308; Digest Reel 1

Good evening I'm Steve Taylor here in Trenton the Casino Control Commission today resumed its marathon hearings into a permanent license for the boardwalk Regency casino owned by Caesar's world as the third week of hearings began Caesar's chairman Clifford Perlman had his fourth day on the stand. It is Perlman's associations with men allegedly tied to organized crime that has led the State Division of Gaming Enforcement to recommend that seizures not be granted the permanent license. In its report to the commission the DGA cited Perlman's business dealings with Alvin Melnik and Samuel Cohen. Malik and Colin reputedly have ties with alleged Mafia crime boss Meyer Lansky. According to the D-G Perlman has had two business associations with Melnik and one direct deal with Cohen. The DG reports that in 1971 Perlman and Caesar's world joined Malic and Cohen to purchase just over 600 acres of Florida real estate. That deal was known as Skylink north in 1972. The DGA says Perlman invested personal funds with Melnik and the sons of Samuel Cohen to buy the cricket club a partially completed condominium complex in Florida. The

deals which were referred to as coal now and Joe now. It was the five casino commissioners themselves who questioned Clifford Perlman this morning. We begin our digest as Commissioner Don Thomas attempts to clarify the call now. And Joe now transactions. If you will be guaranteed three million dollars in loans. The Miami Beach to the cricket club. Call cool move corporation. Yes. Could you explain at. What point in time home will be involved in this situation. I'm just talking here in terms of whether or not. To come out and don't want to do it. What happened was this was a five page document. The cover page was a guarantee that was signed by me. The other four pages where the security for the loan. Describe the security in that. And the. And in a coma all guarantee of the same loan it was Comella. I didn't know that Komal his name was even in that document when I signed it. That was the subject

of a great controversy at the FCC at the time because I signed it as a guarantee for the cricket club and all the money went into the cricket club none of it went to Comella. Finally we did a full audit of it Levinthal and Christine did Leventhal Horwitz rather did a full audit and they confirmed that all the money that whole three million dollars went into the cricket club. So I had the Comella. It was only a guarantor on that loan along with me and I didn't know it at the time I signed the guarantee. But in any event the funds all went to the cricket club. Commissioners. It's. Just one or two questions. Yes doing the transcript. Which I believe is. More. True. It's the fourth 4:31. Transcript of the December 10 1975. Meeting with in the. 40s. I note that you indicated to them that you would not get Mr. Mallock until 1972. But I think you can establish from your testimony that you would

at least as early as July 1970 when you got that description that was a mistake. That was 1971. Yeah. And my other question is again pertaining to that transcript of that meeting. Did you at that time indicated to the Nevada authorities. That the possibility of a libel suit by Ms de Mello was again a lot of consideration. In 1975. Yes then Malik. Said absolutely and he filed a libel suit about two weeks after that. I mean I was then I was so. Depressed and so awfully hurt by the whole thing. And then he went and found a libel suit right away. But then you know wasn't really didn't count my opinion if he hadn't filed it. And 72. In my judgment it didn't count but he did file suit and it was dismissed without prejudice. About a year later. And that's all I know about it. Thank. You. We. Have

several. Yes. It was. Came out in testimony earlier that that one might have to into life. I. Do I still have it. Well not since we sold Lum's. With. An. Organisation. With. First. That's correct. You have to if you have to get a new look or a license for every new owner. That question though was whether or not Mr. Mildmay had. Oh yeah I had a liquor license too. Yes. Yes I was holding a liquor. No I'm not. How long was Mr. Chasey president. From. 1968 to 1972. Approximately how did he happen to join you. He and I were members of a club in Miami called the West Country Club. And I met him there and we became friends and he had left his employment in

New York and. Was in a small business he was in the vending business in Miami. And we began to talk about our businesses and then ultimately he became interested in joining the company and I invited him in. Did you make any investigation of his background before you invite him to join you. Well I knew all about him. I have known him for two or three years before he came into the company. Why did he resign. His wife and he moved to Las Vegas and she hated it. And and they had children back East and their family was getting split up. That was the primary reason. Did he have any personal connection to the Teamsters pension fund. Not that I know of. Mrs. McWhinnie. Am I correct that you testified that in late 1971 or early 72 the Nevada Gaming authorities asked you to eliminate the honorary memberships of Teamsters union California.

