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[narrator] New York City.
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[woman] Happy New Year!
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At the dawn of the 80s
it was exploding
with opportunity.
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[newsreader] Boom times,
that's what the numbers
signal today,
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an economy that's on a roll
in this country.
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A place to seek money,
power, fame.
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Amid the glitz and greed,
five titans seized their moment.
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But in 1986, we started to learn
the very dark secrets
behind their success.
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A striver from Detroit
had transformed himself
into a titan of Wall Street.
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[Ivan Boesky] You have
to understand
that I'm a professional.
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But his house of lies was
about to collapse.
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[Bryan Burrough] Ivan knew
once Levine started talking
that he was dead. He was dead.
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A real estate star had seemingly
perfected the art of the deal.
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But could not run his debts
for long.
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[Donald Trump] We'll talk
about that later I suspect.
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The queen of the palace
had turned meanness
into a winning brand.
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[Leona Helmsley] I'm a woman.
I'm a tough business woman.
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But her subjects
were about to revolt.
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[Tovah Feldshuh] She had fired
enough people,
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acted in an imperial way,
people were open for blood.
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And as Gotham's new hero
went after his biggest villains
yet...
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[Rudy Giuliani] They do not pay
millions of dollars in taxes.
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[Graham Weatherspoon] Giuliani
has always been out
for Giuliani.
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The Dapper Don looked
danger in the face...
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[Jerry Capeci] The button
was pushed. The car blew up.
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...and laughed.
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[John Gotti] I know
you didn't believe I was guilty.
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People asked did he have
a guilty conscience?
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Guilty smilty. There was such
a sense of every man
for himself.
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She said well you should
have kept your pants on.
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If you kept your [expletive]
in your pants you wouldn't
have such problems.
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[James B. Stewart] I remember
when that news struck.
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It was like all the air went out
of the room.
Paranoia ran rampant.
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These five titans would reshape
the city and the world
we live in today.
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And when in 1986 we began
to see them for who they really
were, it was already too late.
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A new gilded age defined
by opulence and extravagance
was reaching its apex.
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New York City, all by left
for dead less than a decade ago
had been shocked back to life
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by an explosion of development,
culture, and money. It looked
like the party would never stop.
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But looks, as they say,
can be deceiving.
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[newsreader] Investment banker,
Dennis Levine, has been arrested
and charged with insider trading
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[newsreader 2] Dennis Levine
collected $12.5 million
in illegal profits.
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He did it by gaining
advance knowledge
of 54 pending takeovers.
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[Dennis Levine] I now realize
that I committed
very serious crimes
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which I'm very sorry and it was
a very painful lesson to learn.
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[newsreader 3] Rudy Giuliani,
US Attorney
for the Southern District,
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was the driving force
behind his arrest.
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[Bethany McLean] He's young
and he's incredibly aggressive.
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And he takes those same
techniques that he had used
to bring down mafia figures
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to go after
white collar criminals.
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[Jeff Madrick] What credit
it will do to my reputation
says Rudy to himself.
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[newsreader] Was anyone else
involved in this at all?
Knowingly?
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Yes, at this point, though,
I can't identify anyone else.
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No one else
has been publicly identified.
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[Ken Auletta] When
the Dennis Levine news
broke in the press,
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the reaction on Wall Street
was shock.
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One rotten apple.
Get rid of him. This is
not typical of our industry.
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[Andrew Ross Sorkin] At the time
this information
was flowing everywhere.
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Nobody thought anyone was ever
gonna get in trouble. It almost
became part of the culture.
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[James B. Stewart] What Dennis
himself had done was bad.
But it wasn't cataclysmic.
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The reason Dennis Levine
was cataclysmic
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was because what he knew.
Who he knew.
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Ivan Boesky, the man.
He became the biggest
in his profession.
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His meteoric rise to the top
of Wall Street was built
on lies.
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And with his web of deceit
about to unravel,
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he would discover that there
was no honor amongst thieves.
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Ivan Boesky made a lot of money.
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His assets in 1986
came to about $131 million.
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He was clearly
one of the wealthiest people,
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had amassed
one of the great fortunes
in the 80s.
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What's the biggest
payoff day you have ever had?
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How much-- a tacky question,
I'm sorry.
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Well we don't,
we don't talk numbers.
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[Stewart] Ivan Boesky had to
have known that he was now
in mortal danger.
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The day Dennis Levine
was arrested in 1986,
and that news went out,
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Ivan Boesky came out of a
conference room. Someone in the
office said, "Hey look at this,
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"did you hear this news?
Dennis Levine was arrested."
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And he said, "Who?"
He said, "Dennis who?"
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And they said, "Dennis Levine."
He said I've never heard of him.
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Now Dennis Levine made promises
to his collaborators all along
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that he'd be a, "stand-up guy
who would never talk."
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Dennis Levine turned out
to be a chatterbox.
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[newsreader] In return
for a lighter sentence he agreed
to tell all he knew.
