The lead story in the June 9 Washington Times was a bombshell. Under a page-one banner headline boldly proclaiming, "Casinos Checked Out Babbitt, His Denials of Gambling Don't Fit Record," Washington Times reporter Jerry Seper gave Washingtonians something to chew on with their morning coffee, as he recounted the lurid details of what looked like the country's next big political scandal.
Bruce Babbitt, then the leading candidate for a post on the United States Supreme Court and the current secretary of the Department of the Interior, had been the subject of "credit checks" run by four Las Vegas casinos in 1976. The checks, the story said, were made during a period when Babbitt reportedly had run up "substantial" gambling debts in Vegas casinos--some of which were allegedly recorded on "markers," or IOUs, kept in the vaults of the Dunes Hotel.
Seper wrote that although Babbitt claimed he had never been involved in gambling and had never visited the casinos, a former Las Vegas police supervisor--tracked down in retirement by the diligent reporter--remembered that several of his officers had actually watched Arizona's former attorney general and governor gamble at the Dunes "every six to nine months" between 1979 and 1982. The combination of the documented credit checks and the eyewitness testimony seemed to make a strong case that Babbitt was lying about his debts, as well as possible ties to organized crime.
The story also noted that Babbitt had been accused in 1976 of accepting a "mob payoff" to cover large gambling debts while he was Arizona's attorney general. Adding diabolical mystery to the mix, the payoff was said to have been uncovered in the process of the investigation into the 1976 murder of Arizona Republic reporter Don Bolles.
Seper added that law enforcement continued to probe into allegations about Babbitt's links to gambling and organized crime as late as 1990.
It is understandable if readers of the Washington Times piece, along with those who saw the story later on national network news reports, believed they were witnessing the birth pangs of yet another administration imbroglio.
This scandal in the making was even worse than past Clinton controversies, though, not only because it involved perhaps the most universally respected member of the president's cabinet--Babbitt was in the running for the court seat in large part because his squeaky clean reputation suggested an easy confirmation--but also because it linked him to an explosive tale of bribery, organized crime, gambling, deceit and even murder. This story, dripping as it was in allegations of moral turpitude, was clearly no mere Nannygate. This had the potential to do real damage.
Seper's article, however, was nonsense. It amounted to a smear.
Sources close to the several probes made into gambling allegations against Babbitt, including a former U.S. attorney, two state attorneys general, an FBI investigator and even the key source cited by Seper, say evidence clearly refutes the essential charges leveled against Babbitt in the Washington Times.
Kent Clifford, the former head of the Las Vegas police intelligence unit, whom Seper quotes as confirming that officers observed Babbitt gambling, tells New Times that Seper misquoted him, "enhancing" his comments. He insists that neither he nor any police officers ever saw Babbitt roll the dice or pull on a one-armed bandit.
In fact, no official investigator--state, local or federal--who has probed recurring Babbitt gambling allegations over the past 17 years has found any hard evidence that the Interior secretary so much as set foot in a Las Vegas casino, much less submitted to credit checks or ran up big gambling debts. Law enforcement investigations in 1977, again in 1986 and once again during Babbitt's confirmation hearings for Interior secretary earlier this year all cleared him of wrongdoing.
"Is this story ever going to die?" wonders Clifford. "My honest opinion is . . . I heard lots of things about Mr. Babbitt. All I ever heard was innuendo and rumor. He did nothing wrong that I know.
"Let it die and go away. Let the man live his life."
In his June 9 "expos," Seper led readers to believe that the investigation into Babbitt was relatively fresh and, possibly, still ongoing.
"It was not clear yesterday why the state probe continued into 1990 or where it stands today," wrote Seper.
The only reason the status of the investigation was "not clear" was because the reporter never bothered to call the chief prosecutors for an update or appraisal. Seper did not check back with former U.S. attorney Mike Hawkins or former Arizona attorney general Bob Corbin, both of whom investigated the allegations and found them spurious.
And contrary to what Seper wrote, it was very clear indeed why the charges were reexamined in 1990.
