CHAPTER 12

LORD OF THE DESERT

LAS VEGAS ON $178,000 A DAY

A $13.2-million outlay was but a petty-cash expenditure when measured against the billions of dollars that had passed through the Hughes empire over four decades. Yet acquisition of the Desert Inn in 1967 had a special significance that transcended any dollars-and-cents assessment. It revitalized Hughes and finally brought him out of the deep depression he had been in ever since the TWA jet-financing battle in the late 1950s.

Perhaps the negotiations with Moe Dalitz had awakened memories of more tolerable times. Perhaps it was the realization that at age sixty-one he had little time to achieve some new success, to offset, in the history book of American business, all his failures—TWA, RKO, the D-2, the Hughes Tool Company Aircraft Division. Or perhaps he was just feeling a bit better, physically and mentally. Whatever the reason, the purchase of the Desert Inn marked the beginning of a new phase in Hughes’s life, a renewal of his spirits, a return if not to the way he had lived twenty years before, at least to an active business career, or as active as the geography of a hotel bedroom would permit, for he would never again live outside its protective environment. In his own fashion, Howard Hughes was ready to go back to work.

Now that he had severed his ties to Romaine Street, Hughes leaned more than ever on the four aides who lived with him twenty-four hours a day. Indeed, the aides had replaced Romaine Street and established a new Operations in the room next to his. There they processed the tide of paperwork to and from the various outposts in the empire, screened his telephone calls, recorded and transmitted any messages he had for others, and, of course, saw to his personal needs.

Hughes’s first priority was a personal one—to get his wife to Las Vegas. He had not seen Jean since the stay in Boston in 1966. Although they never exchanged letters, they did talk on the telephone almost daily.¹ Hughes knew that Jean detested hotel rooms, that she intensely disliked their life in separate bungalows at the Beverly Hills Hotel. If he could offer her a home, he reasoned, she would move to Las Vegas. And so he directed Parry Thomas, his principal banker in Nevada, secretly to buy the estate of Major A. Riddle, an old-time gambler and part-owner of the Dunes Hotel and Casino. The palatial Riddle estate—its master bedroom and dressing area were several times larger than Hughes’s bedroom in the Desert Inn—was in an exclusive section of Las Vegas where entertainers like Phyllis McGuire and Buddy Hackett maintained homes. Because Hughes demanded immediate possession of the property, “Thomas allowed Riddle to move into his [Thomas’s] home”—the Thomas family was spending the summer in California—and the banker moved into the Desert Inn.

For insurance, Hughes decided to buy a second place, the 518-acre ranch owned by Vera Krupp, who had been married to Alfried Krupp, the German arms merchant. The two properties cost Hughes nearly $1 million. Now Jean could have a choice: she could live in the lavish Riddle house near the Strip or at the ranch a half-hour drive from Las Vegas, or both.

Hughes sent Jean “a scrapbook, with photographs and floor plans” of the ranch.² When they chatted on the telephone, he told her what he wanted at the ranch—“his own landing strip, a really good projection room, a really modern up-to-date kitchen, bath, a stable with horses.”³ Every time Hughes called, Jean said, “the question before the house was what we were going to do about our living arrangements, and we spent a great deal of time at first discussing a house in Las Vegas and we discussed the ranch and we discussed how he was going to set up his offices there and when he was going to move out of the hotel into the house.”⁴ Each time Jean pressed Hughes about leaving the Desert Inn and settling in the ranch, he stalled. For her part, she told him that she would move to the ranch “if he would be there first.”⁵ He could not do that, at least not then. And so the husband and wife stalemated over who would move first.

While Hughes was trying to persuade Jean to come to Las Vegas, he sent Bob Maheu out scouting for additional investments. Maheu’s old friend Edward P. Morgan, the Washington lawyer and power broker, thought the Sands Hotel and Casino could be bought for the right price. Moe Dalitz, Maheu’s consultant on casinos, heartily endorsed the suggestion, saying he thought the Sands “would be a good acquisition” and would be most profitable if Hughes “could continue to maintain the array of talent that had been presented there.”⁶ When Maheu passed the proposal along to the Desert Inn penthouse, Hughes instructed him to begin the negotiations at once.

The Sands, which opened in 1952, had long attracted the highest of the high-rollers and all the big names in entertainment. It was owned by a syndicate of more than a dozen investors headed by Jack Entratter, who held 16 percent of the stock. A onetime bouncer at the Stork Club and part-owner of the Copacabana in New York, Entratter more than anyone else had created the superstar image for Las Vegas. Opening night at the Sands in 1952 featured Danny Thomas. By 1960, the power and excitement of the Sands had grown to extravagant proportions, when the celebrated clan—Frank Sinatra, Dean Martin, Joey Bishop, Sammy Davis Jr., and Peter Lawford—played to standing-room-only audiences. Sinatra himself had owned 9 percent of the Sands until 1963, when the State Gaming Commission forced him out because of his continued association with Chicago mob boss Sam Giancana.

Maheu had little difficulty reaching a quick agreement to acquire the Sands. Conveniently, the negotiators on the other side of the bargaining table, representing the owners, were his friend Edward Morgan and Parry Thomas, who now wore different hats at different times—one when he acted as Hughes’s banker and personal agent, and another when he represented those doing business with Hughes. After the talks were completed, Maheu invited Dick Gray, the Houston lawyer, and Calvin Collier, the chief financial officer of the Hughes Tool Company, to his home on the edge of the Desert Inn golf course, where he told them he had negotiated the Sands acquisition.⁷ It was Maheu’s way of letting the old-timers in the Hughes empire know that someone else was running things, at least in Las Vegas. Gray in particular was annoyed by Maheu’s brashness, but he said nothing. He just “assumed” that that was the way Hughes wanted it.⁸

Maheu, Morgan, and Thomas had agreed on a $14.6-million purchase price for the 777-room Sands and the 183 acres of prime real estate on which it was situated. Oddly, Hughes decided that rather than use any of the proceeds from his TWA stock sale to pay for the property, he would borrow. He directed Raymond Holliday, the chief executive officer of the Hughes Tool Company, to make the financial arrangements. Holliday, in turn, called E. O. Buck, an officer at the Texas Bank of Commerce. “Raymond asked me to arrange a $15 million unsecured note for Howard Hughes,” Buck said, “and I asked him if he wanted Houston funds, Houston banks, or could I have an election of partners, because my loan limit at the bank was six and a half million dollars, and Hughes already owed me three, so obviously I was going to have to have a partner, and Raymond said that he would prefer that we kept the loan local.”⁹ On July 25, 1967, the $15 million was deposited in Hughes’s account in the Texas Commerce Bank and transferred to his bank account in Las Vegas.