Yes ma'am. Was that request. Addressed. To Mr. Chase and I suppose. You know who made the request I mean we heard about Gaming Authority but was it just there. I'm not exactly sure but it might have been Mr. Hannifin who was at that time the chairman of the gaming board but I'm not sure that we have some letters that would indicated. That you think the request did come to Mr. Chase and. I believe it that it would either have come to him or me. And I don't recall which one of us received it. But in any event he would have been aware of it. Oh yes. Oh definitely. Had it was Mr. Chaisson who prepared the application for another loan from the Teamsters Union in 72 the one that never went through. Yes that was part of our original deal when we bought Skylink when we bought the car like it was a 10 million dollar mortgage with a commitment to add two million dollars later on. And so what we were trying to do is to draw down the. There was an additional commitment for two million dollars. And what we tried to do was to take

that down. With the first. Forget what the number was. The document that was shown to us the other day with the agenda for the Teamsters union law which never wasn't. Yes. Yes. Why was that not so why didn't you pursue that. Well as I recall Mr. Lesher went up there with some people and he was just sent from door to door. I remember he described the incident to us. No one would talk to him no one knew him. He went from office to office and finally they told him to leave the documents with a secretary or some functionary and he did and we never heard from them. Even though you agreement from them to give you that extra two million. Yes. I don't know. If that agreement was an ironclad agreement or whether it was an expression in the original deal or I'm not absolutely certain of that at this time. But there was definitely a form. Of commitment to for us to get that 2 million plus from the

pension fund. You testified last week that in mid 1972 Mr. Chase and rehired at least for a short period of time a man named Irving Carroll Yes. Correct. Yes. Why did he rehire. Well I don't know. I remember when Irving problem was fired because Joel snow was fired at the same time and I remember him because he's the son of Larry snow. But Mr. Chase who was running the casino at that time and I just don't know why I rehired. Did that have any connection with the attempt to get that 2 million from the Teamsters. Oh no I don't think so at all. But was it. No I don't think so. Mason McWhinnie was the reason I asked is that there was some indication in the testimony that if he had put him back on the payroll the quest of Alvin Dorfman. Well I must say that it was a spectacularly unsuccessful if that somebody said. Do you know how long the problem with back on the payroll.

I understand about 90 days. Like to turn now to the cricket club. I was curious as to why the partnership agreements were set up indicating that you would be consulted. On all major matters that you decided never to take any active part into the. Organization. Well when we originally set up the cricket club it was just Mr. Mallock and I Joel and Alan Cohen weren't in it and when they were brought in to it Mr. Mallock said I'll bring him in but I'll make sure that you and I make the decisions as we had established it originally and that's how it got in there. But that didn't alter my intention which I had expressed in the beginning and which I had was and carried out throughout the entire arrangement and that was not the vote on any subject not to be a officer or a director and I in fact was living in Las Vegas for most of the period given the fact that that agreement did exist though that you had a right to

approve major items. You objected to the employment of Kalkhoven if I recall correctly. Yes yes. And so they went ahead and employed him anyway but didn't you use that as grounds to get out of that agreement. Yes I could. But then that put me squarely in the business of the business because then I'd have to be a party to the next one and I mean that would have been a major decision on my part it was the contract with Mr Koven for that fear cost plus. I didn't go out for a set fee. I think there was a bond attached to it. There was some testimony that one of the reasons that the contract so the project was so to late is that Mr. Mallock made a number of changes in the plans. Were you consulted on the consequences as the cost or completion date of those changes. No. Never. That was. My buy complained about the fact that the

building wasn't being finished and that the economy was deteriorating. And that all these changes. Were expensive not only in their initial cost but also in the time that it took. But he had an aesthetic view of the building he had adopted and nothing would dissuade him. From doing it his way. You testified that at one point last Friday that you were doing everything possible to get the club finished by that you did not mean getting involved in the management and saying to Mr culverin let's get on with home. No no I never spoke to Mr. cogen about that young. Do you normally take that kind of an attitude about a major investment like that that you get into an agreement without any conditions or exit. The only thing that. I can do that. Like I I think that I probably place a lot of reliance on people Mrs. McWhinnie I will do that I'll understand what the exposure is and then let the person try to do it. I've always run my business that way.

