Ties to Reagan, Mob Figures : Laxalt Finds Friendships Plus, Minus for Candidacy

Paul Laxalt’s campaign for the presidency starts with his friends.

As Ronald and Nancy Reagan’s closest political ally outside the White House--Washington insiders call him the “First Friend”--the former two-term U.S. senator from Nevada claims endowment rights to the Reagan conservative legacy, as well as Reagan’s Western-state constituency.

After all, as Laxalt puts it: “During the last six years, I’ve literally had one foot in the White House and one in the Capitol building because of the unique relationship I’ve had with this presidency.”

But in these early, exploratory summer days of the Laxalt-for-President campaign, other friendships from the past are proving disquieting.

At campaign stops from Miami to Sacramento, Laxalt, 64, has been dogged by questions about his past Nevada associations with reputed mobsters Morris (Moe) Dalitz and the late Allen M. Dorfman, and financial connections with de-licensed Nevada casino owner Delbert Coleman.

Down the road, Laxalt faces other challenges establishing himself as a credible contender in the GOP primaries. He has a long resume in politics but has not enunciated his own vision for the country. He is starting his campaign late by conventional standards, and even friends wonder if his energy will match the exhausting duration of the campaign.

But at the beginning, Paul Laxalt’s candidacy seems more a tug of war between friendships: on one side, his connections to the President and the President’s hard-core conservative followers, and, on the other, the men who raise what Laxalt himself calls “Nevada-type questions.”

Recently, a pair of newspaper stories only 10 days apart illustrated the equation. The Washington Times gave the upside, stating that First Lady Nancy Reagan was urging the President’s supporters to get behind Laxalt. The Miami Herald then blared out the downside with this Page 1 banner headline: “Laxalt Named Mobster ‘Special Assistant,’ ” referring to documents that showed that Dalitz was once made special assistant to then-Gov. Laxalt.

Little Public Exposure

For now, Laxalt offers little else to discuss. After retiring from the Senate after the 1986 election, his public schedule has been scanty to the extreme, and his political call to arms, delivered in his simple monotone, is unlikely to bring many out of their seats:

“Most of the people I run into--I’ve been in some 14 states already--seem to be basically satisfied with the direction of the Reagan policies. . . . And they just want to continue what we have been doing all these many years.”

Why so much understatement? That’s his style, for one thing. For another, he appears willing to give these early months of the campaign to his critics. Let them focus now on his life 25 years ago and clear the air. Few rank-and-file voters are paying attention anyway, he reasons. Meanwhile, he will organize conservatives and then, “by the time we get into September and October, we will have a very interesting program.”

Highlights Budget Aims

For now, when pressed about what he would do as President, Laxalt offered that he would first send Congress a balanced budget--something Reagan has never done--and do so without raising taxes. Laxalt also said he would “probably” reduce military spending and would avoid social reformers in federal court appointments.

Paul Dominique Laxalt did not tailor his life to be President, that much is plain.

By his own account, Laxalt, the son of a Basque sheepherder, was for most of his life “a small-town lawyer practicing in Carson City.” He attended the University of Santa Clara in California, served as an Army medic in the Pacific during World War II and then graduated from Denver University School of Law.

Even after he won election as lieutenant governor of Nevada in 1963, after a stint as district attorney in Ormsby County, Nev., Laxalt said his world view was so narrow, “I didn’t even know the New York Times really existed. That’s a fact.”

Three years later, Laxalt ran for governor, winning the job the same year Ronald Reagan became chief executive in neighboring California. Recently, Laxalt walked through the California state Capitol reminiscing about the comfortable friendship that took hold there between “Ron and I.”

Ties to Howard Hughes

In his four years as governor, Laxalt tried to improve the gambling industry’s image by encouraging corporations to buy casinos. One of the investors Laxalt worked most closely with was Howard Hughes. Laxalt also takes credit for helping break a short convict strike by walking into the state prison and negotiating directly with inmates. He signed fair-housing legislation for Nevada and, despite his conservative image, recalls with pride that he supported collective bargaining rights for state workers.

After his election to the Senate in 1974, Laxalt supervised Reagan’s national campaigns in 1976, 1980 and 1984, and he was national chairman of the Republican Party.

Along the way, Laxalt did not gain fame as a legislative innovator: His most memorable moment under the spotlight on the Senate floor was when he led a futile effort to keep the Panama Canal under American control.

Laxalt instead achieved standing as a country lawyer in alligator boots who knew the corridors of power and could build bipartisan consensus. In person, one is struck by the simple phrases, short answers and informality of manner. The round face is well-tanned, just short of leathery. Laxalt has what one friend called an “easy way in a meeting.”

For six years he also could speak for the President. When it came time to nudge Philippine President Ferdinand E. Marcos out of Malacanang Palace, Laxalt made the call.

More Than Inside Man

Now, Laxalt is trying to demonstrate that he is more than the inside man who pushed Ronald Reagan’s vision on Capitol Hill and through three presidential campaigns.

“You are assuming that the Reagan vision is his alone,” Laxalt said in an interview. “I shared that vision. I helped formulate it. I wasn’t somebody sitting off at the side and Ronald Reagan had his own vision and the rest of us stood awkwardly around and mouthed his vision. That’s our vision.”

And there are three reasons he gives why he should be the one to carry on.