At settlement a week later, when Hughes took possession of the Sands, Parry Thomas and Edward Morgan received, respectively, $275,000 and $225,000 for representing the sellers of the hotel. As he had done after the Desert Inn sale, Morgan shared his fee with, among others, the ubiquitous John Rosselli, who received $45,000. In the eight months since Hughes’s arrival in Las Vegas, Morgan had gotten $375,000 in fees for representing the owners of two hotels and casinos sold to Hughes, and he had passed along $95,000 to Rosselli. In addition to his $275,000 fee for representing the Sands’s former owners, Thomas had received additional fees and commissions for representing Hughes in other transactions. But Morgan, Rosselli, and Thomas were not the only ones benefltting from Hughes’s arrival in Las Vegas.

Herman M. “Hank” Greenspun, editor and publisher of the Las Vegas Sun. United Press International

The financial future of Hank Greenspun, the publisher of the Las Vegas Sun, for example, had brightened considerably since Hughes moved into the Desert Inn. Through the efforts of Maheu, the Las Vegas Sun had received an unusual $500,000 prepaid advertising contract from the Hughes Tool Company. The agreement contained two unique features. First, the tool company paid to Greenspun the full $500,000 in advance. Then, instead of deducting the cost of each advertisement from the advance as it was published, the tool company simply paid again. Greenspun thus was blessed with half a million dollars to use as he pleased. Sometime later, Greenspun insisted that “it was just supposed to be a contract for advertising, the money came as a surprise.”^10*

Then in September of 1967, Greenspun, whose newspaper had so warmly welcomed Hughes to Nevada, received a $4-million loan from the Hughes Tool Company. When the loan papers were being drawn up, Hughes’s conservative lawyer, Dick Gray, suggested an interest rate of 6 percent. Greenspun balked. He told Gray he “didn’t think it was a proper rate because I didn’t think Mr. Hughes wanted that much interest from me. In fact, I told him Mr. Hughes didn’t want any interest from me.”¹¹ Greenspun later said he based that statement on his understanding that Hughes was in a “peculiar tax position” and was “making too much interest on his money as it was.”¹² In any event, Greenspun said, his attorney and Gray finally decided “that a legal rate that the Internal Revenue would accept would be about I think 3 or 4 percent or something, so I said, ‘Okay, make it 3 percent.’”^13*

Greenspun banked a check for the $4 million on September 20,1967. The following day, his friend and lawyer, Edward Morgan, called to say that Bob Maheu “needs money pretty badly.

“Is it possible for you to make arrangements at a bank for him to get some money?” Morgan asked Greenspun.¹⁴

“Ed, I’m leaving town, but if Maheu needs any money, I’m flushed,” Greenspun said. “I don’t have the time to go to a bank, but if it’s an urgent thing, I’ll stop at his house on the way to the airport and ask him how dire the need is, and if it can wait ’til I come back. I can get any bank to loan him the money. But if it’s just a question of for a short time, I’ll be glad to let him have it myself.”¹⁵

A short time later, as he prepared to leave for a speaking engagement in San Francisco, Greenspun dropped by Maheu’s house.

“I understand you need money,” Greenspun said. “I don’t have any time to go to the banks, if you can wait ’til I come back from out of town, why, I’ll be very happy to explore with banks or maybe even help get you a loan.”¹⁶

Indeed, Maheu could not wait. Despite a $520,000-a-year retainer from Hughes, a generous expense account, and other miscellaneous perquisites, Maheu was in financial difficulty, mainly with the Internal Revenue Service, which contended that he had failed to report all his income. “It is kind of urgent,” he told Greenspun.¹⁷

“Well, I’ll let you have the money. When do I get it back?” Greenspun asked.¹⁸

“Well, at the end of the year,” Maheu said. “Will that be all right?”¹⁹

“How much do you need?” Greenspun asked.

“$150,000,” Maheu said.²⁰

“If that’s all that’s involved,” Greenspun said, I’ll be glad to let you have it.”²¹ Greenspun wrote out a check for $150,000 on the account that he and his wife Barbara maintained at the Bank of Las Vegas, and handed it to Maheu.

As for interest on the loan, Greenspun never considered it. “I thought it was just a question of a couple of months,” he said.^* “I didn’t even discuss any interest or anything else with him.”²²

It was not at all unusual that Morgan had interceded with Greenspun on behalf of Maheu. Morgan had known both for years. Morgan and Maheu had met during their days in the FBI in the 1940s. After leaving the bureau, they saw each other occasionally over the years, and about 1959 or 1960 Maheu asked Morgan to do some legal work for him—” prepare a will and a partnership agreement.”²³ Morgan had met Greenspun in 1954, shortly after Greenspun was indicted by a federal grand jury for using the United States mail for “inciting the murder of United States Senator Joseph McCarthy.”²⁴ The Justice Department had used an obscure federal statute to bring the indictment against Greenspun, whose newspaper routinely denounced the Wisconsin senator for his anti-Communist tactics. Copies of the Las Vegas Sun carrying Greenspun’s outspoken comments, mailed to subscribers, were used as the basis for the charge. Morgan represented Greenspun and subsequently won an acquittal. “That was the beginning of my representation,” Morgan said, “and, I should say, very close friendship, because I regared myself as a very close friend of Mr. Greenspun.”²⁵ Morgan, who continued to represent Greenspun in other matters, did not submit a bill. As Morgan explained it, “To be very honest and frank about it, Mr. Greenspun’s financial problems were quite acute for a long, long while and I didn’t even charge him for defending him on the criminal case.”²⁶

So it was, then, that even before Hughes arrived in Las Vegas the Morgan-Maheu-Greenspun connection was invoked. While Hughes was on the train from Boston to Las Vegas, Morgan called Maheu and told him that Greenspun was about to publish a story disclosing that Hughes was en route to the gaming capital. Maheu said he begged Morgan “to put pressure on Greenspun to kill the story, with the hope that maximum security could be maintained.” Morgan talked to Greenspun and, according to Maheu, “he did kill the story.”²⁷ Once Hughes established residence at the Desert Inn, Maheu called Morgan innumerable times to “solicit his help with Mr. Greenspun so as to secure from him favorable stories pertaining to Mr. Hughes and the Hughes interests.”²⁸

In addition to the advertising agreement and the loan, Greenspun was negotiating with Maheu for the sale of his television station, KLAS-TV, to Hughes. He had agreed to sell the station, a CBS affiliate, for much the same reason that Dalitz parted with the Desert Inn—exasperation. On moving to Las Vegas, Hughes gave up his practice of renting and screening motion pictures. Instead, he watched the late-night movies on television. But Hughes liked to look at films around the clock, and it annoyed him that KLAS ended its telecasting day while he was still in a watching mood.

