Jay Solomon

Jay Solomon speaking at the U.S. Institute of Peace.Photo credit: U.S. Institute of Peace / Flickr (CC BY-NC 2.0) 

Fired WSJ Reporter Connected to Iran-Contra Arms Dealer

Excerpt From Inside Job: The Looting of America’s Savings and Loans

Bizarre back-story on the source used by a fired Wall Street Journal reporter who failed to disclose business deals, including weapons sales, with that source — an arms dealer implicated in the Iran-Contra scandal.

The Wall Street Journal recently fired Jay Solomon, its chief foreign affairs correspondent, for failure to disclose business deals with one of his sources — including selling weapons to a foreign power.

Solomon says he was in over his head and apologized, while denying that any money had changed hands or that he had consummated any arms deals with his source and two partners who were retired CIA covert operations officers.

The revelations about Solomon would be remarkable enough even if he were not also the author of a book lambasting such activities, or that his source, Farhad Azima, had not been implicated in the Iran-Contra scandal 30 years ago. Azima allegedly offered Solomon a 10% stake in a private security firm, Denx, that sought to ship weapons to the United Arab Emirates, among other deals.

The other partners also discussed a plot to overthrow the government of Kuwait, but it’s not yet known whether they told Solomon, who did not report it in the Journal, which is now reviewing hundreds of other stories Solomon wrote over his 23-year career.

“I clearly made mistakes in my reporting and entered into a world I didn’t understand,” Solomon said in a statement.  “I never entered into any business with Farhad Azima, nor did I ever intend to. But I understand why the emails and the conversations I had with Mr. Azima may look like I was involved in some seriously troubling activities.”

This excerpt from Inside Job, by Stephen Pizzo and colleagues, describes how Azima, an Iranian-born wheeler-dealer, used loans from financial institutions involved with organized crime and connections to some shady characters working with US intelligence agencies to build an air-cargo business that survived both the Iran-Contra scandal and the trillion-dollar bankruptcy of US savings and loans institutions that followed Presidents Reagan and George H.W. Bush’s “deregulation” of the financial industry.

Whether dupe, cut-out, patsy, useful idiot, victim of a set-up, or willing accomplice to a con in which he played the mark, Solomon certainly knew who Azima was — and is. So should have his employers.

WhoWhatWhy Introduction by Doug Vaughan.

The excerpt below is from Chapter 9, “Tap-dancing to Riches”,  from Inside Job: The Looting of America’s Savings and Loans by Stephen Pizzo, Mary Fricker, and Paul Muolo (McGraw Hill, 1989)

In Kansas City, back in 1980, little Indian Springs State Bank had been struggling to break out of its small shopping center location, squeezed between Wig City and Athlete’s Foot shoe store. The board of directors of the Indian Springs bank was unhappy with the bank’s lackluster performance, so they hired William Everett Lemaster, 56, away from a rural bank in Lexington, Missouri, because he had “impeccable credentials,” a former chairman of Indian Springs State Bank told an American Banker reporter.

One of Lemaster’s first moves was to hire former local attorney Anthony Russo (whose credentials were anything but impeccable), who reportedly told Lemaster he could drum up all kinds of new business for the bank.

The two men were very different: Lemaster was tall, thin, and distinguished and reminded associates of an ambassador; Russo was 10 years younger, short, fat, and talkative, and he wore an ostentatious display of jewelry. Russo was plugged into centers of power in Kansas City from his years as a prominent criminal attorney there, and Lemaster may have wanted to use those contacts to invigorate the Indian Springs bank. The kind of contacts Russo had, however, were not necessarily the best medicine for a small financial institution. According to an official of the Kansas City Crime Commission, Russo had defended organized crime figures in Kansas City, in particular the Nick Civella crime family. Russo himself had served 16 months in Fort Leavenworth federal penitentiary in 1976-77 for bribery and interstate promotion of prostitution and had voluntarily relinquished his license to practice law rather than chance disbarment.

