Gregson Bautzer grew up on the waterfront and went to war in the air. The next phase of his life would drop him in the desert. After his discharge from the navy, he returned to his law practice—and to a surprise. Bentley Ryan was leaving to become an associate director of the Del Mar Beach Club in Santa Monica. Bautzer and Bernard Silbert removed Ryan’s name from the office door in the Equitable Building and got back to work. Bautzer had no residence to return to, so he moved in with Billy Wilkerson at his mansion on Sunset Boulevard. By this time, Wilkerson and Joe Schenck were more than mentors to Bautzer. They were his adopted family. They were also both troubled.
Joseph Schenck was recovering from a major scandal. In 1940, a federal grand jury found that he had paid a bribe of $100,000 to a man named Willie Bioff so that the racketeer would call off a nationwide strike of the International Alliance of Theatrical and Stage Employees (IATSE). Schenck was indicted on charges of conspiracy, perjury, and income tax evasion. In April of 1941, he was convicted on the tax charge and sentenced to three years in prison. He had testified against Bioff, so his sentence was suspended, but he still had to serve four months and five days. It is widely believed that all the studios paid Bioff, but Schenck was the only mogul to be charged. President Truman pardoned him after he’d served part of his sentence. Bioff later testified against his Mafia cohorts, ending an ugly period of racketeering in Hollywood. Schenck returned and signed a ten-year contract as head of production at Twentieth Century-Fox.
Wilkerson had helped Bautzer meet Schenck; now Wilkerson needed his help. “The first thing I know,” recalled Bautzer, “on the first day I was home, Billy Wilkerson wants to send me over to Las Vegas to buy a chunk of property.” There was a compelling reason for this errand. Though Wilkerson’s restaurants and the Hollywood Reporter were doing well, he was not. His gambling was out of control. His daily schedule was determined not by business but by cards, craps, and the racetrack. In the first quarter of 1944, he gambled away the newspaper’s annual profits. In the second quarter, he devoured the advertising receipts of his paper and his restaurants. By the third quarter, his gambling losses were approaching $1 million. Not even he could deny his addiction.
Schenck gave him some advice. “Be on the other side of the table if you’re going to suffer those kind of losses,” he said. “Build a casino. Own the house.”
The idea struck a chord. Building a casino would gratify Wilkerson’s two passions—entrepreneurship and gambling. He already had experience running a casino. In 1939, he helped Schenck and CBS founder William Paley with the ailing Arrowhead Springs Hotel, a resort in the California town of Lake Arrowhead in which they had both invested. Signing on as owner-operator for a year, Wilkerson improved the hotel’s appearance and it began to show a profit. But there was another explanation for its rising word-of-mouth popularity: it had card games. In 1938, authorities had cracked down on gambling in Los Angeles. Wilkerson and his partners hoped that Arrowhead was not too far from the city for frustrated gamblers to make the trip but sufficiently remote to elude detection. Before long, gamblers started making the three-hour drive to Lake Arrowhead. The setting was sublime, but they saw little of it. Their eyes were fixed on the gaming tables. The makeshift casino didn’t last long. In less than a year, the tables were smashed. US marshals raided the hotel, destroyed gaming paraphernalia, and shuttered the premises. Wilkerson barely avoided charges, and he vowed that he would never again run an illegal operation.
Fortunately for Wilkerson, gambling was legal in Nevada. In 1945, it was the only place in the country where it was. Most of the games were in Reno or Carson City, the capital. Las Vegas had a few gambling halls in the downtown area, but the only quality establishments were El Rancho Vegas and El Cortez. Both had opened in 1941, introducing Las Vegas to the concept of a combined hotel and casino. Wilkerson was drawn to the two properties’ gambling parlors but not to their hotels. They were quaint, Western-themed, and dull. Other than gambling, there was nothing to attract wealthy travelers to Las Vegas, inside or out. It was hot and windblown, only a stop on the way to someplace else. Still, Wilkerson saw its potential.
One day in January 1945, Wilkerson had just left the tables at El Rancho and was headed for the airport. “When I feel the table turn cold,” he said, “I leave the casino.” His business associate Tom Seward was with him. Seward was used to seeing Wilkerson bet the Reporter payroll. “I watched Billy gamble my future away,” Seward said later. Looking out the window of their taxicab, Wilkerson saw a FOR SALE sign at the corner of a lot on Highway 91. The large parcel of land was distinguished by nothing more than the ruins of a motor hotel. “Take that number down,” Wilkerson directed Seward.
