Sen. Harrison A. Williams (D-N.J.) tried to get federal undercover agents to arrange a $100 million loan for a hotel and gambling casino project in Atlantic City, according to sources familiar with the investigation.
Williams and an associate Cherry Hill, N.J. lawyer Alex Feinberg, sought the financing for the owners of the old Ritz-Carlton Hotel at a meeting with the undercover agents last fall in New York City's Plaza Hotel, sources said. It was in this context, the sources said, that the senator assured the agents that obtaining a gambling license from New Jersey authorities would not be a problem.
The suggested loan from the mythical Arab "sheik" the agents were pretending to represent was the second $100 million deal discussed with Williams during the FBI's undercover operation, ABSCAM.
The other, sources said, involved a plan whereby Williams was to exchange his influence for 18 percent of the stock in a $100 million venture to mine and mill titanium on Virginia farmland near Lynchburg.
The episode involving the Ritz was first reported by Newsday and confirmed by other sources. Williams declined comment except to say through a spokesman that there were "inaccuracies" in the account. He did not say what they were.
The Ritz hotel-casino project is being undertaken by Ritz Associates Inc., a partnership in which a majority interest is held by the Hardwicke Cos. Inc. of New York. Williams' wife, Jeanette, is a paid consultant and former director of the Hardwicke Cos. Williams' associate, Feinberg, was retained as a lawyer for the company on the senator's recommendation last summer, according to a Hardwicke spokesman.
"The contents of these reports are under investigation by Sen. Williams' attorney," a spokesman for Williams said. "The senator hopes to clarify the inaccuracies in these reports and issue a statement on all these matters at the earliest appropriate time."
Sources said Williams and Feinberg brought sketches and other papers dealing with the Ritz renovation project to the meeting at the Plaza Hotel. They reportedly wanted the "sheik" to finance the $100 million undertaking and take a first mortgage on the building and land as security.
The New Jersey Casino Control Commission unanimously approved Ritz Associates' renovation plans in May, granting the group a variance from a general rule requiring new construction. Commission Chairman Joseph Lordi said in a 11-page decision that renovation would move up the opening date for the proposed hotel-casino by 30 months.
At the meeting last fall, however, the undercover agents, sources said, wanted to know what assurance was there that Ritz Associates would get a casino license. The Casino Control Commission will not grant even temporary gambling licenses -- as distinct from building permits -- until construction is completed.
Williams and Feinberg, sources said, in effect told the agents not to worry.
"I spoke to Lordi about doing something for the Ritz," Williams reportedly replied. "I saved them $3 million."
"Yeah," Feinberg reportedly added, "I spoke to MacDonald about that."
Casino Control Commission member Kenneth MacDonald resigned from the commission earlier this week and there have been demands in New Jersey for Lordi and Williams said though both have denied any wrong-doing. Both Lordi and Williams said they have no recollection of having a conversation concerning the Ritz or anything else in recent years, although Lordi has acknowledged talking to Feinberg about another matter.
A spokesman for Ritz Associates, James Murray, a New York attorney and a director for the Hardwicke Cos., said in a telephone interview that he knew of no $3 million savings that could be pinpointed by the commission's approval of renovation project instead of requiring new construction. He said Ritz Associates would simply have built a new and cheaper-looking hotel for about the same amount.
"We firmly believe it's the best [project] in Atlantic City," he said. "It's the only one acclaimed to have architectural merit."
Jeanette Williams was paid $34,500 as a consultant for the Hardwicke Cos. in 1978-79. She also has held between $1,000 and $5,000 in Hardwicke stock.
According to Murray, "We retained Feinberg" for some legal work last summer at Sen. Williams' recommendation. "We told him [Williams] we were looking for additional counsel." Asked why they would consult a U.S. senator when they wanted a lawyer, Murray said he saw nothing unusual about that.
The dickering over titanium took place earlier during Operation ABSCAM, sources say, and reportedly began at a meeting at the Twin Bridges Marriott Motor Hotel in Arlington.
In all, sources close to the investigation say the FBI videotaped at least three meetings in which the agents posing as representatives of the "sheik" talk about titanium investments and eventually agree to put up $100 million for the venture if Williams will help get the sheik U.S. residency.
One of the videotapes, sources say, shows Feinberg taking stock, ostensibly for Williams, in three new paper corporations to mine, mill and process titanium ore.
According to sources, Sen. Williams introduced the undercover agents to a friend, Henry A. (Sandy) Williams who owned a company called U.S. Titanium and who was interested in developing land in Virginia's Amherst and Nelson counties.
The land lies beside an abandoned titanium mill on the Piney River owned by U.S. Titanium. It was closed down apparently after it became too expensive to run.
At first, plans were discussed to invest $1 million in U.S. Titanium, but sources said that idea was dropped, in part because the undercover agents wanted to be able to issue stock in a new company.
According to these sources, Feinberg suggested splitting the stock seven ways: 5 percent for each of the two agents planning the deal and 18 percent each for himself; Camden, N.J., Major Angelo Errichetti; Sen. Williams; Sandy Williams, and a friend of Sandy Williams from Paterson, N.J., named George Katz.
(Errichetti is said to have introduced Sen. Williams to the FBI Impostors -- at a meeting in Fort Lauderdale, Fla., aboard a yacht that had been seized by the FBI in a drug raid and renamed "The Left Hand.")
The Post could not learn whether Sen. Williams or the undercover agents were first to mention an investment of $100 million. The sources said the apparent idea was to develop far more than U.S. Titanium and its old titanium dioxide mill. The aim, they said, was to buy up land in Nelson and Amherst counties where known deposits of ilmenite and another ore called rutile are located.
A study in 1962 by the U.S. Bureau of Mines says there are 800,000 tons of recoverable ilmenite in the two counties. The survey says the ilmenite is locked in weathered soil that lies on top of a rock formation in both counties that is known as "The Roseland."
A separate survey by university geologists states there is as much as 300,000 tons of recoverable rutile, a mineral richer in titanium than ilmenite and from which titanium metal is extracted. About 90 percent of the rutile used by titanium metal manufacturers in the United States comes from Australia.
As strong as steel and half as heavy, titanium metal is used in the airframes of most missiles and high-performance airplanes. Sources said that during one meeting Williams mentioned to the undercover agents that he was "patriotically" in favor of buying titanium ore in United States.
Sources also said the senator boasted he could use his influence to win government contracts to buy titanium ore mined by the consortium. CAPTION: Picture 1, Sen. Harrison A. Williams . . . linked to Virginia mine deal; Picture 2, Jeanette Williams . . . was paid $34,500 as consultant