The Los Angeles Times from Los Angeles, California on March 13, 1988 · 69
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The Los Angeles Times from Los Angeles, California · 69

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Sunday, March 13, 1988
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69
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4 Part IV Sunday. March 13. I'MW HooAnflclcoSIlmco CASINO: Ex-Bandleader Survives Brush With Mob to Revive Sahara Continued from Page 1 After Joining a band that played at a Reno casino in 1961, Lowdcn started playing the keyboards in Las Vegas lounges. One of his earliest gigs, he recalls, was in the Fremont's Carnival Lounge, where a young Wayne Newton and his brother were performing. Although Lowden's only training was in music he once was accompanist to singer Ann-Mar-gret-it turned out that he had a good head for business, and he developed a knack for successfully investing in the stock market. He recalls playing the organ with a copy of the Wall Street Journal next to him so he could study the market. Haven for Small Bettors Lowden credits his investments for a major assist in getting a toehold in casino ownership, along with the fact that he was earning good money, especially after becoming musical director at the Flamingo around 1970. In 1972, Lowden was able to come up with $250.000 half of it from the Valley Bank of Nevada in Las Vegas-to buy a 15 interest in the Hacienda, where he also became entertainment director. The Hacienda once rather shabby but later upgraded considerablywas at the south end of the Strip, far from the nearest casino. Unlike the major establishments farther north, the Hacienda had a reputation as the stomping ground for a type of small bettor sometimes derided by locals as the Greyhound Bus set. Lowden had recruited several local partners a lawyer, a small Although Lowden's only training was in music he once was accompanist to singer Ann-Margret it turned out that he had a good head for business, and he developed a knack for successfully investing in the stock market. He recalls playing the organ with a copy of the Wall Street Journal next to him so he could study the market. casino operator and a dentist to buy the Hacienda from the estate of the late Judith Bayley. Lowden says one of his partners, in turn, recruited a young San Diego land developer, Allen R. Glick, who later admitted that, as the sole owner of the Stardust and Fremont hotel-casinos, he acted as a front for the underworld. In a recent interview at his Sahara office, Lowden displayed a copy of a carefully preserved credit Pepperdine University School Of Business AndManagement Wcomes 1988 Candidates for the PresidentialKey Executive MBA High Technology! Aerospace Julius Salud Corporate Asset Manager Amdahl Corp. RegBroughton Vice President - Marketing Computer Consoles, Inc. Darius Antia Director- Marketing & Sales Computer Peripherals, Inc. GeneTange Director-Human Resources GoperVision John Syzmanski Director Ind. Relations -West Douglas Aircraft Company Elizabeth Herrell Mgr. , Installed Base Marketing TSM Division, IBM RichOrsi Vice President - Marketing ITT Aerospace Controls PaulPetach Vice President - Marketing LASA Industries, Inc. Khaled Ibrahim Director of Finance & Admin. MylexCorp. Steve Goldman Vice President - Engineering Power One Thomas McDorman Director, Mfg. Engineering Seagate Technology, Inc. Dr. Henry Morris III Chief Financial Officer Wismar Associates Financial Services Gerald Griswold VP- Group Actuarial Pacific Mutual Life Ins. Co. Michael Breen Vice President Wcstpac Banking Corp. Publishing Bernard Steinhouse Vice President, Sales R.R. Donnelley&SonsCo. HealthCare Alistair Barron, M.D. President Center for Mental Health Confidential President & CEO Major Health Care Provider For more information about our EXECUTIVE or PRESIDENTIALKEY EXECUTIVE MBA programs, contact: Michael R. Forrest, Associate Dean Pepperdine Unireisity School of Business and Management, Office for Executive Programs 400 Corporate Mae, Culver City, CA 90230 (213)568-5541 (415)398-2090 (714)552-3014 report on Click from 1972. "We did as much due diligence as we knew how to do in those days," ho commented, pointing to the report's conclusion on Clicks "No suits, no judgments, no derogs (derogatory information!." In 1975, Lowden also became a part owner of the Tropicana. In