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On the one side were three longtime and trusted lieutenants from the Hughes empire. They were Raymond Holliday, executive vice president of the Hughes Tool Co. of Houston, the castle keep of the boss's corporate kingdom; Frank W. Gay, senior vice president of that company and a onetime member of the Mormon corps around Hughes; and Chester C. Davis, Hughes' longtime lawyer. On the other side was Robert Maheu (pronounced May-hew), 53, a bulky, pink-cheeked man who, after only Hughes himself, had become the second most powerful figure in Nevada. Maheu, an ex-FBI agent, had worked for Hughes since 1953, when his own tough anti-Communism caught the eye of superpatriotic Hughes. He was assigned to several security and personal jobs, including keeping an eye on some of Hughes' female acquaintances.
Since his promotion to head Hughes' Nevada holdings. Maheu had become rich. Besides the $500,000 a year that he was paid by Hughes, he had an unlimited expense account and freely used company Cadillacs, helicopters and an airplane. He kept a $500,000 yacht on the Pacific, a French Regency home in Las Vegas estimated to be worth the same amount, and a $50,000 lodge at nearby Mount Charleston.
In recent years, Maheu had expanded on his own, buying into a $70 million housing development in Los Angeles, restaurants and an electronics company. Maheu and his security chief, Jack W. Hooper, a former Los Angeles cop, also had interests in a number of consulting firms. The Maheu firms hired the Hooper firms as security consultants, while the Hooper firms hired Maheu's companies for advice on management.
Depth of Corruption. Maheu's rise stirred intense envy and innumerable rumors in Las Vegas. In that gaudy city, where stuccoed pastel towers climb improbably out of the desert, a gambler's distrust pervades everything, and almost everyone is thought to have his (or her) price. The entertainers often kick back part of their inflated fees to the producers, dishwashers pay their bosses for the opportunity to work, and waitresses pay off their captains. "There is a depth of corruption here that would leave even the Vietnamese breathless," reported TIME Los Angeles Bureau Chief Don Neff. "A prominent banker, after his third drink, talks loudly about kickbacks: '$50,000, $75,000 off the top−so what's that?' A famous attorney declares in public: 'If he doesn't like it, I got friends who will take him to the edge of town and take care of him.' Embezzlement, thievery, cheating−they are subjects as natural to Las Vegas as rosaries are to convents."
Hughes, who is notoriously distrustful of everyone, became suspicious of some of his Las Vegas employees last February after a tip-off from federal investigators, who are investigating corruption in the Hughes Nevada operation. Huge kickbacks, it was said, were received on the purchases of old and largely worthless Nevada mining properties, for which Hughes had paid $2,000,000 more than they were worth. In another deal, one prospective seller was asked for a $250,000 payoff in return for persuading the boss to buy a piece of land on the Las Vegas Strip. Payments were demanded from entertainers who performed at Hughes' hotels, and from others who were offered Hughes' business.