambler who bet on sports other than professional football, Rozelle proclaimed that Rosenbloom had “ceased such practices.”

Upon hearing the news that he had been cleared for betting against his own team, Rosenbloom said, “I'm pleased. It [was] a long time coming, but it was a thorough job. I'm happy with it not only for myself but for the Baltimore club as well.”

In an unpublished interview, reporter Jessica Savitch asked Rozelle about his view of Rosenbloom's dealings with Chesler.
Rozelle replied, “It wasn't just his relationship with Lou Chesler. It was, I believe, his involvement with Mr. Chesler in an entertainment company [Seven Arts]. And when the entertainment company contemplated expanding into the Bahamas and starting a gambling casino, I talked to Mr. Rosenbloom.

“And I said that the entertainment company is one thing, but I think that the type of operation that the company is expanding to could hurt you and the reputation of the league. And Mr. Rosenbloom did not participate in that. He ensured that that was spun off from the company he had invested in.”

Rozelle serenely gave reporter Bob Curran a less-guarded explanation. “Yes, I could have said, ‘He goes or I go,' and I would still have the job, but I would be ruining a man's life—and the Colts are his life—just to prove that I really am ‘a strong commissioner.' I could not do that. I had to make a decision on whether there was proof there or not. The proof was not there.”
⁹

Upton Bell told me there was no question about Rosenbloom's guilt in the matter. “One of the NFL team owners told me that everyone knew he was guilty. And there's no question in my mind that Rozelle knew he was guilty. And if my father had been commissioner, even though Rosenbloom was a friend, he would have thrown him out of the league. They had him dead to rights.”

Ralph Salerno, New York City's supervisor of detectives, agreed. “I know as a fact that the NFL knew that Rosenbloom was a notorious gambler. And they knew that he gambled with bad people. And they just worried that he might need money bad enough to be not adverse to a fix or a shave.”

As the NFL gambling scandal wound down, Senator John L. McClellan, chairman of the U.S. Senate Permanent Subcommittee on Investigations, announced that he was going to look into other suspicious NFL activities, including a possible fixed game between the Chicago Bears and the San Francisco 49ers in September 1962. Reports had been received by the Senate panel that three unnamed 49ers players had been paid off by gamblers for the fix. The six-point-underdog Bears won the game, 30-14. However, no players were ever charged with any wrongdoing.

In a speech about sports, gambling, and narcotics to the Chicago Crime Commission on April 24, McClellan said that the threat of organized crime in America “transcends and exceeds any immediate danger of infiltration or subversion by the Communist
international conspiracy.” To combat the problem, he called for court-authorized wiretaps on mobsters and the creation of a national crime commission with subpoena power and the authority to investigate all aspects of crime.

However, after the investigation and its hearings were announced, the subcommittee, claiming insufficient evidence, dropped the inquiry. McClellan himself began referring questions about gambling and professional football to Pete Rozelle.

What happened? Attorney General Robert Kennedy, an unabashed football fan, stepped in. A top Kennedy aide told me, “Bobby quietly told Rozelle and the NFL owners that the league was going to have to get tough with NFL people who violated league rules, as well as federal gambling laws. When Kennedy saw the firm action Rozelle took on the gambling matter, he was convinced that the NFL could handle these matters internally. Kennedy [who had been McClellan's chief counsel during the days of the Senate Rackets Committee] simply told the old man to back off. McClellan trusted Bobby and did just that.”