THE MEN WHO MADE LAS VEGAS
by Byron Craft
THE MAN WITH A DOUBLE LIFE
Shortly after Bugsy Siegel assumed room temperature, a new key player arrived in Vegas: Moe Dalitz.
His name was Morris Barney Dalitz and he was born on Christmas day in 1899. His father, Barney, operated a laundry in Boston, Massachusetts and taught Morris the business as he was growing up. The family moved to Michigan where Barney opened Varsity Laundry in Ann Arbor, catering to University of Michigan students. As time went on, Morris opened a string of laundries in Michigan and then branched out to Cleveland in the 1930’s.
Morris Dalitz early on began a career in bootlegging, capitalizing on his access to the laundry trucks in the family business – an excellent delivery system for his hooch. Not only could you get your shirts cleaned and delivered, but between the folds you would find your Scotch.
In due course, Dalitz became associated with mob muscle, a door opened wide and he gravitated toward the lucrative and dangerous Prohibition-era liquor trade. Dalitz eventually would run the leading criminal organization of Jewish American gangsters called the Cleveland Syndicate. They were known for their violence and criminal ways, with partners Louis “Lou Roddy” Rothkopf, Leo “Charles Polizzi” Berkowitz, Morris Kleinman and Sam Tucker, all of whom operated primarily between Cleveland, Ohio, Detroit and Ann Arbor, Michigan during the Prohibition era. Additionally he developed a partnership with the Maceo syndicate, which ran Galveston and supplied liquor from Canada and Mexico. Morris Dalitz formed strong ties within Cleveland’s Eastside, Little Italy community. He later merged his group with top underworld leaders from the Murray Hill and Mayfield Road area, such as brothers Fred “Freddy King” and John “Johnny King” Angersola, Alfred “The Owl” Polizzi and brothers Frank and Anthony Milano of the “Mayfield Road Mob” to form the leading underworld organization in Cleveland.
In keeping with his colorful cadre of business associates, Morris became “Moe.”
Moe Dalitz’s laundry business resulted in his developing a close relationship with a key figure in his life…Jimmy Hoffa. When the Detroit Teamsters local demanded a five-day workweek for laundry drivers, laundry owners, including Dalitz, strongly opposed the union’s position. Negotiations reached an impasse, with each side unwilling to budge. Dalitz saw a way around the issue. He had the owner representatives bypass the local’s negotiator, Isaac Litwak, and reach out directly to its former business agent and current leader of the Detroit Teamsters, Jimmy Hoffa. They asked what it would take for Hoffa to intervene on behalf of the owners. Hoffa’s man said $25,000 would do the trick. The owners agreed though neither side bothered to inform Litwak of the settlement.
During the next bargaining session, Litwak was confident he had the owners on the ropes when the door opened and in walked Jimmy Hoffa. He told the group there would be no strike and he wanted the contract signed on the owners’ terms, with no five-day workweek provision. The stunned Litwak had no choice but to comply. The transaction wasn’t a big deal, however, it did open the door for something much bigger years later…multi-million dollar loans from the Teamster Pension Fund to finance the mob-controlled casinos in Las Vegas.
In those days the nation was fascinated with organized crime, fueled back then by Hollywood and banner headlines during the many whiskey wars. Moe Dalitz reached something analogous to a celebrity status as a runner of rum and operator of roadhouse gambling parlors from Cleveland to Newport, Kentucky. Dalitz never achieved Meyer Lansky’s moniker of “financial genius of organized crime,” and it was not because he was less successful. Dissimilar to Lansky, whose inability to shake off the infamy of his early years that forced him into the shadows throughout his life, Dalitz made the improbable transition from underworld figure to legitimate citizen. If local police detectives and FBI men suspected Dalitz of wrongdoing, they dared not whisper such criticism without ample evidence.
By the time prohibition ended, Moe Dalitz had opened several illegal gambling joints. He also converted some of his profits into legitimate businesses. The man with two careers, two identities: a lawful business owner and a criminal bootlegger and casino operator, a combination that would ultimately lead him to Las Vegas.
