Bill Pechart, left, and Dave Kessel

1950-1953

During the 1950 federal hearings on organized crime, two Northern California gamblers — Walter “Big Bill” Melburn Pechart and David “Dave” Nathan Kessel — were uncooperative, according to the questioners.

They were Senators Estes Kefauver (D-Tenn.), Charles Tobey (R-N.H.) and Alexander Wiley (R-Wisc.), congressmen who comprised the Kefauver Committee, or the United States Senate Special Committee to Investigate Crime in Interstate Commerce. During its two-year probe, the group conducted inquiries in 14 major cities across the nation, during which more than 600 individuals testified.

In San Francisco, the committee subpoenaed Bill Pechart and Dave Kessel to testify because they were “big wheels” in illegal gambling along with bookmaking and slot machine enterprises in Contra Costa County, or the East Bay, as described in California Crime Commission reports.

During the 1930s and 1940s the partners owned and operated numerous illegal gambling clubs — including The Wagon Wheel, the 21, the Rancho San Pablo and the Hollywood — in the then-unincorporated area between El Cerrito and Richmond dubbed “No Man’s Land.” They also were former associates of Elmer “Bones” F. Remmer, co-owning at least one gambling house and allegedly bribing politicians to let them operate outside the law.

During those decades, California prohibited all types of gambling except draw poker (legalized in 1911) and horse racing (legalized in 1933).

One-Sided Sessions

At the start of questioning, Kessel, 56, read a statement indicating he wouldn’t answer questions because of potential self-incrimination. He claimed he’d written the verbiage but when asked the meaning of some of the included legal terms, he admitted his lawyer had penned it. Thus, the committee charged him with perjury. Subsequently, he answered nary a question, including whether or not he knew Pechart.

Kefauver described Kessel as “one of the most sinister characters” the committee had interviewed (Oakland Tribune, Nov. 22, 1950). “Very substantial charges as to his operations in Contra Costa County have been made by citizens of that area. He appears from these charges to be a nuisance and a very bad influence.”

Pechart, 57, responded to some queries but invoked his Fifth Amendment right on others, particularly those about the duo’s businesses, income and taxes.

Consequently, the committee cited both men for contempt of Congress, which the Senate subsequently officially affirmed. Kessel was indicted for refusing to answer 32 questions, Pechart for 38.

If convicted, each gambler faced a maximum of one year in prison plus a $1,000 fine for each question they refused to answer: $32,000 for Kessel, $38,000 for Pechart (about $328,000 and $389,000 today, respectively).

Ruling On Contempt

After having pleaded innocent in 1951, the two gamblers went to trial in January 1952.

They were acquitted.

“Taking the whole record and the setting and circumstances in which the questions were asked, there was a right to claim the privilege,” said Federal Judge Louis E. Goodman. Yes, Pechart and Kessel were engaged in illegal gambling and racketeering, but no one can be forced into being a witness against himself.

Goodman also found Senator Tobey to be hostile at times during questioning, which could’ve  contributed to Pechart and Kessel fearing possible prosecution based on any information they might’ve provided.

In one instance, Tobey had asked: “Why in hell didn’t you come clean? When we get through with you, you will wish you had” (Oakland Tribune, Jan. 31, 1952). Another time, the senator had said, “You realize the penalty of breaking faith with this committee. It means a prison sentence.”

“There can’t be the faintest doubt that there was a reality of danger,” Goodman said about the hearing atmosphere, which lacked “impartiality” (Reno Evening Gazette, Jan. 30, 1952).

Kefauver, however, stated there was “no possible excuse” for the gamblers, “two of the most contemptuous witnesses who appeared before our committee,” not having answered questions (Oakland Tribune, Jan. 31, 1952). “It is a great disappointment and very discouraging that they were acquitted of the contempt charge.”

How About Nevada?

Six months after winning their contempt case, Pechart and Kessel tried to enter gaming in Reno, when they applied for a gambling license to run the Palace Club. They claimed to have given up all of their Northern California clubs in 1950. The Nevada Tax Commission, which then granted such permits, denied the men one due to their criminal background.

Sources

Pat McCarran, U.S. Senator for Nevada, 1947

1933-1954

His unfavorable personal opinion about gambling notwithstanding, Patrick “Pat” A. McCarran (D-Nev.) — U.S. Senator between 1933 and 1954 — acted repeatedly on the industry’s behalf. Had he not, it’s likely gaming wouldn’t have emerged as The Silver State’s greatest revenue-producing economic sector — a positive or negative, depending on one’s view.