Arizona's new attorney general, Grant Woods, had promised on the campaign trail that the mystery of the Bolles homicide--largely unresolved after 14 years--would be solved. As part of the process of thoroughly inspecting hundreds of old leads, the Babbitt gossip was reexamined and, for at least the third time, found to be without substance. The new probe by Woods, and his predecessor, Corbin, resulted in the conviction of Phoenix contractor Max Dunlap.
Attorney General Woods would have gladly told Seper that his office has no lingering questions about Babbitt. Indeed, the testimony of Attorney General's Office investigator George Weisz before the grand jury in 1990 put such questions to rest. Again. But the prosecutor's office said last week that Seper never called.
Neither Babbitt nor Seper returned calls from New Times. In response to a list of questions faxed by New Times to the Washington Times, Seper faxed back a note that took issue with the "sincerity" of efforts to contact him, but did not answer any of the questions.
Although readers had no way of knowing, Seper's story was not a fresh, hot political expos, but simply a moldy, warmed-over concoction of old innuendo and distortion. Most of this "scoop" had been reported before, in 1977 and then again in 1986--on the latter occasion by Seper himself. Both times it was quickly discredited by state and federal investigators and entombed in the mausoleum reserved for unsubstantiated political supposition.
@body:To trace the genesis of this lingering tale, it is necessary to venture back to 1977, when Babbitt was serving as state attorney general. Early that July, the U.S. attorney for Arizona, Michael Hawkins, announced that fellow Democrat Babbitt was under investigation for alleged ties to Las Vegas gambling figures and casinos--where he was reported to have incurred six-figure debts by betting wildly during several Nevada visits.
Babbitt said at the time that the rumor was merely a political counterstrike launched by Robert Fendler, the president of the defunct Lincoln Thrift Company, who had been indicted by Babbitt's office. Babbitt, who insisted he had been to Las Vegas only twice--once while in college and again in 1967 for a legal seminar--publicly welcomed the investigation.
The FBI quickly began a probe into the charges, and by the end of the month, Hawkins called a press conference to announce that the investigation had cleared Babbitt.
"My feeling has always been," Hawkins tells New Times, "that it was some rather unsavory characters, someone who had an ax to grind against Bruce, someone who his office might be investigating or preparing to prosecute, who started this rumor.
"The allegations were murky at best to begin with, and they didn't get any better when the FBI looked into them. I don't know where [Seper] is coming from on this now."
Hawkins' gets a chuckle out of the image of the bookish, reserved Babbitt as a rabid gambler.
"The idea of Bruce Babbitt bellying up to a crap table and yelling 'snake eyes' is just absurd," he says with a laugh. "Bruce is the kind of guy who if he saw a pair of dice would wonder if they were ivory, and what international poaching law had been violated to bring them into the country."
Hawkins, who wrote a letter explaining the results of the investigation to the U.S. Senate committee on Energy and Natural Resources during Babbitt's Department of the Interior confirmation hearings, says there "wasn't a shred of evidence to support a connection between [Babbitt] and gambling or organized crime in Vegas, or anywhere else."
Anticipating that critics might charge that Hawkins, a fellow Democrat, could be involved in soft-pedaling the investigation to protect Babbitt, Hawkins noted in his letter that although they eventually became friends, he and the then-attorney general had often differed--and that Babbitt had even opposed Hawkins' appointment as U.S. attorney. He remains skeptical that Babbitt indulged in heavy gambling then or at any point in his career.
Although experience teaches that politicians, even policy wonks like Babbitt, are often full of unsavory surprises, the results of the investigations--as well as the policies and procedures of Las Vegas casinos--support Hawkins' conclusion.
A high-ranking ex-FBI source who took an active role in the 1977 investigation confirmed that agents checked guest-registry books and interviewed employees at all four Las Vegas hotels--the Dunes, the Marina, the MGM Grand (now Bally's) and Caesars Palace--where Babbitt was reported to have gambled. The agent echoes Hawkins' assertion that there was absolutely no evidence linking Babbitt to the casinos, and noted that the FBI also suspected that a Babbitt foe was at the root of the story.
