[From Investigation of Organized Crime in Interstate Commerce: Hearings before the Special Committee to Investigate Organized Crime in Interstate Commerce, U.S. Senate, 81st Cong., 2nd Sess. and 82nd Congress, 1st Sess., Part 10, US Government Printing Office, Washington DC: 1950., pp. 25-34 and 38-41.]

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ORGANIZED CRIME IN INTERSTATE COMMERCE        25

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            We shall proceed with Clifford Jones, Lieutenant Governor of the State of Nevada.

            Mr. Jones, do you solemnly swear the testimony you will give this committee will be the truth, the whole truth, and nothing but the truth, so help you, God?

            Mr. JONES. I do.

TESTIMONY OF CLIFFORD JONES, LIEUTENANT GOVERNOR OF NEVADA

            Mr. HALLEY. Mr. Jones, your full name is Clifford Jones?

            Mr. JONES. Clifford Aaron Jones is the full name.

            Mr. HALLEY. You are an attorney?

            Mr. JONES. I am an attorney at law practicing here in Las Vegas.

            Mr. HALLEY. You are a member of Jones, Wiener & Jones?

            Mr. JONES. Jones, Wiener, Jones & Zenoff at the present time.

            Mr. HALLEY. Where is that located ?

            Mr. JONES. 206 Beckley Building. That is on the corner of First and Fremont, here in Las Vegas.

            Mr. HALLEY. You are Lieutenant Governor of the State of Nevada?

            Mr. JONES. Yes, I am duly elected and qualified.

            Mr. HALLEY. Do you have any other business ?

            Mr. JONES. Yes, I have. Of course, besides Lieutenant Governor, I have an interest in the Thunderbird Hotel, and I have an interest in the Golden Nugget, and I have an interest in the Pioneer Club.

            Mr. HALLEY. Would you state specifically ---

            Mr. JONES. Or define the interests ?

            Mr. HALLEY. Yes.

            Mr. JONES. In the Pioneer Club, which is a partnership, I have 2 1/2 percent of the partnership interest.

            Mr. HALLEY. When did you obtain that?

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            Mr. JONES. I acquired that in September of 1941, before the war was opened.

            Mr. HALLEY. Did you acquire that by purchase?

            Mr. JONES. Yes, that interest was acquired by purchase, and I also am paid 2 1/2 percent of the income from the club attorney's fees, which was an agreement that was entered into in September of 1941 also, or about that time.

            Mr. HALLEY. What did you pay for your 2 1/2 percent ?

            Mr. JONES. $5 000.

            Mr. HALLEY. $5,000 ?

            Mr. JONES. Yes.

            Mr. HALLEY. What other interests do you have?

            Mr. JONES. In the Golden Nugget I have 1 percent, of the Golden Nugget.

            Mr. HALLEY. When did you acquire that?

            Mr. JONES. I obtained that in August of 1947.

            Mr. HALLEY. Did you pay for that?

            Mr. JONES. Yes.

            Mr. HALLEY. How much?

            Mr. JONES. The figure was $23,310, approximately. I hope I am not held to the odd figure.

            Mr. HALLEY. That is for 1 percent?

            Mr. JONES. That was for 1 percent in the partnership at that time, which is now a corporation, and I have been issued the stock equivalent to 1 percent of the stock.

            Mr. HALLEY. From whom did you purchase the 1 percent?

            Mr. JONES. From Guy McAfee.

            Mr. HALLEY. Was any other consideration paid?

            Mr. JONES. No, no other consideration. In fact, at that time that was the highest price that had ever been paid by anybody for an interest in the club.

            Mr. HALLEY. Has it paid out?

            Mr. JONES: Pardon?  

            Mr. HALLEY. Has it been a worth-while investment ?

            Mr. JONES. Yes ; it has been a worth-while investment.

            Mr. HALLEY. What have you received from the Golden Nugget?

            Mr. JONES. Approximately $12,000 a year up to the present year, and I don't know just what I will receive this year because it changed its structure from a partnership to a corporation July 1, and I have received no dividends from the corporation.

            Mr. HALLEY. None would be payable yet, I presume.

            Mr. JONES. It would probably be payable if they had made sufficient money to declare a dividend.