mid-1976, about two years before scandal hit the major owners there, however, he walked away. He says he didn't even wait to be paid off on $500,000 he invested there. According to Lowden, he left because of the influence of the late Joseph Agosto over the operation. Agosto subsequently was a key figure in the Mafia skimming scan-' dal uncovered at the Tropicana by federal agents who intercepted conversations of Kansas City crime figures. (Agosto later pleaded guilty to skimming and was the principal government witness in a trial in which underworld figures and several casino employees were convicted in the same case. ) Got $250,000 Back Lowden says he departed the Tropicana in mid-1976 after Mitzi Stauffer Briggs, one of the major owners with Deil Gustafson, declined to buy him out. He says he told Briggs at the time: "My license means more to me than the money! pay me when you can." In the recent interview, Lowden saidi "You make your choices. It was a lot of money to me then. It'&a lot of money to me now. It was half a million. Is your license worth more than a half million dollars? I said, 'No matter what happens, I'm not going to stay in this place.' " (It wasn't until 1979, after the state forced the owners out, that Lowden got back $250,000 of his investment. His claim for the rest, he says, is still tied up in a longrunning lawsuit. ) Meanwhile, in mid-1976, a storm that had been gathering over the Glick-controlled casinos including the Hacienda broke with a discovery by state investigators that about $7 million had been skimmed from the casinos' slot EdMoser Director, Marketing 6k Sales Life Support Products M. Frances Sponer VPChief Executive Officer Omnimed Donald Peck, M.D. President & CEO Donald A. Peck, M.D., Inc. Roberts. Rosen, M.D. Medical Director PearleVisioncare Distribution TonyAaronson Director of OTC Emday Anthony T. Oliveira President Freshpack, Inc. Gerald Guerin President & CEO Monterey Marketing, Inc. Paul Murray Director of Operations Murray Distributing machines since 1974. In 1977, Lowden managed to put together a $22-million buyout of Glick and the other minority owners. Most of the purchase price, he says, was provided by Valley Bank in Las Vegas on a first mortgage and First American National Bank of Nashville, Tenn., on a second mortgage. But there remained another obstacle. The state Gaming Control Board recommended against allowing Lowden to take control of the Hacienda because of his past associations. However, the Nevada Gaming Commission overrode that recommendation, giving Lowden his new license, and he was free of the Glick connection. In 1978, federal agencies disclosed the wiretap evidence that was to be the foundation for the criminal skimming cases Involving the Tropicana as well as Click's casinos. Nevada later revoked Click's casino license on grounds that he failed to prevent large-scale skimming, and the Tropicana's majority owners surrendered their licenses to settle disciplinary proceedings. Glick himself later testified in a skimming trial as a key government witness, reiterating what the prosecutors had told the jury in opening statements that he was a terrified victim of the mob figures who influenced the Teamsters Union leadership to finance his purchase of the Stardust and Free-mont. Witness Before Grand Juries There came a time when Lowden considered buying the Stardust and Fremont himself, he recalls. But he says he decided not to take it on because the mortgages were still held by the mob-tainted Teamsters Central States Pension Fund and because his investment banker, E. F. Hutton, advised him that the firm could not take on the financing arrangements because "the stigma is too great for us to overcome." That was in 1978, and the owners who succeeded Glick were forced to surrender their license in 1984 because of yet another skimming investigation. As for Glick, Lowden notes that he was a witness before two federal grand juries investigating skimming during Glick's ownership. Lowden says he expected to be called as a witness in the 1985 criminal trial of the underworld figures and still finds it "strange" that he was never put on the stand. Noting that the federal prosecutor painted Glick to the jury as a victim, Lowden said: "Then I read what the government said about Allen Glick, which was in conflict with a lot of areas about which I testified," Lowden said. "The