The lot consisted of thirty-three acres located several miles from the other gambling dens. Wilkerson began negotiating with its owner, one Margaret M. Folsom, who had formerly operated a brothel in Hawaii. By early March, she and Wilkerson had reached an agreement, sealed by a check for $9,500—though the exact nature of this deal is unclear. According to Wilkerson’s son, W. R. “Willie” Wilkerson III, author of The Man Who Invented Las Vegas, the lot was divided into two separate parcels. Willie Wilkerson believes that his father first bought a ten-acre parcel with the $9,500, leaving the remaining twenty-three acres in the hands of Folsom. What is known for certain is that Wilkerson would not conclude the purchase of the entire lot until Bautzer’s return from the war later that year. Meanwhile, Wilkerson hired architect George Vernon Russell and decorator Tom Douglas, both of whom had worked on his Sunset Strip niteries. This commission was more ambitious. What Wilkerson envisioned was something like the casinos he had seen on the French Riviera in the 1920s: a lavish, exclusive resort. He had already brought Paris to Hollywood. Bringing Monte Carlo to Las Vegas would pull the high rollers from Beverly Hills. His vision included a hotel, shops, a casino, a nightclub, a restaurant, a café, a gymnasium with steam rooms, an outdoor swimming pool, and courts for tennis, badminton, and squash. This array of entertainment would make the gambler stay longer and spend more. The resort would be a pleasure dome in the desert.
The project needed a name. Wilkerson thought of the fabled watering holes he had known in New York. One of his favorites was the Stork Club. He thought about birds. He came up with the name Flamingo.
Before he could begin construction, he had to finalize the purchase of the land. Even though Bautzer was still technically in the navy when he arrived back in Los Angeles in November 1945, Wilkerson saw him as the ideal negotiator. “So there I was,” recalled Bautzer, “still in my lieutenant’s uniform, trying to buy up this property. In those days there wasn’t much. Just a lot of bare land.” Apparently Folsom had become more difficult to deal with since Wilkerson paid her $9,500 for the first ten-acre parcel. Perhaps she had realized the full extent of Wilkerson’s plans and that he could not complete his dream project without the twenty-three acres she still held. Whatever the reason, she now wanted much more per acre. Negotiating directly, without a lawyer representing her, Folsom drove a hard bargain. The madam and the lieutenant commander went back and forth for an entire day and then haggled into the night. By the next morning, Folsom had agreed to a selling price of $84,000 for the rest of the land.
Two deeds were signed on November 21, 1945. The first was recorded under the name of Moe Sedway, and the second was signed by Gregson Bautzer, acting as agent for William R. Wilkerson. Who was Sedway? He was not part of Wilkerson’s Hollywood contingent. He was the owner of El Cortez. Why was he involved in the transaction? Wilkerson, for all his entrepreneurial savvy, knew relatively little about operating a large-scale gambling den. He was also encountering permit problems and shortages of material due to wartime restrictions. He needed contacts in local politics, so he turned to Sedway and his business partner, Gus Greenbaum. It is not known if Wilkerson researched his new associates. If he had, he would have learned that Sedway worked for Meyer Lansky, a major East Coast gangster, and that Greenbaum was an Arizona bookmaker with a police record.
At first, Wilkerson merely contracted with these men to secure permits, oversee construction, and operate the gambling concession. But before long, it became obvious that Wilkerson’s concept would require more cash than he had budgeted. Worse, his gambling debts were growing. At one point, in an act of self-abnegation, he transferred the first parcel of land to Sedway—hence, the name on the first deed.
Schenck thought this ill advised and helped Wilkerson buy it back. Still, Wilkerson needed more capital. In February 1946, a mysterious businessman named G. Harry Rothberg approached him with a timely, tantalizing offer. A New York firm wanted to invest in the Flamingo, and a consortium of investors would fund the project in exchange for a two-thirds interest. In reality, G. Harry Rothberg was fronting for Meyer Lansky. Wilkerson was willing to accept the offer, but only if he could control the hotel and own the land. His terms were accepted. Although he later professed ignorance, Wilkerson may have known that Rothberg, a former bootlegger, was representing Lansky. After all, Wilkerson had run a speakeasy during Prohibition. Regardless of his new partner’s questionable affiliations, Wilkerson signed the deal, and in March 1946 took delivery of $1 million.
A month later, Wilkerson was at the construction site when Sedway and Greenbaum arrived with a friend who was visiting from Los Angeles. Wilkerson immediately recognized the man as someone who frequented his establishments on the Sunset Strip. Benjamin “Bugsy” Siegel was a fixture on the Strip, often escorting starlets such as Wendy Barrie and Lana Turner. But he was known for more than where he ate or who was on his arm—he was a notorious criminal, arrested in 1940 for the murder of mob informant Harry Greenberg. And Siegel was no small-time crook; he was a powerful figure in organized crime. While awaiting trial and being defended by Jerry Giesler, Siegel’s meals were catered by Ciro’s, and he was spirited out of jail for conjugal visits to girlfriends. Two witnesses were murdered, and the case was closed for lack of evidence, so Siegel returned to mob business, which in his case meant importing drugs from Mexico. His presence in Las Vegas confirmed that Lansky was behind Rothberg’s Flamingo investment. Beyond that, Wilkerson did not ask questions. When interviewed years later, Bautzer gave a defense lawyer’s explanation for Billy’s decision to continue doing business with known mobsters: “It was Billy’s decision to concern himself with the eventual outcome and success of the project rather than with connections his business associates might have had.”
