Nelson Johnson - Boardwalk Empire - The Birth, High Times, and Corruption of Atlantic City

Matthews relished the headlines generated by political infighting and cultivated his image as the maverick—a self-styled champion of the underdog. But beneath this veneer was a person too immature to compromise and so paranoid he was incapable of making a lasting alliance. There was no “inner circle” or continuum of personalities whom he relied on from one campaign to another. He remained aloof from the people who supported him. By the time he was elected mayor, Matthews had used up and discarded several valuable advisors who could have kept him out of trouble. Once in office, he followed his instincts, which led to his ruin.

As a former ally observed, “Mike Matthews was a creep. His independence was really paranoia. He never trusted anyone in politics and nearly everyone who trusted him got screwed sooner or later.” A supporter of social programs for senior citizens, Matthews had charmed thousands of aging voters. They were the mainstay in one election after another, with many of them showing up to work at his campaign headquarters. While the senior citizens licked stamps and made phone calls, he might be found in a back room receiving oral sex from a political groupie young enough to be his daughter.

As mayor, Matthews featured himself as a type of social lion in casino land. He identified with the celebrities who appeared at the casinos and sought them out to pose with him for photos he displayed in his office, and when they were willing, which wasn’t often, for a dinner date or a golf outing. He wanted to be the person everyone invited to the party. Had he been honest and kept to the duties of his job, Matthews had the ability to be a capable mayor. Instead, the number one thing on his agenda was his yearning to become a celebrity. People who knew him think that’s half the reason he fought so hard to become mayor. “Michael loved the glitter of the casinos and once gambling was legalized, he wanted to be top dog in casino city. He was like the firefly who couldn’t resist the flame.”

The affair honoring Tony Torcasio was just the type of gathering Matthews was sure to attend. Seated at the head table with the likes of Joe DiMaggio, Mickey Mantle, and Joe Theisman, throwing barbs back at Don Rickles, it was the sort of evening Matthews lived for. But the FBI disrupted the mayor’s plans that night. Before the Torcasio dinner was over, Mike Matthews was finished as a politician, having been written off by everyone in attendance. In the weeks that followed, the mayor gained notoriety on a scale to match his ego.

An FBI agent, who didn’t even look Italian, came to town posing as a Mafioso and wearing a wire. Within a few short weeks he worked his way into Matthews’ confidence and taped hours of incriminating testimony. The transcript reads like something out of a pulp fiction crime story. Never one for understatement, the mayor ran off at the mouth over dinner at a local Chinese restaurant, The Peking Duck, and gave the Feds all they needed. He buried himself when he accepted a $10,000 bribe in marked bills from the undercover agent. At the time of his indictment a full-length photo of the mayor with handcuffs and shackled ankles appeared in newspapers across the country. Mike Matthews had finally received the celebrity status he craved.

The record presented to the Court revealed an unscrupulous politician who all but put a “For Sale” sign on his office door. As Judge Harold Ackerman stated at the time of sentencing Matthews in December 1984, “You were on the take. Anyone with an eighth grade education could reach that conclusion.” Rather than gracefully resign as mayor, he was removed from office by a recall election. In little more than two years after taking office, Michael Matthews was on his way to federal prison. By Atlantic City’s standards, Michael Matthews’ biggest sin wasn’t that he stole, but that he was so clumsy at doing it. Matthews was worse than corrupt—he was inept.

Not everyone was as inept as Mike Matthews. After the adoption of gambling, the real Mafioso came to town, not just cops posing as them. Given the town’s history with gambling and the way things were in the past, there’s little wonder Atlantic City’s new casino industry attracted the mob and its friends. This time around the reception wasn’t so friendly. Brendan Byrne and leaders of the state legislature had meant what they said during the 1976 campaign. The mob wasn’t welcomed. Resorts International got a break, but would-be casino operators who followed them were scrutinized much closer. An example is the Perlmans.

Clifford and Stuart Perlman were no strangers to Atlantic City. Natives of Philadelphia, they knew the resort wasn’t the “World’s Playground,” but rather the place where Philadelphians went to let it all hang out. The Perlmans got their first taste of business on the Boardwalk selling junk to visitors. A couple of decades later, they returned, lured by casino gambling. During the intervening years they had made a fortune in Las Vegas. Upon their return to Atlantic City they were hailed as marketing geniuses. They set the standard for a first-class casino resort, with Caesar’s Palace the best-known casino in the world. They were leaders in the casino industry and viewed as natural players in the new Atlantic City.

Shortly after the adoption of the ’76 referendum the Perlmans began looking seriously at Atlantic City. Before Resorts International opened its doors, Caesar’s signed a deal to lease the Howard Johnson’s Regency, a leading local hotel. That a glitzed-up chain motor lodge was one of the city’s better hotels was proof of how badly the resort needed casino gambling. The Perlmans let the world know the Boardwalk Regency was just the beginning—a project that would allow them to open as quickly as possible. After the Boardwalk Regency started raking in cash, the Perlmans planned to reproduce their Las Vegas magic and build a Caesar’s Palace in Atlantic City. Caesar’s and the Perlmans were the type of casino operators Atlantic City wanted. But they had another side, one that had snuggled up to the mob for years. It began with hot dogs.

In 1966, Clifford convinced Stuart to invest nearly every penny they had in a Las Vegas restaurant called Lum’s. Stuart hoped it would be a fancy place but found it was a small storefront. Unlike the nearby Forge Restaurant, which was one of Meyer Lansky’s favorite spots, Lum’s was a tiny place that specialized in hot dogs. These weren’t your average wieners though. They were boiled in beer and served with sherry-flavored sauerkraut. But Stuart didn’t share his brother’s taste. “We went and bought a couple of hot dogs and then we went outside because I didn’t want to eat in there.” The Perlmans would later claim they knew nothing of the Forge Restaurant’s infamous reputation and its notorious patron who held court there, but events convinced people otherwise.

In 1969, Clifford led his brother into another deal, more grand than hot dogs. It was a major turning point in their careers together. The Perlmans, through Lum’s, made an offer to buy Caesar’s Palace, one of the swankiest casinos in Las Vegas, but widely known to have been built and owned by the mob. When the Perlmans took over, all they changed was the locks, leaving most of the management team in place. Caesar’s managers had a strong reputation around town, and the Perlmans saw no need to check into their backgrounds. The Caesar’s team included Jerome Zarowitz as director of casino operations. The Perlmans knew Zarowitz had a criminal record and at some point learned he had participated in the so-called Little Appalachia meeting of mob figures in Palm Springs in 1965. While the Nevada gaming regulators were concerned about Zarowitz’s suitability to run a casino, they never required him to be licensed. The Perlmans kept Zarowitz on the payroll from September 1969 through the following April. Zarowitz’s name didn’t appear as an owner, but when the Perlmans bought Caesar’s Palace, $3.5 million of the $60 million purchase price went to him.