In last week’s cover story, we described how two of America’s richest and most powerful oil barons took a small La Jolla hotel called Del Charro and turned it into an unlikely base for their political and financial schemes. In the second installment, we trace how the pair used their political influence and financial connections to seize control of the Del Mar racetrack.

Even before Clint Murchison and Sid Richardson acquired control, the Del Mar racetrack had long been associated with mobsters and various other unsavory personalities whose ownership interests were obscured behind famous names.

Bing Crosby, Pat O’Brien, and their pals from L.A. had been the founding operators in 1937. “Bing was president, Pat the vice-president, with the board including the late William A. Quigley, the late Charles (Seabiscuit) Howard and Kent Allen,” wrote L.A. Times columnist Ned Cronin in 1955.

That group sold out in 1946 to a Chicago syndicate headed by Arnold Grant. “Crosby got out and put a chunk of his money in the Pittsburgh Pirates, which is roughly the equivalent of parlaying a gold mine into a gopher hole,” Cronin noted.

“Grant and drawling Charlie Carr ran the Del Mar affairs for two years, unloading in 1948 just before the summer meeting got underway.”

This time the buyers were Joseph M. Schenck and Jay Paley.

Six years earlier, on September 7, 1942, Schenck had been released from a federal prison in Danbury, Connecticut, after serving four months for income-tax evasion in a sensational 1941 case involving, among other things, fraudulent deductions taken in conjunction with the sale of stock in Tijuana’s Agua Caliente racetrack.

To lighten his sentence, Schenck agreed to testify against Willie Bioff and George E. Browne, two members of the Chicago mob who used the corrupt International Alliance of Theatrical and Stage Employees union to extort over a million dollars in protection money from the big Hollywood studios. Schenck, who was chairman of the board at Twentieth Century Fox, worked hand in glove with the mobsters throughout the mid-1930s extortion scheme. (On October 26, 1945, Schenck was granted a full pardon by president Harry Truman on the recommendation of “prominent people,” the New York Times revealed more than a year later, in January 1947.)

Convicted in November 1941, Bioff and Brown were both sentenced to hard time but soon started talking to federal investigators and were released in 1944. Using their testimony, the Feds busted Johnny Rosselli, the Chicago mob’s top Hollywood operator, and six other hoods, who all ended up behind bars. Rosselli would later become a Del Charro regular and a figure of interest in the assassination of John F. Kennedy.

By 1955, Bioff was living under an assumed name in Phoenix, Arizona, where he was friendly with Republican Senator Barry Goldwater and working as an entertainment consultant for the new Riviera Hotel and Casino in Las Vegas, backed by the Chicago mob. That November he was killed by a bomb rigged to the ignition of his pickup truck, according to the New York Times.

The Schenck and Paley group ran the track for four seasons “and did a great job of hanging up a new longevity record,” Cronin said. “Then came Al Hart and a new slate of directors.” The year was 1952, and it was announced that Hart was buying his interest in the track for the Alfred and Viola Hart Foundation.

Hart, a longtime associate of the Chicago mob, had been a beer runner for Al Capone, writes Gus Russo in his book Supermob. In the 1930s, Hart owned Central Liquor Distributors, the San Angelo Wine and Spirit Corporation, and Alfred Hart Distilleries.

“In 1949, a San Bernardino grand jury was convened to investigate two of Hart’s partners in Alfred Hart Distilleries, Edward Seeman, the slot machine king of San Bernardino, and State Senator Ralph E. Swing, for soliciting a bribe from a citizen who wanted to obtain an auto-racing concession. However, the grand jury returned no indictment,” according to Russo.

While an owner at Del Mar, Russo says, Hart “struck up a lifelong friendship” with J. Edgar Hoover, “despite the fact that Hart’s FBI file notes, ‘Hart has a reputation of associating with known hoodlums.’” In 1948, Hart had invested $75,000 in Bugsy Siegel’s Flamingo Hotel in Las Vegas. At the time of the partnership, says Russo, Siegel had a box at Del Mar, which he shared with his girlfriend Virginia Hill.

In November 1959, Hart crossed paths with Judith Campbell — later to become one of John F. Kennedy’s mistresses — in a penthouse hotel suite in Hawaii rented by Frank Sinatra. The singer had invited Campbell along for a week in Hawaii with Peter Lawford and his wife Patricia Kennedy, the sister of the president-to-be. Hart, like many of Sinatra’s mobbed-up friends, dropped by for a visit.

“He was in and out, and I seem to remember him being there that first day, but it could have been the next day,” Campbell, then known as Judith Exner, recalled in a 1977 autobiography, My Story, as told to Ovid Demaris. “He sticks in my mind because of the comical image he presented when he walked out in swim trunks.