            Mr. HALLEY. You don't know whether they did or did not?

            Mr. JONES. They have not declared a dividend since July 1.

            Mr. HALLEY. Has business been less profitable this year ?

            Mr. JONES. I would not say that business has been less profitable. However, this changing their structure—they had to build up in the corporation sufficient bank accounts, sufficient supplies, back supplies of liquor, and so forth, and also they have corporate tax obligations winch would decrease the amount of money received from the venture.

            Mr. HALLEY. Going back to the Pioneer Club, during the year 1949 what was your income on the basis of 5 percent of the total net profits?

            Mr. JONES. I believe approximately $14,000.

ORGANIZED CRIME IN INTERSTATE COMMERCE        27

            Mr. HALLEY. So that the Golden Nugget is apparently a much more profitable operation ?

            Mr. JONES. Well, many times; yes. In other words, I received about as much from 1 percent on the Golden Nugget as I received from 5 percent of the income of the Pioneer Club, lumping the two interests together making the 5 percent of their income.

            Mr. HALLEY. What other business interests have you ?

            Mr. JONES. I have an interest in the Thunderbird Hotel.

            Mr. HALLEY. What is that?

            Mr. JONES. One of the resort hotels.

            Mr. HALLEY. I mean, what is the interest?

            Mr. JONES. The interest amounts to 11 percent of the stock.

            Mr. HALLEY. When did you acquire that ?

            Mr. JONES. I acquired that—I, together with Mr. Marion B. Hicks, owned the land on which the Thunderbird Hotel is built, and he and I built the Thunderbird Hotel together, and I acquired the interest in the Thunderbird Hotel by virtue of an exchanging of my interest in the land and the structure to a certain date for the stock.

            Mr. HALLEY. In other words, you had a 50 percent interest in the building? Is that operated by a holding company ?

            Mr. JONES. In the land I owned one-third of it, and Mr. Hicks owned two-thirds of it.

            Mr. HALLEY. In the building, what did you own?

            Mr. JONES. In the building, when we first started to build, my part—my contribution amounted to 10 percent of the total contribution of the people who came into the venture, and I acquired 10 percent of the stock. Then I later bought 1 percent more, making a total of 11 percent.

            Mr. HALLEY. Who are the people in the Thunderbird ?

            Mr. JONES. Marion Hicks, Harry Badger, Victor Sayer, Jacob Kosloff, Joseph Wells, Paul Wagner, James Schuyler, and myself. I think that I have named all of them.

            Mr. HALLEY-. Is there a separate operating company ?

            Mr. JONES. There was a man by the name of Jack Lane, who has a very small interest, but he, incidentally, has never signed the partnership agreement.

            Mr. HALLEY. Are there separate owning and operating companies?

            Mr. JONES. There are.

            Mr. HALLEY. When you say you have 11 percent, are you talking about the operating company?

            Mr. JONES. I am talking about the operating company. I also own the same amount of stock in the ownership company.

            Mr. HALLEY. Does the operating company itself operate all of the gambling at the Thunderbird?

            Mr. JONES. It does. It operates not only the gambling; it operates the bars and it operates the dining room.

            Mr. HALLEY. Do you have any concessions that you give other people ?

            Mr. JONES. Yes.

            Mr. HALLEY. What are they?

            Mr. JONES. Well, there is a ---

            Mr. HALLEY. With particular reference to gambling.

            Mr. JONES. No.

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            Mr. HALLEY. No concessions in gambling?

            Mr. JONES. No, there are none. The other concessions are apothecary or smoke shop, and a men's ready-to-wear, and a jewelry shop, and so forth.

            Mr. HALLEY. Do you have a commission room?

            Mr. JONES. There is a horse book operated there; yes.

            Mr. HALLEY. Do you have a commission room ?

            Mr. JONES. No.

            Mr. HALLEY. Do you operate the horse book yourself ?

            Mr. JONES. The horse book is operated by the company itself.

            Mr. HALLEY. How do you handle your lay-off bets?

            Mr. JONES. I am sorry, but I don't know the answers to those things because I am not a gambler and I am not around the hotel or its operation. That question I could not answer.

