Was that hot dog you ate at Petco Park unsavory? Fans have complained about unsavory food at the new ballyard. Well, for years the company that provided you that hot dog has been trying to overcome an unsavory past -- particularly, financial involvement with notorious mobsters.
While investigators haven't found organized-crime relationships in recent years, and the successor company now enjoys a reputation for professionalism, the malodor lingers on. When the company bids on a concessions contract, competitors disinter the sordid past. When the firm gets a prestigious contract, such as for concessions at Yosemite National Park, the press digs into its past.
The company says it has cleaned house, but as the Wall Street Journal pointed out in a story November 17, 1994, the question of whether efforts are a cleanup or a whitewash "seems destined to plague the company for at least another generation."
The exclusive food service and retail concessionaire at Petco is called Sportservice. It is part of Delaware North Companies of Buffalo, New York, a privately held company with more than $1.6 billion in sales, concessions contracts at major sports stadiums, and a big stake in the gambling industry through racetracks, casinos, slot machines, and, of late, combination racetracks and casinos, called "racinos."
The predecessor company was named Emprise. It was founded in 1915 by three brothers. One of them, the late Lou Jacobs -- longtime head and patriarch of the company -- became infamous for his underworld relationships. The Reader's retelling of Emprise's history won't make that hot dog any tastier, but it serves as another example of the historical connection between professional sports and the gambling industry.
Wendy Watkins, spokesperson for Delaware North, says this about the food: "In any brand-new venue, there are bound to be areas for improvement." The first season "is a learning experience, and we are responsive to comments and suggestions from fans."
I gave her a list of questions about Emprise's dubious past associations. She passed the queries to the company's outside counsel, who said that Emprise is "a twice-removed predecessor of Delaware North that was dissolved in 1978 -- 26 years ago -- and the management of Delaware North played no role whatsoever in the operations of Emprise."
However, Delaware North's website makes it clear that the Jacobs family, owners of Emprise, own Delaware North. The current chairman and chief executive, Jeremy M. Jacobs Sr., one of Lou Jacobs's sons, headed a Canadian subsidiary of the Jacobs empire as early as 1961 and became chairman in 1968 at age 28 upon his father's death. As John Emshwiller's 1994 Wall Street Journal article pointed out, Jeremy Jacobs took over the parent company at a time that "investigators were probing the intensely private company for evidence of organized-crime ties." Later, the company became Delaware North.
In 1972, after Howard Hughes had bought Las Vegas's Frontier Hotel and Casino, a jury in Los Angeles federal court concluded that the casino's real ownership had been illegally concealed. Among the actual owners had been Anthony J. Zerilli and Michael S. Polizzi, "two high-ranking members of the Detroit Mafia family," according to The Boardwalk Jungle by Ovid Demaris. Another owner was Emprise, which, according to the jury, had loaned a bundle of money to front men for the allegedly mob-related owners. According to Demaris, Emprise also jointly owned a Detroit racetrack with Zerilli and Polizzi.
As a result of the Frontier case, some of the alleged mobsters went to prison; Emprise was fined $10,000, according to both The Wall Street Journal and The Boardwalk Jungle. Lou Jacobs and his son, Max, were named as unindicted co-conspirators. "That same year , Sports Illustrated put the late Lou Jacobs on its cover under the headline, 'The Godfather of Sports,' " wrote investigative reporter John R. Emshwiller in the Wall Street Journal's comprehensive 1994 piece on Delaware North and its predecessor, Emprise.
In that story, Emshwiller said that Jeremy Jacobs "doesn't deny that his father traveled in a rough-and-tumble world. Lou Jacobs built the company by obtaining lucrative concession contracts at sports facilities and other locations in return for providing millions of dollars in upfront payments and loans to stadium and team owners."
Continued Emshwiller, "Some of those loans went to horse tracks, dog tracks, and jai alai arenas. Besides concessionaire, the company also became owner and operator of a number of such facilities. Mr. Jacobs says his father's forays into the gambling world unavoidably put the company into contact with questionable characters. 'It went with the territory,' he says."
In the year 2000, when a Delaware North subsidiary won the concessions contract at Yosemite National Park, the company's past hit the headlines. On August 27, 2000, Michael Doyle of the Fresno Bee wrote, "Before Delaware North entered Yosemite, competitors reminded regulators of the company's time as Emprise." Under Lou Jacobs, "Emprise had some dealings with organized crime figures. Congressional hearings revealed old company practices that included secret cash payments to politicians in the 1950s," as well as the Frontier Hotel and Casino fine.
