ROGER WHEELER AND JAI ALAI'S NONE-TOO-WATCHFUL WATCHDOGS
The gangland-style slaying on May 27 at a Tulsa country club of Roger M. Wheeler, chairman of Telex Corp. and the largely absentee owner of Miami-based World Jai-Alai Inc., has prompted Connecticut authorities to announce the reconvening of a grand jury to look into possible links between jai alai and organized crime. Whether or not Wheeler's murder had anything to do with jai alai—last week law-enforcement officials were leaning toward the view that it did—the prospect of a closer look at jai alai's possible mob ties is welcome. Certainly it didn't require Wheeler's murder to determine that World Jai-Alai, which operates four frontons in Florida and ran one in Hartford, Conn. until three months ago, has had at least indirect links to organized-crime figures. Those connections conceivably may have been strong enough for the Florida and Connecticut gaming commissions to deny or revoke pari-mutuel licenses. Yet the commissions took a see-no-evil approach to jai alai, a sport that, perhaps not incidentally, produces considerable tax revenue for both states.
Specifically, the commissions seemed untroubled by the shadow that John B. Callahan, who was World Jai-Alai's president from December 1974 to March 1976, continued to cast after his departure from the company. A 275-pound accountant and Boston-based business consultant, Callahan was ousted after it was learned that police in Boston had given Connecticut authorities information concerning alleged ties between mobsters and Callahan, a potential source of embarrassment to World Jai-Alai. Callahan was succeeded by a man he had brought into the company, Richard P. Donovan. Callahan and Donovan had worked at the same Boston accounting firm and had become partners in a consulting business. Upon Callahan's departure from World Jai-Alai he and Donovan appeared, outwardly at least, to have had a falling-out.
But Callahan didn't exactly disappear. World Jai-Alai's board soon began seeking a purchaser for the company, and Callahan made overtures to buy, but the board apparently concluded that not even the notably lax Florida and Connecticut commissions would license him. Another prospective buyer, Jack B. Cooper, was also rejected; he was a convicted felon and a known associate of mobster Meyer Lansky. Cooper later testified he had been introduced to World Jai-Alai's management by Paul Rico, a former Boston FBI man who had been hired by Callahan as World Jai-Alai's security chief and who, like Donovan, is still with the company. Cooper also said he had used Callahan as a financial consultant. World Jai-Alai was later courted by the Bally Manufacturing Company, which makes slot machines. Partly because Bally had had mob ties in the past, that deal fell through, too, leaving World Jai-Alai still in need of a "very wealthy, totally independent" buyer, as Donovan put it. Enter Wheeler, who had roots in the Boston area—he was born in Reading, Mass.—and who became the head of Telex, a Tulsa-based manufacturer of computer and electronic gear. Described by friends as a churchgoing man who found gambling personally abhorrent, Wheeler nevertheless had become attracted to legalized gambling for investment purposes. After dickering in vain to acquire racetracks, a slot-machine business from Bally and a Las Vegas casino, Wheeler decided to buy World Jai-Alai. He was steered into the deal by David McKown, a loan officer at First National Bank of Boston.
Investigators engaged by the Florida Pari-Mutuel Division to look into the proposed sale of World Jai-Alai adjudged Wheeler's "moral character" to be acceptable. However, they learned that McKown had assured World Jai-Alai's management that Wheeler would be uninvolved in day-to-day operations—or as Donovan put it, "Roger would do the deal and that is it, he is gone." The investigation also revealed that in putting together a $33-million loan to Wheeler—toward the purchase price of $50 million—First National had insisted on provisions in the loan agreement that assured that Donovan would stay on, ostensibly to provide continuity of management. Furthermore, McKown said in a deposition that the bank insisted on the right to name Donovan's successor if that became necessary and that his initial choice would be the ubiquitous Callahan, who turned out to be a financial consultant to First National.
Expressing misgivings about the conditions imposed by the bank, the investigators noted that Callahan's name had been linked by law-enforcement sources to a Boston-area organized-crime faction headed by Howard Winter, who was convicted in 1979 on racketeering and bribery charges largely on the testimony of master horse-race fixer Tony Ciulla (SI, Nov. 6, 1978). Nevertheless, the Florida agency approved the sale of World Jai-Alai to Wheeler in June 1978. Dan Bradley, who was the agency's director at the time, last week told SI's Bob Sullivan that he had received assurances from First National that McKown's testimony notwithstanding, Callahan wouldn't be involved in World Jai-Alai.
The Connecticut Commission on Special Revenue (since reconstructed as the Gaming Policy Board) wasn't even that vigilant. Long considered a dumping ground for political hacks (SI, June 11, 1979), the commission either didn't obtain the report of the Florida investigators or suppressed it. Nor did it delve into First National's role in the Wheeler deal or whether World Jai-Alai had purged itself of Callahan's influence. Lester B. Snyder, a University of Connecticut law professor who was then a commission member, says he tried without success to raise those questions. The Wheeler acquisition was approved in October 1978, with Snyder casting the only dissenting vote.
No sooner was Wheeler's purchase of World Jai-Alai consummated than he found himself in a business attracting more than its share of unfavorable attention. A grand jury in Connecticut, the one now being reconvened, looked into allegations of corruption at Hartford and the state's two other frontons, an investigation that led to the conviction of seven people for fixing games. There also were charges that former fronton employees had provided inside information to a network of gamblers suspected of having organized-crime ties. Last summer World Jai-Alai entered into a partnership with three Florida dog tracks, including one owned in part by Cooper, whose ties with Lansky touched off a political uproar in Connecticut.
Wheeler, who had been described as having had "moral apprehensions" about getting into jai alai, now was said to be contemplating getting out. Last March he sold the Hartford fronton to L. Stanley Berenson, a jai alai entrepreneur who had feuded with Callahan and Donovan and who had reportedly complained to the FBI that World Jai-Alai was infiltrated by mob elements. If the sale to Berenson was calculated to ruffle feathers, so was Wheeler's recent firing of 11 World Jai-Alai employees. Maybe none of this had anything to do with his murder, just as it may have been an unrelated development last Friday when somebody fired several bullets into the Miami building housing the Florida pari-mutuel division's offices. Still, this much was certain about Wheeler's last few months: Suddenly the absentee owner was making his presence very much felt.
Last week Callahan's lawyer quoted him as denying "any involvement whatsoever with organized crime." A spokesman for First National of Boston meanwhile insisted that it had followed its normal procedures in arranging its loan to World Jai-Alai and was satisfied it was dealing with "people of sound reputation" in the transaction. The sad thing was that these denials concerned allegations that were made nearly five years ago to state regulatory bodies that chose not to get to the bottom of them. That failure might have contributed to the misapprehension that Wheeler apparently labored under when he bought World Jai-Alai. He expressed the opinion at the time that the sport was "clean as a hound's tooth," adding, "I've staked my reputation and money on it." He said nothing about staking his life on it.