            Mr. HALLEY. Who is Marion Hicks? How long has he been a resident? Is he a resident now of Las Vegas?

            Mr. JONES. Yes, he is.

            Mr. HALLEY. How long has he been here?

            Mr. JONES. He has been a resident—he first came to Las Vegas when I first made his acquaintance, in 1938. He came again and I got better acquainted with him in 1939. He came here with the expectation of building a hotel. Then in 1940 he came here and stayed awhile and made his first deal, I believe, on a piece of property for a hotel at that time.

            Mr. HALLEY. Where did he come from?

            Mr. JONES. Long Beach, Calif.

            Mr. HALLEY. Had he ever been in the East, an easterner?

            Mr. JONES. No, not in the East. He came from the Middle West.

            Mr. HALLEY. From where ?

            Mr. JONES. Joplin, Mo. He was born and raised there, and his family is still located in Joplin, Mo.

            Mr. HALLEY. You say he owned two-thirds of the land; is that right?

            Mr. JONES. Yes; that is right.

            Mr. HALLEY. Does he have other interests as well?

            Mr. JONES. He owned, together with a man by the name of Grayson, the El Cortez Hotel.

            Mr. HALLEY. He apparently came here with very substantial assets.

            Mr. JONES. That was a substantial structure that was built there. He came here although he had other stockholders in the El Cortez Hotel.

            Mr. HALLEY. Who is Grayson?

            Mr. JONES. Johnnie Grayson. I became acquainted with Grayson when they came here and when they built the El Cortez Hotel and I have known him off and on since that time.

            Mr. HALLEY. He had been an operator of the gambling ships off California, had he not?

            Mr. JONES. He had some interest in the gambling ships off California, yes; and I believe before that he had been located in Phoenix, Ariz.

            Mr. HALLEY. In a gambling operation?

            Mr. JONES. That I can't say of my own knowledge because I wasn't acquainted with him at that time.

            Mr. HALLEY. Where did you get your wire service for the horse book at the Thunderbird?

ORGANIZED CRIME IN INTERSTATE COMMERCE        29

            Mr. JONES. It comes through the same agency that the other horse books in the city get their service.

            Mr. HALLEY. That is the Nevada Publishing Co. ?

            Mr. JONES. I assume so. I wouldn't know the details.

            Mr. HALLEY. Run by James A. Dunne?

            Mr. JONES. Yes; that is right. It was a man by the name of Dunne that operates it here. I have met him on one occasion.

            Mr. HALLEY. What does your operation pay for its service?

            Mr. JONES. I don't know that answer.

            Mr. HALLEY. Do you know approximately ?

            Mr. JONES. No, I don't.

            Mr. HALLEY. Can you get that figure for us and phone it in to Mr. Ruymann ?

            Mr. JONES. Yes.

            Mr. HALLEY. He will be here. You can reach him at 2 o'clock.

            Mr. JONES. I will phone that figure in to you as soon as I get it. It is just a matter of calling. In other words, those are details that I don't know.

            Mr. HALLEY. Surely. The committee would like to have an annual audit for the Thunderbird for the years since it began operations. It began in 1947 or 1948 ?

            Mr. JONES. It began in—it has been in operation just 2 years. It started operating September 2, 1948. It has only operated 2 years.

            Mr. HALLEY. Can you let the committee have the annual audit for each of those years ?

            Mr. JONES. I can let you have the annual audit for the first year. And the other audit, I don't believe, is quite completed, but I will furnish it to you as soon as it is completed.

            Mr. HALLEY. As far as you know, what was the net income or loss in 1949?

            Mr. JONES. That was the year ending 1949. The corporation made a profit of a little more than $8,000.

            Mr. HALLEY. That would be the year ending September 1949 ?

            Mr. JONES. August 31, 1949, and the partnership lost approximately $8,000.

            Mr. HALLEY. In the first year of operation ?

            Mr. JONES. In the first year of operation.

            Mr. HALLEY. What about the gross income during its first year?

            Mr. JONES. That I do not recall. I have seen the figure, but it will be evidenced by the statement.

            Mr. HALLEY. Do any of the stockholders receive salaries?

            Mr. JONES. Yes.