All of our subsidiaries are run that way. It never occurred to you or your account that Mr. Cockburn's might be ripping the project off at your expense. Oh no I didn't think that. I think that. I don't know that that happened I think he was just inept in that he didn't take care of the job. I don't know that Mr Koven stole anything on the job. All I can say so I'm sorry you said riff off now but it's not Drakkar. Well. I was curious as to why Mr. Mallock gave you the $50000 that you then lent to the cricket club and then they paid back to him which is done before the $50000. Gave me a tax deferred on that year on the cricket club got the money. So I got the. The benefit of the tax deferral on the cricket club that the money was there any other agreement that that was part of. No. He just did that out of the goodness of his heart. I'm sorry he just did that out of the goodness of his heart. No he didn't do it out of the goodness of his heart.

He got the use of the money. What is your position by the VW the cricket club now you still have some guarantees out of the three million dollars. I pay all of the banks. Three hundred and eighty six thousand dollars to be relieved of. There was one bank that refused that was. I'm not sure it was us real to your MGI I see they had only a tiny portion left $280000. And the only way that I could get off of that is to pay the $280000. That would ensure to the benefit of Mr. Mallock. So I was advised not to do that. You gave him back your stock correct. Yes. What is the value of that stock today. Until the building is completely sold I wouldn't know. What's the status of the building today. They have about. 100 units I think left to sell. Out of how many. That is. Two hundred and twenty. That's really only about half. So. I don't think so now. But again this is very speculative on my part.

But I think that's something like that. Turning back to Desert palace or Caesar's Palace you testified on Friday that during this time period if you had accused the original owners of stealing or skimming you could have not about the hotel why. We would we were in the middle of renegotiating our deal Mrs. McWhinnie we had originally made a 60 million dollar all cash transaction for the purchase hotel within 60 days of that. The market had descended to the point where that was no longer possible. So then we engaged in a lengthy negotiation to change those terms if in the middle or anywhere near the completion of those terms I I'd accused them of stealing them. It doesn't seem to me that we would have made that deal. Were there other buyers standing in the way. Well I don't know. Denny's had tried to buy you know. And I just don't know there may have been there was a lot of oh yes there was it was an electronics company who was in the wings.

I can't remember its name but there was there was definitely an electronics company who was trying to buy it at the same time we were. I believe you testified that you arrived at the 60 now 60 million to hug as a multiple of earnings when the earnings went down so sharply that some of you didn't consider reviving what you got to the places where it. Was based on the previous year's earnings and in fact the following year's earnings were as good when the whole year came in that were better. When the FBI uncovered that million dollars in with lockbox. Did you consult your lawyers about the possibility of attaching any of that money. No. The first thing that I did was to. Make sure that the processes were straightened out by those people once we had a huge confrontation the FBI had sealed off the area so no one could get in. Our people were I think mistakenly trying to get some proper. Warrants. And so this confrontation ensued. And when I.

Told our people my position on the company's position that is that. The formalities were over and that the FBI had access to that area the the FBI sequestered the money. And so we didn't. What became of it. Did he keep all of. That. Let me think. The money ultimately was not tagged the skimming money by the way the money was ultimately. And I think even originally and they ultimately found this out was used for a bookmaking operation in Las Vegas which was legal. And he paid a huge tax on the money and they never prosecuted him. It did not come from the palace. It appeared that it did not. It appears that it was book book making money. But either I don't know very much about that. Another subject you were speaking on Friday about your various marketing techniques in Nevada. And you were talking about the host. Technique the host. Are you going to use that similar kind of marketing technique in Atlantic

City. Yes. Excuse me. I have a question please. I'm sorry I missed the first but I'm sorry on Friday outlining the kinds of marketing techniques that that CWI has used in Nevada. And one of the ones which seem to be quite important this is a host of hosts three different parts of the world and I have not run across that term before in anything that we heard and I was just wondering if he was going to be using that in Nevada as well going in that city. Well. Yes very definitely. We are in the embryonic form of that system is now in place. And I think that in a two or three years we're going to have a very successful and worldwide marketing program for Atlantic City. To those people in Atlantic City have credit responsibilities as they do in Nevada. No I think that the credit responsibilities are more closely defined in New Jersey than they are in Nevada. I'm not quite sure I haven't been part of the process you see but I think that it'll be a little different because of the

