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The Batista-Lansky Alliance

How the mafia and a Cuban dictator built Havana's casinos
Matthew Reiss
From the Print Edition:
The Cuba Issue, May/Jun 01

It was December 31, 1958. Cuban dictator Fulgencio Batista raised a New Year's Eve toast to his cabinet members and senior military officers and wished them hasta la vista. After seven years of building Havana's tourism industry by inviting gangsters such as Meyer Lansky to construct casinos, helping to fund their enterprises and taking a large chunk of the proceeds for himself, Batista knew his presidency was over. His plundering had weakened Cuba's treasury and demoralized the army. He filled three cargo planes with all he could carry and was on his way to the Dominican Republic before the sun came up on 1959.

Nine days later, Fidel Castro's guerrillas took the capital and installed what would become the longest-lasting communist government in the Western Hemisphere. But while Castro could close the casinos, arrest the gangsters and deport or imprison Batista's henchmen, he could not bury the skyscrapers that had drained the wealth of the island. Castro inherited from Batista a Havana of overt poverty and ostentatious wealth, where the haves of the world's richest nations had come to exploit the have-nots; where statues of Lenin and Marx would be dwarfed by glass and stone monuments to the Mob; where the nation's architectural landmarks would be a constant reminder of the days when criminals were in charge and the Mafia roamed free.

But until that last day of 1958, the only revolution that mattered to Mafia financier Lansky involved a roulette wheel. During the Batista years, Cuba was a place where a crooked man could make an honest living. After a half century on the wrong side of the law in the United States, the celebrated gangster was legit. America's high rollers and celebrities were living large in the casino of Lansky's luxury hotel, the Riviera, and the drinks were on the house.

As a kid in Manhattan's Lower East Side ghetto in the early part of the century, Meyer Lansky learned how to cheat, bribe and split fees with other cheats. He ran into Charlie ¿Lucky¿ Luciano, as legend has it, in a street fight, and Lansky's tenacity convinced the Sicilian Luciano that this Jewish kid had possibilities. Together with another local Italian, Frank Costello, and a young tough named Benny "Bugsy" Siegel, they created a powerful network of numbers runners and bookies throughout the city. With Luciano at the helm and Lansky at the register, the combination soon expanded nationwide.

When Prohibition took effect in 1919, Lansky's and Luciano's gambling alliances helped provide contacts with illicit liquor distributors across the country. The pair soon controlled a healthy share of the import and transportation of bootleg liquor.

After 14 years of windfall profits, many bootleggers were put out of business by the market forces of competition when Prohibition was repealed in 1933. Lansky's financial success had already made him a target of law enforcement. When New York started getting too hot, Lansky looked for other places to take his gambling operations.

 

In the mid-1930s, a Cuban army sergeant named Fulgencio Batista took advantage of political chaos in the former Spanish colony and formed his own government. At the time, the island republic was foundering, as was its gambling industry. Years before, Havana's nightlife had attracted wealthy entertainers from the United States, such as Sarah Bernhardt and Enrico Caruso. But Cuba's gaming industry had become mired in cheating and corruption by the 1930s. So, in 1939, Batista recruited a New England racetrack owner named Lou Smith to revive Havana's Oriental Park track and Meyer Lansky to clean up the casinos.

Soon, gamblers who were familiar with the professionalism of Lansky's stateside operations were eagerly making the flight to Havana, where they could be separated from their earnings in style. Within months, Cuba was back on the map as a gambling destination. Lansky's success did not escape Batista. The pair developed a close relationship, which is best chronicled in Robert Lacey's biography of Lansky, Little Man.

The resurgence of gambling and the return of rich tourists helped foster a wave of confidence in the island's economy. Batista scheduled an election in 1940 and won handily, only to have his hand-picked candidate defeated in 1944 by Dr. Ramón Grau San Martín of the opposition Autentico party. Under Grau, gambling was frowned upon. Lansky returned to the States to take care of his other investments. (He did, though, attend a Mafia summit in Havana in 1946 when the leaders decided Bugsy Siegel's very brief future.) Grau was followed by Autentico's Dr. Carlos Prío Socarrós in 1948. Both Grau's and Prío's terms were tainted by corruption.


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