When Siegel was not in trouble with the law, he was on the fringes of Hollywood, hobnobbing with stars like his childhood friend George Raft and romancing society matrons like Countess Dorothy Di Frasso. He was good-looking, well-dressed, and charming. “A real gentleman,” recalled George Kennedy, general manager of Wilkerson’s Hollywood Reporter. “He could charm the wrappings off a mummy.” Underneath the calculated charm was a reptilian killer with a hair-trigger temper. The slightest misstep was sufficient to send him into a violent rage. “His face would darken when he got angry,” recalled Bautzer, “and his blue eyes were known to turn a slate gray color.” Legend had it that he shot a newsboy for doing nothing more than hawking a newspaper with the name Bugsy on it. This was the nickname he had earned for his fits of temper. He loathed it and warned associates never to use it. “Anyone who knew Siegel took his threats seriously,” said Bautzer.
Siegel respected Wilkerson, but neither man was happy when Lansky assigned Siegel to monitor the project. Siegel disliked Las Vegas for its heat and isolation. “Why would anyone want to come here?” he asked.
“People will go anywhere, endure almost anything, where there is legal gambling,” replied Wilkerson.
Siegel assured Wilkerson that Rothberg’s investors would not interfere in the building of the Flamingo, yet Siegel himself began telling workmen how to do things. Wilkerson was first astonished, then annoyed. In the beginning, Siegel had been deferential, treating Wilkerson like a sage. Now he was competitive and obstreperous. Siegel demanded more say in the project, so Wilkerson let him oversee construction of the hotel, providing him with architect Richard Stadelman and Phoenix contractor Del Webb. Wilkerson continued to oversee the casino, restaurant, and amenities. There were two discrete companies. Siegel began to see them as rivals. He convinced himself that he—not Wilkerson—had conceived the project. He forbade mention of Wilkerson’s name in his presence.
“Billy was sticking to his budget,” recalled Bautzer. “Siegel was out of control.” In May 1946, Siegel demanded that the original agreement with Rothberg be changed to give him full control of construction. What he offered in exchange was 5 percent additional ownership. Wilkerson agreed, and Siegel blundered ahead, making needless, costly changes to the plans, and completely mismanaging the project.
Siegel was obsessed with owning the entire concern, but Wilkerson still owned the land. Siegel offered to buy it from him for another 5 percent of the Flamingo. Wilkerson agreed to sell half the land. Siegel used the land as collateral for a loan but quickly ran through the money. In late November, Siegel pressured Wilkerson to cosign for a $600,000 loan using Wilkerson’s remaining half-interest in the land as collateral. “Billy was in a difficult spot,” said Bautzer. If Wilkerson signed, he would be sucked into a whirlpool of corruption and insanity. If he did not sign, he might kill the project and lose his investment. Wilkerson signed, hoping that the hotel would be finished by early 1947. To his dismay, Siegel decided to open the day after Christmas 1946. Wilkerson enumerated the reasons not to open during the holidays. “I’m the one who makes the decisions!” Siegel shrieked at him.
For all his foibles and missteps, Wilkerson remained a devout Roman Catholic, attending Mass regularly and saying the Rosary in times of crisis. He believed in miracles. He also had earthly patrons. In early December, he received a call from J. Edgar Hoover, director of the FBI. Hoover quietly warned Wilkerson that the mob was contemplating a takeover of the Flamingo project and that his life might be in danger. The syndicate was most likely interested because Siegel had lost control. He was calling attention to himself and, more to the point, had spent $6 million without having a hotel to show for it. An accounting was due. Siegel sensed it and decided to take up the slack.
Siegel called a meeting at the construction site. With him were his lawyers, Louis Wiener and Clifford A. Jones, the latter of whom was also the lieutenant governor of the state of Nevada. Wilkerson brought Bautzer with him. Siegel wasted no time. He had none to waste; the Christmas opening was two weeks away. He addressed Wilkerson. “You’re gonna have to part with your portion of the interest,” said Siegel. “You’re not gonna be paid anything for it, and you’d better have all the interest in hand.”
“Just a minute,” said Bautzer. “Are you telling this man, who has a legal and valid right to that interest, that he’s gonna have to part with it? Cause he’s not gonna ‘have to do’ anything.”
“He’s gonna have to do this,” Siegel explained. “I’ve sold one hundred fifty percent of this deal, and I don’t have one hundred fifty percent—only one hundred percent—and everybody’s gonna have to cut, including Wilkerson.”