Morris Barney Dalitz’ (the aboveboard side of Moe’s alter ego) list of legitimate businesses was very impressive. Dalitz held an interest in the Michigan Industrial Laundry Company in Detroit and the Pioneer Linen Supply Company in Cleveland and percentages in Reliance Steel and Detroit Steel. There was also Milco Sales, Dalitz Realty, Berdene Realty and the Liberty Ice Cream Company. He even owned a piece of the Chicago & Rock Island Railroad.
Different from the common rumrunners of the day who wound up either dead or incarcerated, Dalitz was no dummy. His operation ran Canadian Whiskey in trucks floated on barges across the Great Lakes. During Cleveland’s liquor wars, where local mob factions battled for market share, Dalitz came away unscathed. By the repeal of the Volstead Act, he had opened a series of illegal casinos with names like the Mound Club, Pettibone Club, the Jungle Inn, the Beverly Hills Club and the Lookout House. “How was I to know those gambling joints were illegal?” Dalitz once told a friend. “There were so many judges and politicians in them, I figured they had to be alright.”
Moe Dalitz served his country in the 1940’s with more than cards, clean shirts and liquor. He served in the Army during the war, rising to the rank of second lieutenant. Unfortunately, when the war ended, he found himself reluctantly returning to an increasingly complex business life at home. The heat was on across America, as law enforcement and high-ranking politicians vilified illegal gamblers and gangsters as societal scum. Moe Dalitz did what any decent God-fearing businessman in his racket would do. He moved to Las Vegas. There casino games were legal and gamblers were men to be respected. At the time, Las Vegas and Havana vied for dominance as legal gambling centers. Dalitz dabbled in Cuban casinos, where his friend and bootlegging ally Meyer Lansky had invested millions, but he was more impressed with what was happening in the Silver State.
Dalitz escorted a group of Cleveland investors consisting of Sam Tucker, Thomas McGivney and Morris Kleinman, in the purchase of the then-incomplete Desert Inn, which opened in 1950. Dalitz not only was an experienced casino man, but he also understood that gamblers wanted more than green felt. He also gave them greens, along with tee boxes and sand traps developing the Desert Inn Country Club. He created the Tournament of Champions golf tournament, which focused a positive national spotlight on Las Vegas.
A year after the Desert Inn opened, Sen. Estes Kefauver, the head of the U.S. Senate committee investigating organized crime, focused another kind of spotlight on gambling. The Kefauver hearings concerned themselves with the phenomenon of gambling and organized crime in America, as well as with promoting the political careers of senators who portrayed themselves as mob-busting Puritans. Dalitz appeared before the Kefauver committee and did more than hold his own.
KEFAUVER:“As a matter of fact, you had been making a great deal of money in recent years, so I suppose from your profits from one investment you would then go ahead and make another investment. Now, to get your investments started off, you did get yourself a pretty good little nest-egg out of rum running, didn’t you?”
DALITZ:“Well, I didn’t inherit any money, Senator... If you people wouldn’t have drunk it, I wouldn’t have bootlegged it.”
The critics came and went, but Dalitz kept on building his financial empire and paying his taxes. In his lifetime of nefarious activity allegations, Dalitz was indicted twice – once for bootlegging and once for tax evasion. Both charges were dismissed.
By the time 1958 rolled around, Dalitz and his associates used millions in Teamsters’ loans and dollars borrowed from Louis Jacobs’ Emprise Corporation to take over the Stardust from a group led by Jake “The Barber” Factor. The new crew of efficient casino men turned the Stardust into a winner by expanding the number of rooms and the gaming area and adding a Parisian-style floorshow.
Moe Dalitz was not without a sense of humor when it came to his own sense of image making. “When I left home, it was during Prohibition in Ann Arbor, Michigan, and I went into the liquor business while it was illegal,” Dalitz once told a reporter. “Then when the Repeal came along, we went into the casino business in Kentucky and Ohio where it was illegal. I learned everything I know there.”
