Gerardo "Jerry" Catena has not appeared in the five weeks of New Jersey Casino Control Commission hearings here on whether Bally Manufacturing Corp. should be allowed to keep its Atlantic City casino-hotel, Bally's Park Place.
But the name of Catena, a reputed leader in the Vito Genovese crime family, has come up daily and at times hourly in testimony before Casino Control, an independent commission appointed by the governor of New Jersey to license and oversee casino activities in the state. Even in Catena's absence, and even though Bally says Catena has had little to do with the company for 15 years, the white-haired 78-year-old Florida resident is the central issue in Bally's future.
The Division of Gaming Enforcement, an arm of the New Jersey attorney general's office that acts as casino investigators and prosecutors, says that Bally and its former executive, William O'Donnell, should be denied casino licenses because of Catena's undisclosed investment in Bally in the 1960s and his associates' presence in the company into the mid-1970s. The division forced O'Donnell, Bally's founder and longtime president and chairman, to step down a year ago when the casino opened with a temporary license. That license expires Dec. 29.
Bally lawyers say that those charges are ancient history and that Bally, the nation's largest slot-machine and arcade-machine manufacturer, for years has not had any connections with figures associated with organized crime.
The final decision on Bally's and O'Donnel suitability for a casino license rests with the five-member Casino Control Commission, which is expected to conclude its hearings tomorrow and vote within the next 10 days.
The risks are colossal for Bally. If denied a license, the company would not only have to divest itself of its 83 percent interest in Park Place, a $300 million boardwalk casino-hotel, but it also would be barred from selling slot machines in the resort city.
The Chicago-based company reported that Park Place grossed $167 million while the parent company as a whole grossed $505 million, including profits of $39 million, during the first nine months of 1980. The company also owns the Midway pinball machine company and the Aladdin's Castle subsidiary, which owns pinball arcades in 36 states.
As hard as Bally executives have tried to shake it, Catena's shadow has followed them into New Jersey.
Catena, now semi-retired in Boca Raton, Fla., lived for years in West Orange, N.J., helping run the Jersey mob and overseeing its secret
He was one of the original investors in Bally's forerunner company. Lion Manufacturing Corp., when O'Donnell bought it in the early '60s. Catena's interest in Lion was held secretly by a New Jersey businessman. Barnet Sugarman.
O'Donnell testified he first learned of Catena's share of Lion in 1965 and immediately had Catena's interest bought out for $175,000. O'Donnell said that he has spoken to Catena only once or twice in his life that Catena exercised no influence inside the fast-growing company.
But New Jersey officials charge that O'Donnell should have known that Catena had entered the company. Sugarman and another man O'Donnell brought into Lion as a major investor. Abe Green, had been a partner with Catena in about a dozen vending and amusement-machine companies, according to the division, which claims O'Donnell had known about this for many years.
Robert Sturges, the division's deputy director who is handling the Bally case, has hammered away during the hearings at the ways in which Catena's trail lingered inside the company even after he left.
Catena remained with Green as a partner in Bally's New York-New Jersey distributorship, Runyon Sales, until 1971.
In 1975, the Nevada Gaming Commission ordered Bally to sever its ties with Green as a condition for Bally getting a casino license there.
Sam Klein, a Cleveland vending machine magnate, was another reputed associate of Catena and helped finance Bally in the 1960s, according to the division. In 1976, Nevada authorities forced Klein to resign as a Bally vice president and director, sell his stock and pay a $50,000 fine after Klein was spotted playing golf with Catena in Florida. The Nevada Gaming Commission also ordered Bally not to "employ" Klein "in any capacity."
The division claims that Bally broke its word to Nevada officials by continuing to have business dealings with both Kelin and Green.
The division says that even after leaving Bally, Klein acted as middleman in the company's efforts to hire a manager for its Atlantic City casino.Klein also acted as a real estate finder for Bally in 1977 when it was searching for land in the resort city, the division said. Bally denies that it violated Nevada's 1976 order barring Klein from the company because it did not "employ" him in these later transactions.
Further, the division charges that Bally broke its word to Nevada by maintaining ties to Abe Green, who now lives in the same well-to-do neighborhood in Boca Raton as both Klein and Catena.
The division says that between 1975 and 1978 Bally used as its New York area distributor a company called Coin-Op, owned by Green's son, Irving. Coin-Op was housed in offices adjacent to the elder Green's company, Runyon Sales, and was for all intents and purposes the same as Runyon Sales, according to information presented at the hearings Bally says that it didn't know then that Coin-Op was essentially controlled by Abe Green. Bally attorney Clive Cummis says that its background checks on distributor Coin-Op "did not work" because its security slipped up.
That is the common theme in Bally's response to the charges: Company officials have tried to run a taut ship but have faltered on some matters despite their best efforts.
"They have not been perfect in their judgements or their conduct," attorney Cummis said of Bally executives in his opening arguments. But he said the problems are not "fundamental mistakes of character.
"I don't believe there's a legal principal of original sin," Cummis said.
O'Donnell, the high school dropout widely recognized as the driving force behind Bally, testified in an attempt to "let it all hang out" that he has made "mistakes of judgement" involving reputed underworld associates but that he never tried "to bring the Mafia into Bally."
One decision he says he regrets is hiring a man named Dino Cellini as a commission salesman of slot machines in Europe and Africa. O'Donnell said that Cellini, who was barred from Great Britain and the Bahamas because he was an associate of reputed mob financier Meyer Lansky, was "a friend." O'Donnell said that he hired Cellini because he felt sorry for him following his expulsions. The division claims Cellini, a close friend of many gambling figures and of entertainers such as George Raft, was paid substantial funds by Bally in some periods where he achieved few sales.
Other charges believing Bally involve a Louisiana Bally distributor convicted in 1974 on federal racketeering charges for promoting illegal gambling with Bally machines and allegations that top Bally executives knew of a Kentucky distributor's attempts to bribe state legislators around the time the legislature was considering a bill to legalize a certain type of pinball machine in Kentucky.
Bally attorneys critize New Jersey casino investigators for being overzealous and sullying Bally's reputation, and Cummis describes company executives as "the kind of people the state of New Jersey wants to operate a casino enterprise here." The company has put on a parade of witnesses to attest to O'Donnell's character, including businessmen, a Chicago banker, a judge and a priest.
By anybody's reckoning, though, the whole process is worth O'Donnell's while, including his more than eight days on the witness stand. O'Donnell owns more than 1.5 million shares of Bally manufacturing common stock -- recently selling for about $21 on the New York Stock Exchange -- that he would have to sell if he is denied a license.
The commission has a precedent in denying a casino license to a casino executive while granting one to the casino itself if that executive resigns. Using what New Jersey officials call the "bad apple" approach the commission barred the two founders of Caesars World Inc., Chairman Clifford Perlman and his brother, Vice Chairman Stuart Perlman, on Oct. 23, while approving Caesars World itself. The commission denied licenses to the Perlmans because of their business dealings with Alvin Malnik, a Miami attorney and reputed Lansky associate.
The antacid-popping O'Donnell must be thinking himself, as his judgment day approaches, about whether he'll be joining the Perlmans in the ranks of the ex-casino magnates. He seems glum on the stand, his face visibly sagging. t
He told one interviewer recently on the subject of the New Jersey investigation "to quote Adlai Stevenson -- and I'm not being facetious -- I'm too old to cry, and it hurts too much to laugh.'"