regulations. What kind of criteria do you use in Nevada for determining who gets the. Comps. I guess they're called free food from transportation. What the host First of all makes a recommendation that is the person who is assigned to the customer. And that recommendation is discussed with a casino manager and then it's taken to a committee. Every large credit is set by a committee of four or five people which is chaired by Mr. Wall the executive vice president of the hotel. What are the criteria they use in determining whether an individual should get a certain line they pay it first whether or not he's played and whether or not he's paid well. Secondly what his financial status is as much as that can be determined. The third thing is his pattern that is he a player. Some people are very rich but they don't play very much so their credit has to be restrained because it will create a bad public relations problem some people play on the surface what would appear to be

more than they could afford. But they do that over a long period of time that's their history in life. So those are the major elements are the activities of the man in his previous period and his apparent financial standing. Thank you for your. Feel pressure. As. These. Froment. Good morning. Good morning. To you. No Mr. Jarvis no longer have any direct or indirect relationship. With. His girl. Or any other. Girl. He has nothing to do with our company at all. I noticed that in. Among the holders. Of the. 12 and a half. Subordinate sitting on the bench or doing 1990. And. Is. Apparently. Someone from his family knows approximately two hundred twelve thousand dollars of ambition.

Did you know that. No sir I did not. Let's go back to the time when various. Employees. Of the predecessor. Company. Caesar's. Palace. Desert. Palace. For it was under your control. Price no. Cinto Gordon. Price. Snow. Sinto. And Gordon. Others. Inserted their fifth amendment rights. Did you or any. One of your socialist. Or seisures work. For Caesars Palace. Or any other company or. Under your director who control.

The. Secure or representing those persons. Or contributed in any way. To the cost of that representation. No neither one. It was not our attorney and we did not contribute to their cause. There was some testimony Mr Perlman. Alluded to the fact. That. Mr. Mallory. At some point. Talks. About the possibility of a sale and leaseback. Of Caesar's Palace for 75 million dollars. You remember that. Yes. Then some time. After that discussion. The L.A. Times article appeared. Is. That right. Yes sir.

Get the article. Here is the article in The Los Angeles Times. For. Those discussions. No. Mr. Mehlman came to us with a proposition. We listened to him courteously. I never had any intention of making a deal with Mr. Melmac. Because obviously the intense public relations problem in his background would have prevented it. And secondly I wouldn't have made a sale at least back on Caesar's Palace at all. I turned down two deals subsequent to that on the sale leaseback so and even to this day the Aetna loan as a result of my reluctance to enter into that kind of an arrangement for Caesars Palace. So that was never a possibility. For me. His. Suggestion. Was summarily turned down.

But we just listened to him. Mr. Danziger we weren't going to do it. And when ever I listen to any deal I rarely summarily turn it down if I'm not interested I'll say well thank you when we'll think about it. That's when a gentleman says maybe he means no kind of thing was turned down. More. Permanent for official fashion. After the appearance of the Los Angeles Times article that was never brought up again. The. Name of Alan Dorfman. Has been. Mentioned during the course of these Here. What have you missed the problem haven't you. My. Predecessor company. CS's world. Sees the world in New Jersey. Caesars Palace. SkyLink. Copayment cricket club. Or any other boring. Talk machine. Or. Investor. You are associated with or have

a. Direct. Or. Indirect interest. Any of those companies or yourself. Been involved or done business with Mr. Dalton or any insurance companies directly or indirectly and. Even subsequent to the period that his well he had the contract he did the his company held the insurance for Caesar's Palace when we bought it. What company. United United. Something. As it was an insurance agency in Chicago. Yes they do supply that to us. You. Buy it. Yes. Absolutely. I. Certainly will. With that. Policy. It's just. The same time you nurture Caesar's palace that was in place when we purchased Caesar's Palace remain in place.

You it now. Yes. Is it still in play. No sir it is not. To disassociate yourself from that company. I think around 1970 four or five I'm not absolutely certain but I'll supply that information. Also you know the premium on that. No sir I do not know. No I wouldn't know that you know sir that when you rewrote that policy rewritten. To increase or decrease. Or did they remain the same premiums pay. For the same coverage. When the issue came up. The question was when the issue came up the question was put to me. I said at that time I think it was in 1972. That. The policy should not be renewed unless he was competitive.