To the average Joe, one might think Dalitz led an almost colorless life, but to a friendly interviewer one day he gave his own spin on the phenomenon of gambling. “Let’s say gambling isn’t moral. Neither is drinking to excess. I think Las Vegas has given people lots of fun. Sure, some will get hurt. But listen, they can go to Atlantic City and get into more danger in a crap game than here, where there’s supervision.”
By 1962 there was an abundance of supervision to go around. Moe Dalitz had long since become a major player on the Strip and in Las Vegas business development, in general. He was a 13.2 percent owner of the Desert Inn. His longtime partners, Morris Kleinman and Ruby Kolod, each held a similar percentage. Wilbur Clark, the Desert Inn’s co-founder, held 17.1 percent, but had no real decision-making power.
Even with his small casino holdings, Las Vegas business leaders were impressed with Dalitz and marveled at his success. There was however, a diatribe by some in the press, touting the evils of Las Vegas gambling. Their bylines opined him as a “sanctimonious little mobster from Cleveland.” They lambasted Dalitz for his old ties and notorious friendships. But Moe Dalitz was far more complicated than that. At a time many in the state’s gaming industry remained inactive politically, Dalitz was a driving force behind Pat McCarran, one of Nevada’s most powerful U.S. senators. It was Dalitz who pushed McCarran to publicly fight a devastating federal tax on sports betting, eventually reducing a wagering surcharge to a paltry quarter of 1 percent from more than an excessive 10 percent.
During his longtime relationship with Hoffa, Dalitz had a hushed but formidable influence on loans to Las Vegas businesses from the Teamsters Central States Pension Fund. Law enforcement investigators speculated that a word from Dalitz could secure millions in low-interest financing. Dalitz used his clout with the Teamsters to build more than casinos. He and his partners used a one million dollar Teamsters loan in 1959 to build Sunrise Hospital. Other dollars flowed into golf course and shopping mall developments, during years in which most lending institutions laughed at entrepreneurs from the notorious Sin City.
The question of whether Moe Dalitz continued his association with his old roots to the rackets has never been accurately determined. The Cleveland Mob, for several years, maintained strong ties to Las Vegas and worked at making new ones. The Mafia’s ruling commission was rumored to declare Las Vegas as an open city, so each crime family was supposedly entitled to stake out different casinos as their exclusive territory. The Cleveland family got in early with the Desert Inn. Its principal owner was, of course, Moe Dalitz. It is said that he served as an informal referee in territorial disputes among the different Mafia crews.
Dalitz was considered a senior member of Las Vegas casino society in the 1970’s, but the subject of several damaging pieces of investigative journalism, not the least of which was a Penthouse magazine article titled “La Costa: Syndicate in the Sun”, which did a lot to damage his “legitimate businessman reputation.” A defamation suit was filed by Moe Dalitz and was eventually settled with a letter of clarification.
To top things off, Dalitz’s suitability was being questioned by the always image-conscious Nevada gaming authorities, but Moe’s continual practice of giving back to the community finally smoothed out the ruffles. Moe Dalitz’s charity was legendary around Las Vegas. There has never been a greater influence of giving in the city.
Moe Dalitz was named Humanitarian of the Year by the American Cancer Research Center and Hospital in 1976. In 1982 he received the Torch of Liberty Award by the Anti-Defamation League of B’nai B’rith. In 1979 he set up the Moe Dalitz Charitable Remainder Unitrust, a million-dollar fund to be divided upon his death. When Dalitz died a decade later, 14 nonprofit organizations split $1.3 million.
You can’t understand Las Vegas history without knowing about Moe Dalitz, his career, and his cunning double life that transformed his image from a bootlegger to that of a revered philanthropist. His contributions to the growth of Las Vegas were priceless.
The Men Who Made Las Vegas is a series by Byron Craft chronicling the growth of Sin City and the men who made it possible.