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July 2002

MOB STORY: The Vice President

By John William Tuohy


Lyndon Johnson
Lyndon B. Johnson

     For decades, Washington, DC insiders had wondered aloud about how Lyndon Johnson, a professional public servant all of his life, had acquired a fortune which included a radio and television station, considerable real estate and bank holdings worth a total of $15,000,000.

     Johnson caused the whispers himself. He made no attempts to hide his wealth, instead, in true LBJ fashion, he flaunted it. He owned a 414-acre ranch in Texas, which included a 6,300ft landing strip and two planes and an enormous and very expensive estate, the Elms, in exclusive Northwest Washington.

     Life was good for the former high school janitor who worked his way through college. For almost ten years he had been one of the most powerful men on the Hill, and as Vice President, his career still had promise.

     Then, in March of 1962, the FBI arrested Billie Sol Estes, a big time contributor to the Democratic party from West Texas, on charges of fraud and theft for his role in a multi million-dollar deal involving storage tanks, fake montages and cotton allotments which would eventually lead to the dismissal of several Agricultural Department officials.

     Slowly, word leaked out to the public, for most of inside Washington already knew the allegations, that LBJ and Estes had been business partners in several ventures and that Johnson had lobbied on Estes' behalf at the Agriculture Department, that Johnson had tried to block the FBI's investigation and that he had received many gifts from Estes' office including an airplane.

     There's some evidence to suggest that Johnson worked a deal with Hoover to suppress the evidence against him in the Estes case or that after Kennedy was killed, that Johnson simply ordered Hoover to destroy the evidence against him.

     The Kennedys were worried over the Estes business, especially when they learned that a Republican congressman was planning to use the Estes business to impeach Johnson.

     Relations between the Johnson and Kennedy families had always been tense. During the democratic presidential primary in 1960, when Johnson was in the race for the White House, his staff spread stories that the Kennedy brothers were "cross-dressing homosexuals" and that certain Staff members had photographs from a party in Las Vegas to prove it.

     Somebody also broke into the Kennedy doctors' office and ransacked the place and a few days later, Texan John Connelly, a Johnson supporter held a press conference to announce that Kennedy had Addison's disease and would not live long enough to fulfill his term.

     Another loser from that primary was Chicago's own Democratic king maker, Jacob Arvy, who backed LBJ against Kennedy and as a result had no influence with the Kennedy White House.

     In the middle of the Estes mess, Henry Marshall, an Agriculture Department official in Texas who was investigating the Estes case, ended up dead. Although Marshall's face, hands and arms were bruised and he had been shot five times with a bolt-action rifle, meaning that each shot required a pump to eject the shell, the death was ruled a suicide.

     Estes would later claim that Marshall was killed by a convicted killer named Mac Wallace and that the murder was contracted by LBJ.

     Just as the Estes mess was erupting, the Bobby Baker scandal exploded.

     Bobby Baker of Pickens, South Carolina, started his career in Washington as a Senate Page in 1942. Twenty-one years later, at age 34, he was personnel secretary to the Majority leader and was a major power on Capitol Hill and was known, rightfully, as the 101st Senator of the United States.

     Starting in the 1950s, Baker became Johnson's protégée, or "Little Lyndon" as he was sarcastically called.

     LBJ's aide Harry McPherson recalled Baker by saying "He was very smart, very quick, and indefatigable. Just worked all the time. He was always running someplace to make some kind of a deal."

     By 1960, Bobby Baker was the man to see on Capitol Hill. He not only knew where the bodies where buried, he probably buried them there. He was also a millionaire, an odd circumstance for a man who was born into humble surroundings and never worked outside government.

     There were always rumors about Baker's involvement with the mob but the connections were never made clear until 1962.

     For years, the Trujillo dictatorship that ran the Dominican Republic had been trying to influence Bobby Baker to their side.

     All the attempts failed until Baker learned that Intercontinental Hotels Corporation, which was then wholly owned by Pan American Airlines, was considering expanding his casinos into the Caribbean, specifically into the business friendly Dominican Republic.