That is that the benefits were better and the premium was less than the competitors. That was I instructed Mr. Chase and Mr. macrame on that especially Mr. Mack on I think he was we had an association developing with Marsh McLennan at the time and Mr. Michael they reviewed it and awarded it to the lowest bidder which I think was united whatever their name was. So I understand this to parliament. That. At the time that you took over Caesar's Palace or shortly thereafter. As. You competitive we went out to secure. Insurance coverage. For Caesar's Palace. Mr. macrame was the one who handled that but I'm certain that was a competitive arrangement. I mean he went out and competitively tried to secure insurance or your attorneys find. That to me too as well. Show. Time. And. Again that.

Search. Results. In detail the analysis presented to him. And then again. The time that you. Took over Caesar's Palace did you know about Mr. Dormans reputation. At the time I bought Caesar's Palace. No I did not. When did you first learn. This reputation. Well I didn't and I don't remember when. I don't remember when I know about his reputation. The first thing I remember is that he was indicted for some offence in connection with the Teamsters pension fund. That's when I first became aware of his problems. You know. The approximate. Date. Year. You'll. Learn that. Was 73 or something like that. I'm not sure. Your best recollection now is that you maintained an insurance relationship with

Mr. Dorfman. In 1974. Is that right. Yes. That was as a result of the new contract that was signed but I don't have to get the dates for you Mr. Danziger. One last question in reference to Mr. Madoff and. The time you took over Caesar's Palace. There was an outstanding. Mortgage held by the Teamsters pension. Is that right. That's correct. That was. Withdrawn. Were you in any way we are reading the records required to maintain. That relationship with Mr. Dollar and his insurance company. Cost of that alone. Absolutely not. Mr. Dorfman was one of the people that we threw out of the sky country club and that was in early 1972. I'm sorry in late 1972

so we never felt that we had to do anything to maintain that relationship with the Teamsters pension fund. Of. The same. Mr.. You mean as an investor. No we had an honorary membership list and the the state of Nevada and our company had a dialogue with them and as a result of that we not only through Mr. and throughout Mr. Fitzsimmons who was a. Very important person in our numbers as a result of. Both the Nevada Gaming Commission and the report. Mr. Campbell. About those. We kind of remembered well and certainly the Nevada Gaming Commission required it and we did it and that was that. Refresh your recollection as to when you learned. That Mr. Dallman. Person of questionable reputation.

Yes sir. At least from 1972. And 73 and into whenever you disassociate yourself from Mr. Dalton's insurance company in 74. You knew that he had a question ready to take. Yes. From 72 from that time on we knew of it. Let us go to Scotland for a moment if I may. As. I understand it. Mr. Chaisson. When he first. Brought. That. Possible deal to you and having spoken to Mr. Melnik. The deal was 23 million care about. Pay. Is that correct. Yes. And at some later date. July. 71.

Or thereabouts. Deal had changed sufficiently that you only have approximately 50 percent in cash. That. Be. Brought. Up. Virtually no pay. Benefits came and then the board decided to move ahead. Yes. At the time that was Chase first spoke with. Mr. Malik. You or other members of the company. There was no human existence. Loan agreement with the teams that it on the sky like property. I think it was I have I'm not absolutely certain because I didn't have any discussion with it I turned it down without any further discussion. But I would think it would have been on. Fire.

Refresh your recollection to tell you that by telling you that on February 24 71. Teams took commitment. Twelve point eighteen dollars. Was further. Excuse me. That's. You. Well I didn't know. Mr. Danziger So it's possible. I when he came to me in 1970 I said no I'm not interested in that was that was it. It was a one line. Response. And then in 71 we the deal and I don't know when they put the teamster loan on but. It's possible that it came after that. I. Read. That you said that in. The course of those 23 million dollars that there was nothing to consider we had nothing like that kind of money. It was ridiculous. Excuse me. When you say 23 million dollars in cash it's understood and stipulated it was a 10

million dollar mortgage or was 13 million dollars in cash. I'm trying to. Ascertain that must be is my understanding. I'm wrong on the current account. And in 1970. Mr. Malik first to Mr. Chase. About styling. It was a 23 million dollar deal and there was no to. No it was 13 million dollars above the mortgage. I don't know if was a Teamster mortgage. I said no but it was. I've testified many times on this. It was 13 million dollars above the mortgage. 9. 7. When it. Was first brought to you. Yes. Cash above the mortgage. Mr. Danziger Mr. Danziger if it would have been helpful if I pointed to page 6 of page 2 of the stipulation and and so forth. And stipulations for four through six. Thank you very much. Commissioner Danzinger. You might also refer

