Blood Aces Read online

  The plea agreement surprised District Attorney Wade—he was not consulted in advance—and set him fuming. Allowing Binion to cop a plea in Nevada meant that the State of Texas’s case couldn’t proceed. Justice was being thwarted, Wade believed, as were certain ambitions for higher office. In July 1952, he wrote the U.S. Department of Justice and asked that Potter’s decision be overruled. “As you can readily see,” he argued, “law enforcement in this area has suffered in not being able to bring Binion to trial in almost three years, since he is acknowledged to be or to have been the biggest gambler in this area in some time.”

  The letter blindsided Potter. He learned of it “to my utter surprise and astonishment” when he read about it in a Dallas newspaper. The reaction to it surprised him even more. It was highly unusual, if not unprecedented, for Justice to overturn one of its own ranking officials because the local DA had thrown a tantrum. But that appeared to be happening, and Binion’s lawyers soon got wind that their plea deal might be falling apart.

  In Las Vegas, Binion’s happy satisfaction turned to dread. “Oh, the heat just built up on me,” he recalled.

  • • •

  Binion may have sensed the heat, but he had no way of knowing the power of its source. On August 8, 1952, James P. McGranery, attorney general of the United States, sent a memo to FBI director J. Edgar Hoover. “The Binion case,” McGranery told Hoover, “has been the subject of my personal attention.” He ordered a full FBI investigation into the matter.

  Five days later, FBI assistant director Al Rosen wrote an internal memo regarding Binion with the subject line “Obstruction of Justice.” He reported that confidential informants “whose reliability cannot be evaluated” had told FBI agents that “pressure was allegedly brought to bear” on U.S. Attorney Potter by a member of the board of directors of the First National Bank of Dallas. First National owned a controlling interest in Hillcrest State Bank, where Binion had deposited hundreds of thousands in policy game proceeds. The bank official told Potter that if he could persuade the grand jury to no-bill Binion, his reward would be a federal judgeship. “Potter allegedly declined to use his influence,” Rosen wrote.

  Hoover sent a telex to the bureau’s offices in Dallas and Salt Lake City, which oversaw the FBI’s Las Vegas operation, three days after Rosen’s memo. The Binion investigation, the director said, “must be given preferred and continuous attention.”

  Though he kept the FBI on the case, the attorney general had already seen enough to make a decision. McGranery ordered that the plea agreement with Binion be withdrawn, and that he be brought back to Dallas to face charges.

  But the legal wheels were already turning, and Binion’s lawyers insisted that their deal, once struck, couldn’t be undone. While waiting for the federal court to decide this matter, Binion was ordered to jail by a judge. “Well, I guess nobody will have any trouble finding me for the next ten days or so,” he said before book-in at the Reno lockup. He assured reporters he would receive no special favors during incarceration. “I’ll eat jail chow just like everybody else.” As usual, he made friends, this time with two young runaways next door. “And there’s two little ol’ girls in the next cell to me that stole a automobile in Kansas City and came out here,” he recalled. “They was fifteen years old. So I knew from their conversations that they never were going to get in no more trouble. So I sent word to the judge to turn ’em loose and send ’em home, and I’d pay for it.”

  The judge did not accept that offer, but he did give Binion exactly what he wanted in his own case: the Honorable Edward P. Murphy denied the attorney general’s motion, and allowed Binion to enter a no-contest plea to tax evasion. He would not have to go back to Dallas to face charges.

  On September 3, 1952, in Carson City, Nevada, Binion was fined $15,000 and placed on five years’ probation, and when the final gavel rang down, he showed the relief and ecstasy of someone who had eluded a firing squad. “Now don’t that beat all,” Binion exclaimed. He turned to his lawyer, smiled—displaying a “wide Texas grin,” according to one newspaper—and said, “Man, I’m glad that’s over.”

  Yet it wasn’t. “Binion Freed,” a Dallas headline declared, but added, “Wade Has Ace.” Which Wade then played: Less than a week later, the Dallas district attorney traveled to Washington for a personal meeting with McGranery in which Wade pointed out that Binion’s case had been based on his 1949 tax returns. His 1948 returns, Wade argued, offered a much richer chance for a successful prosecution. Evidence from Harry Urban’s trial showed that Binion owned 66 percent of the Dallas policy wheels, and that the total take in 1948 exceeded $1 million. But Binion had reported making only $2,000 from the policy games.