Because gambling had become vital to Nevada — or “woven … in its various forms into the warp and woof of the state’s economic structure,” in the words of McCarran — he believed he had no choice but to do what he could to keep it thriving. But he felt like a “whore,” he said, defending gamblers (casino owners and operators), whom he considered “tinhorns.”

“In the climactic decision of his long and turbulent career, [McCarran] characteristically chose to justify and defend his beloved Nevada rather than take it into one more battle with poverty and want,” wrote the authors of The Money and The Power.

Inside His Bag Of Tricks

Here are 7 of McCarran’s pro-gambling efforts:

1) He intervened to get underworld denizens gambling licenses.

When Moe Dalitz, Cleveland mobster, applied for a gambling permit for the Desert Inn casino in Las Vegas in 1949, the Nevada Tax Commission said no based on his criminal background — bootlegging and illegal gambling. McCarran discussed the matter in person with one of his powerful friends, Salvatore “Sam” Maceo, Texas organized crime boss who previously had partnered with Dalitz in illegal liquor distribution.

After the McCarran-Maceo tète-a tète and supposed intervention by Maceo subsequently, state gambling regulators granted Dalitz a license.

2) He helped gamblers surpass other obstacles.

When mobster Benjamin “Bugsy” Siegel and the Nevada Projects Corporation, the cadre of mobsters financing the new hotel-casino, were having the Flamingo constructed in Las Vegas immediately following World War II, in 1946, construction materials were in shortage. As such, the Nevada office of the federal Civilian Production Administration allocated scarce materials on a project priority basis.

McCarran jumped the Flamingo to the top of the list so it could, and it did, receive construction materials without delay.

3) He got the scope of the Kefauver inquiry broadened.

In 1950, when Senator Estes Kefauver (D-Tenn.) pursued launching a congressional investigation into gambling nationwide, McCarran got the target expanded to encompass all types of organized crime — prostitution, narcotics, loan sharking, murder, extortion and labor racketeering — to lessen the resulting consequences to Nevada’s gambling.

The probing body became the United States Senate Special Committee to Investigate Crime in Interstate Commerce, or in short, the Kefauver Committee.

4) He delayed Congress’ approving the Kefauver inquiry.

Among his efforts there, he begged for additional time for the Judiciary Committee, which he headed, to consider the proposal, raised potentially related legal issues and suggested the matter be sent to the Senate Commerce Committee for its review as well.

Kefauver, however, received a green light, and his team conducted hearings in 14 major U.S. cities during 1950 and 1951.

5) He fought Congress’ agreement to levy contempt citations against Kefauver witnesses in general.

When subpoenaed to testify during the hearings, numerous gamblers either failed to appear or when they did appear, they refused to answer questions. Kefauver wanted them slapped with a congressional contempt charge* for obstructing the investigation. McCarran fervently argued against the idea but lost that battle. Once Congress approved one contempt charge, a slew followed.

6) He got contempt charges against multiple gamblers quashed individually.

7) He helped thwart passage of a bill to tax all gamblers.

Growing out of the Kefauver Committee’s findings, the House Ways and Means Committee, in May 1951, voted to impose a “10 percent gross receipts tax on bookies, numbers rackets operators and others who operate gambling pools” (Nevada State Journal, May 17, 1951). Kefauver urged that the tax bill from the House must be amended to incorporate all forms of gambling.

McCarran called on some Nevada gamblers to lobby against the bill while he fought it at the Senate Finance Committee level. He pleaded his case, that the “cumulative result would spell tragedy for the State of Nevada” and gambling, as a major economic component, needed protecting.

What eventually passed were a 10 percent tax on all wagers concerning sporting events or lotteries and a $50 annual occupational stamp excise for bookmakers and lottery operators. These mandates comprised a small portion of the much larger Revenue Act of 1951.

For these and his other interventions in support of gaming, McCarran was lauded by some and criticized by others.

—————————-

* Contempt of Congress is the criminal act of obstructing the work of the U.S. Congress or one of its committees, a misdemeanor punishable by a $100 to $1,000 fine or one-month to one-year imprisonment.

Sources