to paragraph 3 of the stipulations on page 1. I think that may. Know. Ice. Having read the stipulations in the. Game Gameel vision and your counsel so clearly pointing out to me I still have the same question. As I understand the stipulation. Because. In 1977. 1970. Was. The mountain. Range. Mr. Chase and Mr. Chase

and Mr. Melnik together. And discussed the purchase of skylight. Question I have for you is. At that time. At. That time. Was there any existing commitments. In B for any more. And if you're not sure I've asked you to say that you're not sure and asked me to supply that with the record. Well I I am not sure but I will say that Mr. Chase had that discussion with me and he said it was 13 million dollars about the mortgage and I just assumed since ultimately there was a 10 million dollar Teamster mortgage on it that that's what he was talking about. I would ask you to check that sir. Sure. Further reading material and. Listening to the customer. Is my understanding that on February 24 1971 for the first time there was a commitment for the teams to more. Of

twelve point eight million in February of 71. Proximately eight months or thereabouts after Mr. Chaisson first came to you with the potential deal. You remember that I said in the stipulation I don't know if it was eight months we made the deal in July. And it was eight months years 71 and it was about eight months before that that I had the conversation with Mr.. Chase and so that would have probably been and maybe November or. October of 0 7. So it may be that they had. The loan arranged for and that the and here in paragraph 3 of the stipulation Mr. Danziger says that Comella obtained the commitment by all that probably was a result of some negotiations. I'm not sure. I think it's best that we just supply the information that we have. But the original deal that was brought to me was $13 billion above the first

mortgage. Like you to supply to me. Essentially there were two deals offered to you. Mr. Berman is that right. First time yes property but two very different deals. Yes. And I would like you to track. Those two deals. And when for the first time. The teams the loan. Became an issue. All right sir. Yes sir. Sure. One. Question I have you asked to supply the historical account if you will. Is did you. Or any member of your company. Or. Anybody. Who you have retained. Directly or indirectly. Indicated to Mr. Mauldin.

Or anybody on his behalf. That Caesars would be interested in the skylight transaction if they were able to secure. The financing. Through the Teamsters or anyone else. At that time the first rule of the deal to you in November of 1970. I'm not sure I had a one line discussion in 1970 so. I don't know that there would be any more negotiations. He said they'd like to sell his property for 23 million dollars. Thirteen million dollars in cash and I said no that's impossible and that was the end of it. I asked you Mr. Perlman didn't you for any one in your ploy or anyone associated with your company. Or anyone read by you. Directly or indirectly. In. Negotiating the.

Arrangement to secure the skyline. Property. After the first deal was presented to you. Indicated that you would be willing to move forward on that deal if they were able to mount it. Or anyone. Associated with him. Mr. Dog or anyone else. Were able to secure financing. Or some substantial portion of that deal. Through the Teamsters is the first time I had contact and the second was that the period you're talking about I'm asking not only about discussions you had. Discussions with persons associated with you. And or under your control. OK well I can answer one part of the question now. I never had any contact like that or discussed that. And no one that I know of. Had that. I and with that one single issue out of the way I'll go back into the company and then ask Mr.

chosen and Mr. Peres and Mr. McNamee about whether or not they know of anything like that areas I'd like to. Cover with you Mr. problem. One is in the area of your initial cash investment. With the purchase of the stock was $10000. Is that right. Yes. Other than any loan guarantees. Or buyouts. That was cash contribution. Yes. Sir. Now what's. That. Three hundred eighty six thousand dollars. That you recently had to pay recently more recently than the initial deal. One more the banks.

Have loans outstanding. So that you might be released as I understand it from any guarantees. That you had entered into to secure those loans. Individually and. Jointly with the other participants in the company. Is that right. Was that 386 that use 386 thousand. Of. The Spanish reimbursable. Pain. Oh absolutely yes absolutely. That money's gone. Oh no sir that's gone. No. No. No it is not alone. I've got my release they release me. That money. Has been given by you if you will of the exchange with the release of the guarantee is that right. That's correct. Now. There's a

series of loans. That you made. To the cricket club. During the. Course of your association with that investment. Take advantage of. Tax lower. You're under Subchapter S. Is that right. Yes sir. Have you calculated. Or has it been calculated on your behalf. The benefits. That you derive. From that investment. By way of. Legitimate tax avoidance or savings. Plus any cash distribution if any. Has not been counted. Yes sir.

