WATCH | Senate Minority Leader Harry Reid’s attack on the FBI in late October is the latest chapter in a long-simmering relationship with the law enforcement agency that began four decades ago when agents reviewed his dealings with mobsters during the heyday of the Las Vegas casinos.
Over the years, the FBI has received multiple allegations against the powerful and soon-retiring Nevada Democrat, most recently in 2014 when agents sought permission to investigate a Utah businessman’s allegations against Reid.
They were turned down by the Justice Department, officials confirm. Reid has always denied wrongdoing and never been charged with any crime.
Back in the 1980s, a massive FBI organized crime investigation developed information that Reid may have received money from a mob figure that was routed through a friend, and subsequently took action as Nevada’s top gaming regulator that allowed a mob-controlled casino to keep operating, according to internal bureau memos and wiretap tapes that escaped public notice for most of Reid’s Senate career.
The evidence included an interview with Joseph Agosto, a now-deceased La Cosa Nostra crime family figure who told FBI agents he provided through an intermediary “$25,000 or $30,000 to be used to furnish Reid’s new office” in 1977 right after Reid was named chairman of the Nevada Gaming Commission.
That interview was part of the FBI’s extensive Mafia history files that were released in 2013-14 under the Freedom of Information Act.
Wiretap intercepts reviewed by Circa also captured major mob figures discussing in 1978 -- a year after the alleged gift -- that Reid had helped them resolve a case that threatened to revoke the license of a large mob-controlled casino. According to FBI documents, the mobsters in the tapes referred to Reid by the codename they had given him, “Clean Face” or “Clean.”
Reid’s commission opted to fine the Stardust casino $100,000 in 1978 rather than revoke its gambling license as Gaming Control Board regulators had recommended, the records show.
“I’m happy that Clean, you know, was able to deliver,” the late Agosto was captured on a wiretap tape saying as he described the reaction of a mob associate shortly after Reid persuaded the regulatory commission to approve the fine and keep the casino open.
Agosto, the Kansas City mob’s top lieutenant in Las Vegas, told the FBI in a subsequent jailhouse interview in 1983 that Reid’s action in the Stardust matter was “so favorable," confirming the FBI’s suspicions that the regulatory decision allowed organized crime to keep skimming funds from the casino.
The late Joe Agosto, a mob figure in Las Vegas, told the FBI he routed a gift to Harry Reid and then got favorable treatment for a mob casino.
No charges have ever been filed against Reid, who has long denied he did anything wrong as chairman of the Nevada Gaming Commission in the 1970s. His office provided a statement in 2014 when the documents surfaced denying Agosto’s allegations:
“This is an absurd attempt to rewrite the well-documented and thoroughly investigated history of a time when Sen. Reid fought the mob and won, surviving an assassination attempt and working aggressively with law enforcement issues, including the FBI, to put mob figures in jail,” the statement said.
Reid’s uneasy relationship with the Bureau surfaced anew last weekend when he formally accused current FBI Director James Comey of violating federal law by announcing a new investigation of Democratic presidential candidate Hillary Clinton’s emails just 11 days before the election.
The FBI disputes that Comey did anything wrong.
The now-retired FBI agents who worked the 1980s casino case said in videotaped interviews in 2013 that there was sufficient evidence at the time to warrant a criminal investigation of Reid, long before he rose to become the second most powerful Democrat in Washington.
But they said they did not have the initial resources to pursue Reid because the FBI was first focused on taking down some of the most infamous members of the mob. Then Agosto died suddenly of a heart attack, eliminating a key witness that could be used in any case against Reid, they explained.
Though no charges were ever filed, the agents said the dealings between Agosto, a known mobster, and Reid, a gaming regulator, appeared inappropriate to them since organized crime was not supposed to have any dealings with legalized gambling in Nevada.
“It was a corrupt relationship, yes. Helping, backdoor help would have been indictable probably,” retired FBI Agent William Ouseley said when asked about the Reid-Agosto relationship.
Retired FBI agent William Ouseley was one of two agents to oversee the organized crime unit in Kansas City during the 1980s Strawman probe that toppled mob bosses in several cities.
Ouseley said the FBI’s evidence indicated “that this Clean Face person, who we later identified as Reid, is assisting them in their interests. And that this Clean Face is an asset for organized crime.
“When they need help, he’s someone they can go to, an important someone.”
Ouseley ran the bureau’s organized crime unit in Kansas City that oversaw the massive investigation codenamed “Strawman” that toppled the mob bosses in Chicago, Kansas City, Las Vegas, Cleveland, and Milwaukee.