Nevertheless, Lemaster hired him in 1981 to be vice president of Indian Springs State Bank.

Bank records showed that Lemaster’s plan to make Russo a bank officer was met with dismay by bank regulators in Kansas City, who knew about Russo’s reputation and his 16 months in prison. The Kansas City regulators passed the application along to Washington with a strong recommendation to deny approval. Inexplicably their warning was overruled by Washington and on August 19, 1981, the FDIC’s board of review authorized Russo to be an Indian Springs officer but restricted his activities to “new business development.” Russo’s job at Indian Springs was to locate new depositors from among his wide-ranging business and personal contacts, and he had plenty to offer in that capacity.

A former Indian Springs board member later told a reporter that Russo was well suited to his new job: “He could walk up to someone and say that they were to move their account to Indian Springs State Bank, and people would do it with no questions asked.”

At about the same time, Iranian-American businessman Farhad Azima, 39, was invited to be a bank director. Lemaster had met Azima when Lemaster was an “advisory director” for Global International Airways, owned by Azima and headquartered in Kansas City. Russo was also an “advisory director” for Global. Lemaster and Russo’s role as “advisory directors” was to assist Global in finding financing.

Stephen Pizzo, Inside, Job

Stephen P. Pizzo, Author & Journalist. Inside Job: The Looting of America’s Savings and Loans by Stephen Pizzo, Mary Fricker, and Paul Muolo. Photo credit: and McGraw-Hill

In 1978 Azima had founded Global International Airways to ship cattle to Iran, he told a Kansas City Star reporter, but when the Shah of Iran was ousted in 1979, Azima had to adjust his business plan. With money borrowed from an Arabian international bank, Global International quickly became one of the nation’s largest charter airlines, with 900 employees worldwide and twenty planes, including seventeen 707s, two 727s, and one 747.

Global International Airways first came to the public’s attention in 1979 when it had an airplane stranded for three days on an airfield in Tunis, Tunisia. The pilot had been paid $93,000 in advance to make the flight, but when his payment arrived in $100 bills in a suitcase, he became suspicious. (Azima told us cash transactions are common in the international charter air freight business.) And when cargo was loaded on his plane at the Tunisian airport, he demanded to see the relief supplies he was supposed to be flying from Lebanon to Nicaraguan refugees in Costa Rica. Let me see the “lettuce,” he insisted.

The “lettuce” turned out to be twin-barreled 57-millimeter guns with several dozen cases of ammunition labeled in Chinese. Azima said Global refused to deliver the cargo once they discovered what it was. Later the Tunisian government said the Palestine Liberation Organization had been sending arms to the Sandinistas. A Global crewman told the Star of a standing joke among the crew: “They [airport personnel] would ask us what our cargo was and we’d tell them cabbages and cabbage launchers.”

Apparently to discourage nosy airport personnel, former pilots said subsequent shipments stopped masquerading as cabbages. The boxes “had Red Cross stickers all over the sides,” one of Global’s former pilots said.

Global International developed a reputation among intelligence community insiders as one of the CIA’s secret charter airlines. Former Air America pilots (2) showed up on Global’s pilot roster and logs show them flying arms and other supplies to Ecuador, Peru, Nairobi, Thailand, Haiti, and Pakistan. All the flights, Azima later claimed, had State Department approval. Although at first Azima issued (facetiously, he told us) “no comments” when asked by reporters if he had worked for the CIA, he later denied that he or any of his companies knowingly did work for the agency.

He attributed the stories of CIA involvement to his pilots’ fanciful imaginations.

It is undisputed, however, that Global did a significant amount of business with persons connected to the CIA. As part of the Camp David Accords, President Jimmy Carter promised Egypt tons of American military aid. Much of that aid was shipped by Egyptian American Transport and Services Corporation (EATSCO), a company set up in 1979 by Thomas Clines (former CIA director of training who in 1986 would become a prominent figure in the Iran-Contra scandal) and Hussein Salem — who was a former Egyptian government official and a friend of Azima. EATSCO used Global International to transport much of that material to Egypt, reportedly paying Global about $100,000 a load. For five years, half of Global International’s cargo business was with EATSCO, according to the Kansas City Star. Azima later said Global flew an average of one flight a week for EATSCO and during this period the flights accounted for roughly 10 percent of Global’s revenues.