In that calculation you took. You tried with. The benefits of the tax avoidance. Yes. My accountant. I have a. Personal account and my brother 9. He did all that and we have the tax returns which you know. As you look at the. Total. Transaction. You've invested. All those in tax bracket. The cost of the buy. The implications of that investment too you need to make. Sure I have that. I didn't hear the last set last summer. Please don't have application. To you.

Or the object of that. Poorly worded. Portlock question I'm trying to assess. The power of. What. You. Gain. From that experience. Yes you take into consideration the benefits of the tax paid. For. Either. By the guaranteeing. The loss of your $10000 initial investment in the game. Can you tell us that. I had no objection commission. I just simply didn't hear one part of the question. Well. The highest cost of all is the enormous pain and suffering. I mean that us about that. Well I just couldn't go by it without saying that because the dollars fade into insignificance against that one I will get all my tax returns together. And compute the amount against the amount that I pay. And try to find what other costs I may

have had in travel and so forth. But I couldn't let it go without. Describing it against the background of that that you understand what I'm trying to. Determine. What. Made a profit a benefit or a long simmering over savings tax. These are only tax deferrals must advanced you know so I don't get that. Ultimately I pay them and somewhere downstream with my. Assessment doesn't matter right. OK. One last. QUESTION Sir. Could you tell us by name and position. You can't. Today. I would like you to supply that written form to us. Name and position. Every family member. By Blood. One married. However. Close decisions. Who has a position with seat world. Sees the world of New Jersey. Caesar's Palace. Or. Great Regency. Or any. Other company.

Associated. With. The various options. For licensing. Here before the casino control. Make. Sure. My Fam. Sure. You know. You know those right now. I know a lot of them I can tell you that my dad has been with the company since it started. Dr. Bernard Belman. He takes care of them all and. He. Goes to the bank things. He's 83 years old but he's been with the company a long time and my brother is vice chairman of the company. He and I started the company. My daughter Robin was sitting over there is in the public relations and marketing. I have a niece that works in the. Entertainment office at Caesar's Palace. Her name is Lizanne Tredwell. And her dad Bill works for the company he's been with us about 15 years.

I think. Oh yes. Yes. My brother is a boy who just graduated from. University of Florida and I started working in Atlantic City in the accounting section I believe. I'm not sure about that but still has got him placed there. Mr. Wilkins was the owner of the cove Haven property when we bought it and he stayed on his manager. Mr. Wilkins is. A cousin I believe to Stu's wife Mary. That's how we bought the property. And you might have to take somebody lurking in the woods there. Well I certainly would. You. Mark. And Sam. You know.

That firmness in any way connected with Mr.. No I don't think I have. Some questions was the permit purpose of clarification work casino employees. Required to be licensed in Nevada before the loans purchased the desert is. No. No only county employees was designated by the commission the commission would have to designate those persons for which license was required plus they designate those individuals to LUMS at the time of this vacation. Yes they did. Were they only casino employees. Well first we had to be licensed of course the people who were buying the Caesar's Palace and then they finally designated Mr. that had not been licensed and it was

a casino manager. And then I'm not sure about who others down lower on and the management team or require the procedure followed by the Nevada Gaming Commission commission prior to LUMS acquisition of the. Caesars Palace. Yes I understood that and then. It was it was David to identify the individuals and not the applicant. Yes sir. And. Throughout your testimony you've indicated that. You wanted to become and didn't become a passive investor in the cricket club and I think. Commissioner McWhinnie pursue this line of questioning. I'm still not sure in my own mind why you wanted to become a passive investor and that was that. I was. Very much engaged in Caesar's Palace in 1970. Mr. Campbell conducted this search of the premises from that minute on I had dedicated my business life to

Caesars Palace because it was chairman of Caesar's Palace wasn't able to run. Well the company would have been finished. Did it have anything to do your decision to become a passive investor or have anything to do with the reputation and character of the. Individuals that you were negotiating. I didn't know much either. I was very concerned about Mr Mamluks reputation. I never had sat down and talked to him about it until that fateful day in 1972. But I was concerned about that very much. What was that one of the reasons yes. I'm a massive investor. Yes that was. I believe you also testified that it was Mr. chasid who introduced you to Mr. Mallock is that correct. Yes. Do you know how long Mr. Chase knew Mr. Madoff. No not really. Do you know whether or not they had an ongoing relationship.