     Intercontinental already had 23 hotels in the Caribbean, three of which housed casinos which had been set up to lure tourist into the hotel, tourist who would use Pan Am Airways to get there.

     But the company didn't want to run the casinos because they considered it unseemly and instead set out to find a company which would run the casinos for them.

     At that point, somebody brought in Bobby Baker, largely because Pan Am Airway, Intercontinental's owner, was subject to strict federal airline regulations and it was well known that Pan Am wanted those regulations relaxed and Baker had enough power on Capitol Hill and the White House to make that happen.

     Baker called Intercontinental's chairman and arranged an appointment to see him, but on the day of the appointment, Baker showed up with mobster Ed Levison, brother to the infamous Louis "Sleep-Out Louie" Levenson, who was the original manager of Myer Lansky's casino, the Havana Riviera in Cuba, and was now running the Fremont in Las Vegas which was secretly owned by Tony Accardo, Sam Giancana and Paul Ricca.

     It was also at Accardo's request that Levenson managed to get then Senator Lyndon Johnson and Baker as his first official guests at the opening of the Stardust casino back in 1955.

     Baker and the Levenson brothers had been involved in a series of questionable business deals over the years, in fact Sleep-Out Levenson consigned a $175,000 business loan for Baker a few months before the meeting.

     Now Baker wanted Intercontinental to allow Levenson to run their casinos for them in Santo Domingo, the Dominican Republic.

     Intercontinental executives explained to Baker that other bids were already under consideration and that one of the bids had been submitted by Cliff Jones, the former Lieutenant Governor of Nevada.

     But, unknown to Intercontinental, Jones was already partners with the Levenson brothers in a shady Caribbean bank as well as several Las Vegas Casinos.

     Baker said, "I'll talk to Cliff, we're very close" and added that he and Jones and Kozloff could operate the casino together and, in theory, Intercontinental agreed.

     At the next meeting, Intercontinental told Baker and Levenson that the deal would fall apart if his brother, Sleep-Out Louie, were involved in the casino because of his criminal record and contacts to the underworld.

     Levenson assured the corporation that his brother would have nothing to do with the casinos despite the fact that Ed Levison himself also ran a mob-connected gambling empire and had five felony arrests on his record.

     It was finally decided that they would merge the Jones bid with Bobby Baker and Levenson bid for control of the casinos, however, when the final bid was submitted, it only showed Jones' name on it.

     Baker, Levenson and Jones won the bid of course and were given control over the hotel-casinos, not only in the Dominican Republic but in Curacao, British Antilles and Quito Ecuador as well.

     With control of the casino in the Dominican Republic, all Baker and Levenson had to do now was to get assurances from the island's iron-fisted ruler, Trujillo, that they would be allowed to operate safely and undisturbed.

     Trujillo, who was as corrupt as a leader could be, agreed. However, shortly before the Baker-Levenson plan could fall into place, Trujillo was murdered by his own military guards on orders from the CIA.

     In December of 1962, with Trujillo out of the way, the Dominican Republic held its first free election and a victory for Juan Bosch of the Partido Revolucionario Dominicano ensued.

     Bosch, who had been exiled by Trujillo for twenty-five years, was a progressive in the democratic tradition and Kennedy instructed the state department to give Bosch its full support. With communism making rapid advancements throughout Latin America and the Caribbean, Kennedy hoped to make the Dominican Republic under Bosch a democratic showplace.

     Vice President Johnson, Bobby Baker and Ed Levenson were in the Dominican Republic as guests of the Bosch government to witness Bosch's swearing in. Afterwards, Baker flew to Miami Beach where he met with Sam Giancana and Sigelbaum at the International hotel in Miami Beach.

     It was probably at this meeting that Baker convinced Giancana that the Dominican Republic, which on the surface anyway, looked stable enough, could be the mob's replacement for Cuba.

     A few weeks later, the FBI learned that Giancana did, in fact, intend to open casinos in the Dominican Republic.

     Perhaps at that point it all came together for Bobby Kennedy, who may have recognized all the signs of pending scandal and decided to close it down before it exploded.