  Federal prosecutors in Dallas vehemently disagreed with Wade about the value of the 1948 returns. “This is positively untrue,” one assistant U.S. attorney told the FBI, insisting that “1949 is the only year which would even support indictment, to say nothing of conviction.” But the attorney general listened to Wade, and forestalled any internal dissension in the ranks by appointing a special prosecutor. Back in Dallas, a new federal grand jury was impaneled for the singular purpose of indicting Binion.

  Just when he thought he had escaped, Binion found himself in extreme jeopardy. He didn’t know the law especially well, but he did understand that he was under a pursuit unlike any he had seen. “The whole outfit was stalking me,” he said years later. “I just didn’t have no way to duck.”

  • • •

  McGranery left no doubt that he wanted Binion handled in such a way as to produce favorable notice for the Justice Department. A Philadelphia lawyer with a regal bearing—he was a former congressman and federal judge—McGranery had been appointed attorney general by President Harry Truman in May 1952. He was a lame-duck AG on the day he took office, for Truman’s term would end in less than nine months. But he saw himself as a reliable, if temporary, moral compass.

  He conducted daily staff conferences in his office at the Department of Justice Building in Washington, DC. The imposing seven-story Justice headquarters covered a full block along Constitution Avenue, five blocks from the White House. As with many federal buildings in the District, governmental homilies had been chiseled into its limestone, and one near the Tenth Street entrance proclaimed “To Render Every Man His Due.” The new AG made it clear that Binion would get his.

  The staff conferences were attended by various assistant attorneys general and a delegate from the FBI, usually assistant director L. B. Nichols. Shortly after each session with McGranery, he produced a memorandum to FBI director Hoover, some of which ran to six typewritten pages, single-spaced. The talk at these meetings often turned to some of the bigger names of the era. The officials discussed, for instance, the illegal immigration status of a Swedish nurse working in the home of Richard Nixon, then a member of Congress and soon to be vice president of the United States. A possible solution would be to alert Nixon and let him introduce a “private bill” in Congress that would right the nurse’s status. But that would be wrong, McGranery said, and he dismissed the idea. “The attorney general then commented on Nixon and referred to him as being a ‘hypocrite,’” Nichols’s memo noted. Nixon routinely did favors for campaign contributors, McGranery said, and “was not telling the truth when he said no one who had contributed had ever asked him to do anything.”

  The AG and his assistants also talked of hiring an ambitious, not to say rapacious, New York lawyer named Roy Cohn to “set up a new unit . . . in the Internal Security Section.” The attorney general thought Cohn “had many admirable qualities,” Nichols wrote, and “could be used for constructive purposes.” One of his assistants disagreed, dismissing Cohn as a publicity seeker. Cohn later found work—and no small degree of infamy—as counsel to red-baiting senator Joseph McCarthy.

  The Justice staff conferences occasionally dealt with sub rosa international matters, such as a proposal to reverse, via high-level bribes, the natio
nalization of the oil industry in Iran. McGranery told his staff he had sent a memo to Secretary of State Dean Acheson’s home on a Saturday afternoon regarding a plan to have four oil companies borrow several million dollars to pay off Iran’s prime minister. “The Attorney General said the whole idea was wrong and he would not be a party to it; that if a higher level wanted to take the responsibility, that was perfectly okay,” Nichols wrote. Higher authorities did indeed take charge: Two years later, the CIA helped depose the troublesome—and democratically elected—prime minister in a coup code-named Operation Ajax. He was replaced by the U.S.-friendly and torture-condoning shah, Mohammad Reza Pahlavi, and the unintended consequences of that move unfold yet.

  Amid such inflammatory topics, one matter that arose repeatedly that summer was Binion’s case. Nothing could enrage the nation’s chief law enforcement official faster, it seemed, than a subordinate’s reluctance to pursue Binion. When an assistant said he “has his doubts as to whether they can get a prosecution,” one memo reported, “the Attorney General literally hit the ceiling.”

