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Las Vegas: An Unconventional History | Article

The Syndicate

At the end of the investigation conducted by the Special Committee to Investigate Organized Crime in Interstate Commerce, Chairman Senator Estes Kefauver concluded that there existed within America a "government within a government." Over the years, this secondary government has been known by many names, most accurately, perhaps, as "the Syndicate."

The Big Seven
One of the major crime organizations in America stemmed from Jewish and Italian gangs working out of New York City. Young Maier Suchowlansky and Benjamin Siegelbaum, better known in later years as Meyer Lansky and Ben "Bugsy" Siegel, hailed from Brooklyn, New York. The Jewish gangs' traditional rivals were the Italians, who had established "the Mafia," the most powerful crime organization in the country. While Italian and Jewish gangs operated independently of one another and kept within their ethnic roots, Lansky, Siegel, and Salvatore "Lucky" Luciano were the exception. These powerful men of different ethnic backgrounds initiated a multi-ethnic gang years before Prohibition served to unify and ethnically integrate organized crime. Lansky, Siegel and Luciano formed a gang, the Bugs and Meyer Mob, in Manhattan's Lower East Side. By 1929 they were one of "the Big Seven" largest and most influential bootlegging operations in the Northeastern United States.

Beyond Ethnicity
Although older and more established criminal groups had flourished by maintaining ethnically homogenous gangs, natural rivals Lansky, Siegel and Luciano realized at a young age that crossing ethnic boundaries was a new and powerful way to hide, marshal resources, and build ties, allowing them to threaten the existing power structure. The future mobsters formed a highly unlikely friendship in the age when Italian, Irish and Jewish gangs were constantly in friction with one another.

Bootlegging, Robbery, Gambling and Murder
As most gangsters did in the early 20th century, the Mafia and the Bugs and Meyer Mob earned their living through bootlegging, robbery, gambling and murder. The gangsters' actions went more mainstream after the passing of the 18th Amendment in 1918. With Prohibition banning the manufacture, transportation and sale of alcoholic beverages, gangs had an easy entrance to public support by providing liquor through bootlegging and the black market. Because so many Americans criticized and condemned Prohibition, they supported the gangs' approach, and Prohibition thus served as the catalyst for the extreme growth in power and scope of organized crime. When the 21st Amendment repealed Prohibition in 1933, the Bugs and Meyer Mob lost their main source of income. However, in anticipation of the end of Prohibition, members of one-time competing crime factions came together to form a loosely bound organization, entitled "the Syndicate." Lansky and Luciano were two of the Syndicate's bosses.

The Crime Corporation
The Syndicate was created to unify once competing gangs. Without the lucrative profits from the black market during Prohibition, their power was weaker and they could not afford internecine strife. So they set up a commission to divide up the turf and to regulate the markets. Each gang maintained a degree of independence within the Syndicate, pursuing its individual interests and expertise, such as gambling, narcotics trade and prostitution. One such branch was known as "Murder, Inc.," specializing in the "enforcement" of the Syndicate's business.

Courtesy: UNLV, Manis Collection

Chairman of the Board
With their newfound unification, the Syndicate's power grew considerably. When Lucky Luciano was deported to Italy, he turned all of his responsibilities to Lansky, who was known as the Chairman of the Board of the National Crime Syndicate. Siegel created a Syndicate stronghold in the quickly developing American Southwest, where he set up new monopolized gambling circuits and the Syndicate-funded Strip hotel-resort the Flamingo, founded in 1946.

In Las Vegas
After Siegel, who had once famously noted of Syndicate members, "We only kill each other," was murdered in 1947, Gus Greenbaum, Davey Berman, and Morris Rosen, three of the Syndicate's chief authorities, took over the Flamingo. The hotel's success prompted the Syndicate to pour more money into building Strip resorts, and by the 1950s, the Strip was lined with hotel-casinos, many, if not all, funded by Syndicate money. From the 1940s through the 1970s, Las Vegas and its lavish resorts were made possible in large part by the mob, who not only funded resort development, but offered indispensable knowledge in casino management. Men who had little-to-no criminal records fronted the resorts. Behind the scenes, so-called "Miami hotel men" took undeclared, thus untaxed, money from the establishment's profits. As the Syndicate's "chairman," Lansky was the Syndicate's accountant. He was responsible for collecting, and then dividing, the skim.

For decades, the FBI, led by director J. Edgar Hoover, had flatly denied that any such organization existed. Although many people knew that the Syndicate existed, it was difficult to prove much of anything with certainty. In addition, many politicians were indebted to members of the Syndicate, further compromising the political will to crack down on the mobsters. Judges and authorities were very often just as intertwined with organized crime as the gangsters being investigated.

The Syndicate and the CIA
The American government had an ambivalent relationship with the Syndicate. The Office of Strategic Services (later, the CIA) in fact employed the Syndicate in some covert operations. During World War II, the Syndicate helped with the invasion of Sicily and in protecting the Eastern waterfront against German sabotage. Some of the Syndicate's major drug traffickers were used as informants and assassins in the Cold War. As one White House official described the government's relationship with Lansky, "The government turned to him because hiring thugs was what government and business had been doing for a long time to control workers, and because it could conceive little other choice in the system at hand."

Bigger than U.S. Steel
In the second half of the 20th century, the Syndicate's influence permeated not only Las Vegas, but American society and industry at large. The rise of Las Vegas and gambling grew out of turn of the century ethnic gangs that produced such leaders as Meyer Lansky, who once said, when referring to the Syndicate, "We're bigger than U.S. Steel." Although there were numerous mobs all in rivalry with each other, Las Vegas remained the place where mob forces from different cities gained power and control in their ownership of hotels and casinos. Parallel to the rise of the Syndicate as a corporation was the omnipresent rise of capitalism in the nation. Although the Syndicate and mobs across the country had a stronghold on Las Vegas casinos, by the 1980s, the rise of capitalism introduced a new force in the gambling capital: Wall Street.

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