"I'll tell you frankly," the now-retired agent says. "It wouldn't have upset me on a personal level if we had found Bruce involved in some wrongdoing. I wasn't a big fan of his. I always thought he was arrogant and ambitious--a dangerous combination.
"But there wasn't anything to [the allegations]. There were rumors upon rumors that we chased down, but nothing you could put your finger on."
Both Hawkins and the agent admit that the name "Bruce Babbitt" was found in the files of Central Credit, a company that researches credit-history requests for Las Vegas casinos. In his Washington Times story, Seper noted the presence of the name, confirmed by Nevada Gaming Control Board investigator Ron Hollis in 1989, as evidence that the credit checks were performed.
But as Seper reported, not even Hollis could confirm that the "Bruce Babbitt" in the Central Credit files and the future governor were one in the same, partly because the records were mysteriously missing by 1989, but also because the "credit inquiries" didn't include vital information such as a date of birth or a social security number.
According to Seper, Hollis--who did not return telephone calls from New Times--attempted to rationalize this shortfall in evidence by saying that casinos often allow "celebrities or prominent people" to forgo submitting such detailed personal information to the credit-checking company.
But Las Vegas sources tell New Times that casinos are much less willing to bestow credit, few questions asked, than Hollis seems to suggest in Seper's story.
A longtime employee of Caesars Palace, who frequently deals with credit requests from hotel guests, says that casinos check "absolutely everyone" who asks for credit, and will only allow guests to forgo filling out a detailed credit questionnaire if they are "truly exceptional."
"If George Bush walked in here and wanted credit," the employee says, "we might have Central Credit check him out by name only." A young, little-known attorney general from a sparsely populated western state--which is what Babbitt was in 1977--would definitely not qualify for such treatment, he added.
A spokesperson for Central Credit says it is actually impossible for casinos to perform any kind of check without detailed personal information.
Constance Fitzgerald, Central Credit's vice president for operations, says the company "can't help track a guest's credit history, unless he has a very, very unusual name, without a complete form." Fitzgerald laughed when asked if casinos ever submit just a name to help the guest protect his anonymity.
"Why would they want to do a thing like that? The law bars us from releasing credit checks to anyone but the person himself and the casino doing the check at his request, anyway," she says.
"Too much money is at stake for casinos to gamble on just a name."
Noting this, investigators believe that the presence of Babbitt's name--and his name alone--in the credit files is highly suspicious. Rather than indicating he actually applied for credit, as Seper reports, the files tend to suggest that someone may have deliberately planted the name in an effort to smear Babbitt.
The Caesars Palace employee notes that anyone could have walked into a Las Vegas casino, identified himself as "Bruce Babbitt" and requested immediate credit. Because casinos have an obvious financial interest in providing credit to guests as quickly as possible, in such circumstances a hotel employee would probably ask "Mr. Babbitt" to step into a backroom. There, the employee would call Central Credit and ask the necessary questions directly of the credit applicant, relaying the answers over the telephone in an effort to speed the process.
"Anybody could walk in here and say they were Babbitt and we would do a credit check," he says. In fact, someone could simply call on the telephone, claim to be Bruce Babbitt, and a credit check on that name would be sufficient to start a file showing an inquiry had been made. The name would likely still be left in the Central Credit records to show that an inquiry was begun.
However Babbitt's name came to be immortalized in the files of Central Credit, it clearly falls far short of serving as the evidentiary bombshell Seper's article suggests it to be. As the FBI concluded after examining all the possibilities, it fails to prove that Babbitt applied for credit, lost heavily at the tables, or even ever visited a casino.
But to the readers of Seper's story, it was clear that Babbitt must, at the very least, have gambled at the Dunes Hotel. What couldn't perhaps be proven by apocryphal credit checks could certainly be verified by eyewitness testimony. And according to the Washington Times, Las Vegas police officers actually watched Bruce Babbitt put his money down.
@body:Seper quotes Kent Clifford, the former head of the Las Vegas police intelligence unit, as saying that his agents--lured by reports from the Dunes that Babbitt had gambling debts at the hotel--covertly observed Babbitt placing bets there on "two or three occasions" between 1979 and 1982.