Karen Liberatore, a Delaware North spokesperson, told the Bee, "Those are things that happened more than 40 years ago. A lot of time has passed, and the company is run entirely differently."
Many things happened decades ago. According to the Las Vegas Review-Journal, money from Emprise and the corruption-ridden Teamsters permitted Morris B. "Moe" Dalitz, whom the newspaper identified as a former Cleveland bootlegger and racketeer, to take over the Stardust casino from Jake "The Barber" Factor, a friend of Al Capone.
I first ran across Emprise when I was bureau chief in Cleveland for Business Week from 1966 to 1973. In fact, my first interest in investigative financial reporting came when I was anonymously sent a prospectus for a public offering for a slot-machine maker named Bally Manufacturing. The Securities and Exchange Commission held up the offering for months because of a principal's alleged longtime relationship with Gerardo "Jerry" Catena, whom Demaris calls a "Genovese family underboss" and close friend of Lucky Luciano.
The kingpin in the Bally deal was Sam Klein, a Clevelander with longtime ties to illegal gambling, according to Demaris. The best passage on Klein comes from Mobbed Up, the book by James Neff about the life of Teamster and mob boss Jackie Presser. Klein told the author that Bill Presser, Jackie's equally disreputable father, had come to him to talk about his son. "His old man was very unhappy with his performance and got me to beat the shit out of him in the early '60s," said Klein. "We are dear, dear friends."
According to Demaris, Emprise and Klein were critical in the financing that led to the transmogrification of Chicago's Lion slot-machine maker into Bally. Later, Klein gave Bally stock to the Presser family, and the Teamsters Central States fund loaned the company $6 million. In 1969, according to Demaris, the New York State Bureau of Criminal Investigation said that Sportservice and Emprise "have many admitted contacts and dealings with individuals who are hoodlums or alleged Mafia leaders. This is particularly true relative to their many concessions at stadiums, racetracks, ballparks, and so forth." (Italics mine.)
Neff's book also says that Jackie Presser had a girlfriend who was on the Sportservice payroll but didn't show up at work.
Said Emshwiller in his 1994 story, "In 1973, five years after Lou Jacobs's death, a report by the House Select Committee on Crime concluded that, 'Emprise knew, or should have known' that it was the financier or business associate for operations with alleged mob connections stretching from New England to Nevada."
Emprise got negative publicity over fallout from the 1976 assassination of Don Bolles, an investigative reporter for the Arizona Republic. Bolles had written a series of articles about Emprise activities in Chicago, Detroit, and particularly in Arizona, where it was in the racing business and had close ties with top political and business leaders. According to investigative reporter Michael Wendland, Bolles went to Washington, D.C., to tell a congressional committee about Emprise.
On the day of his death, Bolles had an appointment to meet with a racing-dog owner named John Adamson, who claimed he had more information on Emprise. But it was a trap. Adamson never showed up, and Bolles's car blew up. According to media reports, the critically wounded Bolles mumbled the name of Emprise, along with that of Adamson and the Mafia.
The drama played out for years. Adamson admitted planting the bomb. Two other alleged co-conspirators were sentenced to death on Adamson's testimony. But the convictions were overturned. Adamson was prosecuted for first-degree murder and sentenced to death. But that was overturned, too. The three eventually did spend time in prison.
Emprise was not charged in any way after an investigation by Arizona politician Bruce Babbitt. But later there were widely publicized investigations into whether the company had been given favorable treatment by Babbitt, who, according to the Wall Street Journal, received thousands of dollars in campaign contributions from the Jacobs family through the years. Babbitt has consistently denied that the contributions affected his decisions. "When Mr. Babbitt was attorney general and later governor of Arizona in the 1970s and early 1980s, he had helped work out arrangements allowing Delaware North to remain in the racetrack business there despite the 1972 [Frontier casino] conviction," wrote Emshwiller in 1994.
Questions about Babbitt's relationship with the firm continued as he went on to become secretary of the interior under President Bill Clinton. The charges didn't stick, but the publicity over Babbitt, as well as the alleged mobsters through the years, did not help Delaware North.