            Mr. HALLEY. Do you ?

            Mr. JONES. No; I never received any salary or any compensation at all. I have only been reimbursed for the amount of costs involved in the formation of the corporation. Mr. Hicks receives a salary, and Mr. Schuyler receives a salary, and as far as I know, and I am certain that I would know otherwise, they are the only two stockholders who receive a salary from the corporation or the partnership.

            Mr. HALLEY. So far, you have not received any return whatsoever on your investment, then ?

            Mr. JONES. I have not.

            Mr. HALLEY. Or any income ?

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            Mr. JONES. No income or return whatsoever. I might say that the income that will be reflected by the second year of operation has been reinvested in the enterprise itself.

            Mr. HALLEY. One of your partners in your law firm is the executor for the estate of Benjamin Siegel, is that right?

            Mr. JONES. I believe he is the attorney for the executor.

            Mr. HALLEY. Who is the executor?

            Mr. JONES. The executor is a Dr. Siegel, who is the brother of Benjamin Siegel, in Los Angeles.

            Mr. HALLEY. Do you have any familiarity with the details of the estate?

            Mr. JONES. No, but my partner would be available to you. I have only scanty knowledge of it. We have rather large offices, six lawyers in the office, and we handle a piece of business and we handle it throughout, and it is often the case I wouldn't even know the business was in the office. But I do know, of course, of this; I do have scant knowledge of it.

            Maybe I could answer your question. I don't know whether these things are considered proper for attorneys to answer or not, or whether they are considered privileged communication, but we take the attitude of cooperation.

            Mr. HALLEY. The particular question I had is this

            Mr. JONES. I will answer any question that you deem proper.

            Mr. HALLEY. If you can answer this, fine; if not, perhaps Mr. Wiener can. Were you present during the testimony taken here in 1948 with reference to the race wire service?

            Mr. JONES. No; I was not present

            Mr. HALLEY. Have you ever seen that testimony ?

            Mr. JONES. No; I haven't.

            Mr. HALLEY. Your brother, who was then a county attorney, was active in that?

            Mr. JONES. He is a partner, but he is not my brother.

            Mr. HALLEY. That is Robert Jones?

            Mr. JONES. He is not my brother. I have a brother in the office; his name is Herbert. Robert is not my brother.

            Mr. HALLEY. Is he related to you at all?

            Mr. JONES. No relation whatsoever.

            Mr. HALLEY. He was in 1948 county attorney, is that right.?

            Mr. JONES. He was.

            Mr. HALLEY. Is he still?

            Mr. JONES. He still is. His term ends the 31st of next month.

            Mr. HALLEY. During the course of that investigation, you may have heard a man named Rosen came to Las Vegas?

            Mr. JONES. I am acquainted with Mr. Rosen. I met him.

            Mr. HALLEY. You have met him?

            Mr. JONES. Yes.

            Mr. HALLEY. He succeeded to some of the business interests of Bugsy Siegel, is that right?

            Mr. JONES. I don't know of my own knowledge that that is true. He—you might say he assumed a position of authority over some of these things.

            Mr. HALLEY. He was a partner of yours at the Golden Nugget, wasn't he?

ORGANIZED CRIME IN INTERSTATE, COMMERCE       31

            Mr. JONES. Who was that?

            Mr. HALLEY. Rosen.

            Mr. JONES. Never.

            Mr. HALLEY. Didn't he have an interest?

            Mr. JONES. Never has had any interest.

            Mr. HALLEY. He had an interest in the horse book at the Golden Nugget didn't he?

            Mr. JONES. To answer that, let me explain—and I think it is probably what you want to get to—back when the Golden Nugget was built, at that time the race wire service was very closely held here. The Golden Nugget group, as a partnership, were finding difficulty in getting service. So they finally leased out the race book on a monthly basis. The people who leased the property called their race book the Golden Nugget race book, but none of them had anything to do with the Golden Nugget, a partnership.

            Mr. HALLEY. They operated in the same premises?

            Mr. JONES. They operated on the same premises under a lease or under a sublease, you might say. None of them were ever connected in any way with the Golden Nugget itself or the Golden Nugget partnership or any of the partners in the Golden Nugget.