The case revealed how the mafia skimmed profits from casinos and used Teamsters union pension loans to fund its illegal activities. It became the inspiration for the 1995 fictionalized movie Casino starring Robert De Niro.
Retired Agent Gary Hart, who started the investigation and preceded Ouseley as the organized crime unit chief in Kansas City, said for years later he always cringed when Reid took credit in his biography and on the campaign trail for cleaning up the mob’s influence in Las Vegas when he was a gaming regulator.
“It was all fiction,” said Hart, whose youngest son once worked on Capitol Hill for retired Sen. Tom Coburn, R-Okla.. “
Did he clean up the mob in Vegas?
“No,” Hart answered
Was Reid helping the mob in Vegas?
“Yes,” the retired agent answered.
Retired FBI supervisor Gary Hart was one of the early leaders of the Strawman investigation when Harry Reid's name first start surfacing.
Ouseley gave a similar account of his frustration when he read Reid’s autobiography entitled “The Good Fight,” where the Nevada Democrat argued he risked assassination and retribution but steadfastly tried to ease the grip of the mob on Las Vegas casinos during his tenure on the Gaming Commission.
“Mr. Reid’s recounting of those times simply does not fit the facts that we developed and that you have. His using his time in Las Vegas as a positive in his political career, using the statements of how he cleaned up Las Vegas, is simply not true.”
Both men reluctantly agreed to be interviewed after the FBI released documents between 2012 and 2014 chronicling the Strawman investigation as part of its organized crime history project.
The documents are highly coveted by historians, but have triggered little attention for their political significance.
Rumors of Reid dealings with the mob have lingered for decades in Nevada. The Senate minority leader and his defenders have dispelled those rumors by pointing to a 1980 internal investigation conducted by Nevada officials that cleared the Nevada Gaming Commission of any wrongdoing, and had access to all of Reid's financial records.
The retired FBI agents, however, said that the most serious evidence of wrongdoing was never sought from their Kansas City office or turned over to the 1980 Nevada Gaming Control Board investigation.
In fact, some evidence -- like wiretaps and cooperating witness testimony -- wasn’t publicly available until long afterwards, they said. “No effort was ever made to even get an overview from us, what we might have and what we might be able to turn over later,” Ouseley said.
The agents said the FBI’s first priority in that case was to prosecute the mob bosses at the center of a casino skimming scheme, and it was only years later that the FBI was able to focus on whether the Mafia had received favorable treatment from Reid and other political figures.
Reid and his codename “Clean Face” first surfaced in mob wiretaps in 1978, and at trials in Kansas City a few years later.
The FBI agents say the mobsters told agents they codenamed Reid “Clean Face” because he was clean shaven in an era and city where beards were fancied.
Reid’s defenders claim the title was given because the mob considered Reid ethical.
It wasn’t until 1983 -- well after Reid had declared his innocence, stepped down as Nevada’s top gambling regulator and moved on to Congress -- that Agosto began cooperating with the government after pleading guilty to criminal charges.
Agosto served as Kansas City mob boss Nick Civella’s handpicked lieutenant to oversee the Mafia’s interests in Las Vegas in the 1970s. He served as entertainment director of the Tropicana, one of the casinos controlled by the mob and regulated by Reid.
Agosto provided agents with a detailed account of how the mob skimmed profits from multiple casinos to fund its illegal activities. Weeks into his FBI debriefings, he turned to the subject of his contacts with Reid.
Agosto alleged he funneled money in 1977 through a mutual acquaintance to Reid to buy furniture for Reid’s office as soon as Reid became Nevada Gaming Commission chairman.
His account of the payment is contained in a few concise sentences in an FBI 302, an interview summary report.
“When Reid became chairman of the NGC, it was necessary for Reid to open his own law office so that there would be no conflicts if his law partner represented clients appearing before that commission,” the report explained, relating what Agosto told agents during his debriefing.
Agosto said he gave a lawyer who was Reid’s friend “$25,000 or $30,000 to be used to furnish Reid’s new office,” the report said. The lawyer named by Agosto is still alive today but did not return countless calls and emails over the last three years seeking comment.
The Reid office statement in 2014 declined to address the specific Agosto allegation, saying only that giving credence to “aging memories and the words of a convicted mobster trying to get his sentence reduced is extremely tortured.”
“At the end of the day, the only viable explanation is the same one reached by what was the most aggressive investigation in Nevada state history: Senator Reid was completely and unequivocally innocent," the statement said.
Hart and Ouseley said Agosto’s spontaneous admission in 1983 helped explain wiretap intercepts and evidence the FBI had recovered years earlier from the home of Carl De Luna, a high-level mob figure in Kansas City.
