Boardwalk Empire: The Birth, High Times And Corruption of Atlantic City (43 page)

Wynn publicly conceded his company had blundered and admitted that hiring Harris had been an embarrassment to Golden Nugget. Several years later, after Fat Tony’s trial was over, the government revealed how close the mob had come to infiltrating the Golden Nugget. The FBI had managed to bug the Palma Boys Social Club and recorded a number of conversations involving Salerno and his cronies. Those discussions made it clear the mob intended to use Harris to make inroads into the Atlantic City casino industry.

Harris, O’Donnell, and the Perlmans—their stories only begin to tell the tale of a long cast of unscrupulous characters who thought they could cash in on legalized gambling. There were many lesser lights of organized crime that tried to infiltrate the casino industry as vendors in everything from junkets for high rollers to sales of food and beverage supplies. Given Atlantic City’s past and New Jersey’s reputation for corruption, many criminal types assumed the only thing needed for admission was money. They never had a chance. What they hadn’t bargained for was a licensing process akin to a proctology exam. That process was established by the Casino Control Act and the scope it created amplified the tiniest warts.

There’s nothing quite like the Casino Control Act anywhere. As a threshold, every applicant has the burden of proving a negative, namely, that he or she isn’t corrupt and has no ties to corrupt individuals. As William O’Donnell and the Perlmans learned, a person can be guilty by association. An applicant can be so tainted by his ties and acquaintances that he will never be licensed, even if he’s never been charged with a crime and is an asset to his community. Every applicant, whether an individual or corporation, must consent to a background examination that an ordinary, thinking person would find very disturbing. For starters, an applicant waives his rights under the 4th Amendment to the U.S. Constitution, which prohibits unwarranted searches. When you apply for a license in the Atlantic City casino industry, you authorize investigators to inspect, demand production of, and, if necessary, seize any documents or records of any kind, pertaining to any aspect of your past. It’s heavy-handed stuff but has been upheld by the courts. The reason is because a license is a
privilege
, not a
right
. If you want the privilege to own or work in a casino, you must agree to subject yourself to scrutiny, which the courts have described as “extraordinary, pervasive, and intensive.”

The architect of the Casino Control Act was Steven Perskie. Perskie was elected to the state assembly on the ticket with Senator Joe McGahn, which unseated Hap Farley in 1971. The adoption of the ’76 Referendum had raised the political ante in Atlantic City. By 1977, Perskie was tired of following Joe McGahn’s lead. He particularly bristled at having to contend with Joe’s brother, Pat, who was the Senator’s alter ego. Farley’s long tenure in the position of state senator had made it the most coveted position in city and county politics. His career still cast a shadow over local politics and was the standard for leadership. In the perception of politicians and the public alike, state senator was where the power was. Perskie wanted it for himself.

Some observers believe Perskie’s clash with McGahn was unnecessary. With his ally Brendan Byrne in the governor’s office, Perskie had all the clout he needed in Trenton to make his mark on any casino legislation. But Steve Perskie wanted to do it as senator, not as an assemblyman, and the McGahns were in his way. With the help of Democrats who feared that Pat McGahn wanted to become another boss, Perskie denied Joe McGahn the party’s nomination. Perskie went on to win an intensely bitter three-way general election (McGahn ran as an Independent) in a campaign, which, at the time, was the most expensive ever waged for a New Jersey legislative seat. Fortunately for Atlantic City and its new casino industry, Perskie’s legislative talents equaled his political ambitions. Working with the governor’s office, Steve Perskie crafted a statute that ensured the mob could never control a casino.

While criminal types would make occasional inroads into related businesses and unions, they never had a prayer at dominating Atlantic City as they had under Kuehnle, Johnson, and Farley. The rigorous standards for admission to Atlantic City’s casino industry greatly reduced the number of eligible applicants and, in the process, spawned a new type of casino management. Additionally, the requirements that applicants for a casino license must post a $200,000 application fee
and
fund the investigative and licensing process (often resulting in total costs exceeding $1 million), plus guarantee construction of a 500-room hotel, created a situation in which only corporate America would operate casinos in Atlantic City. The demands of the Casino Control Act made it extremely difficult for anyone but a publicly traded corporation to own and operate a casino.

Steven Perskie had raised the bar for admission beyond the reach of the mob. The standards he created ensured that the leaders of Atlantic City’s new industry would be educated, experienced businesspersons. They would have degrees from distinguished universities and hotel management schools. Many would have a masters in Business Administration or degrees in the Law, Hotel Management, or Accounting. The training grounds to be an executive in Atlantic City were now places like the Cornell University Hotel Management School and the University of Pennsylvania Wharton Business School. One graduate of the prestigious Wharton School soon became a major player in the new Atlantic City.

12

The Donald Comes to Town

Donald Trump stood on the bridge of his $30 million yacht, the
Trump Princess
. Despite gray skies and showers, hundreds of people—politicians, reporters, the paparazzi, and devoted Trump watchers—huddled out of the rain in the waiting area of the Frank Farley Marina. They had come to see the New York City real estate tycoon, turned casino mogul, sail proudly into Absecon Island with his latest toy.