Not that I know you know whether or not they had any business associations prior to Mr. Chase. And if you do see you to Mr. Mountain I didn't know any. Did you ever inquire as to the manner in which the length of time that Mr. Chase and Mr. Chase told me around that time that he had. I think that he had met Mr. Malmuth through Jay Weiss he was in the vending business and he was a competitor of Jay Weiss's. I think that's how he met them. But other than that you had no further conversation with Mr. Chase regarding his relationship business or personal with Mr. Mauldin No. Do you know whether or not Mr. Chase knew Meyer Lansky. I know he did not know this but he told me that. Yes. Did you know Meyer Lansky character being introduced to Mr. Mountain. No sir. Have you ever met Lance. No sir. Never seen him. Do you know whether Mr. Chase ever met.

Miserliness. Not that I know of. But you of course were aware of his reputation around that period of time. Yes sir. When was the last time that you saw Mr. mounding. It's been over two years. Two or three years. I'm not sure. Approximately two years ago yes. Did you have occasion to speak to Mr. Mallock within the last two years. No. And what was the basis for your meeting with Mr. McNamee. Two years ago I think I bumped into him at the Bombay Club in Miami Palm Bay or the Jockey Club one of them. Do you have any kind of a personal or social relationship with this man. No I do not. Did you ever have sex relations. No I never had a social relationship with him or personal. Are you engaged in any other business transactions with Mr. Maliki other than those that you

testified to during the course of these hearings. No sir. I believe you stated that you testified that it would be inappropriate for you to negotiate to get the purchase of copayment because of your interest in the cricket club. That's correct. You Terry over to Mr.. MANN. Did you. Mr. Perlman. Vote at the board meeting to approve the transaction. Yes sir. Do you not consider that a conflict of interest. No I did not. The conflict of interest in the beginning was apparent. And the deal itself was not a conflict of interest. And that's why I voted for your considered opinion. It was not a cop. There was definitely not a conflict of interest. Mr. Perlman. There was some testimony from you

concerning. Your conduct as chairman of a publicly traded corporation and as an individual. And I pose this question to you is it. Your opinion that crossed that strike please. Given the fact that an individual is a chairman of the publicly traded corporation that pays a license to operate a casino in Nevada is it your opinion that the. Individual is held to a different standard of conduct than. As an individual and as chairman of the publicly traded fund raising. I think that in the gaming industry. The standard. Practice for a chairman of the board is quite different than it would be as an individual. In another company. But I'm sure the gaming industry

requires Now I think maybe always a high degree of public confidence and that public confidence can be easily undermined by Pigboy reputation and bad public relations. And since 1975 my company our company has never had a negative. Piece of information published about it with the exception of this affair and because of financial associations and. Our. Controls. We've brought great credit to the gaming industry and to the state of Nevada. And. We intend to continue that. And my personal standards are elevated to that standard. What is your opinion Mr. Perelman. That an individual can enter into certain business transactions which may not be acceptable. To. One or.

Two transactions with be publicly traded. No. No. He serves as the chairman of the board. No. That is not possible. Today. So. Since you were aware of that. Is it not true Mr. Berman that what you do as an individual. Also reflects on your character reputation is truly a publicly traded corporation that holds a license. Absolutely. Just that at all when. That perception as I said it's been growing. I was a new boy in town in 1969 and 70 I had day maybe an atavistic old fashioned view of. How. Methods of proof in defense of American principles but the gaming industry has a requirement. For public confidence that would that would require me to have my personal associations just a second suspect as an individual as I must have as chairman of the board of this company.

My understanding from the testimony is that it was Mr. Chase and the first thing to do is to Mr. Mountain. Yes. It was Mr. Chase and we first introduced you to the deal was it. Was it also Mr. Chase who first asked you to consider the cricket club. No it's not. Yes. Who is the person that you consider the. KOVR-TV instrumental. Mike thank you. You're watching edited testimony from today's Casino Control Commission hearings on a permanent license for Caesar's boardwalk Regency when the Commissioners had finished with Perlin Philip Helfen again took the stand. He's the former chairman of the Nevada Gaming Commission who started testifying last week. Hannifin had to return to Nevada before he finished testifying. So

today Assistant Attorney General Michael call resumed his cross-examination of had effect. Now the division of gaming enforcement says Hannifin once ordered Perlman to disassociate himself from Melnik and Cohen. Last week though Hannifin said he didn't order Perlman to