            Mr. HALLEY. What were the terms of the lease, do you know? Did they pay on a percentage basis?

            Mr. JONES. No, they did not pay on a percentage basis. They paid on a straight monthly rental.

            Mr. HALLEY. Siegel was one of the owners of that race book?

            Mr. JONES. Siegel was reputed to be one of the owners of the book; in fact, the largest owner.

            Mr. HALLEY. To get to the point that we have been trying to get to, we understand from the testimony that Rosen succeeded to Siegel's interests in that race book and paid no consideration whatsoever to the estate.

            Mr. JONES. The inventory of the estate shows the interest in the Golden Nugget race book as zero.

            Mr. HALLEY. Is that a fair appraisal?

            Mr. JONES. If he owned an interest, it certainly would not be.

            Mr. HALLEY. Didn't he own an interest?

            Mr. JONES. Reputedly he owned the largest interest.

            Mr. HALLEY. Who inventorized the estate ?

            Mr. JONES. Well, it seems as though the interests of—in this Golden Nugget race book—and of course I am testifying purely from hearsay, which would not be admissible in court--

            The CHAIRMAN. This is a committee.

            Mr. JONES. We are only trying to get to the facts, and I want to be as helpful as possible.

According to information, the situation existed something like this; that he owned the larger portion of that race book, although it was reputed to be in the name of Solly Soloway, who was a brother-in-law of his, but he also, according to the stories that go around, owed the book money. So they canceled him out on his debt because it showed on the inventory there was nothing of any value there that could be inventoried on his estate.

            Mr. HALLEY. How much money did he owe the book?

            Mr. JONES. That I do not know.

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            Mr. HALLEY. Was there any tangible evidence of such a debt ?

            Mr. JONES. That I can't say either.

            Mr. HALLEY. Would you ask your partner if he could drop in for us for a few minutes this afternoon with that information?

            Mr. JONES. I will send him over because I think he would be very happy to appear.

            Mr. HALLEY. No other questions.

            The CHAIRMAN. Mr. Jones, are there any other matters that you can think of that would be of interest to this committee?

            What about the matter of outsiders trying to horn in out here in Nevada ? Do you have much trouble about that ?

            Mr. JONES. No, we never—we have had recently, of course, some people who have wanted to move in here because their operations were more or less impaired in other places and they looked to this more or less as a haven. Fortunately, through the protection of the tax commission, we have a pretty good protection against things like that, and don't welcome people who, you know, have operated and have had any particularly strong outside connections. I think that our liberal laws have been well protected through the tax commission.

            The CHAIRMAN. But you blanketed in a lot of racketeers who were already doing business?

            Mr. JONES. Yes; in other words, it is kind of like a grandfather clause. They were here in business, and in operation, some of them and had a lot of money invested. In other words, you can't legislate them out of business.

            Mr. HALLEY. You are a member of the bar of Nevada, aren't you?

            Mr. JONES. Yes.

            Mr. HALLEY. Is it the law that the commission would have no power to refuse a license to anybody who was in business in 1948, or is that simply the policy of the commission?

            Mr. JONES. Well, it was set forth as a policy of the commission, in other words.

            Mr. HALLEY. Was it set forth in the law, or by the commission ?

            Mr. JONES. No, the first law was passed in 19—. Well, of course, the law prior to that was more or less a collection law that collected the 2 percent. Then the tax commission was given some actual authority in 1937. It was in very general language, authorizing them to regulate gambling and so on and so forth. The law had no teeth in it, to speak of, and in the 1949 law is the one that gives them real power over gambling and the right to revoke licenses, the right to hold hearings, the right to refuse hearings.

            It makes it a very discretionary matter within the power of the tax commission.

            Mr. HALLEY. Under that law you would have no doubt that they would be able to refuse a license to somebody even though he had been operating in the State prior to the passage of the law?

            Mr. JONES. They have since that time refused them because of offenses.

            Mr. HALLEY. We are now talking about people who had previously been operating. I understood you to give your legal opinion a few minutes ago that those who had been operating had an investment which under the law couldn't be taken away, and I am simply questioning that legal statement.