“If you’re a conservative, my answer to you is: I was there first.

“If you’re a Westerner, I point out to you that I’m the only Western candidate. I’ve lived and worked on issues of concern to the West--mining, water and all the rest of it, grazing rights--all my public life.

“If you’re looking for experience, I would point out to you I have held local office . . . lieutenant governor, the governor. The President has indicated that’s a very good training ground for the presidency, and I agree. And for 12 years I have been in the United States Senate.”

Before embarking on his campaign, however, Laxalt sought to put to rest once and for all other questions about his record.

In 1984, Laxalt filed a $250-million libel suit against the McClatchy newspapers of Sacramento over a story suggesting that Internal Revenue Service agents had found evidence of illegal skim ming at a casino Laxalt owned from 1972 to 1976, the Ormsby House in Carson City.

Last month, only a few days before it was to go to trial, Laxalt agreed to drop the suit in exchange for an ambiguously worded joint statement with McClatchy that allowed both sides to claim victory. He thus avoided a lengthy trial that would cut into campaign time and might have hammered away at his associations with Nevada gambling figures reportedly tied to organized crime.

The case generated hundreds of pages of pretrial depositions and exhibits that, at least for now, have provided more details of Laxalt’s Nevada days.

There was the letter Laxalt wrote to President Richard M. Nixon in 1971 asking that convicted Teamsters Union President James R. Hoffa be freed from jail.

Laxalt was writing, he said, on behalf of his friend, Dorfman, a millionaire insurance executive and Teamster consultant. Dorfman, who was convicted in 1972 of taking kickbacks for loans from Teamster pension funds, had well-established mob ties and in 1983 was shot to death gangland style in Chicago after his conviction of conspiring to bribe Nevada Sen. Howard W. Cannon. Cannon was never accused of accepting a bribe.

‘President Dick’

“Dear President Dick,” the letter began, “the other day I had an extended discussion with Al Dorfman of the Teamsters, with whom I’ve worked closely the past few years.”

As a result of that conversation, Laxalt wrote, he had become convinced that Hoffa “has been and continues to be a political prisoner” of the U.S. government.

The Teamsters, Laxalt continued, “represent by far the greatest investment in Nevada. Their activities have been ‘above board’ at all times and they have made a material contribution to our state. . . . I cannot believe that the man who organized this group is the criminal type so often depicted by the national press.”

Hoffa was granted presidential clemency in 1971 and in 1975 he vanished, the presumed victim of a mob murder. Last June, the Justice Department initiated legal action to have the government seize the Teamsters, charging that the union was controlled by organized crime.

Two other episodes are frequently raised.

One details how Laxalt intended to become partners in a casino with financier Del Coleman, who earlier had been stripped of his gambling license after signing a consent decree to charges of stock manipulation. With Coleman’s help, Laxalt then got more than $2 million in loans from a Chicago bank for his casino project without putting up any security in return.

Dalitz Story Spotlighted

Then there was Moe Dalitz. Drawing on documents from the libel trial, the Miami Herald bannered the story of Laxalt’s once granting Dalitz credentials that called him a “special assistant to the governor,” noting that Justice Department records described Dalitz as a “major racketeer.”

“I mean, good God, talk about a cheap shot,” Laxalt responded. The special assistant credentials, he said, were little more than public relations gimmicks given out casually, the way many people are named Kentucky colonels.

Laxalt and his supporters also note that there is no evidence, nor have there ever been accusations, that he enriched himself while in office. In his last financial disclosure report before leaving the Senate, Laxalt, married with seven children, reported a net worth of roughly $200,000, among the lowest of any member. His wife, Carol, Laxalt said, had to work to help the couple “make ends meet.”

But Laxalt is taking heat from his Nevada days anyway. One columnist, political writer Ken Auletta, has suggested that his associations evidenced “moral obtuseness” in Laxalt’s character.

Laxalt, in response, asks that voters view his past with more grasp of what he calls the “Nevada frame of reference.”

With prostitution and gambling legal, Nevada embodies a live-and-let-live spirit. “It’s a different set of morals in a positive standpoint,” he said, “because Nevada is less hypocritical than most states.”

Later, he said: “If there is anything I’ve learned . . . it is that very little of life is true black and white. And most of our lives we live in a very gray area.”

It also seems that we live most of our lives in the midst of a presidential campaign. “I think, frankly, based on my own experience, that presidential campaigns do not have to be three or four years long, and I don’t think they even have to be two years long,” Laxalt said.

Thus Laxalt said he thinks he can run an effective presidential campaign in just 18 months.

‘Cost Me Supporters’

His late start, however, has meant that while other candidates were busy courting brand-name Reagan supporters, Laxalt was not even in the contest. “Yeah, it’s cost me some supporters, that’s true.

“But I don’t have a lot of people who are out there disenchanted either, who have been summoned and hustled early and who haven’t had anything to do since.”

For all his years and closeness with Reagan, Laxalt is remarkably unlike the President in one important regard. He simply cannot reach out and grab an audience by the throat. “No, I am not fire and brimstone,” he conceded.

But, Laxalt believes, after two terms of Ronald Reagan, America can do with a steward rather than an orator to lead the conservative movement. “Because we had a revolution that achieved crusade proportions, there were great hopes and aspirations that we were reforming the system entirely.

“This,” he said, “is a different time.”