  McGranery clearly had no patience for such discouraging talk. “He cannot understand this defeatist attitude: that Binion was one of the big-time racketeers,” the memo said. “As far as the Attorney General was concerned, even if they could not get a conviction there was a prima facie case; to get an indictment and get him back to Dallas and the ends of justice would be met.” McGranery hadn’t quite finished hitting the ceiling. “The AG then lambasted the Criminal Division and the attitude of the Criminal Division.”

  The pleadings by the Dallas DA had an obvious effect. McGranery told his staff that the first Binion prosecution had been based on inferior evidence, which was Wade’s argument. “The Attorney General further commented . . . that this is the weakest of the cases they could possibly present. He now understands the Treasury Department has worked up a much stronger case . . . He wants this case presented in Dallas as quickly as possible.”

  If McGranery’s enthusiasm for prosecuting a distant tax case puzzled his assistants, he explained his zeal in a meeting on August 25, 1952. An unidentified congressman had called about the matter, McGranery said, and suggested the convening of a special grand jury. “The Attorney General stated the President would very much like to have this done,” Nichols wrote to Hoover.

  As Binion described it, the feds’ design was to “get publicity to keep the smoke screen to cover up their own damn doin’s . . . I was furnishing ’em smoke.” It was undeniably true that the Truman administration could have used some good public relations on tax matters. The scandal that ensnared assistant attorney general Theron Lamar Caudle—who had promised to prosecute Binion but never did—had spread throughout the Bureau of Internal Revenue. There were, the Associated Press reported, “charges of widespread graft, corruption, irregularities and inefficiency in the nation’s tax-collecting system.” Lavishly publicized congressional investigations led to the firing or resignation of some 166 tax agency employees, including the bureau’s chief counsel, who was accused of participating in a half-million-dollar shakedown scheme.

  Perhaps this pursuit of Binion was a diversionary action, or maybe it sprang from a simple desire to righteously hammer a high-profile gangster. The motives may have been hidden, but the power behind them was clear. As the attorney general revealed, the question of how to bring down Benny Binion had now reached the White House.

  • • •

  If President Truman wanted Binion brought to trial in Texas, then McGranery would hear of nothing else, as he demonstrated one late summer afternoon in Philadelphia. Michael L. Hines, a lawyer and friend of the Binion family, had flown from Las Vegas and requested, via a mutual acquaintance, a conference with the attorney general. McGranery agreed to the meeting in his apartment at the Warwick Hotel, but secretly stationed an FBI agent in an adjoining room for security, and to eavesdrop.

  Hines said he simply wanted to give Binion’s side of the story. As the FBI man listened and made notes, the Vegas envoy said he knew the Binions well, and that he made his visit strictly as a personal mission. “No one could hire me,” Hines said. “I came out of pure friendship.” He neglected to mention that he was a partner of Binion’s boon companion and legal counsel, Harry Claiborne.

  Binion had been caught in a Texas power struggle, Hines told McGranery. “They are afraid that Benny will come back and take over things in Dallas,” he said. “They are doing everything they can to put him away.” Binion feared for his life if he returned, Hines said. “He’s afraid they will bump him off if he goes back . . . Either bump him off or give him a long stretch.”

  Though the meeting was cordial, McGranery showed little sympathy for Binion’s plight. “I don’t suppose there’s anything you can do,” Hines pleaded. McGranery replied that he was sorry that he could not make his visitor’s trip more pleasant, but knew of no legal reason that Binion should not be brought back to Texas.

  Hines thanked McGranery and, as he departed, made one last entreaty on Binion’s behalf. “Is there anything I can do,” Hines asked, “to help him out?”

  Yes, the attorney general answered. “Tell him to start praying.”

  The cops finally put Benny in cuffs.

  17

  THE GREAT BONANZA STAKEOUT

  Never follow an empty wagon.

  —BB

  Binion wasn’t planning to rely on mere prayer for a fight with the feds. He had earthly friends, and he intended to use them. They were powerful, and they were in his debt. At least one of them, Hank Greenspun, had both the gift of hyperbole and the means to display it. And he owed Binion big.