ORGANIZED CRIME IN INTERSTATE COMMERCE        33

            Mr. JONES. I think that I would have to say that a license to conduct gambling is so much within, you might say, police power of the State, that if they so desired, they could. I would have to refer back to the statutes themselves, although I have granted

            Mr. HALLEY. So what you are really talking about is the tax commission at its discretion has decided to allow those who had previously—well, first, that had been here prior to 1949, to continue to operate ?

            Mr. JONES. That is right.

            Mr. HALLEY. Whether or not they were qualified?

            Mr. JONES. That is right. In other words, they have kind of taken the attitude that if they had been here and had been operating and had conducted themselves properly, that they were qualified by that.

            Mr. HALLEY. Since you are Lieutenant Governor of the State, I am going to presume to ask an over-all policy question, which you may or may not see fit to answer.

            Mr. JONES. All right.

            Mr. HALLEY. It is definitely a statement of opinion.

            Wouldn't you say prior to 1949 a great many undesirable characters, with bad police records, were engaged in gambling operations in the State of Nevada, such as Graham and McKay, Wertheimer, Bugsy Siegel? I could name a great many more, of course.

            Mr. JONES. Well, of course.

            Mr. HALLEY. Moe Sedway ?

            Mr. JONES. Some of those I could very definitely concur with you on. Some of them are people who have been in the State long before I was here, so I wouldn't presume to pass upon their qualifications to conduct their business.

            Mr. HALLEY. Well, there had been a lot of people

            Mr. JONES. There were some people that you might say had police records and reputations of gambling in other places. But this seems to hold true, that people who came here when the State started to grow, to gamble in the gambling business, they weren't particularly Sunday school teachers or preachers or anything like that from out of the State. They were gamblers. In other words, they came here to gamble.

            ( Short recess.)

            Mr. HALLEY. We have one more question.

            As a matter of over-all State policy, do you believe it is good policy for the State tax commission to allow people whose previous records have been bad, to continue in the gambling business in this State for the simple reason and the sole reason that they were in that business prior to 1949?

            Mr. JONES. I would say that I believe as long as they conduct themselves properly that I think there is probably no harm comes of it.

            Mr. HALLEY. That is a difficult question, as to whether they are conducting themselves properly. Wasn't it your partner who wrote to the Governor that he thought they were going to settle their disputes by open warfare?

            Mr. JONES. That is correct, and the tax commission did take action on that particular subject and eliminated the thing that was causing the difficulty and might cause the trouble.

            Mr. HALLEY. Isn't the thing that was causing the trouble having gangsters here who would settle their problems by gang warfare?

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            Mr. JONES. That would be one of the fundamental reasons, yes.

            Mr. HALLEY. That is not settled simply by allowing them to continue under a license provision.

            Mr. JONES. Well, they no longer—the group involved no longer continued to operate any race books. I understand that the service itself was in different hands, too, as a result of the actual action of the tax commission at that time.

            Mr. HALLEY. Those people are still operating in the State, are they not? Aren't the Stearns brothers still operating?

            Mr. JONES. The Stearns brothers, yes, they are still operating.

            Mr. HALLEY. They were major parties to the dispute, were they not?

            Mr. JONES. They are the ones who were the ones who were being the victims of the situation, not the proponents of the difficulty. In other words, they were people who had operated the book and who had a place of business and were being denied service arbitrarily.

            Mr. HALLEY. It was being denied by Sedway and Rosen, is that correct?

            Mr. JONES. That is right, correct.

            Mr. HALLEY. Who did you expect to be doing the shooting?

            Mr. JONES. Well, now, I didn't write the letter so I didn't expect anybody. I didn't even know the letter was written.

            Mr. HALLEY. Did you ever discuss it with your partner?

            Mr. JONES. Not until afterward.

            Mr. HALLEY. Do you know who he thought would be doing the shooting?

            Mr. JONES. I would say this, that I don't think that he expected that the shooting would be coming from the Stearns brothers.

            Mr. HALLEY. Rosen and Sedway had what they wanted. They didn't want anything. What motive would they have?

            Mr. JONES. It was an additional situation. In other words, the Stearns boys were getting the information anyway. In other .words, they were having to

            The CHAIRMAN. I think we had better put the press off no longer. We have put the press off here for a long while, and Mr. Jones is going to bring his partner back.

