At its apex, in 1976, the Teamsters Union’s financial commitment to Las Vegas casinos stood at $249.4 million. Ten years later, the union was paid off by the last of its Vegas debtors, the Aladdin Hotel. Said Central States Pension Fund Executive Director George W. Lehr, "The fund is now totally out of casino investments anywhere." He spun the Teamsters’ pullback as the outgrowth of an adverse Morgan Stanley opinion on casino loans, saying Las Vegas casinos "were not the investment-grade assets that we wanted."
The union was also accused of using Milwaukee Mob boss Frank Balistrieri as a go-between in the 1974 purchase of the Stardust and Fremont hotels by Hacienda owner Allen R. Glick. Other hotel-casinos that were bought or built with Teamster money over the preceding years were the Landmark, Desert Inn, Four Queens, Circus Circus and Caesars Palace, the Lodestar and the Plaza Towers. Perhaps the most blatant assertion of the Teamsters’ power occurred at the Dunes, which was co-owned by Morris Shenker, Jimmy Hoffa’s attorney. (In Lake Tahoe, Teamster money went to the then-King’s Castle and Sierra casinos, while Reno’s Riverside casino was a Teamster beneficiary.)
Much of the skimming of the casinos – and the approval of the Glick loan – took place after Hoffa went to the slammer in 1967. Allen Dorfman, head of the Central States Fund (aka "the Mob’s bank"), pulled the trigger on loans during that period, until his ouster in 1977. Dorfman had another Vegas connection, having been a co-defendant with "Tony the Ant" Spilotro in allegedly fraudulent loans made to Gaylur Products/American Pail Company. (The government failed to obtain a conviction.)
The first recipients of Teamster money in Las Vegas were Major Riddle and James Gottlieb, owners of the Dunes, who received $4 million in 1958. Three years later, Moe Dalitz received $10 million in loans for the Desert Inn (which had been completed with Mob money in 1950) and Fremont hotels. Another $8 million went to Dalitz to purchase the Stardust.
In 1962, developer Jay Sarno wanted to buy the future site of Caesars Palace from Kirk Kerkorian and went to the Teamsters Union for the $10.5 million he needed (a sum that eventually ballooned to $20.4 million). During Sarno’s ownership and until a 1995 buyout by ITT Sheraton, Caesars Palace would be dogged by accusations of Mob involvement, including allegations that Sam Giancana and Meyer Lansky were hidden investors.
In 1962, Frank Carroll’s Landmark Hotel had exhausted its line of credit and was far from completion. Enter the Teamsters Union with a $10 million loan. (Carroll, incidentally, was the rare Vegas hotelier of the period not to be accused of Mob ties.) Even that extravagant sum wasn’t enough to get the Landmark complete … not until Howard Hughes stepped in with $17 million to buy and finish the hotel-casino, which was never more than a succes d’estime and eventually became part of Hughes’ divorce settlement with actress Jean Peters.
When Jay Sarno moved on from Caesars Palace to build Circus Circus in 1966, much of his $15 million in startup capital came from the Teamsters Union. Circus Circus struggled from the get-go, for reasons including a lack of hotel rooms and a dice-throwing elephant who "spread offensive odors inside the property."
Sarno was forced out by the Nevada Gaming Control Board in 1969 but soon returned with $2.6 million in Teamster loans, which were contingent upon giving the underlying land to the union and leasing it back to Sarno. The pension fund was a veritable cash spigot for Sarno, loaning him $15.5 million in 1971 and $2.6 million the next year (enabling him to build hotel towers).
Although Sarno leased Circus Circus to veteran executives William Bennett and William Pennington in 1974, he wasn’t done with the Teamsters yet, finagling still more loans. With the Teamster money came accusations of skimming, to which Sarno sidekick Carl Thomas pled guilty in 1979. The ubiquitous Spilotro, who ran a souvenir store in the casino, was accused (but never convicted) of running the skim. Circus Circus wasn’t purged of dubious influences until 1983, when Pennington and Bennett bought Sarno out.
Thanks, in part, to the persistent federal investigation of skimming allegations, the Teamsters’ days in Vegas were numbered. The Carter administration forced the union to surrender oversight of its pension funds to federal regulators in 1977. According to the New York Times, "Since 1982, under a consent decree with the federal government, the fund has been run by prominent Wall Street firms and monitored by a federal court and the Labor Department." There would be no more loans to Vegas casinos, ending an era in which the Teamsters were one of the biggest behind-the-scenes powers on the Strip.
