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In the mid-40s, things were pretty hot for Benny
Siegel in New York. He was the key suspect in a murder and Meyer Lansky was having a hard
time keeping him under control. The two were still as close as ever, but Benny was chafing
under Meyer’s leadership. Bugsy needed to go out on his own, Meyer decided, and so
Benny headed west to Los Angeles to bring the operations in California under the
Syndicate’s control.
Benny quickly rose to the top out west and began to expand the
Syndicate inland. He looked east to Nevada, and saw a small town at the southern tip
called Las Vegas. Siegel wasn’t the first man to build a casino there, but he was the
first mobster with Syndicate connections to realize that putting a casino in Las Vegas
could mean a license to print money for the mob.
In the years since Benny moved out west to cavort with starlets and
take over the Hollywood extras union he and Meyer had remained close. Armed with mob
money, Siegel tried in 1943 to buy his way into a partnership with the owners of the Last
Frontier in Vegas, which was then the hot spot in town. The owners went public with
Siegel’s action and rejected him. Instead, Siegel and Lansky acquired El Cortez, a
downtown hotel and casino that had been open for several years, serving both local
clientele and soldiers from the nearby army air base and gunnery school.
Meyer did not share Siegel’s enthusiasm for Las Vegas, telling his
friend the city was in "sorry shape" and concentrating on his carpet joints in
Florida. He put up a $60,000 investment in El Cortez and became a silent partner –
letting Siegel run the show. Soon after the men bought the casino, Siegel sold the
operation and netted a $166,000 profit – a 27 percent return on their investment in
just 6 months.
In 1946, with the Las Vegas real estate market booming, Benny convinced
the investors in El Cortez to reinvest in a bigger, larger, more fabulous new casino he
was going to build. The Flamingo – named for his girlfriend, Virginia Hill –
would be a glitzy alternative to the dude-ranch style hotels like El Cortez and the Last
Frontier.
Lansky allowed Siegel to reinvest the $650,000 from the sale of El
Cortez into the Flamingo, buying a 66 percent stake in the casino.
"As controller of the majority consortium, Benny set himself
Christmas 1946 as his deadline for getting the Flamingo finished," Lacey wrote.
"But he immediately developed bright new ideas for improving the rooms…. The
charming and imperious Ben Siegel totally lacked his friend Meyer’s sense of
control."
There were incredible cost overruns and delays caused in part by
Siegel’s ignorance of how to build a hotel of the magnitude of the Flamingo and
partly because of the booming post-war construction industry.
In Havana, where Meyer Lansky, Lucky Luciano and the rest of the heads
of the Syndicate were meeting in secret because of Luciano’s exile, Lansky was forced
to tell the bosses that the cost of the casino would far exceed the $1 million they had
been told. In fact, Meyer admitted, the Flamingo was likely to cost the Syndicate about $6
million before it would be completed.
Immediately, there were calls for Siegel’s head, but Lansky was
able to pacify them with promises of huge inflows of cash once the buildings were
completed.
What was unsaid at the meeting in Havana, was that some mobsters were
getting suspicious of the frequent trips Hill was making to Geneva, Switzerland,
reportedly on "buying trips." The gangsters believed Hill and Siegel were
skimming investment money and secreting it away in a numbered Swiss bank account.
"This sort of behavior meant only one thing in the
underworld," Doc Stacher said. "Bugsy was going to be hit. Meyer knew it too,
but he did all he could to save his friend."
Meyer talked the men into giving Bugsy until the spring to turn a
profit, and then went to Las Vegas to try and talk some sense into his old friend. Benny
had turned decorating control over to Virginia Hill, who was in many ways responsible for
the overruns. When Meyer returned from Las Vegas, he was quite dejected.
"I can’t do a thing with him," Lansky told Stacher.
"He’s so much in that woman’s power that he cannot see reason."
Luciano told Lansky that Bugsy would have to get things under control
or he would order their old friend killed.
"Unless Bugsy makes a great success of that hotel, you know as
well as I do that he will have to be hit," Luciano told his friend. "And if you
don’t have the heart to do it, Meyer, then I will have to order the execution
myself."
Doc Stacher reported that Luciano’s comments brought tears to
Meyer’s eyes and he excused himself from the meeting with bosses. For two hours, he
remained in his suite at the Hotel Nacionale before calling friends in the States and
ordering them to keep an eye on Benny.
"If anything happens to him," he told Benny’s
lieutenant, "You will answer to me."
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The Flamingo Hotel, Las Vegas
(Lake County
Illinois Museum) |
Siegel managed to get the casino completed by his
self-imposed December 1946 deadline, but not the hotel portion. On December 26, the casino
opened with Xavier Cugat’s orchestra providing the music and Jimmy Durante and Rose
Marie providing the comedic entertainment. At the gambling tables, nothing went right for
the mobsters. Although in the long run the house cannot help but win because of the way
the games are structured, in the short run the guests at the Flamingo cleaned the casino
out of $75,000 in the opening evening. | 