De Luna kept a series of detailed handwritten notes about work he had done for the mob. One of those notecards detailed a meeting he, Kansas City crime boss Nick Civella’s brother Carl, and Chicago mob boss Joseph Aiuppa held on May 10, 1977 in Chicago.
The notecard suggested that Aiuppa - codenamed “22” -- was keenly interested in securing the mob’s friendship with Reid as he was taking over as gaming chairman. The notecard indicated both Agosto (codenamed “Caeser”) and a second mobster named Frank “Lefty” Rosenthal (codenamed “Crazy”) were trying to gain influence with Reid.
“MM & I saw 22 and Hambone,” the notecard read, referring to all of the mob attendees by their codenames.
"Talk almost entirely of the Caeser (Agosto) and Clean Face (Reid) relationship and what Crazy (Rosenthal) has been doing to try to corral Clean Face.”
The fact that Aiuppa, then one of America’s most powerful mobsters, was so personally interested in Reid as gaming commission chairman had intrigued the agents for years.
“They don’t get together and meet unless it’s something important for their criminal endeavors,” Hart explained. “This relationship (with Reid) was a benefit to both Chicago and Kansas City.”
In his 1983 interview, Agosto also provided agents new information about a summer 1978 meeting in which he, a lawyer friend and Reid met to solve a regulatory matter that threatened to shut down the Stardust.
The Nevada Gaming Control Board had recommended revoking the casino’s gambling license, and mob bosses were mortified they might lose their skimming operation, wiretap intercepts showed.
Though Agosto technically had nothing to do with the Stardust -- he was the Tropicana casino’s entertainment director -- he claimed that he reached out to Reid to try to protect the interests of mob bosses in both Chicago and Kansas City, according to his interview and FBI wiretaps.
“They gonna revoke the f&*!ing license. We can’t afford this. We’ve got to have a f&*!ing deal,” Agosto told a mob boss in a call to Kansas City intercepted by the FBI in 1978 that recounted the entire drama.
Reid eventually voted to overrule the recommendation from gaming board officials and allow the casino to stay in operation, persuading his colleagues on the commission to approve a $100,000 fine in lieu of revoking the casino’s license, the records show.
Shortly after the commission approved the fine, a gleeful Agosto was captured on a wiretap reporting to a high-level member of the Kansas City mob that he had “personally” gone to Reid to save the Stardust.
“He asked for the settlement on a fine basis to stop the proceedings,” Agosto told his mob associate De Luna, describing Reid’s alleged help.
“Mr. Clean no doubt had a big influence?” De Luna asked.
“The statement, ah, Crazy made last night, he says, the only statement he made, he says, I’m happy that Clean, you know, was able to deliver,” Agosto proclaimed on the wiretap.
In his 1983 FBI interview, Agosto credited Reid with coming up with the idea to save the Stardust license.
“It was suggested by Reid that the Stardust be fined the unprecedented amount of $100,000 in lieu of suspending the casino’s license. There was no bribe offered to Reid for this decision, and he does not believe that Reid was ever rewarded for making a decision that was so favorable to the Stardust,” the FBI summary of the Agosto interview said.
Agosto told authorities Reid once represented Agosto’s wife in an amicable divorce proceeding and that he ultimately felt like the mob left him as a fall guy to protect Reid.
He pleaded guilty to criminal charges and proved to be a valuable government witness against his former mob bosses during a summer 1983 trial that resulted in several convictions. But in late August that year, he suffered a fatal heart attack while in FBI protective custody.
Asked why the FBI never pursued Reid further, the retired FBI agents said they had to finish the prosecutions of the major crime family bosses first and by the time that worked was completed Agosto had died.
“We had a lot of higher priorities,” Hart explained. “We were focused on the mob guys in Chicago, Kansas City, Cleveland, Milwaukee, and we had all kinds of evidence on even people other than mobsters that perhaps we could have pursued.
"But we had a certain amount of resources and we had to prioritize what we spent our time on and we picked the targets that we felt were most important and tried to make good cases on them.”
In June 1983, Agosto testified under oath that he lied to Nevada gaming authorities during the 1980 investigation that cleared Reid and his regulatory commission. Agosto said he lied so that Reid would be protected from being exposed as friendly with the mob, according to the transcript.
“I did lie at that time to save Mr. Reid,” Agosto stated in court.
“At the time we had an interest to save the position of the Gaming Commission, which was Mr. Reid, which was named in the tapes,” Agosto added, describing himself as a “sacrificial lamb to save Mr. Reid.”
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