It started with the Flamingo, the first of Las Vegas’s glittering casinos. It was built with mob money under the supervision of violent and colorful Bugsy Siegel.
Siegel, a longtime associate of Meyer Lansky — with Lucky Luciano one of the top two powers in organized crime in America — had come west in the late 1930s to handle the mob’s betting empire. In time, he became a fervent shill for turning Las Vegas, then a dusty stop in the middle of the desert, into a glittering gambling paradise.
Actually, Lansky had pioneered the idea and sent an aide, Moe Sedway, there in 1941. At the end of World War II, Siegel, Sedway, Gus Greenbaum and Israel “Ice Pick Willie” Alderman — all close Lansky associates — bought a small nightclub there. They later sold the place and invested the revenues in the Nevada Project Corporation, the vehicle that financed the building of the Flamingo. Lansky was exercising a tactic he had learned by studying the ways of big business, having underlings go out front on an idea and then step forward to take the credit if things worked out right.But Siegel appeared to be doing nothing right in building the hotel, which he named the Flamingo, the nickname of his mistress, Virginia Hill, the former bedmate of numerous high mafiosi from coast to coast. From the beginning, construction was beset by troubles that led to inflation of the costs. Anxious mobsters saw their investments being gobbled up—$2 million became $4 million which became $6 million—and started worrying that Bugsy was doing more than wasting their money. Virginia, a practiced bagwoman taking mob money to Switzerland to be stashed in numbered accounts, started going there regularly on Bugsy’s behalf. When asked why she was flying off to Zurich so often, she got rather vague, mumbling that she was shopping for furnishings and curtains for the hotel. The mob had a different theory, that Siegel was skimming off the construction money and had tucked away more than a half million dollars in his personal account.
The building contractor, Del E. Webb, got pretty concerned about a sudden influx of mobsters on the site and complained to Siegel about it. The handsome gangster laughed and assured Webb not to worry. He used a line that was to become a classic, “We only kill each other.”
At the time Siegel probably still thought he could survive. The mob, from Lansky on down, had advised him they wanted their money back. Bugsy undoubtedly thought he could pay them back by skimming off the profits once the Flamingo opened. Unfortunately, the opening was a disaster. Siegel, a man about Hollywood, had assembled a top-flight cast to attract an expected horde of guests—George Jessel was master of ceremonies and featured stars included Jimmy Durante, Baby Rose Marie, the Turn Toppers, Eddie Jackson, and Xavier Cugat and his band. Among the guests were some of Siegel’s Hollywood friends, George Raft, George Sanders, Charles Coburn; but many more did not show up. Among other errors, Siegel had staged his opening between Christmas and New Year’s, a period considered deadly in the entertainment business.Siegel’s fate was then sealed, and a death sentence was passed on him at a famous meeting in Havana presided over by the deported Lucky Luciano. Lansky, who actually called the meeting, did little or nothing to save Siegel. Bugsy was assassinated the following June. By the end of the year new management inserted by Lansky had turned the Flamingo around and it made a $4 million profit—and that was nothing compared to the unreported profits that were skimmed off.
The Flamingo was a huge success, even if it killed Bugsy Siegel. The mob began pouring millions into Las Vegas, building casino after casino. The Flamingo had a checkered history thereafter, always involving Lansky, although he did not appear as an owner of record. In the mid-1950s, the Flamingo was bought by the Parvin-Dohrman Company which was headed by Albert B. Parvin, a one-time interior decorator whose chief claim to fame previously was having laid the carpets in many of the big hotels. In 1960, Parvin sold the place to a syndicate headed by Miami Beach hotel man Morris Landsburgh (of the Eden Roc) who was coincidentally an old buddy of Lansky’s. Lansky collected a $200,000 finder’s fee from Parvin in the transaction. Landsburgh and his associates tired of the Flamingo when the government started digging into allegations of skimming in Las Vegas. In 1967 they sold out to Kirk Kerkorian, a former non-scheduled airline operator. And Lansky collected a fee when that sale was made. Lansky (along with five others) was indicted for skimming $30 million from the Flamingo from 1960 to 1967; he was accused of having hidden interests in the Flamingo during those years.
Lansky was not convicted on any of the charges.