“They were of a jersey material, jockey style, very tight, and his paunch and saddlebags hung over his waistline like an inner tube. None of the parts — legs, arms, torso, head — seemed to go together. He reminded me of a koala bear.”

Despite his appearance, Hart had a reputation for big-time womanizing. One of his many conquests was Anna Maria Pierangeli, a statuesque Italian actress married to singer Vic Damone, who went ballistic when he discovered the affair. Damone related the story in his 2009 biography Singing Was the Easy Part, written with David Chanoff.

“Al Hart, that weasily little son of a bitch! That weasily little soon-to-be-dead son of a bitch! I kept a gun in the glove compartment of my car. We lived up on Moraga Drive in an out-of-the-way area, which is why I had it. Well, now I was going to use it. I’m going to drive over to that son of a bitch’s office and shoot him right between the eyes — that was the one thought I had in my head. I was going to kill the lying little prick. I was so enraged I could hardly see.

“I’m going to kill that son of a bitch Al Hart,” Damone says he told a friend, who in turn called Frank Sinatra: “Vic Damone is on the way to kill Al Hart. He’s got a gun in his car. You better stop him,” the friend told Sinatra. A quick sit-down between Sinatra and Damone ensued.

“Dago, listen,” Sinatra told Damone. “You want to find how the fuck this guy ever did it? I mean, just how did he do it? You’re a good-lookin’ guy, you have a kid with her. And look at him. Jesus. How in the world did a guy like that manage it? I want to know how he got her away from you. Send him roses. Talk to him. ‘You son of a bitch, how did you do it? What did you say to her?’ And if you’re going to kill someone, kill her. But you know what? She’s not worth it.”

Two weeks after Del Mar closed for the season on Labor Day, 1953, Clint Murchison wrote Hoover with details of his scheme to buy the track using a charity as a front. “I have talked with my tax man as to the methods we should use to make this a tax-free organization,” he said in his September 15 letter, excerpted in Clint, a 1986 biography written by Murchison’s longtime personal secretary Ernestine Orrick Van Buren, who said she had exclusive access to Murchison’s personal files.

“Assuming I am successful in making proper overtures in Chicago, I want your permission to tell them that I expect you to head it on an honorary basis in the beginning and that when you arrive at the period of your retirement from the FBI, you expect to devote your every effort to the furtherance of this project. I do not want to use your name in vain, so I would appreciate it if you would give me permission to tell the owners of the tracks in Chicago that I expect to have your cooperation.”

On June 11, 1954, Murchison and Richardson staged a press conference in the Gold Room of the Beverly Wilshire Hotel in Los Angeles, where they appeared, flanked by Hart and Louis B. Mayer, to announce their takeover of Del Mar. Time magazine reported they were buying a 40 percent controlling interest for $1.2 million. On July 12, the New York Times reported that C. Ray Robinson, a Merced-based attorney for the Texans, had outlined a plan to take over a total of six racing operations across the nation.

“Del Mar would be the nucleus of the planned chain of tracks,” the Times said. Ninety percent of the operation’s net would be given to Boys, Inc., a nonprofit that had been incorporated in Delaware on June 3, 1954.

“The foundation would operate a chain of centers in underprivileged urban sections from coast to coast,” the Times reported. “These centers would have recreational facilities, guidance counselors, and vocational training facilities in which industrial concerns might participate.

“The sponsors would like to have J. Edgar Hoover, Director of the Federal Bureau of Investigation, head Boys, Inc., whenever he sees fit to retire from the Federal Service. Mr. Robinson said Mr. Hoover had been approached on the matter and expressed enthusiastic approval of the foundation idea but had not committed himself on taking the position.”

“It was a racket, if you want to know what it was,” George Allen, a longtime Washington insider and crony of both presidents Truman and Eisenhower (as well as Murchison and Richardson), told Ovid Demaris in the 1970s. “You see, they could go in and buy the track with their foundation, the Boys’ Club deal, and there’s no taxes. They would lend the money, then get it back, but you see, they would then control the track. Sure the Boys’ Clubs would get something, but it was a tax racket. One time they wanted to buy all the tracks in the United States. George Humphrey, who was Secretary of the Treasury, wouldn’t let them do it.”

The board of directors of the new operation, according to Murchison biographer Van Buren, was composed of Clint Murchison and his son John; Sid Richardson and his nephew Perry Bass; and Dallas attorney George C. Anson.

On September 10, 1954, the state Horse Racing Board granted a one-year license to run the Del Mar racetrack to Operating Company, a corporation owned by Clint Murchison and Sid Richardson. But the controversy over handing the Texans control of the track had not subsided; if anything it had gotten more heated.

The state Senate’s Committee on Racing, citing a loss of taxes to the state and federal government caused by the charity setup, protested the move. When it became obvious that the Horse Racing Board would award the license anyway, Senator Harry Parkman told the New York Times, “We’ll propose new legislation to take care of a situation like this. We’ll amend the law to require the owners of a track to operate it.”