Renegade CIA agent Edwin Wilson claimed to have an interest in EATSCO. In the mid-1970s Wilson was found guilty of selling arms to Muammar Qaddafi — and then was charged and convicted of trying to hire assassins to murder prosecutors and witnesses in the first case — and went to jail.

In 1983 Clines pleaded EATSCO guilty to overcharging the U.S. government $8 million. Global International was not accused of any wrongdoing, and Azima says that he did not know Wilson or have any direct dealings with him.

When Russo and Azima were appointed to positions at Indian Springs State Bank in 1981, Global International Airways was at the height of its activities out of the Kansas City airport. Whether Azima got Indian Springs State Bank directly involved in Global’s activities, we could never determine. However, the following year Russo received a $25,000 check from Global, and later when he was questioned about the check in court (Russo was on trial for tax fraud), he gave the following explanation:

Global [International] was hired by the United States government (3) to fly the president of Liberia, which was a new government, and its cabinet around the world on a goodwill tour. Liberia is a little country in Africa that I studied about, as a result, and learned a little bit about. After the War against [sic] the States, Lincoln, our president, sent some slaves to Liberia to live. And they lived on the, I believe, the west coast of Africa. Yes, the west coast of Africa. And formed this little country called Liberia.

The United States has supported that country over the years. And about in 1981 they had a coup. Sergeant [Samuel] Doe, who was a sergeant in the Liberian army, overthrew the government. The government was backed by the, our CIA and our government. And when the revolution or coup occurred, the United States then wanted to become friendly with the new government, wanted to continue to have ties between the United States and Liberia and wanted us to continue our relationship with them. So they hired Farhad’s airline, Global, to take Sergeant Doe, his entire cabinet, around the world on a goodwill tour.

Farhad asked me if I would go as the ‘host’ to the president and the cabinet to escort them from country to country. It was at that time, of course, I was an officer of the bank and I had to check with Mr. Lemaster, who was the president, and he covered for me and I took that trip around the world and we went all around the world with the president and his cabinet, and the president and I became friends and I would introduce them and kind of act like an ambassador…. The arrangement with Mr. Lemaster at the time was that any fee I would recover I would split with him because he covered for me at the bank.”

Azima later said that Russo, whom he asked to go on the flight only because he needed someone “to kiss [Doe’s] ass,” greeted Doe with a hearty “Hi, Pres!” when first introduced to Doe. A Global attorney said that Russo’s job was “to keep [Doe’s] bodyguards from showing their guns too often.”

Azima also testified during Russo’s tax fraud trial, and the scheduling of his appearance had to be moved up one day because he had a luncheon meeting in Washington, D.C., the next day. A frustrated member of the prosecution team later told us she believed a judge acquitted Russo of the tax fraud charges after two hung juries partly because of the aura of respectability Russo’s references to the CIA and the U.S. Government gave him.

Although Azima claims he ultimately lost at least $400,000 investing in the bank’s stock, Indian Springs State treated Azima well before it was seized by regulators. According to bank examination records, his companies’ accounts at the bank were frequently overdrawn even as bank examiners demanded  —  on at least three occasions — that the loans be paid down. Each time examiners returned they found the loans still on the books and still in arrears. Regulators also noted that Global was overdrawn at the bank by about $150,000 a day. Azima said the overdrafts were actually covered through a bank credit facility and were thus in effect unsecured loans and not improper. In 1983 Azima and his companies owed Indian Springs State Bank $800,000.