            Mr. HALLEY. This afternoon at 2 o'clock.

            The CHAIRMAN. So we will excuse you.

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FURTHER TESTIMONY OF CLIFFORD JONES, LIEUTENANT

 GOVERNOR OF NEVADA

            Mr. HALLEY. You have brought us certain information?

            Mr. JONES. You have asked for information about how much wire service cost furnished to the Thunderbird. The race wire service was commenced about a year ago, and they paid $100 a week. Four months later the rate was increased to $160 a month.

            Mr. HALLEY. A month or a week?

            Mr. JONES. A week. That, apparently, was done when the State put on a tax of $10 per day for each service outlet. Approximately 4 months ago the rate was raised to $200 per week with an additional charge once each month of $14 being made for a line charge.

            Mr. HALLEY. So you are now paying about $880 a month total?

            Mr. JONES. No, $814.

            Mr. HALLEY. You figure 4 weeks to a month?

            Mr. JONES. That is correct.

            Mr. HALLEY. It would be $800 plus

            Mr. JONES. Now, in checking my list I found that I omitted two names. One is L. B. Shear, who owns a very small interest, 2 percent, and Guy McAfee, who owns 1 percent. That completes the list.

            Mr. HALLEY. Go ahead.

            Mr. JONES. I also brought the financial statement of the Thunderbird and the Bonanza Hotels which you requested for the year ending August 31, 1949.

            Mr. HALLEY. Do you know Meyer Lansky?

            Mr. JONES. No, I do not.

            Mr. HALLEY. Have you ever met him?

            Mr. JONES. No; I haven't.

            Mr. HALLEY. Does he not spend time at the Thunderbird Hotel?

ORGANIZED CRIME IN INTERSTATE COMMERCE        39

            Mr. JONES. No; as far as I know, he has never been in the city of Las Vegas.

            Mr. HALLEY. He is reputed to live at the Thunderbird Hotel a great deal of the time.

            Mr. JONES. There is a man by the name of Jack Lansky who has stayed some time at the Thunderbird Hotel.

            Mr. HALLEY. That is Meyer Lansky's brother, is it not?

            Mr. JONES. I assume so.

            Mr. HALLEY. The man that was convicted for gambling in Florida a couple of months ago?

            Mr. JONES. I don't know that.

            Mr. HALLEY. Does he stay at the Thunderbird ?

            Mr. JONES. He has stayed there and at the Thunderbird and the Last Frontier on different occasions.

            Mr. HALLEY. In recent years does he stay at the Thunderbird exclusively ?

            Mr. JONES. Yes; I know on the two occasions.

            Mr. HALLEY. For how long?

            Mr. JONES. The last time I believe he was here, to my knowledge, a couple of weeks.

            Mr. HALLEY. When was that?

            Mr. JONES. I don't know, some weeks ago. I would say 3 or 4 weeks ago.

            Mr. HALLEY. Is he a good friend of any of the owners of the Thunderbird?

            Mr. JONES. I think Mr. Hicks knows him, but I don't know how well lie knows him.

            Mr. HALLEY. During the early years of the Thunderbird operation, it lost a lot of money, did it not?

            Mr. JONES. The first year we lost $84,000; yes, sir.

            Mr. HALLEY. Was there any effort made to obtain fresh capital for it?

            Mr. JONES. We put up an additional bankroll; yes.

            Mr. HALLEY. How much did you put up ?

            Mr. JONES. I put up $10,000.

            Mr. HALLEY. In cash ?

            Mr. JONES. Yes.

            Mr. HALLEY. Was any money borrowed from any outside interests ?

            Mr. JONES. Not that I know of. I did borrow $10,000 from the First National Bank when we put up the first bankroll at the Thunderbird Hotel, and the second time they called for money it happened to be that I was just ready to pay off my loan at the First National Bank, and instead of paying off the loan I turned that money into the Thunderbird Hotel and continued to pay on my loan monthly.

            Mr. HALLEY. Did the Thunderbird obtain any loans from anyone else ?