“Well, you’d better figure another way out,” snapped Bautzer, “‘cause he ain’t gonna cut.”
Siegel jumped to his feet and snarled at Bautzer. “I can only tell you if I don’t deliver the interest to the people in the East, I’m gonna be killed.” Then he turned to Wilkerson. “And before I go, you’re gonna go first. And don’t take that lightly. I’ll kill you if I don’t get that interest.”
Bautzer leapt to his feet also. “Sit down and shut up!” he yelled at Siegel. For a moment there was silence. Everyone was shocked to see Bautzer confront Siegel toe to toe. Even Siegel was surprised. Bautzer told Wilkerson to leave the room for his protection, then addressed Wiener and Jones. “You’d better shut this guy up ‘cause I’m gonna make an affidavit—on the remarks Mr. Siegel has made at this meeting and who was present. I’m sending one copy to the district attorney of Los Angeles. I’m sending one copy to the district attorney of the county here in Las Vegas. I’m sending one copy to the attorney general. And I’m sending one copy to the FBI. And if Siegel is wise, or his ‘associates’ are, they’d better make sure Mr. Wilkerson doesn’t accidentally fall down a flight of stairs. They’d better make sure he doesn’t sprain an ankle walking off a curb, because that affidavit is going to be in the hands of those men, and I’m going to be prepared to testify—like all the rest of you are going to have to testify—as to the statements Mr. Siegel has made. So you’d better be goddamned sure Mr. Wilkerson enjoys a very long and happy life.”
Siegel’s attorneys tried to calm Bautzer. They didn’t want their names in an affidavit alongside Siegel’s. “Nothing is going to happen to him!” They sputtered assurances. “Take it easy, Greg! There’s no need for affidavits!”
“That’s what I’m gonna do and he’d better be made aware by you gentlemen that represent him of the consequences if anything does happen to Mr. Wilkerson.”
Bautzer stormed out of the meeting. As he and Wilkerson left the building, Wilkerson turned to him and said, “I have something very unflattering to tell you—I just wet my pants.”
Bautzer went back to the hotel where he and Wilkerson were staying and wrote his affidavit. The usually ebullient Wilkerson was quiet. In a few days, he went to Paris and hid out in the Hotel George V. He told Bautzer that the best thing to do was to wait for Siegel to foul up the opening and anger the syndicate. Bautzer thought he’d do better to sell. “Forty-eight percent of this deal is rightfully mine,” said Wilkerson. “Why the hell should I sell?” That he had to hide out might have reminded him why. He spent Christmas in Paris.
The Flamingo opened, on schedule but unfinished. The opening was both poorly organized and executed. Reviews were curdled. Siegel continued to spend. His attorneys asked Bautzer what Wilkerson would take to relinquish his share. Bautzer asked for $2 million and a release of all liability. Siegel agreed to the release, but only offered $300,000. At Bautzer’s recommendation, Wilkerson dropped his demand to $1 million. When Siegel rose to $600,000, Wilkerson accepted. His partner Tom Seward went to retrieve the first installment. Siegel was droll. “If your partner were here right now,” said Siegel, “I’d blow his fucking brains out.”
By April, the Flamingo had begun to show a profit. Wilkerson returned to Beverly Hills, where he received an anonymous call from a woman who claimed to be the wife of a man hired to kill him. “There was every chance that it was a bluff,” said Bautzer, “but I advised Billy not to take the risk.” He sent Billy to hide out again in Paris. Back at the Hotel George V, Wilkerson received a cable from Seward. On June 20, 1947, Benjamin Siegel had been shot to death in the rented Beverly Hills home of his girlfriend, Virginia Hill. While the murder was taking place, Bautzer was enjoying dinner with actress Greer Garson at the Bel-Air Hotel a short distance away. Siegel’s murder was never solved, although there was speculation that the syndicate wanted satisfaction for its misspent millions. The Flamingo passed quietly into the hands of Sedway and Greenbaum.
“Siegel was not the right choice to head an operation like the Flamingo,” said Bautzer. “He was a paranoid man who had no business masterminding a multi-million dollar deal. He exhibited no experience building anything. He was in way over his head. I blame the principals associated with Siegel, who let him get away with it, as much as I do Siegel. The Flamingo wound up being the most expensive hotel ever built in the world at the time.”
Bautzer was back in action. The town was abuzz with talk of his courage in dealing with Siegel. His practice started to thrive again. As for Wilkerson, he never set foot in the Flamingo. He would conquer his addiction in an unexpected way. In October 1951, his sixth wife, Tichi, gave birth to a son, William R. Wilkerson III, whom they called “Willie.” Fatherhood calmed Wilkerson’s spirit, and he never gambled again.