Collateral for one of the loans was Azima’s DeLorean. At least $600,000 of the money went to Global International and a related company, even though regulators complained that the loans exceeded Indian Springs State Bank’s loans-to-one borrower limit (then $348,881). When Global International declared bankruptcy in 1983, it owed the bank almost $600,000, according to a stipulation filed in the bankruptcy proceeding. Azima said he saw no impropriety in a bank’s loaning large sums to its directors and said that in fact Indian Springs encouraged such loans. He said that regulators never questioned his credit worthiness.

(At the same time, in 1983, Global got a loan for an aircraft from Republic Bank in Kansas City for $297,500. Republic Bank failed in 1984. Then reporter Jerry Bohnen discovered in an examination of Federal Aviation Administration records that between 1984 and 1988 Utica National Bank in Tulsa loaned Aviation Leasing Group, a company chaired by Azima, several million dollars on a Boeing 707 and two Boeing 727s. Utica National Bank failed in July 1989. Global and Aviation Leasing satisfied these loans.)

Three years later a bankruptcy court judge allowed Indian Springs State Bank to take over Global CDs and other investments held by the bank, reducing Global’s debt to $62,000. After Global declared bankruptcy, Azima’s name turned up in the Iran-Contra affair. A group of private individuals, including Adnan Khashoggi, who played his familiar middleman role by raising $15 million, sold arms to Iran and used the profits to fund the contras. In July 1986, according to the National Security Archives, an airline owned by Azima’s brother and sister-in-law (who also borrowed money from Indian Springs State Bank), RACE Airways, carried 23 tons of arms to Iran, via Spain and Yugoslavia, as part of the Iran-Contra deal. RACE Airways had leased aircraft from Azima and Global.

Although Azima denies having had any involvement in the Iran-Contra affair, he does confirm that he was questioned by federal investigators, and suspicions of his possible involvement surfaced so early that, to keep reporters at bay, he was forced to deny involvement by issuing a press release on November 13, 1986 — the very day that President Reagan announced the affair to the nation on television.

Federal prosecutor Lloyd Monroe told us that an examination of Azima’s connection to Indian Springs State Bank was turned over to the FBI, and they were told to leave Azima alone. “I was told [by the FBI] that Azima had a get-out-of-jail-free card,” Monroe said, a comment he interpreted as a reference to the CIA. Azima ridiculed Monroe’s remark, claimed the allegation was “unconscionable,” and said Monroe was just mad because the government had failed to convict Russo on the tax charges.

Azima also had other connections at Indian Springs State Bank. According to federal bank examination reports, President Lemaster claimed that Azima had sponsored the Dunes Hotel and Casino in Las Vegas for an unsecured loan of about $200,000 in 1982. The loan was guaranteed by Dunes owner Morris Shenker. (Though Azima admitted knowing Shenker, he strongly denied sponsoring the loan.) Shenker was the millionaire St. Louis defense attorney who in the early 1980s was chairman and controlling stockholder of the Dunes Hotel and Casino in Las Vegas. (4)

Shenker had been Teamster boss Jimmy Hoffa’s attorney and confidant for over 10 years, until Hoffa disappeared in 1975. Through him Shenker had access to the Teamster Union’s $1.5 billion Central States, Southeast, and Southwest Areas pension fund. (5)

Bank records revealed that a Shenker business associate from Las Vegas, Jay Fihn, also had a loan at Indian Springs. Russo testified he and Fihn teamed up to broker fuel to Azima’s Global Airways, which, according to Russo, had a contract with some Las Vegas hotel-casinos to fly junkets (ferrying tourists to Las Vegas). Kansas bank regulators complained about the Dunes Casino loan, saying Shenker was not a creditworthy borrower and the casino was too far away from Kansas City. Regardless of demands by regulators that the loan be removed from the bank’s books, it never was.

(When Shenker filed bankruptcy in 1984 he listed debts of $197 million and he left banks, savings and loans, and pension funds holding the bag for tens of millions in unpaid loans. The IRS said he owed $66 million in taxes.)