  Greenspun, a New York lawyer looking to remake himself out West, had come to Las Vegas a few months before Binion, in September 1946. After a stint as a publicity agent for Bugsy Siegel, followed by several episodes of smuggling machine guns to Israel—he later pleaded guilty to violating the federal Neutrality Act—Greenspun bought a small newspaper that he renamed the Las Vegas Sun. A crusader by nature, he went after Senator Joseph McCarthy, calling him, among other things, “the queer that made Milwaukee famous.” He also declared editorial war on McCarthy fellow traveler Pat McCarran, accusing the Nevada senator of destroying democracy via a corrupt political machine. Major Vegas casino owners, all of whom were beholden to McCarran for political favors, pulled their advertising from the Sun. The lone exception was Binion, who refused to yank his ads. Much later, he recalled the pressure from Gus Greenbaum, the Phoenix mobster who was one of Siegel’s successors at the Flamingo, to put the Sun out of business. “Greenbaum said, ‘We gonna bust him,’” Binion remembered. “I said, ‘You gonna have to bust me, too.’”

  Part of this grew out of Binion’s sense of decency. “I didn’t like that kind of stuff . . . People puts too much importance on theirself.” But he also sensed that Hank Greenspun could be a valuable, rising ally, while McCarran—although he had helped Binion obtain a casino license—had now passed the peak of his power. “What the hell,” Binion said of McCarran. “He wasn’t going to be here forever.” For this, Binion earned Greenspun’s deep and abiding loyalty. And Greenspun, who penned a regularly bumptious column on the Sun’s front page titled “Where I Stand,” rarely disguised his sympathies—as seen on October 1, 1952, when he addressed his friend’s treatment by authorities.

  “I sometimes wonder,” Greenspun mused, “if the President of the United States is aware of the fact that agencies of the federal government are being used to pillory and harass private individuals at the whims and dictates and for the personal satisfaction of some elected autocrat.” He went on to deplore the “cheap, rotten political treachery” directed at Binion, who had been a “model citizen” in Las Vegas. “Either the Attorney General of the United States is being hoodwinked by some corrupt Dallas officials in a nefarious political scheme,” Greenspun wrote, “or else the attorney general is taking pressure from some high government official who has
personal reasons for ‘getting Benny.’” Probably both, he concluded. For good measure, he compared the feds to a lynch mob and the Gestapo. “No man,” he added, “does more for the good and welfare of the community than this man whom the federal government and a few politicians in Texas are trying to shackle.”

  In Washington, FBI director Hoover read the column, and decided McGranery needed to see what was being said about him. The director uncapped his pen and wrote at the bottom of the page, “Send copy to A.G.”

  • • •

  Potter, the U.S. attorney in North Texas, also had serious reservations about Binion’s treatment. “I do not believe it is the policy of the Department of Justice to resort to subterfuge to return a defendant for prosecution by State authorities,” he wrote to his bosses in Washington. But his protest had no teeth, because a special prosecutor appointed by the attorney general was running the show in Dallas now. That prosecutor got some help from the federal judge who impaneled the grand jury to consider Binion’s case. Judge T. Whitfield Davidson reminded jurors that Herbert Noble had recently been “blown to pieces at his mailbox,” and that Mrs. Noble was “blown to pieces as well.” The judge added, “And not long before that you read where another man was killed, and another man was killed, and another man was killed.” Lest the panel still not get the point, Judge Davidson told them that sometimes income tax cases were the only feasible way to punish those who had hired killers, “as was done in the case of Al Capone.” The grand jury promptly indicted Binion for tax evasion.

  He got the news at the Horseshoe, and seemed close to dumbstruck. “I don’t see how they could have done it,” Binion said when a reporter called. “I swear I don’t.” Six weeks later, at a court hearing in Las Vegas, he removed his white Stetson and told a judge that officials in Texas wanted him dead. “I don’t fear the federal government,” Binion said. “But I fear if I fall into the hands of Texas authorities, I will be murdered.” The judge, though apparently sympathetic, said he had no alternative, and ordered that Binion be returned to Dallas. Then the problems compounded: in December, the government filed a tax lien against Binion, claiming that he owed $862,532.