But Clifford, now a real estate salesman, tells New Times a different story, one that is diametrically opposed to Seper's smoking-gun account.
Clifford says Seper misquoted him and "enhanced" his comments about the Babbitt investigation. Contrary to what appeared in the Washington Times, Clifford maintains that neither he nor his officers saw Babbitt at the casino or anywhere else in Las Vegas.
"Nobody saw him there to my knowledge," he says. "I don't think any of my officers saw him there. They were just asked to check on the record."
What the record revealed was identical to what had been uncovered by the FBI in 1977--Babbitt's name was in the Central Credit files. An inquiry into the gambling debts led to a similar dead end. Ash Resnick, the shadowy Dunes employee mentioned in Seper's story, allegedly told officers he had copies of IOU markers Babbitt owed the Dunes. But Clifford tells New Times Resnick never actually showed the markers to anyone from the police department.
Clifford says he ordered the inquiry abandoned after reviewing the "informal" file on Babbitt compiled by his officers, noting that there was no evidence to justify a formal investigation. He says he then threw the report away.
"I looked at that report and said, 'So what?'" he says. "There was no reason to believe criminal activity was involved."
Clifford says he is weary of inquiries into Babbitt's alleged gambling.
"The FBI called me during the Interior [confirmation]. I told them, hey, the guy never did anything wrong in this state that I know of."
Clifford's men weren't the only ones to fail in efforts to document the alleged Babbitt gambling IOUs. Don Devereux traveled to Las Vegas with former Phoenix police detective Jack Weaver in the mid-1980s in an effort to purchase proof of the IOU markers from Resnick.
Although Devereux occasionally worked as a reporter for the Scottsdale Progress, he wasn't in Vegas merely to do journalism. A passionate supporter of Max Dunlap, one of the men charged with orchestrating the Bolles assassination, Devereux was there to negotiate for and purchase the IOU markers on the behalf of what Devereux calls "Phoenix interests."
(Dunlap is awaiting sentencing after his recent conviction, the second, for killing Bolles. His alleged co-conspirator, Jimmy Robison, is scheduled for trial later this summer.)
Devereux won't say why he wanted to buy the IOU markers, or for whom he was acting as a middleman. What is clear, however, is that Devereux now says "the deal never came to pass" because the price of obtaining the IOU markers was too high. He admits that he never saw any "hard evidence" of Babbitt's gambling debts.
Like many conspiracy alleys, the IOU markers turn out to be blind. With the interests of well-connected developer Max Dunlap hanging in the balance, it is difficult to imagine a price for evidence that was too high. And if you are going to consider the possible existence of these markers, you also have to entertain the idea that sharp Las Vegas hustlers might have tried to shake down a potentially gullible Arizona ideologue like Devereux. If Resnick had markers, forged or legitimate, he took them to his grave in 1989.
One year later, 1990, Arizona had a new attorney general, Grant Woods, who was determined to resolve the 1976 killing of reporter Don Bolles. Woods' predecessor, Bob Corbin, had already amassed a mountain of data that was on its way to the courthouse.
Far from unearthing damaging information on Bruce Babbitt, the Attorney General's Office uncovered questionable ties between the target of their probe, Max Dunlap, and sometime-journalist Don Devereux. Investigators for the state's top prosecutor were troubled when they learned that Devereux channeled small amounts of cash and gifts from Dunlap's camp to suspected Bolles killer James Robison.
Although the sums involved were not large, they were viewed by prosecutors as possible payoffs for Robison's continued silence. Devereux found himself in an odd position for a journalist, that of being called a bag man by the attorney general.
Today, Devereux says in astonishment that his role in the Dunlap saga caused him to be viewed as an "unindicted co-conspirator."
When not acting as a courier and champion for Max Dunlap, Devereux claims he carried information to another Arizona journalist, Jerry Seper.
While Devereux failed in his efforts to find and buy the IOU markers, he did manage in 1986 to locate a kindred spirit back in Phoenix. According to Devereux, he often shared information with Seper. Seper had been one of dozens of writers, including Devereux, who covered the aftermath of the Bolles murder and became absorbed in exposing truth behind the case. Even, his critics say, if it meant playing fast and loose with the facts.