Federal organized crime investigators said Shenker was an associate of the Nick Civella mob family in Kansas City. (6) Regulators found the Civella family at Indian Springs State Bank too. They were part of that “new business” they said Tony Russo brought to the bank. Members of the Civella family got $400,000 in loans from Indian Springs, bank records show, including one for an Italian restaurant. Their accounts were “habitually overdrawn,” a bank examiner complained in one examination report. At the end of 1982 regulators alleged that bank officers kept a loan to a Civella current by rolling it over (renewing it) and increasing the amount of the loan at each renewal to cover the interest costs the loan had accrued since the last renewal.

At the same time that Indian Springs was making sweetheart loans to the Civella family, some of the Civellas were embroiled in a messy criminal prosecution in Kansas City. Federal organized crime prosecutors in 1981 had indicted brothers Nick and Carl Civella and others for skimming $280,000 off the gaming tables of the Tropicana Casino in Las Vegas. Nick Civella died of cancer before the trial ended in July 1983, but his brother Carl was convicted.

Carl Caruso, convicted along with the Civellas, was also on the loan list at Indian Springs. Caruso operated junkets for the Las Vegas Dunes out of several Midwestern towns, including Kansas City. In court it was revealed that he was the bag-man for the skimming operation, transporting the skim from the casino to Chicago and Kansas City for distribution to the mob families there.

* * * *

In this setting Mario Renda was about to embark upon a new scam. He had recently met Franklin Winkler, the son of an old friend, and they had agreed to combine their talents and go into business together.

Franklin Winkler was an international wheeler-dealer. He and his dad, V. Leslie Winkler, were cosmopolitan con men. They were Hungarian Gypsies, smooth operators, and both spoke a number of languages. Franklin, who was in his forties, had been born in Istanbul and had lived all over the world, wherever his father Leslie’s schemes took them. Franklin had most recently lived in Cuba, Italy, Australia, Kansas City, and Southern California and had lately settled temporarily in Hawaii. Leslie lived in Palm Springs.

Franklin and his father were fat and affable. Franklin weighed over 300 pounds, but he was a charmer whom women found enchanting. Described by federal prosecutors as “a criminal financial genius,” Franklin had reportedly already been convicted of felony frauds in both Italy and France but had never spent a day in jail. An attorney who had cross-examined him said he had a remarkable facility for slipping into a variety of nearly perfect foreign accents. “He’d be talking to me about something during court recesses and all of a sudden he’d be speaking with a perfect French accent, or Italian, or Middle European accent. He’d just throw it in for effect. The guy was really smooth.”

Franklin Winkler had been losing money on real estate investments in Hawaii, and he agreed to cooperate with Renda in a scheme that would benefit them both. Renda would broker deposits into savings and loans or banks if the institutions agreed to make loans to Hawaiian real estate partnerships fronting for Winkler and Renda. “Linked financing,” where deposits were promised to a bank or thrift in return for loans, was not always illegal, but regulators didn’t like the practice because they feared the promise of huge deposits would induce financial institutions to make risky loans that they would not otherwise have made. But the linked financing Renda had in mind was illegal because it was an end run around S&L and bank loans-to-one-borrower limits.

Linked financing has been practiced for years by mob-dominated unions which could offer union deposits (and kickbacks if necessary) to bankers in exchange for loans. Jonathan Kwitny describes the practice in Vicious Circles (W.W. Norton & Co., 1979), as did Steven Brill in The Teamsters (Simon and Schuster, 1978).

The details of the plan would work like this: Renda would put the word out through First United Fund to large investors that he could place their deposit money with banks and thrifts at rates a full percentage point or more above the going rate at the time. (7)  Renda knew full well that the prospect of such a high interest rate would attract managers of credit unions and pension funds who were constantly on the prowl for the best rate for the money they managed. (Renda and his brokers mockingly referred to these investment managers as “rate junkies.”)

