Peoria Landmark #482
This is the story of how a Peoria man, philanthropist and Bradley Alum, Sam Rothberg, helped finance Las Vegas’ first major hotel – as told by St. Petersburg Times, June 10, 1951.
WASHINGTON – They have managed to keep their names out of the crime headlines, but many legitimate businessmen have been found dealing with the underworld. […]
Another big busi nessman, whose name has been shielded from the public, is Sam Rothberg, millionaire vice-president of the American Distillery Company of Pekin, Ill. Senate investigators discovered that Rothberg was the financial angel, who helps mobster Bugsie Siegel build the flashing Flamingo Hotel in Las Vegas, Nevada. Later Siegel was murdered by the underworld in the home of his girl friend Virginia Hill.
The Flamingo Story has been told in newspaper headlines, and was even made into a Hollywood movie, yet Rothberg’s part in the deal never got past the Senate investigators’ report, and Rothberg was never called on the witness stand. Rudolph Halley, counsel for the crime committee, asked that the Senators not cross-examine him.
However, Rothberg was given a significant grilling by Senate investigators, at which time he tried to explain the inside story of the Bugsie Siegel – Flamingo Hotel deal. At this grilling Rothberg told Senate investigators the highly improbably story that he had no idea Siegel was a notorious racketeer, and that he had invested $860,000 in the Flamingo on a week’s acquaintance with Siegel. Most businessmen, of course, do not invest $860,000 on mere hearsay.
“He (Rothberg) was asked why he had sunk nearly a million dollars into a venture on a week’s notice with a nationally known gangster, and was further asked what his net worth was at that time,” the Senate investigators’ report states. “He said that his net worth was about two million dollars and that he was impressed byt the projected earnings of the Flamingo.
“He (Rothberg) said that his brother, Harry, knew Bugsie better than he did; that Bugsie knew all the better people in Los Angeles – actresses, etc. – and that he seemed to be in the social swim,” the report continues. “Rothberg said that he never checked on Bugsie and never knew that he had been run out of New York.”
Rothberg explained that he met Siegel while on vacation in California and, a week later, decided to go into partnership with Siegel in the Flamingo Hotel.
Here is Rothberg’s story, as reported by the Senate investigators who questioned him: “Rothberg said that in 1945 or 1946, he went on vacation to California and visited his younger brother, Harry, in Los Angeles. Through him, Rotheberg said, he met Bugsie Siegel – where and when and under what circumstances he was not too clear about. He thought it might have been at the La Rue Restaurant, which was then managed or owned by Billy Wilkerson. The only persons present at this meeting were his brother, Wilkerson and himself.
“During this meeting, or shortly thereafter,” the report continues, “Siegel, Wilkersen and his brother talked to him about a hotel project which would bring fabulous profits. Asked why he was interested, Rothberg said he was desirous of giving away money to charity. When questioned further, he admitted up to that time he had only engaged in philanthropies to the extent of about $5,000.”
The report goes on to tell how Rothberg, after only a week’s persuading, invested $250,000 in the Flamingo. This was supposed to represent 50 per cent of the undertaking though Rothberg eventually was hit for a total of $860,000. The Nevada Projects Corporation was formed to build the hotel with racketeer Bugsie Siegel as vice-president.
“When Rothberg went out there to the grand opening of the Flamingo in the Spring of 1947, he said he met Virginia Hill for about half an hour,” the report adds. “(However) he said that he had never met a man with Bugsie who was supposed to be his bodyguard, but did admit meeting and knowing Allen Smiley and Moe Smedway and Morris Rosen (West Coast racketeers).
“Rothberg does not believe that his Flamingo venture has militated against him or affected him in any way with his American Distilleries position or interest,” the report notes. “Rothberg persistenly reiterated that no force or anything like ‘muscle’ was used in inducing him to make the investment. The only time anything resembling pressure was used, was when they were calling for more money to meet the construction costs.
“The place (Flamingo Hotel) was sold in 1948 about 30 days after Siegel was killed,” the report winds up. “Rothberg still has stock in the Nevada Projects Corporation, and expects to get 70 per cent of his money back.”