Parkman did not carry out his threat, and the state ultimately gave Boys, Inc., a ten-year lease to operate the track. But the protests continued, and the Texans were persistently rebuffed when they attempted to get the Boys Clubs of America to accept their money. In April 1957, according to Van Buren, Boys Club board member E.E. “Buddy” Fogelson, a frequent Del Charro guest, wrote his friend Murchison, saying, “…the National Organization would not accept directly or indirectly income derived from racetracks.”

“Not one cent has been turned over to Boys, Inc. I do not know where the money went,” said Gen. Holland Smith, a retired Marine general whom Clint had retained as a front man; they later had a falling out. “It is my considered opinion that no money will be transferred to Boys, Inc., for at least five years, if then. I hope I have given you a fair idea of what I think of Mr. Murchison and Mr. Richardson…”

Sid Richardson died September 30, 1959. John Connally, as co-executor of Richardson’s estate, replaced him as a board member of the Del Mar track; Sid’s nephew Perry Bass, who had inherited the bulk of Richardson’s empire, also went on the board. Murchison, who had suffered a series of strokes, was replaced by his sons John and Clint Jr.

Connally was 16 when he enrolled at the University of Texas in the fall of 1933. Two years later, a local newspaper publisher introduced him to Lyndon Johnson, an ambitious congressional aide who’d recently been named head of Franklin Roosevelt’s National Youth Administration.

Connally was admitted to the Texas bar in 1938, along with college friend Robert Strauss. Both had worked in the 29-year-old Johnson’s 1937 special election campaign to fill a vacancy in the House of Representatives. In 1939, Johnson made Connally his top assistant.

In 1948, Connally was a principal player in the infamous South Texas ballot-box scandal that got Johnson elected to the U.S. Senate by 87 votes, earning for Johnson the nickname he never lived down: “Landslide Lyndon.”

Connally went to work for Austin lawyer Alvin J. Wirtz, an LBJ insider who had helped set up Johnson’s wife Lady Bird in an Austin broadcasting empire, allowing the Johnsons to maintain the fiction that she, not Lyndon, was making millions on advertising bought by his political benefactors. When Wirtz died suddenly in 1951, Connally was hired by Sid Richardson and became a Del Charro regular.

Together, the new board members would face a two-front war, against the state of California on the one hand and the U.S. Internal Revenue Service on the other.

In 1962, the IRS revoked the tax-exempt status of Boys, Inc., and ordered it to pay four years’ worth of back taxes, a total of $729,234.90, plus interest. That fall, Jim Mills, a freshman assemblyman from San Diego, introduced a bill to prohibit Boys, Inc., from renewing its lease on the track — scheduled to expire in 1969 — without a public bid.

The Texans sued the IRS in Federal District Court in Dallas, which ultimately ruled in their favor. The IRS did not appeal. To take on Mills, they turned to one of Murchison’s favorite fixers. His official title was secretary of the Senate Democrats under majority leader Lyndon Johnson, but Bobby Baker, a country boy from South Carolina who had started out as a senate page, was by turns a bagman, procurer of carnal pleasures, master of the payoff, and possessor the darkest personal secrets of virtually every member of the senate.

Clint and his sons had done much business with Bobby, including a commission deal with the Murchison-owned Haitian-American Meat and Provision Company, commonly known as Hamco.

“Though in 1960 the Murchisons backed Richard Nixon for president and gave him Lord knows how much money, they had Tommy Webb, a former FBI agent, bring a bet-copping $10,000 in cash for the Kennedy-Johnson ticket,” Baker wrote in Wheeling and Dealing, his 1978 memoir with Larry L. King.

“The loyal courier Webb and I flew to New York City where, outside an office building owned by the Kennedy family, we traded handshakes with Bobby Kennedy and then handed him the money in a white envelope. He whisked it to the safety of his inner coat pocket and, as with so many people to whom I made cash deliveries, seemed eager to see our departing dust.”

Baker, who set up a vending-machine company called Serv-U with two of mobster Meyer Lansky’s associates and who later went to prison on a tax rap, was said to be a Del Charro regular during racing season, hanging around the bar with senators he kept supplied with high-class hookers. As always, Hoover was taking notes.

In the spring of 1963, the industrious Baker traveled to California to help save the Murchisons’ ever more tenuous hold on Del Mar. “Gov. Edmund G. Brown disclosed today that Robert G. Baker made a special trip to California last May in an effort to protect a racetrack monopoly in San Diego,” United Press International reported.

Brown, who told the wire service that Baker had been accompanied by Clint Jr., said he “believed that Mr. Baker was intervening on behalf of the Murchisons because of the financial support the family had given the Democratic Party.”