"You've got to be damned careful of what you say to [Seper]," says Arizona's former attorney general Bob Corbin, now national president of the National Rifle Association. "Because you know he's going to take it out of context."
Corbin learned that lesson when Seper--who moved to the Washington Times in 1985--teamed up with Devereux the next year to "break" the story of the Babbitt "payoff."
This scandal is separate from the gambling problem but demonstrates how easily these mob-related hoaxes take on a vampirelike resiliency even in the face of silver-bullet reality.
@body:Corbin, no stranger to political and journalistic intrigue, says he should have known from the start he was being taken for a ride.
In December 1986, he received calls from both Seper and Devereux. Both told him that they had evidence Babbitt may have taken a bribe from "the mob" in 1976. If they shared that evidence with the attorney general and it turned out to be valid, would he investigate?
Corbin, bound by law and ethics to follow up any and all such leads, said he would look at the evidence.
The next day, the Washington Times proclaimed that Attorney General Bob Corbin was conducting a full-fledged investigation of Bruce Babbitt. "AG confirms Babbitt 'payoff' probe," screamed a matching headline the same day in the Scottsdale Progress.
In this version of the "Babbitt scandal" story, the duo reported that Corbin was probing charges made in a tape-recorded conversation between a Phoenix police snitch and a onetime Phoenix greyhound trainer. The trainer, Leo Lane, told the snitch, Keith Nation, that Babbitt had accepted a $45,000 bribe from the "mob" for his role in allowing a company called Emprise to keep its interests in several Arizona dog tracks.
Emprise, which was found guilty of conspiring to hide its involvement in a Las Vegas partnership that had mob connections, was ordered by the Arizona State Legislature in the 1970s to sell off its six Arizona dog tracks. In a deal later worked out with state officials, the company was allowed to retain some interest in four tracks.
The bribe, Lane said on the tape--recorded in 1976 and misplaced by investigators for almost a decade--was for Babbitt's help in arranging this deal.
Corbin agreed to examine the tape as part of the ongoing Bolles investigation (Emprise was suspected of involvement in Bolles' death), but not as an independent probe of Babbitt.
"We didn't put a lot of faith in this one, but we felt we had a duty to check it out," Corbin remembers. "We tried to track down so many of Devereux's leads, but it was pathetic--they just wouldn't pan out. And then he'd write in the Scottsdale Progress that we had refused to check it out. I used to get so damned mad at him.
"So I said to my guys, 'Look, go check it out. We've got to check it out or we're going to get accused of covering up for Bruce.'"
Just as the report that Corbin and crew were "investigating" Babbitt turned out to be overblown, it soon became apparent that Lane didn't have any evidence to support his story about the payoff. In fact, Lane admitted to New Times in a 1986 interview that in mentioning the payoff to Nation, he was merely lapsing into a Joseph Stedino-esque fit of braggadocio.
"This is the straight story," said Lane, who was by then retired to Colorado. "I didn't know shit about Bruce Babbitt and gambling. It was something I heard somebody talking about rumorwise one time, and when I got this call from old Keith Nation, I just start bullshitting him--one braggart talking to another braggart."
Even if Lane had been serious about the payoff allegation, however, the story is of dubious relevance to the latest Seper resurrection of gambling accusations against Babbitt. Nowhere on the tape does Lane say the payoff was meant to cover gambling debts, as Seper reports. Rather, Lane indicates that the $45,000 was strictly a direct bribe to ensure Babbitt's complicity in the Emprise deal with state officials.
Nevertheless, Seper saw fit to include Lane's charge in his Washington Times story, patchworking it into the other gambling allegations by using a narrow, almost nonexistent thread of logic: The alleged payoff was from a company that dealt with gambling and had a "mob" interest in a Las Vegas casino, Babbitt had Vegas gambling debts, therefore the payoff must have been meant to cover those debts.
"A reporter . . . can take a fact way over here to the right and one way over here to the left and you can bring them together," he notes. "I've got to have evidence to bring them together."