“The man wanted the station open all night long, and he wanted certain pictures to be shown,” Greenspun said. “Every night it was a call at my home or a call some place else, ‘Can’t you keep it open an extra hour?’ and things like that. If Mr. Maheu wasn’t calling me to put a certain picture on, then Mr. Gray was asking me to do it. And then they had asked me to put somebody to work who would be helpful in ascertaining what kind of pictures Mr. Hughes liked.” Finally, Greenspun asked one of Hughes’s lieutenants, “Why don’t you buy the station, and run it any damn way you please?”²⁹

When Hughes decided to do just that, he asked Maheu to recommend a Washington attorney who could persuade the Federal Communications Commission to grant him a license without the customary personal appearance and submission of detailed financial statements.

Maheu, naturally, had a candidate at hand—Edward P. Morgan. Not only did Morgan’s law firm, Welch & Morgan, specialize in communications law and practice before the FCC—Vincent B. Welch was a former FCC attorney—it was already representing Maheu and Bill Gay in their bid to obtain a license to operate a Fullerton, California, radio station. Maheu and Gay each owned 15 percent of Orange Radio Inc., a California corporation that was seeking the license. Orange Radio Inc. was typical of the many sideline business ventures engaged in by Hughes executives, most often without Hughes’s knowledge.

Morgan proved to be a fine choice for the licensing chore. Transfer of the KLAS-TV license was arranged with no inconvenience whatsoever to Hughes. Only one concession was required—that the application papers identify Raymond Holliday, rather than Hughes, as the person with the “authority and responsibility” for managing the station.³⁰ Everyone knew that Hughes, not Holliday, would exercise final control, but the FCC went along with the charade. Its records gave no indicationt that Howard Hughes had the slightest influence in running KLAS-TV. Therefore, the agency rationalized, no special favors had been granted to the reclusive industrialist by the failure to require his appearance in Washington.

The television station cost Hughes $3.6 million. With its acquisition in 1967, a substantial cross-section of Las Vegas business and real estate now resided in his investment portfolio. Besides the Desert Inn, the Sands, the Krupp ranch, the Riddle estate, and KLAS-TV, Hughes had acquired the Castaways Hotel and Casino, a 229-room hotel and thirty-one acres across the Strip from the Sands; the Frontier Hotel and Casino, 571-rooms, opposite the Desert Inn; Alamo Airways, a small charter service and its fixed base operations at McCarran Airport; North Las Vegas Airport and a motel and restaurant on the 225-acre airport grounds; some hundred residential lots in a subdivision adjoining the Desert Inn Country Club; and assorted tracts of land in and around the Strip. Within one year, Hughes had spent some $65 million in Las Vegas, an average of more than than $178,000 a day. His hotels, the sixth-, eighth-, twelfth-, and fourteenth-largest on the Strip, with a total of about two thousand rooms, represented “20 percent of all resort hotel accommodations on the Strip.”³¹ No longer was Hughes just another Nevada curiosity, like bare breasts and all-night wedding chapels. He was one of the state’s largest private landowners and employers.

THE PUBLIC-RELATIONS BLITZ

Such an unprecedented buying spree prompted many to wonder whether Hughes had embarked on some grand plan. Johnny Carson greeted audiences at Del Webb’s Sahara by saying, “Welcome to Las Vegas, Howard Hughes’ monopoly set. You ever get the feeling he’s going to buy the whole damned place and shut it down?”³² But Carson’s remark was only half a jest. From the seclusion of his Desert Inn penthouse, Hughes’s finely tuned political ear could detect faint rumblings of discontent within the state’s power structure. And if there was unease in Carson City, what about Washington?

For instance, what possible violation of federal antitrust guidelines might ensue from a continuation of the hotel- and casino-buying binge? Hughes asked Dick Gray to consult with Robert F. Campbell, a senior partner in Andrews, Kurth, Campbell & Jones in Houston about the antitrust implications of additional acquisitions.

He was not pleased with the answer he received. Gray, who seldom got back to Houston these days—for more than eight months he had worked out of a room in the Desert Inn—told Hughes to forget about buying any more hotels or casinos along the Strip. “Mr. Campbell is quite concerned,” Gray said, “over the extent of acquisitions in the Strip area, which is a relatively small ‘market area.’ Therefore, he feels that any additional acquisitions of property of the same nature would be exceedingly dangerous.”³³ The lawyers even rejected a Hughes plan to buy a pair of motels and a restaurant near the Sands and the Desert Inn. “Mr. Campbell is of the opinion that the acquisition of any additional motel, hotel, or restaurant property would ‘add fuel to the fire’ of what we have already acquired in your behalf.”³⁴

Closing the otherwise gloomy news on an optomistic note, Gray reported Campbell’s opinion that Hughes could buy a hotel and casino far removed from Las Vegas, perhaps in the Reno or Lake Tahoe area, without encountering antitrust difficulties. Even so, neither lawyer was enthusiastic about Hughes’s investing more money in Nevada’s most important industry. If Hughes wanted to increase his cash flow, as he claimed, then he should consider, they said, investing in businesses “outside the hotel-casino area.”³⁵ Hughes ignored the advice. At that particular moment he was interested only in casinos. He did, however, agree to look to northern Nevada.