But Brown wanted his pal and campaign contributor Johnny Alessio to take over the track. Spurning Baker, the governor said he “favored the bill and wanted it to move. I believe that the track should be leased to the highest bidder if others are available.” The story went on to report that “Governor Brown noted that Mr. Baker had said the appointment was set up by Vice President Johnson. The governor said this was not true, and that Mr. Baker had acted independently.”

Jim Mills, the bill’s author, is now 83 years old and lives in Coronado. He doesn’t recall Baker’s role, but he distinctly remembers the power Alessio exercised with Brown. “Johnny Alessio raised a lot of money for Pat Brown and had a lot of influence. In addition to the Del Mar bill, Alessio [who owned the Hotel del Coronado] also got Brown’s backing to build the bridge between San Diego and Coronado.”

Brown signed the Mills bill in June 1963. The days of the Murchison family’s control of Del Mar were nearing an end. The L.A. Times headlined it “Texans Want Out at Del Mar.” By the time the story appeared on Dec. 6, 1965, Clint Sr. was wheelchair-bound, and his sons John and Clint Jr. — who founded the Dallas Cowboys and become a notorious playboy — spent little time at the track and had little interest in the Del Charro hotel. Murchison senior would die on June 20, 1969. The hotel was sold and torn down for condos in the 1970s.

In December 1966, the 22nd Agricultural Association board voted 8-1 to give a 20-year Del Mar operating lease to Johnny Alessio, the onetime shoeshine boy who ran Tijuana’s Caliente racetrack and its bookmaking operation. The crony of both Democratic Gov. Edmund G. Brown and San Diego’s Republican kingpin C. Arnholt Smith, Alessio, who would later go to jail for income tax evasion, was suspected of using his considerable political influence to sway the decision — especially since the amount of his bid was second to one made by the San Diego Turf Club, reported the New York Times.

In the end, the decision of the agricultural association board was reversed, Alessio was denied the lease, and he never got to run the track.

Two years later, after a flurry of investigations and legislative action, the Del Mar Thoroughbred Club was awarded the lease. The club billed itself as a “a non-dividend paying corporation that uses its share of the track’s profits for capital improvements,” according to a July 1989 Union-Tribune report. “It was the pits,” the club’s general manager Joe Harper told the paper about conditions in 1970. “The grandstand was in disrepair and the stable area was an absolute disgrace. There had just been years of neglect and there wasn’t enough money to do anything.”

And in 1989, when the lease again came up for renewal for another 20 years, the club beat out John Brunetti, owner of Florida’s Hialeah Park and the Ogden-Nederlander Group, which offered to build a new grandstand and concert venue to boost revenue. Both had argued they could deliver more income to the state, even after making a profit.

Critics of the Thoroughbred Club said it obtained the lease in time-honored Del Mar fashion, through connections, pointing out that over the years its directors have included ex-GOP congressman Claire Burgener, grocery-store magnate John Mabee, and John Connally’s old pal, Bob Strauss. The club argued that its agreement to give the state 75 percent of the net profit was what sealed the deal. “The trick was to give the state the best deal,” Thomas Hamilton, a lawyer who was president of the club from 1970 to 1987 told the Union-Tribune in July 1989. “I had known Cap Weinberger, who was the state’s finance director, for years, and I went up to Sacramento and had a series of meetings. I said no one can offer to give you more than all of the profit.”

Mills, who authored the 1963 bill that eventually forced out the Murchisons, says that the group that came to control Del Mar was primarily composed of wealthy Republican insiders. “People like [political consultant] Larry Remer later claimed I wrote the bill for my political donors, but that was ridiculous. The Republicans who gave money against me were the ultimate beneficiaries. I just wanted to open up the bidding to competition.”

“It’s sort of like the cattlemen’s club on the TV show Dallas,” an anonymous critic told the L.A. Times in February 1989. “They sort of sit around and say, ‘I’ll trade you a grocery store for an oil well.’ It’s an appendage to their personal prestige and personal wealth. I think that was nice and fine in its time, but today you’ve got to look at running this as a business.”

Last year, the Del Mar track lease was put up for bid once again. Only the Thoroughbred Club responded with a bid, which was approved by the state racetrack leasing commission at its November meeting, according to spokeswoman Linda Zweig. In the meantime, Democratic state Sen. Christine Kehoe has introduced a bill to sell the land under the track and the rest of the Del Mar fairgrounds to the City of Del Mar for the bargain-basement price of $120 million.

And a racing group led by Michael Pegram, co-owner of 2010 Preakness Stakes winner Lookin at Lucky, is jockeying for a new $30 million, 50-year lease. Governor Jerry Brown, son of the late Gov. Pat Brown, Johnny Alessio’s old crony, will no doubt have a big say in the final outcome. Clint Murchison and Sid Richardson would be envious. ■