All a bank or thrift had to do to get these deposits was agree to make a few loans to the Hawaii real estate partnerships. Once the institution agreed to make the loans, Renda would send the deposits to the thrift or bank and, almost the same day, Winkler would send in his straw borrowers (also called “mortgage pullers”) (8), to get the agreed-upon loans, often totaling half the amount placed on deposit there by First United Fund.  These individual borrowers (lined up by Winkler) would receive a fee of between 2.5 and 6 percent of the loans obtained in their names. Applications and references that the bank or thrift required from the straw borrowers would be provided by Winkler. Often the references were Winkler.

When the loans were funded the borrowers would turn the money over to Winkler, who would tell the straw borrowers they could just forget about having to pay back the loan. Winkler would take care of that, he said. By sending in many straw borrowers, Winkler and Renda disguised the fact that all the loan money was really going to them.

And when the loans went into default, the straw borrowers’ names — not Winkler’s or Renda’s — would be on the foreclosure papers and lawsuits.

The key to the whole arrangement was Renda’s deposits. They were the bait that enticed bank officials to play along with the scheme. Without them little of the looting over the next five years would have been possible.

* * * *

The timing of this new friendship between Renda and Winkler was serendipitous. Within weeks Anthony Russo went to Hawaii on vacation. Before he left Kansas City he contacted an old friend who told Russo to look up a Franklin Winkler in Hawaii, which Russo did. The two men liked each other, and Winkler made Russo a business proposal.

Authorities said Winkler suggested that under “the right circumstances” he and his friend Mario Renda could get Indian Springs State Bank all the deposits and all the loan business it could handle. Russo liked the sound of the offer.

A few months later, early in 1982, Russo traveled to Las Vegas, where he met again with Franklin Winkler. Accompanying Winkler this time was Sam Daily, a retired Air Force colonel, then a Honolulu realtor. Daily was a Louisiana redneck, a short, fat man who looked like a TV huckster. He had black, greasy, plastered-down hair, a sailor’s tongue, and a terrible temper.

Indian Springs State Bank vice president Anthony Russo, con man and swindler Franklin Winkler, and Hawaii realtor Sam Daily met in a suite provided as a favor to Russo by Dunes owner Morris Shenker. Under the plan the men formulated at the Dunes, Renda would broker deposits into Indian Springs State Bank — “courtesy deposits” they were euphemistically termed. In return the bank would make loans to straw borrowers who would be fronting for Renda, Winkler, and Daily.

Russo agreed to introduce Franklin Winkler to Indian Springs State Bank president Bill Lemaster. Winkler told Lemaster that First United Fund would broker into Indian Springs all the deposits he wanted, free of fees, in return for some loans. To Lemaster this looked like a good way to pick up both deposits and loan business in one neat package and he agreed to the arrangement. In June 1982 Winkler, Daily, and Renda began shopping for straw borrowers.

By July 19, 1982, First United Fund had placed the first batch of brokered funds at Indian Springs State Bank, and the first crew of straw borrowers were in the starting gate. Winkler outlined the operation in one last letter to Renda that concluded: “I suggest that we proceed with this first pilot transaction and then we should get together in order to formalize a proper form modus operandi for all future transactions of this type.”

In other words, if the scam worked at Indian Springs State Bank, they would expand their operation to other financial institutions.

Indian Springs State Bank made the loans to the straw borrowers as planned. The scheme worked perfectly. And on August 29 Franklin Winkler called a meeting with his dad, Leslie, and Renda at Southern California’s luxurious La Costa resort to review the progress of their plan. (9) After the La Costa sit-down, Franklin’s father sent Renda and Franklin a memo grandly entitled “Memorandum Premenoira.” In the memo Leslie stated:

…Both Franklin and Mario have agreed to carry out a number of trial transactions under the contemplated terms and procedures. One transaction has already been concluded via K.C. Bank (10) and the intention is to repeat a few similar deposits which will demonstrate the feasibility of the operation of the program.

[Leslie’s interest in the project was not platonic. Because he had introduced Franklin and Renda, he was entitled to a “finder’s fee” on each deal that went down.]