     Kennedy ordered the FBI to place a lockstep on Giancana. No matter where he went or what he did, six to ten FBI agents dogged his every move. Agents would even stand next to Giancana at public urinals and insult the size of his manhood.

     Agents followed his daughters, his caretakers and his girlfriends. They knocked on neighbors' doors and asked if they knew that a notorious gangster was living on the block.

     The pressure of surveillance put on by the FBI forced Giancana to shut down extortion rackets and gambling operations.

     "You tell everyone," Giancana said at a meeting with his Capos, "that everything is off. This is because of the G. We ain't spending another nickel. Everyone is on their own. They got to make it any way they can."

     The same pressure was being applied out in Las Vegas as well and the skim was slowed down which dried up the cash flow in to mob coffers from Boston to Los Angles.

     Still, when the pressure let up a little bit, Giancana and several other Chicago hoods took a jaunt down to the Dominican Republic to scout out more potential casino sights.

     Everything in the Dominican Republic looked good until the Dominican military, backed by the island's land owning class, disposed Juan Bosch and a civilian Junta took over, tossing the Republic into two years of political and social chaos and the mob's hopes of building another Cuba off the American coast were lost forever.

     The end of the game for Bobby Baker came shortly afterwards.

     In December of 1961, at a pre-inaugural party, Bobby Baker and Vice President Johnson had met with Levenson and mobster Benny Sigelbaum and Johnson's neighbor, lobbyist Fred Black and formed the Serve-U-Corporation, which would provide vending machines for companies working on federally granted programs.

     The machines were manufactured by a Chicago-based corporation secretly owned by Tony Accardo, Paul Ricca, Gus Alex and Sam Giancana and others.

     Baker's connection to the Serve-U-Corporation is what caused his life to come tumbling down in October of 1963 when he was forced to resign his senate post after a vending machine contractor named Baker in a civil suit as the person who strong-armed them out of defense contractors' plant when they refused to kick back enough money.

     It turned out that if Baker went down he could have brought John Kennedy and his entire administration with him because Baker was instrumental in introducing John Kennedy to a suspected Russian spy named Ellen Rometsch.

     Rometsch was a stunning young brunette who had found her way out of an East German slum and moved to Washington in 1961 as the wife of a West German Army sergeant assigned to Embassy duty.

     Mrs. Rometsch soon became a popular regular at Bobby Baker's Quorum Club up on Capitol Hill, a semi private watering hole for the Capital's elite and earned a well-deserved reputation as a party girl with a very open mind.

     Then, sometime around 1962, Bill Thompson, a lobbyist, took Rometsch to meet John Kennedy. According to Thompson, after the meeting, "Jack sent back word. It turned out to be the best time he ever had in his life. That was not the only occasion they met. She saw him again. It went on for a while."

     Rometsch started talking about the affair and the FBI, which already suspected that Rometsch was an East German spy, heard about the affair and began to watch Rometsch around the clock.

     When the Bobby Baker scandal erupted, J. Edgar Hoover told Bobby Kennedy about Rometsch and her ties to not only Baker but the Soviets and within hours, Rometsch and her husband were deported back to Europe.

     By 1963, the Kennedys were fed up with LBJ, and there was serious talk of dumping him from the ticket the following year "For health reasons."

     It never happened.

     What did happen, was that one day in Chicago, in April 1963, Jimmy Hoffa was playing cards in his hotel room with Joey Glimco and their lawyers, when Hoffa asked what would happen if something were to happen to Bobby, or "Boo-bee" as he called him, Kennedy. The group responded that John Kennedy would "be so pissed off he would probably replace him with somebody who is a bigger son of bitch then Bobby is."

     After a short silence, Hoffa asked, "But what would happen if something happened to John Kennedy?" and the answer was, "Lyndon Johnson would become President and replace 'Boo-bee' as his first act."

     In 1965, the FBI had placed a bug on Bobby Baker and those bugs were picking up things that LBJ figured the American people didn't need to know, so, on July 11, 1965, President Lyndon Johnson ordered all of the illegal wiretaps planted by the FBI, including every bug planted against the mob, to be shut down.

Mr. Tuohy can be reached by writing to MobStudy@aol.com


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