            Mr. JONES. Yes; but the exact amounts I don't know. There was some money borrowed from Vic Sayer. There has been some money borrowed from Harry Badger, and there was some money that I actually loaned above my contribution which amounts only to $4,000, I believe, is what I had loaned at one time when I had that amount of money, and Mr. Hicks had loaned some money to the Thunderbird Hotel.

40        ORGANIZED CRIME IN INTERSTATE COMMERCE

            Mr. HALLEY. Do you know whether Jack Lansky or Meyer Lansky directly or indirectly ever loaned any money to the Thunderbird or any of its owners?

            Mr. JONES. I am certain that they haven't.

            Mr. HALLEY. You are certain they have not?

            Mr. JONES. Have not.

            Mr. HALLEY. Do you know a George Sadlow ?

            Mr. JONES. Yes.

            Mr. HALLEY. Who is he ?

            Mr. JONES. George Sadlow ? I know that he lives in El Paso, Tex. He has been coming and working here in Las Vegas off and on for about 10, 11 years. He worked at the Las Vegas Club. He worked at the El Cortez Hotel for Mr. Hicks, and he has visited the Thunderbird Hotel, but never has worked there.

            Mr. HALLEY. Does he stay at the Thunderbird Hotel ?

            Mr. JONES. Yes, he does.

            Mr. HALLEY. Has he ever made any investment or loan to the Thunderbird ?

            Mr. JONES. That I can't say. I don't know of any.

            Mr. HALLEY. Or any of its partners?

            Mr. JONES. I can only answer as far as myself, as far as I know. That might be something that I wouldn't know.

            Mr. HALLEY. Was it through Sadlow that Lansky came to, the Thunderbird ?

            Mr. JONES. I might say that Lansky has never been at the Thunderbird unless Sadlow was with him, and I am certain that was through Sadlow that Lansky comes to the Thunderbird. He is a very close friend of Sadlow's.

            Mr. HALLEY. Has either Sadlow or Lansky any interest in the Thunderbird at this time?

            Mr. JONES. No.

            Mr. HALLEY. Does either of them work in any capacity at the Thunderbird ?

            Mr. JONES. No.

            Mr. HALLEY. Do they bring customers to the Thunderbird ?

            Mr. JONES. Except themselves. I say, when they are around the place, they spend a great deal of money themselves.

            Mr. HALLEY. Would you say that either Lansky or Sadlow have no financial interest in the Thunderbird?

            Mr. JONES. As far as I know, none at all. I am certain that Lansky has none and I feel just as certain that Sadlow has none. I know that Mr. Hicks and Mr. Sadlow are very close friends. What might exist between them I wouldn't know at this time. In other words, that is a question you would have to ask Mr. Hicks because I couldn't answer it.

            Mr. HALLEY. Is Mr. Hicks available?

            Mr. JONES. Yes. He is in town today and he could be reached.

            Mr .HALLEY. Is he at the Thunderbird?

            Mr. JONES. Yes.

            Mr. HALLEY. I have no other questions.

            The CHAIRMAN. Do you know whether Frank Costello has or ever has had any interest in the Thunderbird?

            Mr. JONES. I know that he has not.

ORGANIZED CRIME IN INTERSTATE COMMERCE        41

            The CHAIRMAN. Does he come in and stay there?

            Mr. JONES. He has never been in the city of Las Vegas that I know of. I know the man only by reading the name in the papers, and I am certain that lie hasn't been in Las Vegas, at least to my knowledge. He might have been several years ago, but I don't think so. I never have heard of him ever being here.

            Mr. HALLEY. Mr. Wiener, we have been inquiring about the estate of Bugsy Siegel.

            The CHAIRMAN. Before you get started, all of our memoranda got away somehow.

            What is Mr. Wiener's first name?

            Mr. WIENER. Louis.

            Mr. HALLEY. One more question, Mr. Jones. Do you know Phillip Kastel ?

            Mr. JONES. I have never heard that name before.

            Mr. HALLEY. You have never heard the name before ?

            Mr. JONES. No. Phil Kastel ?

            Mr. HALLEY. Yes.

            Mr. JONES. No; I have never heard that name before. Is he a local person or something like that?

            Mr. HALLEY. That is all.