Hughes had already cast a covetous eye on the Reno and Lake Tahoe properties of William Fisk Harrah. Even though northern Nevada ranked a distant second to Las Vegas in volume of tourists and gamblers attracted each year, Harrah methodically piled up the largest profit margins of any casino operator in the state. At his Lake Tahoe casino, the take from the gaming tables ran upward of $20 million a year, the only casino in the state to reach that heady level. Unlike some Las Vegas casino operators, who had clearly traceable ties to organized crime or who came from questionable backgrounds, Harrah was regarded by state and federal law-enforcement officials alike as a model citizen. Some federal authorities pointed to Harrah’s profits as proof that money was being skimmed from Las Vegas casinos controlled by the crime syndicate. Wallace F. Turner, a New York Times reporter who had conducted an extensive investigation of the Nevada gambling industry in the early 1960s, found Harrah to be the most widely respected gaming figure in the state. “The people with foresight in Nevada, those who sit and think about the future of the state’s gambling business, look on Bill Harrah as a shining example,” Turner wrote a year before Hughes’s arrival. “If more gambling houses were in the hands of men like him, one is told over and over, then the future of Nevada gambling would be completely safe. In short, Bill Harrah is what they wish they had everywhere in Nevada.”³⁶

No wonder Hughes wanted to add the Harrah properties to his empire. He dispatched Maheu to northern Nevada to open talks. Whether Harrah actually considered selling his hotels and casinos or whether he was simply stringing Hughes along, as Hughes had done in the past with suitors for his tool company, is unclear. What is perfectly clear, however, is that Hughes believed every man has his price, Harrah included. It was a belief that Maheu shared and he began to spend more time in Reno, seeking to make the belief come true.

With Maheu negotiating with Harrah, Hughes rejected the legal advice of Gray and Campbell and secretly pushed ahead with schemes to buy two more hotels and three more casinos on the Las Vegas Strip. Two properties he eyed were established money-losers—the Bonanza, then in receivership, and the Silver Slipper, a casino that drew small-stakes gamblers and featured a burlesque show and a sixty-nine-cent breakfast served around the clock. But the third, the Stardust Hotel and Casino, was one of the most profitable in Las Vegas, and the largest—1,500 rooms. The principal owner of the Stardust was a now-familiar figure, Maheu’s gaming adviser Moe Dalitz.

While Hughes quietly sought nearly to double his Las Vegas holdings, a small group of state legislators, alarmed over the growing concentration of ownership in the gaming industry, called for an investigation of state licensing practices. The legislators—of course unaware of Hughes’s ambitious expansion plans—were concerned not only about his ownership of four hotels and casinos, but also about the mysterious circumstances under which the gaming license was issued for the Frontier Casino.

Back on November 27, Las Vegas members of the State Gaming Control Board, accompanied by Hughes’s lawyer Dick Gray, had gathered in the agency’s Las Vegas office to work out the Frontier takeover. Of special note was the time of the meeting—midnight. To gain the necessary votes to approve the license, a telephone conference call was placed to board members in northern Nevada, rousing them from their beds. By 1:30 A.M., the board had approved Hughes’s fourth casino, although two board members were not notified of the meeting.

George Dickerson, the chairman of the Nevada Gaming Commission, insisted that the board had acted under standard “emergency participation” regulations, but the extraordinary midnight meeting aroused the curiosity of legislators suspicious of Hughes’s motives and of his unusual relationship with state gaming officials. The legislators also were interested in the gaming licenses held by Del Webb because rumors were rife that Hughes was buying up blocks of stock in the publicly owned Webb corporation. Early in January, Melvin D. Close, Jr., a Las Vegas Democrat who was the State Assembly speaker, announced that he and eighteen other lawmakers were prepared to conduct an investigation of the holding of multiple casino licenses at a special session of the legislature in February.

Undaunted by his lawyers’ warnings of potential antitrust problems on the federal level and the proposed investigation by state legislators, Hughes plunged ahead with plans to buy the Silver Slipper, the Stardust, the Bonanza, the Silver Nugget, and Harrah’s hotels and casinos. To ease the expected opposition to his next round of acquisitions, Hughes did what he had always done—he initiated a public-relations campaign.

Governor Laxalt was the key. Hughes placed a telephone call to the governor, chatting at length about his future plans for the state. The conversation immediately became a major news event because, for the first time since his arrival in Las Vegas, Hughes had talked with someone outside his inner circle of aides and executives. Laxalt reacted predictably. “It was one of the most interesting conversations of my life,” the governor declared, marveling at Hughes’s knowledge of Nevada.³⁷ “It’s like he lived here 20 years,” the governor said. And his praise of the invisible casino owner was effusive. Hughes’s presence, the governor declared, “has added a degree of credibility to the state that it would have taken years of advertising to secure. Let’s face it, Nevada has an image problem—the typical feeling is that sin is rampant here. Anything this man does, from the gaming industry all the way down the line, will be good for Nevada.”^38*

After reaping the goodwill that flowed from the accolades bestowed upon him by the governor, Hughes staged a second public-relations coup of equal brilliance. Nevadans had long talked about diversifying the state’s economy beyond gambling, but had made little headway. Now, working with Laxalt, Hughes arranged to provide land he owned near McCarran Airport as the site for a plant of a New York-based electronics company—Solitron Devices Inc. On January 19, when Laxalt unveiled the development at a press conference, appropriately enough at Hughes’s Desert Inn, the governor gave Hughes most of the credit for Solitron’s decision to locate in Nevada. The company’s president, Benjamin Friedman, agreed, adding that Solitron enjoyed “excellent relations” with the Hughes organization. “We believe these people plan the future,” he said. More important, promised Friedman, “a lot of companies will follow us into this area.”³⁹

For twenty years, Nevada had tried unsuccessfully to encourage an industrial development boom, and now, overnight, Howard Hughes seemed to have accomplished the impossible. “We have managed to acquire a super salesman as a resident, and the results will undoubtedly be exciting and profitable,” said the Las Vegas Review-Journal.⁴⁰ Pointing out that Hughes had achieved what three state administrations had failed to do, the newspaper observed that “most southern Nevadans have long been convinced that this area offers a host of advantages to industry. They have not been very successful in selling the idea to easterners, however. It takes someone of the stature and reputation of Howard Hughes in the world of industry to make the point.” If he had done nothing else, the Review-Journal continued, “Hughes has made a major contribution to the state by forcing other industrialists to take an objective look at Nevada’s potential. This, along with the nationwide publicity Hughes has generated since his arrival, promises to give our economy a giant boost.”⁴¹

Hardly had Nevadans counted their new industrial blessings than Hughes put forward plans for a truly spectacular project—the world’s largest hotel, a $150-million, 4,000-room addition to the Sands. Hughes envisioned “a complete city within itself,” a resort complex so magnificently planned “that any guest will simply have to make a supreme effort if he wants to be bored, whether he is a sophisticated VIP or jet set type, or one of the children of a family spending their vacation with us.”⁴² One floor of the ultramodern hotel would house stores and shops open twenty-four hours a day. Another would be devoted entirely to family recreation—an ice-skating rink; rooms for chess, bridge, skeeball, and table tennis; a theater showing only first-run motion pictures; and “the largest bowling alley and billiard and pool facility in any hotel in the world.”⁴³ The theater would utilize “projection equipment and sound equipment so modern it has not even been shown yet to the public in literature or trade publications, and the same is true of the bowling and billiard equipment.”⁴⁴ Another innovation would be an indoor computerized golf course “so carefully designed that the shots will feel just like outdoors, and the spin of the ball in a slice or hook is even measured electronically and indicated to the player.”⁴⁵