@body:More than simply bending facts to fit, Seper apparently ignored that portion of documents that exonerated his target. According to the same grand jury testimony that Seper cites as proof that the former governor of Arizona was under investigation for gambling as late as 1990, any questions about Babbitt's gambling were answered.
Yes, George Weisz did tell a grand jury--as part of the Bolles investigation--that Babbitt's name had appeared in the Central Credit files. What Seper neglected to include in his damning story, however, is that Weisz went on to testify that there had been a thorough search of all hotel and casino records, and that no mention of Babbitt was found.
As part of his investigation, Weisz interviewed George Duckworth, who started out as a shift boss at the Dunes in 1961 and finished his career as president of the hotel.
Grand jury transcripts show that Duckworth had never heard of Babbitt gambling at the Dunes. According to Weisz, if Duckworth hadn't heard about it, it didn't happen.
"I asked him if an individual such as Mr. Babbitt or any political figure or entertainer would be gambling at the Dunes, would he hear about it?" Weisz testified. "He said he would absolutely hear about it. Something like that would come to his attention, and he just had not heard about Bruce Babbitt doing any gambling at the Dunes."
Weisz also interviewed Inez Anderson, the casino collections manager for the Dunes. In 1986, Anderson was asked by Morris Schenker--the then-operator of the Dunes and a Teamsters boss who federal officials suspected of having ties to organized crime--to comb the hotel's files for any records on Babbitt. Seeking to please her boss, Anderson told Weisz she "checked every record possible," including all the casino books and hotel ledgers. She also talked to employees in the cashier and accounting areas to determine if they knew anything about credit extended to Babbitt.
What did she turn up? Zero, according to Weisz.
As for the credit checks themselves, Weisz interviewed a 22-year employee of Central Credit who said that all the presence of Bruce Babbitt's name in the files indicates is that someone from a casino called and asked about the name. Rather than citing the credit checks as information that casts suspicion on Babbitt, Weisz downplays them in his testimony.
Why none of this exculpatory evidence was included by Seper in his story is unknown. He almost certainly had access to the information while writing the piece. His old friend Don Devereux made sure of that.
Devereux says he sent Seper a copy of the grand jury testimony on which the article is based. "I gave [Seper] most of that stuff," Devereux says of the Washington Times story. Despite Weisz's testimony, which indicates that yet another investigation of the gambling allegations showed them to be illusory, Devereux keeps the faith--maintaining the evidence that will nail Babbitt is just around the corner, one more investigation away.
"I still think, and so does Jerry, that these allegations haven't been properly examined," he says. "Babbitt still has questions to answer."
@body:How much impact the Seper story may have had on Babbitt's sudden disappearance from the U.S. Supreme Court hopefuls' list is difficult to determine. There were certainly other factors at work. Nervous environmentalists lobbied to keep the eco-sensitive Babbitt at the Department of the Interior, influential Senate Judiciary Committee member Orrin Hatch blasted the former governor as "too political" for the court, and there are indications Clinton himself was set all along on appointing either a Jew or a woman.
In Washington, stories critical of Democrats in the rabidly conservative Washington Times should be swallowed along with a large grain of salt. The paper is owned by radical evangelist and infamous mass-marrier Sun Myung Moon, and hardly seems an objective arbiter of political news.
That isn't common knowledge outside the beltway however, and although most major newspapers ignored the Seper piece, CNN made it its lead item in a story about the Supreme Court search. Gun-shy Clintonites could easily have decided that the last thing their beleaguered boss needed was a court nominee with a nationwide reputation for uncontrollable gambling and scotched Babbitt on that basis alone. At least one national columnist, Donald Kaul, hypothesized that this was the case.
"Washington insiders immediately began selling Babbitt futures. Within days, stories of Babbitt connections to the Arizona mob were floated and Clinton bailed out."
As the FBI agent who participated in the original investigation in 1977 put it, "These things take on a life of their own, don't they?"
Not exactly. Sometimes, these things get a little help.
Get the This Week's Top Stories Newsletter
Every week we collect the latest news, music and arts stories — along with film and food reviews and the best things to do this week — so that you'll never miss Phoenix New Times' biggest stories.