Davidson, Bill.The Mafia:
Shadow of Evil on an Island in the Sun

SE Post Feb 25, 1967 vol 204 issue 4 p. 27 - 37

Three centuries ago pirates invaded the Bahamas, and some say they still do. Now a political upset threatens a gambling empire that funnels millions of dollars a year into the hands of American gangsters.

Twice a week a strange little drams is enacted on Grand Bahama Island—a fragment of the British Empire which is described in tourist brochures as a "new horizon, bright with adventure and beauty … a New World Riviera which offers unparallel opportunities to the investor." A man named Dusty Peters rises early on each of those tow mornings, breakfasts in one of Grand Bahama's six luxury hotels, nods politely to the two U.S Government agents watching him intently from a nearby table, shovels a huge cigar into his flabby, middle-aged face, and sets about his chores.

He goes to the island's two gambling casinos, the Monte Carlo and El Casino, where he collects batches of checks and IOUs representing the losings/of the hapless high-rollers of the preceding two or three nights. He cheerfully shoves the checks and "markers" into a briefcase, exchanges Damon Runyonesque badinage with the casino's staid British secretaries, and drives to Grand Bahama's Freeport International Airport. The two U.S. agents always follow at a discrete distance. At the airport Peters and the agents board a plane for Miami, just 70 miles away. When the plane lands in Florida, just 35 minutes later, the agents follow Peters to a Miami Beach bank. Where he deposits the contents of his briefcase, worth possibly $30,000. From the bank Peters goes to the Fontainebleau Hotel and takes the elevator to the mezzanine-floor card room. Awaiting him in the card room is none other than Meyer Lansky, or his brother Jake, or both. Senate racket hearings have established the Lanskys as notorious American hoodlums who have long been associated with the Mafia. The U.S. agents always see at least one Lansky in the room before the door is locked.

The agents cannot force their way into the room because, on the surface at least, there is nothing illegal in what Peters and the Lanskys are doing. They are merely taking gambling money out of the Bahamas. What frustrates the agents is the fact that Meyer Lansky is know by the Justice Department to represent the gambling investments of five "families" of the Mafia in the United States—Chicago, New York, Philadelphia, Detroit, and Buffalo. Federal officials firmly believe that in 1966 Lansky funneled at least six million dollars to the five mobs. The only way that Justice can attack this system is by trying to prove that the recipients of the money are not paying taxes on it—a possibility being investigated by federal grand juries in New York and Philadelphia.

All this is irritating enough for the Justice officials, but what is particularly galling is the knowledge that Lansky, a man they have fought for years, is being allowed to operate just 70 miles off the Florida coast. The gambling operation is legal in the Bahamas, a self-governing British colony. Whatever his connection with the American Mafia, Dusty Peters is simply an employee of Bahamas Amusements. Ltd.— which owns the licenses for both casinos on Grand Bahama—and so are the 55 steely-eyed managers, supervisors and "pit bosses" of the operation. After running intelligence checks on the 55, the Justice Department's organized-crime experts discovered that nearly all of them had criminal records in the United States and that nearly all, in one way or another, have been tied in with the Lansky-Mafia apparatus at some time in the past.

For the past three years, Lansky's gambling operation has been completely legal in the Bahamas. It began under the rule of the predominately white United Bahamian Party. The U.B.P. completely controlled the islands' Negroes, who make up 80% of the population. Film star Sidney Poitier, who was raised in the Bahamas and still holds citizenship in the islands, explains to me how the Negroes felt about the U.B.P politicians: "These people were incapable of governing these islands as a colony, only as a huge, personal plantation."

As gambling prospered, the casinos became the symbol of the general corruption in the islands, but the U.B.P. seemed to be so firmly in control that the system appeared to be unassailable. When Negro leaders began to complain about the racketeers who were running the gambling, The U.B.P confidently called an election in January to renew its hold on the islands. Then the impossible happened. The Negroes organized themselves effectively for the first time and threw the U.B.P out of office. The new premier is a Progressive Liberal named Lynden O. Pindling, but he has a bare majority in the Assembly. When he took over on January 16, Pindling faced the ticklish task of maintaining his power and yet moving against the corruption in the casinos and the 700 islands as a whole. Meanwhile, during the confusion and the uncertainty, Dusty Peters continue to fly to Miami carrying his fat briefcase.

To no one who knew the Bahamas well in the past, a disturbing change has come over one of the world's most beautiful groups of island in the sun. During my visits in 1966, I found that the physical attractions were still there—the transparent waters, the magnificent white beaches, the superb weather. On my previous trips to the islands there/ also had been great charm and hospitality among both white and Negro Bahamians. Now all this seemed to be gone, including, symbolically, the flowers which people no longer cared about.

The whites were nervous and withdrawn, the Negroes bitter and hostile. Some of the lesser-known islands, such as Eleuthera and Abaco, still possessed the old charm. Grand Bahama, however, was a vast scar of raw white limestone dust as bulldozers cleared the way for another, more frenetic, Miami Beach. Colorful old Nassau was a chaos of overbooked hotels, and increasing number of cheap souvenir shops, and so many tourists elbowing their way through the milling crowds on the once-picturesque Bay Street that the city was being referred to as the Coney Island of the West Indies.

There was an ominous blight on the islands—a new colonialism in the encroaching presence of the Mafia and its allies. The government of the United Bahamian Party had paid an American public-relations firm, Hill & Knowlton, nearly $5 million a year to play up the virtues of the climate and the sand and the investment opportunities. Hill & Knowlton (which also numbers the feudal monarchy of Saudi Arabia among its clients) did its job well. Eight hundred thousand tourists visited the Bahamas last year, and with only two daily newspapers and one radio station in Nassau (all solidly pro-government), they were persistently told that all the rumors of Mafia infiltration of the chain of beautiful islands were untrue.

"Preposterous!" exclaimed the royal governor, Sir Ralph Grey. "Our police controls are so effective that American gangsters can't possibly insinuate themselves into our gambling." Sir Etienne Dupuch, editor of the Nassau Tribune, thundered, "Slander! This is a plot by Florida tourism interests to keep people from vacationing in the Bahamas, because they want the business for themselves."

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