“The Donald” and trophy wife number one, Ivana, beamed their biggest smiles and waived triumphantly as the 282-foot yacht maneuvered slowly into its custom-made slip. Television and news photos later made it appear they were waiving to cheering throngs, but in truth, the rain, together with Trump’s security people, had kept most onlookers far from the vessel. Trump’s people had loaded another ship with reporters and camera crews to record the arrival. The animated gestures were merely photo opportunities. Heavy rains left the pier empty and the planned reception was hastily moved indoors to the Donald’s casino hotel, Trump Castle (now Trump Marina).

The
Princess
was Trump’s new plaything. It reeked of wretched excess. A floating pleasure palace, it would have made Nucky Johnson green with envy. The six-deck ship had every convenience imaginable, whether sailing the ocean or at anchor in a Mediterranean port. It boasted eight staterooms, six suites, and two master suites. Bathroom vanities were hand-carved from single pieces of onyx and the basins for the sinks were plated in gold. During an $8.5 million renovation, every screw in the public areas was removed, gold plated, and replaced. There were dozens of telephones throughout the ship, supplemented by a satellite link to keep Trump in touch with his empire anywhere on the globe. A pair of high-speed cigarette boats was kept in davits at the stern of the ship to quickly ferry people to shore at ports where the harbor wasn’t deep enough for the
Princess
. And if the Donald needed to get to shore quickly, the
Princess
had her own helicopter on the upper deck.

The
Princess
was conspicuous proof its owner was world-class wealth. Christened
Nabila
in honor of its original owner’s daughter, the ship had been built for Saudi Arabian arms dealer Adnan Khashoggi, a middleman used by Oliver North in the Iran-Contra scandal. When asked about the rumored secret passageway that enabled Khashoggi to slip from his suite to his paramour’s, crew members would smile silently, feigning ignorance of such things. Girlfriends were expensive, and times got tough for the gunrunner. Over his head in debt, he used the
Nabila
as collateral for a loan from the Sultan of Brunei. Khashoggi defaulted, and the Sultan took the ship. The yacht was estimated to cost as much as $85 million to build and was heralded as one of the most luxurious vessels in the world. But the Sultan didn’t need another yacht. He had one of his own, which he hardly used. He wanted to unload the
Nabila;
Trump took it off his hands for $30 million.

Shortly after purchasing his new yacht, Trump was contacted by Khashoggi, who had been a guest at a number of Atlantic City casinos. The arms dealer wanted Trump to remove his daughter’s name from the yacht. Khashoggi didn’t understand the Donald’s ego, which may be the biggest since the Pharaohs of ancient Egypt. For a man who put his name on nearly everything he owned, there was never a doubt he would rename his new toy. Had Khashoggi waited awhile, it wouldn’t have cost him the $1 million Trump demanded to change the yacht’s name. By the time she sailed into Atlantic City, the yacht had become the
Trump Princess.

The event was Trump’s coronation as the self-anointed prince of the local casino industry. Inside the ballroom of the Trump Castle, hundreds of locals joined the Donald and his people to mark the occasion. The guest list read like a “Who’s Who” of Atlantic City. Area business leaders, the mayor, members of city council, state legislators, and even a U.S. Congressman were on hand. The crowd was a tribute to Trump’s success at cultivating his image as the billionaire developer whose touch turned everything to gold. He was bringing Atlantic City more than a glitzy yacht, he was increasing the resort’s visibility to a national audience. At the time the Donald came to town, the name Trump was on its way to becoming a legend in the real estate world and an icon in popular American culture. But the Donald is only part of the Trump legend and in truth, the lesser part. His father, Fred Trump, was the stuff of genuine legends. He’s where Donald got his start—standing on Fred’s shoulders. To appreciate the Donald, it’s important to know his roots.

Frederick Christ Trump was born October 11, 1905, in New York City. At the time, the family home was a cold-water flat at 539 East 177th Street in Manhattan. The son of German-born parents, Fred’s father, Frederich, wandered from place to place in search of his fortune. He even went back to Germany to find a wife before returning to America and settling permanently in New York. Unsuccessful as a hotelier and restaurateur, he began a real estate business in the Queens section of New York City. Time proved it to be the beginning of an empire. Frederich died when Fred was 11 and his wife, Elizabeth, struggled to provide for Fred and his brother and sister.

Elizabeth Trump was a seamstress, and Fred went to work shortly after his father’s death. Early in his teens, Fred supplemented the family income working in the booming New York housing industry as a “horse’s helper.” In winter months it was often impossible for horse- and mule-drawn wagons to make it up hilly streets with construction materials to a job site. In an age when there were no child labor laws, contractors hired strong young boys to substitute for horses. Fred carted many heavy loads of building materials up icy slopes to busy carpenters. “I replaced a mule,” he said later. While still a teenager, Fred became a carpenter himself. Studying at Pratt Institute in Brooklyn, he immersed himself in the building trades, learning how to read blueprints and prepare mechanical drawings. He would later say, “I learned how to frame walls more efficiently than other people, how to read a blueprint more accurately and faster. They weren’t huge skills, but they gave me an edge.” He had the edge on his competition his entire career.

Fred was self-employed by age 18. Too young to enter into a contract or even sign checks, Fred’s first company was “Elizabeth Trump and Son.” His initial project was a single-family home in the Woodhaven neighborhood in Queens. From the profits on the sale of that home, he built two more in Queens Village, followed by 19 in Hollis. No need to wander from where his father had begun, the Borough of Queens was where he established himself, building everything from mansions in Jamaica Estates to homes for teachers, firefighters, and merchants in Woodhaven and Queens Village.