1939

With the recent discoveries of dead bodies there, Lake Mead in Southern Nevada has been in the news.

The 1.5 million acres encompassing this water body and its environs have been a designated national recreation area since 1964, but a portion of them almost had become a Nevada state park three decades earlier.

The federal government quashed the effort to establish such an entity due to gambling, in part.

Piece Of The Pie

Nevada Senator Key D. Pittman introduced a bill to the U.S. Congress in early 1939 that would carve out about 10,000 acres (or 12 square miles out of 2,600) of publicly owned lands on the Boulder Dam National Recreation Area and authorize The Silver State to use them for a park.*

The recreation area, about 18 miles from Las Vegas, included the lake that Hoover Dam (previously called Boulder Dam) created, Lake Mead, named after Elwood Mead, the U.S. Bureau of Reclamation commissioner at the time.

The National Park Service had gained responsibility for Lake Mead and the surrounding land in October 1936. About 10 years later, the name was changed to the Lake Mead National Recreation Area. The attraction drew about 500,000 or more visitors each year.

All About Gambling

U.S. Secretary of the Interior Harold L. Ickes attacked Pittman’s state park idea, purporting that gambling and liquor interests were behind it. He argued that the 160 acres, allocated in the bill for the state park or “other public purposes,” likely would be used for saloons and gambling houses.

To support these claims, he alleged that, according to circulating rumors, gamblers being driven out of Los Angeles in a citywide cleanup intended to open shop in the Lake Mead area to capitalize on the numerous tourists visiting the lake and dam.

“I believe that the people of the United States want the integrity of their national park areas preserved,” Ickes said (Reno Evening Gazette, March 7, 1939).

Guy McAfee

Ickes didn’t name anyone but was referring to Guy McAfee, according to Charles “C.D.” Baker, president of the Las Vegas Chamber of Commerce. McAfee was a former Los Angeles Police Department officer and gambler who’d moved from the City of Angels to Las Vegas due to heat from law enforcement in the former in 1938. The next year he’d acquired and renamed the Pair O’ Dice Club, on Highway 91 between Los Angeles and Las Vegas, the 91 Club. Also, he’d debuted the Frontier Club in downtown Sin City. Baker refuted Ickes’ claims about gamblers, emphasizing McAfee had nothing to do with the proposed state park.

“That is a cooked-up charge to cloud the issues,” Baker said, referring specifically to Ickes’ assertion that Nevada wanted the state park so gambling establishments could be operated and liquor sold at it (Reno Evening Gazette, March 8, 1939).

Baker conceded, however, that Las Vegas wanted the state park so that Nevada, instead of the federal government, could control and benefit economically from the non-gambling/non-alcohol concessions there.

Ickes contended, too, that were Pittman’s bill to become law, it would set an unwise precedent and encourage other states to demand parcels of national parks.

Attempts To Appease

In response to Ickes’ opposition, Pittman expressed his belief that “western lands are rapidly becoming a barony, of the dictator at the head of the Department of the Interior,” but the senator also took steps to resolve the concerns.

He amended his bill. The new verbiage indicated Nevada would forfeit the federal grant for a state park if it “fails to put into effect and practice in said area laws, rules and regulations put into effect and practiced by the Department of the Interior within the Boulder canyon reclamation area relative to gambling, sale of intoxicating liquors, water pollution or sanitation” (Reno Evening Gazette, March 7, 1939).

Pittman also encouraged the Nevada State Park Commission (NSPC) to ban gambling and liquor sales in Nevada parks, which the agency did.

State Support

While Pittman worked in Washington, D.C. on the state park idea, Nevada legislators did so on the home front. They passed Senate Bill (SB) 133, which authorized the governor to accept a grant of land for a state park at Boulder Dam. They also approved SB 132, which authorized the NSPC to prohibit gaming and alcohol sales in the potential state park at Lake Mead.

The Finale

The fate of Pittman’s bill became known in August, when U.S. President Franklin D. Roosevelt vetoed it. His reasons for doing so echoed Ickes’ voiced criticisms of the Nevada state park prospect except those related to gambling and liquor.

“I firmly believe the Boulder Dam/Lake Mead region in its entirety should continue to be administered uniformly by federal government in the interest of the nation as a whole,” Roosevelt said (Nevada State Journal, Aug. 13, 1939). He added that the area warranted consideration as a national park or monument site. (About 25 years later, the federal government officially made it a national recreation area.)

Angry at the decision by Roosevelt, specifically that he’d based it on Ickes’ input, as reported by the press, Pittman issued a statement. In it, he suggested the U.S. president might lose support in western states due to his public land policy.

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* At the time, Nevada had four state parks, including the Valley of Fire, all of which the legislature had established in 1935.