The picture of this $150-million, 4,000-room pleasure palace painted by Hughes was breathtaking, but not greatly more so than a project he had announced four months earlier—construction of an airport in the Nevada desert that would be the West Coast terminus for supersonic transports. The press release was rhapsodic about an airport serving “the entirety of southern Nevada, California and Arizona. “From this terminus,” Hughes said, “passengers may be flown by regular jet aircraft to any normally located present-day airport. Also, from this same SST terminus, they may be flown by new and thoroughly proven helicopters and other VTOL [vertical takeoff and landing] designs, to many landing terminals which will be closer to the passenger’s ultimate destination—on top of buildings downtown, on top of hotels and in residential areas.”⁴⁶ High-speed trains, Hughes suggested, could whisk passengers from the airport to downtown Las Vegas on a “micrometer-laid track down the present freeway right-of-way.”⁴⁷

Keeping up a steady beat of the publicity drums, Hughes, in another special message to Governor Laxalt, revived his offer of financial help to the proposed University of Nevada Medical School. Nearly a year had gone by since Hughes first volunteered to endow it, but there had been no binding commitment. Several legislators were contending that the state’s failure to pin Hughes down to a formal contract was reason to scrap the medical school. Now, confronted by a small group of potentially hostile lawmakers intent on looking into his ownership of casinos, Hughes dusted off his pledge and renewed the offer in a February 9, 1968, letter to Laxalt.

In what he described as an attempt to clarify his earlier offer, Hughes told Laxalt that “when the medical school has been constructed and opened for academic session, and to insure its successful operation, I hereby commit to furnish… from $200,000 to $300,000 per year for 20 years to make up any deficit in annual operating funds.” Hughes added that “I sincerely hope my commitment will enable you to obtain commitments from others who are interested in the welfare of the state to the end that the medical school may soon be a reality.”⁴⁸

In truth, the letter was no more than a restatement of the original pledge, but it attracted the same favorable publicity when the governor delivered copies to the news media, pointing to Hughes’s signature on the letter as an affirmation of the industrialist’s sincerity.

Two more weeks went by and then Governor Laxalt disclosed that Hughes was establishing a unique tax-exempt, nonprofit foundation to assist a newly proposed state agency in developing a comprehensive masterplan for Nevada’s orderly development. The foundation was to be known as Nevada Essential Development Surveys (NEEDS). The state agency was to be called the Comprehensive Environmental Development Agency (CEDA). Together, they would work toward improving the quality of life for Nevada residents. NEEDS and CEDA, a state official explained, would conduct in-depth studies on a cross section of community problems and needs in such areas as mental health, crime, higher education, libraries, preventive medicine, poverty, welfare, industrial development, and care and treatment of the elderly. “Studies would be conducted in areas where nothing is being done or where the present work is insufficient,” Laxalt said.⁴⁹

It was reported that Hughes would establish the foundation with a $5-million grant, but an aide to the governor allowed that the figure was exaggerated and that besides Hughes’s undisclosed gift, it was hoped that “contributions would come from private industry, foundations and maybe even the federal government.”⁵⁰ Hughes had assigned one of his executives to the project, John H. Meier, a computer specialist. Everybody was enthusiastic about the foundation.

In the first eight weeks of 1968, Nevada citizens were showered with promise of an unprecedented number of good works by Howard Hughes. He was credited with restoring the luster to Nevada’s tarnished image around the rest of the country, and bringing new industry to the state. He would change Nevada’s physical, economic, social, and educational landscape by building the world’s largest hotel and one of the world’s grandest airports, underwriting a medical school, and creating a foundation to provide for the state’s orderly growth and make life more pleasant for everyone. With each fortnight bringing a fresh report of some new Hughes contribution to the public welfare, it was none too surprising that the state legislature lost interest in conducting a serious investigation of concentrated ownership in the gaming industry. Once again, public relations triumphed.^*

MASTERPLAN

Unfortunately, Hughes’s bid to buy more hotels and casinos was not faring nearly as well. The negotiations with Harrah were proceeding aimlessly. No agreement was in sight. Hughes was irritated not only by the failure to conclude the deal but also by Maheu’s increasingly negative attitude. He had never been especially eager about expanding to Reno or Lake Tahoe. Even so, for some weeks, Maheu had dutifully bargained with Harrah. As the talks dragged on, however, Maheu began to sense that Harrah would probably not sell at any price, and that, for the first time since he began serving as Hughes’s front man in Nevada, he would fall short of Hughes’s wishes. He began to downplay the importance of the acquisitions in his reports to Hughes, dwelling at length on all the reasons that he, and others, believed it would be a mistake to buy the Harrah hotels and casinos.

Despite years in isolation, Hughes could read human behavioral patterns as well as he had once read an instrument panel. Hughes and Maheu had never met, but Hughes knew Maheu better than Maheu knew Hughes. He knew immediately that Maheu’s deprecating remarks simply meant that Harrah most likely would not sell. He was angered by Maheu’s pretense and he let him know it.

“Regarding your rationalization of why Harrah’s is not for us,” he wrote Maheu, “please don’t give me any further report on this subject unless Harrah indicates he wants to sell. You know, Bob, sometimes I think you have an idea that I am about 12 years on this world instead of 62.” Posing a series of rhetorical questions etched in sarcasm, Hughes asked Maheu, “Just answer one simple question: If this project is so far beneath my national standing, etc., just why did the governor tell you, on your return from Washington, ‘Okay, Bob, I’ll do this one for you. It will require a little time. I want to see some of the influential men in northern Nevada, and pave the way, etc.’ Why would he do something harmful to me, as he now claims this is, if he was our friend? And why would you permit me to invest nine months of my time thinking about this deal, writing messages about it, etc., if it is so God damned bad?”⁵¹

Hughes reminded Maheu that “the reason I have been so insistent about Harrah’s facilities has been the fact that they are now, at present, laying off the profits we need. The Stardust-Slipper combination can only be fully productive with a lot of work.”⁵² Even though he was quite correct in his judgment that the Reno and Lake Tahoe properties were sounder financially than the Stardust and the Silver Slipper, Hughes by mid-February had resigned himself to life without them and yielded to Maheu’s pressure to concentrate on the Las Vegas market.