guy went into it with his eyes open, there's no question about that. That's what I said to the grand juries." Real EstateDevelopment William Seran President Cutlass Corporation ChinHuaLoh Senior Investment Officer G.S.l.C. Realty Corporation Natural Resources Steven Adam VicePresident-Operations . Grace Drilling, Western Div. Peter McLaughlin.J.D. Vice President Bohannon Lumber Co. Professional Services Joseph Dadon President Alter Ego Communication John Abbey Chief of Police City of Morgan Hill Marjorie Kinney President Kinneyck Associates Debra Strong Principal Strong 6k Goedhart Advertising I The once-seedy Hacienda had a reputation as the stomping ground for small bettors. "You are given choices, and you can make the right choice or the wrong choice," Lowden philosophizes. "In my opinion, Allen Glick made the wrong choice." Lowden adds that he made a conscious choice not to go into the Stardust with Glick originally, saying: "If Allen Glick was going to be involved with the Teamsters Central States Pension Fund, I wanted nothing to do with it." Whatever the degree of foresight that may be credited to him in these matters, there is no question that Lowden also has thrived by being tuned in to Realpolitik, Nevada-style. For instance, he has had the longtime assistance of William Raggio, who has considerable clout as Republican majority leader in the state Senate. Raggio, a Reno lawyer who has served Lowden as corporate counsel since 1977 at the Hacienda and then the Sahara, has been an officer and director of Lowden's operation since 1982. Rare Knack for Finance And throughout his career, Lowden has benefited hugely from banking connections that were the envy of some of his competitors. Importantly, he has had the backing of Valley Bank, whose longtime head, E. Parry Thomas, has been WW a". ' u II JvhWsltets "to, -&Jfcfc ' ' i ''jrr :.. : . enjoy a mue riss, -.v $r . v Bu when It comcVJ r - lW- I; If ipflmmirfl, one of the top powers of the casino industry. Along the way, Lowden got the Sahara a $25-million loan from the state Public Employees Retirement System, which had previously made only one casino loan. And Lowden knew how to get help on Wall Street for his public offerings. Lowden appears to have a familiarity with finance that is rare among casino executives who have not had more formal business training. Among his accomplishments before acquiring the Sahara was the building of a $25-million portfolio of time-share sales contracts for rooms at the Hacienda and the Imperial Hotel in Hawaii. Backed by mortgages, these contracts have provided collateral to finance other operations through the years. "It probably was our main business," Lowden notes. Since putting the hotel-casinos into a limited partnership, however, Lowden sold the time-share portfolio to focus on the main business. The Sahara obviously is the center of Lowden's attention these days. Last month, the partnership sold an 8.8 interest that he had accumulated in Showboat, which owns casinos in both Atlantic City, N.J., and Las Vegas. Lowden says fi A,- 7 - - f MI COMPENSATION I NSURANCE r FUND the stock was sold to Showboat at Sahara's net cost ("We weren't interested in greenmail"). The reason is that Showboat did not seem interested in a friendly takeover and Sahara had too much on its plate to think of a hostile one. Lowden acquired the Sahara six years ago from Del E. Webb Corp., which built it in 1952 for Milton Prell and then bought the resort nine years later. The Sahara had the first high-rise hotel facility on the Strip, and its showroom featured such entertainers as Jack Benny, George Burns and Don Rickles. Proud of Renovation Although showing age, the hotel still retains a handsome appearance, and Lowden says it has maintained a 94 occupancy rate during the past two years. Construction work under way includes gutting and remodeling 600 rooms in the two high-rise hotel buildings and a spate of casino changes that include a greatly enlarged gambling area, a new horse racing and sports betting area, a fancy marble entrance, two new restaurants and even a resurrection the Casbar lounge, a spot that once was known for its lively entertainers. . Please see CASINO, Page 24 D G - any risk is too great. That's why I chose State Fund for my workers' comp carrier. 800-892-6000 8lfyp9nH,.,ai lot FuW 1988

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