Photo by Tony Webster

Sources

1944 stock certificate signed by Pat Mooney

1940-1953

In 1946, Pat Mooney, chief field deputy of the Nevada Internal Revenue (IR) Bureau office, made gambler-Mobster Elmer “Bones” F. Remmer* an offer he couldn’t refuse.

If the gambling club owner purchased $52,400 ($699,000 today) worth of shares in the Mountain City Consolidated Copper Co. (MCCCC) then his 1945 federal tax debt in that same amount would be erased and prosecution avoided. Mooney would prepare Remmer’s tax return to ensure that be the case.

The Bay Area-based racketeer accepted. Remmer paid $2,400 ($32,000 today) for 6,000 shares at $0.40 apiece.

Like him, hundreds of other California and Nevada and business people, including convicted abortionist Gertrude Jenkins of San Francisco, took a similar deal over the previous handful of years. Here are some of The Silver State gamblers who did so between July 1943 and May 1946 and what they paid:

These and all of the other people who bought MCCCC stock had tax problems that disappeared subsequently.

Mining Misrepresentations

Along with Mooney, the key perpetrators of the scam were Ernest M. Schino, chief field deputy for the tax bureau in Northern California, and Martin Hartmann, an ex-con turned MCCCCC sales agent. They told prospective shareholders that the corporation owned a reputable, producing copper mine sitting on valuable property that included 14 mining claims, a mill site and water rights. They touted the fact that the land adjoined that of the producing Rio Tinto copper mine in Nevada’s Elko County, owned by Anaconda subsidiary Mountain City Copper Co., a different entity from MCCCC. 

In reality, MCCCC didn’t have a working mine. The company had no value, and, thus, the stock was worthless. The property was nothing more than “a rathole in Nevada,” Frank Dwyer of the San Francisco Stock Exchange told the San Francisco Examiner (Aug. 29, 1950).

Mooney founded and incorporated MCCCC in 1937, allegedly spent $137,000 on some work there, including a geophysical survey of the land and some underground work in 1944, but that was all. By 1950, MCCCC had about 600 shareholders, a major one being Robert L. Douglass, an IR collector in Nevada.

Compounding The Crime

As promised, Mooney calculated and filled out Remmer’s tax returns not just for 1945 but for all of the five years between 1942 and 1947, a violation of IR regulations. Specifically, the bureau’s employees were prohibited from doing any work that could affect a person’s tax liability and/or from moonlighting in any capacity in which their personal and professional interests would conflict.

Scandal Sees Sunlight

In early 1950, the San Francisco Examiner exposed the IR scheme and the workers involved. Subsequently, William A. Burkett testified before Senator Estes Kefauver’s United States Senate Special Committee to Investigate Crime in Interstate Commerce in San Francisco in November 1950, telling them what he knew about it.  He previously quit his position as the IR intelligence chief for Northern California after his department ignored his reports on the MCCCC stock extortion in what he alleged was a coverup.

“The Internal Revenue office hearing [before the Kefauver Committee] showed … that established law enforcement and investigative officers were in many cases the exploiters rather than the exploited in their relationships with the underworld,” William Howard Moore wrote in The Kefauver Committee and the Politics of Crime, 1950-1952.

Probe, Legal Action Ensue

After an investigation by East Coast U.S. Treasury agents into related tax cases going back to 1940, the federal government pursued a lawsuit against Mooney, Schino and Hartmann for a single extortion case, the one involving Jenkins, the abortionist, who purchased $5,000 worth of MCCCC shares. By this time, Mooney was 81 and retired, Schino was 55 and fired. Hartmann was 63.

A federal grand jury indicted the trio for attempting to defraud the U.S. government by attempting to obstruct the IR bureau’s prosecution of Jenkins for income tax evasion.

Ralph Read, head of the IR bureau’s intelligence unit in San Francisco, said that his team, after investigating the Jenkins case years earlier, concluded “there was nothing involving any Internal Revenue personnel” and “there was nothing in the nature of solicitation of a bribe or any act to influence an Internal Revenue officer” (San Francisco Examiner, Aug. 30, 1950).

In early 1952, federal prosecutors tried Mooney, Schino and Hartmann together. A jury found all three guilty.

Schino and Hartmann appealed the ruling, but in December 1953, the Ninth U S. Circuit Court of Appeals upheld it. Schino’s sentence was two years in prison, Hartmann’s was two years in prison plus a $5,000 ($49,000 today) fine. Mooney got two years’ probation and a $5,000 fine.

As for gambler-Mobster Remmer, he later was convicted of federal tax evasion and sentenced to a $20,000 ($194,000 today) fine and five years prison, of which he served 2.5.

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* Remmer’s gambling houses included the Cal-Neva Lodge at Lake Tahoe in Crystal Bay, Nevada; and in California, the Menlo Club, 110 Eddy and B&R Smokeshop in San Francisco; the 21 in El Cerrito; and the Oaks Club in Emeryville.

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