To reconcile their personal differences, for the relationship between the two men had grown more tense with each passing week, Hughes dashed off a memorandum to Maheu lamenting their estrangement. It is important, he wrote, “that you and I find a way to lay aside any differences and attempt a return to the atmosphere of complete harmony and unity and, most important, enthusiasm that prevailed between us in the beginning of our Nevada activity…. I am only content to give up all my plans in the north and focus right here next door if you will revert to your old attitude of enthusiasm and accord that we had in the early stages of this operation. Please do this, Bob.”⁵³

Sounding at times like the rueful partner in an unhappy marriage—a marriage conducted by telephone and letter—Hughes wrote, “I used to be able to communicate with you and not be frightened for fear each word I spoke or wrote might be the one that would cause you to get angry with me and wind up with my stomach tied up in knots. Please, Bob, let us go back to the environment of friendship that used to exist between us. That is all I ask. And if our differences are due to something I have said or failed to say in the past, or any other mistake I have made, I apologize most sincerely and I hope you will accept this apology and let us put it all behind us.”⁵⁴

As usual, Hughes needed Maheu for a reason. He had the rough outline of a plan of action, which he sketched for Maheu, accompanied by the obligatory admonition on the need for secrecy. Only three weeks had gone by since he announced his intention to turn the Sands into the world’s largest hotel, but Hughes confided that he would put off that venture in favor of a more expedient project involving the Stardust and the Silver Slipper. From his Desert Inn penthouse, Hughes could look across Las Vegas Boulevard to his Frontier Hotel. A few yards to the north of the Frontier was the Silver Slipper and, just beyond it, the Stardust. What Hughes had in mind was the quick construction of an inexpensive hotel that would serve as a source of additional patrons for the Silver Slipper and the Stardust casinos.

To scrap the Sands expansion, which had produced so much favorable publicity, was, however, fraught with danger. “I am willing to postpone the building of the new Sands hotel,” he said to Maheu, “but only if you will absolutely give me your most solemn word of honor that this postponement will not leak out to anybody. And, Bob, I mean any body whomsoever! Not to Hooper, Thomas, Moe, Laxalt, Bill Gay, any of my men, or anybody at all.” Delaying the Sands construction, Hughes explained, “will mean that the funds (not the entire amount by any means), I should say that portion of the funds which was intended to be expended upon the Sands this year, will be available to build a single hotel building upon the Stardust property. Just a simple building out of simple materials, but one that can go up real fast and contain a lot of rooms. Then if the Stardust and Slipper casinos are enlarged to accommodate the people presumably sleeping in those new rooms, there should result a complex capable of those real large profits that Mr. Harrah achieves in the north.”⁵⁵

Maheu needed no further encouragement. His once cheerless reports took on a new optimism. The two men still had their differences, but Maheu’s querulous reservations and sulking questions about the things Hughes wanted done now gave way to glowing accounts of progress on all fronts. The new mood ran throughout a dozen projects that Maheu was managing, from a continuing Hughes battle to force the Atomic Energy Commission to discontinue its nuclear testing program in Nevada to a still-secret plan to begin mining gold and silver. Even the desultory negotiations with Harrah turned upbeat. “As undemonstrative as this man is I am convinced that he feels that we have a deal subject to mutual agreement on the numbers,” Maheu reported following a meeting with Harrah.⁵⁶

There were, to be sure, the usual stumbling blocks. Dalitz once again was bargaining stubbornly about the Stardust price. A group from Texas made an offer to the Silver Slipper owners in an effort to buy the casino out from under Hughes. Another group of investors was trying to reopen the Bonanza. Governor Laxalt was advising Maheu privately that approval of Hughes’s new casino acquisitions by state gaming authorities would require some concession, perhaps a public announcement that these would be his last purchases. The governor even suggested the phrasing of a statement, but it received a chilly reception from Hughes.

“I still want to leave the door open regarding the Nugget in North Las Vegas,” Hughes told Maheu. “Also, I am concerned about the Bonanza. The people trying to reopen this affair seem just unwilling to give up. If we make the kind of a statement the governor wants we will be forbidden from going near either.”⁵⁷

Hughes drafted a step-by-step masterplan for Maheu. Everything was to be accomplished in its proper order. First, he wanted to buy the Bonanza, close the casino, and operate the place solely as a hotel, avoiding the need for a gaming license. The Bonanza transaction would be followed immediately by the purchase of the Stardust and the Silver Slipper. In the interim, an option to buy the Silver Nugget would be continued. Until public opinion could be effectively manipulated, the option was not to be exercised. Simultaneously, Hughes suggested issuing a public statement declaring that the Stardust and the Silver Slipper would be his last acquisitions in Las Vegas, thereby complying with the governor’s wishes in word if not in fact.

“If you will go to work on the Bonanza buyout,” Hughes said to Maheu, “then I would favor this kind of approach to the governor: Provided the commission will take a long look at any new gaming application for the strip, and not rush into any precipitously, I will be happy to agree that the request for licensing of the Slipper-Stardust will be our last for a long time in the strip area. The above avoids saying anything about Bonanza as I expect you to move quickly and try to close that deal before the meeting.” As for the Silver Nugget, Hughes said, “we just say nothing at all plus or minus—hoping that we can extend that option until we have the groundbreaking for the airport. Once this takes place (I mean the big airport), I feel the opinion of the entire community concerning us will be different. So, I am relying upon you to obtain a longer option on the Nugget in North Las Vegas and say nothing whatsoever concerning this at this time.”⁵⁸ To conceal his interest in the bankrupt Bonanza, Hughes wanted Maheu “to handle this affair from behind a third party, so that we are at no time in a position publicly of having any interest in the place.”⁵⁹

WARNING FROM WASHINGTON

Although Hughes was managing nicely to keep his interest in the Bonanza a secret, there had been a security breach in the Stardust talks. On March 10, the Nevada State Journal in Reno proclaimed in a page-one headline: “Hughes Moves to Add Stardust to Holdings.” The publicity annoyed Hughes. He had wanted no announcement until a day or two before the state gaming authorities met to consider his applications for the Stardust and the Silver Slipper. The opposition would now have several weeks to prepare its case. Once again it was public relations to the rescue, via the support of one of the state’s heretofore leading critics of concentrated hotel and casino ownership.