In the month following the meeting at La Costa, the three men formed at least eight companies and partnerships to conceal the paper trail left behind by their activities. Renda, Franklin Winkler, and Daily began visiting banks and savings and loans in areas they had targeted for high-growth potential — Kansas City, Southern California, Honolulu, Texas, Denver, Phoenix, Seattle, New York, and New Jersey — and pitched their linked financing schemes. The code name used for these transactions at First United was, appropriately, special deals.

Then Renda added a new wrinkle. He ran ads to let people know that for a fee he could supply deposits for anyone who needed a loan and wanted to get his own linked financing deal going. Renda placed ads in major newspapers, including the Wall Street Journal, the Los Angeles Times, and The New York Times, which read:








After these ads ran Renda was besieged by brokers or borrowers around the country who agreed to compensate Renda (in a variety of ways) if he would steer deposits to a thrift or bank that had already agreed to make them a loan upon receipt of the deposits. So, in addition to the “special deals” Renda had going with Franklin Winkler and others, he began supplying funds for other people’s special deals as well.

Later he would testify in court that he placed deposits for “hundreds” of special deals arranged by others.

These were near-perfect scams. Renda used other people’s (federally insured) money to influence bank and thrift officials to make loans to the phony borrowers — the officials could even use the actual cash from Renda’s deposits to make the loans. All Renda had to do was break the money into $100,000 chunks so it would be fully insured by the FSLIC.

Even if Renda’s scam eventually caused the bank to collapse (because the loans were not repaid), Renda had no worries — his deposits were insured and his straw borrowers already had the loans. Renda saw the possibility of arranging linked financing scams at thrifts all across the nation. He could borrow millions of dollars before anyone caught on, and when they did, he could move the scheme on to the next institution. He knew over 3,000 thrifts and thousands more small banks that might take the bait. Even in Ed Gray’s darkest nightmares over the potential evils of brokered deposits, he had never imagined abuses as bad as the ones Mario Renda had in mind.



1. Organization of Petroleum Exporting Countries

2. Air America was a charter airline that flew CIA flights in the Far East during the Vietnam War.

3. Azima later said the Liberian government and not the U.S. government contracted with Pan American to carry the Liberians, and Pan Am subcontracted the work to Global.

4. Shenker was licensed in 1975 to operate the Dunes.

5. The President’s Commission on Organized Crime reported in 1986 that the leaders of the International Brotherhood of Teamsters, the nation’s largest union, had been “firmly under the influence of organized crime since the 1950s.” The report said Hoffa and Teamster President Roy Williams (president from 1981 to 1983) were “indisputably direct instruments of organized crime.”

6. In 1987 former Teamster president Roy L. Williams testified during a federal racketeering trial in Manhattan that he was controlled by Nick Civella, who was identified in the trial as the boss of the Mafia family in Kansas City.

7. Renda didn’t bother to share with the banks and thrifts the little matter of the higher interest rate he was quoting to his customers. He simply told the bank or thrift a block of money was heading their way (via the Federal Reserve Bank Telecommunications System, the Fed Wire), and he accepted whatever rate they were paying at the time. They, of course, were delighted to receive these CD funds, and as an added incentive Renda waived the traditional 1 to 2 percent brokerage commission normally paid by the institution. If the CD owners noticed (and they often did not) that the banks were not paying them the rate Renda had quoted them, Renda coughed up a check for the difference (from money generated by the loan end of the scheme).

8. Individuals who posed as borrowers but who then turned the loan money over to someone else.

9. La Costa resort, in northern San Diego County, was the resort built with up to $100 million in Teamster financing and rumored, since 1975, when Penthouse magazine did a major expose of the resort, to be a hangout for organized crime. La Costa general partner Edward “Fast Eddie” Susalla appears in the chapter on Herman Beebe.

10. Indian Springs State Bank.

Related front page panorama photo credit: Adapted by WhoWhatWhy from Jay Solomon, Watch the video on C-SPAN.

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