On March 15, Hank Greenspun, the Las Vegas Sun editor and publisher—once described as “a sort of Robin Hood of the gambling community, attacking the wealthy and corrupt and taking up for the underdogs who were sometimes equally corrupt”—traveled to Carson City to lobby before the State Gaming Policy Board on behalf of Hughes’s takeover of the Stardust and the Silver Slipper.⁶⁰ For Greenspun—who in the past year had collected some $8 million from Hughes in assorted business transactions—his appearance, to champion Hughes’s bid for his fifth and sixth casino licenses represented a complete about-face. Eight years earlier, Greenspun had vigorously and successfully argued against the award of a third gambling license to Moe Dalitz and his associates, who were attempting to buy the Riviera Hotel and Casino.

But now, drawing on a theme expressed by Governor Laxalt, Greenspun stressed the positive effect that Hughes’s presence in Nevada was having on the state’s image. In a speech accented by Greenspun hyperbole, he recounted his role as a goodwill ambassador and volunteer fireman, criss-crossing the country to quench rumor and accusation about Nevada, and especially Las Vegas. “The past three years in particular have brought me into practically every principal city of this nation as well as Canada, and I have been subjected to the most searching and penetrating questions, most of them dealing with rumors, suspicions and outright distortions of our area by the outside press,” Greenspun asserted. “It was my purpose to defend the state of Nevada and the city of Las Vegas in particular for many reasons. Foremost among them being that my children were born here and I felt it a duty—an over-riding responsibility—to insure they would never have cause for misgivings or even hesitation when the need arose for them to disclose their place of birth. It was my desire to make them proud of their home, and in making it possible for my children, all children born in Nevada would be equally benefitted.”⁶¹

Howard Hughes had already performed miracles for Las Vegas’s image, Greenspun told gaming officials, and “it is within our grasp now to look the world straight in their national magazines and law enforcement and say, ‘We have achieved a clean, decent society.’” As for Hughes himself, Greenspun said,

he is a modest, self-effacing person whose contributions to the betterment of mankind are unmatched by any group or man in contemporary history. He has never throughout his career displayed any tendencies of control or monopoly. To the contrary, he is a lone operator and seeks not to impose his will on others nor to permit others to impose their will upon him. His fertile mind is too occupied with exploration and discovery far beyond the scope of ordinary men to concern himself with smaller problems which appear here present.⁶²

Meanwhile, as had happened in the Desert Inn negotiations, the Stardust talks had reached a standoff. This time Hughes could not understand Dalitz’s intransigence. The United States and other Western nations had been plunged into the worst financial crisis in forty years; economic forecasts were unanimously gloomy. Hughes was distressed that Dalitz had failed to take note and lower his Stardust asking price accordingly. Dalitz was asking $34 million and Hughes was offering $5 million less.

“We have received no adjustment for a worldwide financial crisis, which has thrown the financial community of the nation into a panic,” Hughes wrote to Maheu. “It has canceled innumerable plans for the public distribution of securities, common stocks, convertible debentures, etc., one issue after another, which had been announced, have now been canceled. Merrill Lynch tells me there just is no money around. It is like 1929. Moe is welcome to check this through his contacts on Wall Street. Or I will be glad to have Merrill Lynch call him.”⁶³

Still, Hughes felt confident that he would settle his $5-million difference with Dalitz. He had already reached an agreement with the Silver Slipper owners^* to lease the casino, with an option to buy for $5,360,000. The casino would change hands on midnight on April 30. He hoped to assume control of the Stardust about the same time, and so he directed Maheu to begin filing all the required applications for county and state gaming licenses, for both properties.

With the strong support of Greenspun already on the public record, and with Hughes’s other powerful public-relations gimmickry continuing to pay off, Hughes and Maheu were reasonably certain that the state gaming authorities would approve the two license applications. It was a feeling emphatically not shared by Dick Gray, who believed that Laxalt would not be able to deliver the necessary votes on the Nevada Gaming Commission for both the Silver Slipper and the Stardust. Gray’s pessimism finally moved Hughes to entertain an incredible plan. He asked Maheu what might happen if he went to see the governor,

and if I agreed and did join with Laxalt and you in a statement to the press that we are bringing Hughes Tool Company to Nevada (with a long recitation of the company’s many accomplishments), and if we supplement this with a board meeting by Hughes Tool Company (certified copy to Laxalt) passing a resolution instructing and authorizing Holliday, as secretary, to do the necessary to accomplish the change in the corporate setup from Delaware to Nevada.⁶⁴

Hughes was ready to do this within the week.

It was, to say the least, one of Hughes’s more bizarre plans. The Hughes Tool Company, registered as a Delaware corporation for three decades, and headquartered in Texas for more than half a century, made its many millions by servicing oil companies. Why would it move from Houston—the heartland of the American oil industry—to Las Vegas, where the oil industry was nonexistent? Why should anyone expect its personnel to be willing to uproot their families to move from conservative Houston to gaudy Las Vegas? In any event, the relocation of Hughes Tool was not actively pursued, although the proposal was later dusted off as a bargaining ploy. Maheu, who had in any case been supremely confident that the licenses would be granted, and without any commitment to move Hughes Tool, told Hughes, after a conversation with Laxalt, that the governor said “he has no reason to believe it will not be approved.”⁶⁵

Hughes, however, saw conspiracies all about him—an outgrowth no doubt of his own conspiratorial nature. These optimistic reports from Maheu and others might be made to have a dark side, and Hughes found it. Now it became a question not of whether the commission would grant the licenses but of how many licenses would be given to competitors. “I am informed that, since the word has gotten out that our applications will be approved,” he wrote to Maheu,

everybody and his little dog is filing for a gaming license because they all reason that if the commission passes ours they cannot very well refuse somebody else. I am sure my reports are exaggerated but there must be some truth. So what I want is a report on those applications which are nearest to being considered favorably, in order that we can see just how far this movement has gone, and in order that we may take whatever preventive measures may be indicated by the report. Please let me know when you can give me something on this subject. Also, please let me have meanwhile whatever inputs or rumors you may have heard along this line.⁶⁶

For his part, Maheu worked diligently, tending to the licensing formalities. He exuded his usual air of self-confidence, advising Hughes that even the United States Department of Justice had sanctioned the action. This last bit of news was especially heartening to Hughes in light of the dire warnings some months earlier from his attorneys Dick Gray and Robert Campbell, who had vetoed further acquisitions on the Las Vegas Strip because of potential antitrust problems. “Thank you most, most deeply for your message,” a grateful Hughes wrote to Maheu. “I am truly impressed with what you tell me about Justice. That makes me feel better for the first time in some while.” Hughes was so impressed that he said to Maheu, “I will continue to leave everything completely in your hands. If I did not have the most unlimited confidence in you, I would not say that.”⁶⁷

But Maheu had promised Hughes more than he could deliver. On April 24, 1968, six days before Hughes was to take control of the Silver Slipper, James J. Coyle, an assistant United States attorney in the San Francisco field office of the Justice Department’s Antitrust Division, visited Dick Gray in Las Vegas to talk about the pending acquisitions. For several hours, Coyle questioned Gray about Hughes’s business interests in Las Vegas in general and his hotel and casino properties in particular. Gray related that Hughes planned “to bring some of the manufacturing activities of Hughes Tool Company to Las Vegas” and that he also had “offered to construct a true jet age airport in Las Vegas and is already committed to underwrite a feasibility study on such an airport.”⁶⁸ If the study shows that such an airport would be feasible, Gray said, “Hughes will then build the airport and sell it to the city at cost.” As for the industrialist’s hotel and casino purchases, Gray pointed out to the Justice Department attorney that “the FBI, Internal Revenue and law enforcement agents generally are very glad to see Hughes come in and acquire gambling interests from less desirable owners.”⁶⁹

Gray’s dutiful recitation went on. The Frontier Hotel was losing money when Hughes bought it and had just now “come around to a break even point.” The Castaways was in even worse shape, Gray said, and he dismissed it as “a bad investment.” While he seemed to be advocating Hughes’s right to buy more hotels and casinos, Gray’s choice of words conveyed to Coyle the unmistakable feeling that he was not an eager supporter of that policy. “I got the impression,” Coyle said later, “that he would not be too unhappy if we took action to curtail future investments by Hughes in hotels and casinos and that he might recommend cancellation on the Stardust if we moved against it.”⁷⁰

Coyle, in turn, gave Gray the impression, without actually saying so, that the Justice Department would allow the Silver Slipper deal to go through if Hughes would cancel the Stardust purchase. The meeting between the two lawyers ended on a friendly note, with Gray promising to pull together for Coyle some reports and documents on Hughes’s holdings in Las Vegas.

Back in San Francisco two days later, Coyle prepared a twelve-page memorandum on the interview, recommending to the chief of the Justice Department’s San Francisco office that antitrust proceedings be instituted against Hughes to block his purchase of the Stardust:

If we are to follow the mandate of Congress and the recent victories we have won in the courts, I do not see any good reason for not proceeding in this matter…. It is contrary to our basic concept to permit one individual or one firm to control one-fifth of the economic activities of a city of 250,000 people. Already columnists such as Art Buchwald are commenting upon the Hughes acquisitions and implying, with some justification, that he is in the process of acquiring the entire state of Nevada.⁷¹

Rejecting the now-familiar contention that Hughes was ridding Las Vegas of an undesirable element, Coyle observed that “most monopolists have used such an argument but the law does not favor vigilante or ‘extra-legal’ enforcement. I do not believe,” he concluded, “we should abdicate enforcement of the antitrust laws on the theory that duly constituted law enforcement agencies are incapable of enforcing the law without assistance from Hughes.”⁷² Coyle’s memorandum and a draft lawsuit to be filed against Hughes were forwarded to Justice Department officials in Washington for review and approval.

Gray had meanwhile relayed to Hughes the substance of his interview with the Justice Department lawyer and recommended that he pull out of the Stardust negotiations. Hughes reacted defensively, mindful that it was Gray who had earlier warned him of the potential antitrust consequences of buying more Strip properties. Never willing to concede a mistake, Hughes asked Gray if it would not be “more prudent to go ahead and close both [the Silver Slipper and the Stardust] and then negotiate with the Justice Department, enlisting the help of the governor and the legislators, who, I feel want me here.” Hughes added that “if we cancel the Stardust now, it certainly puts us in a position of admitting that we have done something wrong.”⁷³

Gray acquiesced and on April 30 went before the Nevada Gaming Commission to testify on behalf of Hughes’s two license applications. He told the commission that Hughes wanted to take over the Silver Slipper at midnight that day and that “we have provided for a closing on June 30 of the Stardust, but this really has not yet been fully decided.”⁷⁴ Gray reported that Hughes’s investment in the Silver Slipper would amount to $5,360,000, and his investment in the Stardust would total $30.5 million. He assured the commission that Hughes had no desire to obtain a monopoly position in the gaming industry, but he stopped short of promising that the industrialist would make no further investments in Las Vegas. He acknowledged that Hughes also owned a valuable tract of land along the Strip once occupied by the El Rancho Vegas, which had been destroyed in a fire, but he insisted that the property had been bought for investment purposes and that there were no plans to erect another resort complex on the site. Commission members questioned Gray for nearly two hours on the consequences that concentrated ownership might have on everything from wages to the purchase of supplies. In the end, the commission voted 3 to 2 to grant both licenses. Later in the day, at a hastily called meeting of the Clark County Liquor and Gaming Board in Las Vegas, that board also approved Hughes’s takeover of the Silver Slipper and announced that it would approve the Stardust transfer in the near future. With the addition of the two hotels and casinos, Hughes would become Nevada’s biggest gambler, surpassing William Harrah in casino revenue. His casinos would account for 28 percent of all gaming revenue in Clark County; his hotels, with their thirty-five hundred rooms, would account for 35 percent of all rooms on the Strip, and 17.5 percent of all rooms in Las Vegas.

When Hughes asked Gray to push ahead with the Stardust licensing despite signals from the Justice Department that it would intervene, he explained that this approach would enable him to use the Dalitz hotel and casino as a bargaining tool with the federal government if the threatened antitrust action materialized. “If we come to a real impasse,” Hughes said, “we could offer to divert the Stardust in settlement of the claim. If we cancel the Stardust now, we have nothing to offer in settlement.”⁷⁵

Hughes’s legal theory made little sense to Gray, especially since the Justice Department had indicated that no lawsuit would be filed unless he went through with the Stardust purchase. But in Hughes’s logic it made a great deal of sense. He wanted the Stardust as a bargaining chip in a bigger game—one that he knew full well would vex his Houston lawyer. It involved a scheme to eliminate, or at least neutralize, his most feared competitor—the Fresno-born son of an Armenian fruit peddler who, like Hughes, was a recent arrival in Las Vegas.