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And what he knew was dynamite.
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[Madrick] Dennis Levine
ratted on Ivan Boesky.
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He should have known
that was possible all along.
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The fact that Boesky
would associate with Levine
was an example
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of the deep nature of his greed.
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It shows how ambitious
and blind Ivan was
in the pursuit of money.
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[Gary Lynch] I was shocked.
When Dennis Levine provided
the name of Ivan Boesky
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it was clear that this would be
even bigger so we geared up
for a lengthy fight.
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And we launched an investigation
of Ivan Boesky with a barrage
of subpoenas.
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[Harvey Pitt] The notion
that there were 27 subpoenas
made it quite clear
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that this was
a massive investigation.
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I thought we were in for a,
you know, a long, long fight.
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I called Ivan Boesky
and told him
about the subpoenas.
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And I suggested
that we needed to have
a face-to-face meeting.
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Boesky's lawyers said,
"Look, you're guilty.
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"You've been doing this
rampantly. You have no defense."
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And your only hope is to
cooperate and get some lenience.
So who can you give up?
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People asked did Ivan Boesky
have a guilty conscience?
Guilty smilty.
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Ivan knew once Levine started
talking that he was dead.
He was dead.
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It was such a sense
of every man for himself.
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Ivan Boesky had
very intense drive
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to climb the social
and financial ladder.
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He lived in his image.
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He wanted to be accepted.
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[Stewart] And now
he was panicking. This was gonna
come crashing down on him.
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I'm sure he called his lawyer
right away. He basically had
a lawyer joined at the hip.
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Mr. Boesky made the decision
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to initiate
settlement discussions
with the SEC.
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[Lynch] Ivan Boesky
was ready to provide
very intriguing information
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about other people involved
in illegal activity.
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I mean this is like John Gotti
stuff. You know Omerta,
you shouldn't talk.
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This is not the mafia.
These people, they're affluent.
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They don't wanna spend
the rest of their lives in jail.
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They are going to start
turning on each other.
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And who could Ivan Boesky offer
to help reduce his own sentence?
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No less than the most important
person in American finance.
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[newsreader] Junk bond king,
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Michael Milken, the financier
who has transformed American
corporate finance.
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[newsreader] Milken is said
to be the most influential
money man on Wall Street.
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For Giuliani who was trying
to make a point about greed,
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about Wall Street,
about insider trading,
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Milken was the holy grail.
The white whale.
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New York, 1986. On Wall Street
some unscrupulous money men were
skating on very thin ice.
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While further up town in a once
bustling part of the city,
no one was skating at all.
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[newsreader] Remember
the Wollman skating rink
in Central Park?
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It was supposed to reopen
this weekend finally.
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Across from the Plaza Hotel,
this icon of New York,
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in Central Park there was
an ice skating rink.
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And people loved it. I mean even
if you didn't ice skate there
just looking at it,
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it was just a wonderful thing
in the city in the winter.
And the mechanicals failed.
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The city kept saying it's gonna
restore Wollman Rink.
And failed to.
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Much to the embarrassment
of Ed Koch.
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People were annoyed.
And Donald Trump
saw an opportunity.
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[Auletta] Trump,
from his office, could look down
upon the Wollman Rink
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and in his brash way said,
"I can restore it in a year."
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Ed Koch doesn't want Trump
touching this thing. He doesn't
want anything to do with him.
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So Donald starts
a little campaign.
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You know Koch is trying
to deny the people
this glorious jewel.
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[George Arzt] Koch just believed
that Donald
was a massive bloviator.
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[Trump] The city of New York
had that rink closed
for almost seven years.
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It was a total disaster.
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You know it, I know it.
Everybody knows it.
I got fed up watching it.
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And I offered to build it.
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So Koch gives in.
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[Belmont Freeman] Trump milked
the Wollman rink to the max
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for his own PR purposes.
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It was a victory
for Donald Trump.
And was a defeat for Ed Koch.
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I give Ed Koch tremendous credit
for having the courage to say,
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"Donald, go and do it."
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[Ed Koch] You just saw
the modest Donald Trump.
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[Gil Troy] Give him credit.
The Koch administration
is absolutely paralyzed.
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They cannot fix
Wollman Skating Rink.
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Donald Trump came along and said
"I can do this in six months."
And he got it done in five.
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[cheering]
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[Trump] It's been
a tremendous success.
We opened last weekend.
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We had the biggest crowds
in the history of the rink.
And in the history of America.
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[Belmont Freeman] It later
came out that he accomplished
this feat
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largely by screwing
all the contractors.
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[Michael Kruse] Trump,
in essence, was going to pay
some of the people
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who were fixing Wollman Rink
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in attention. He was going
to pay them in hype.
Once Wollman Rink was fixed,
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Trump emerged as the king
of the hill and did not
ultimately share that spotlight.
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In reality what, what he was
asking us to do was to supply
the services for the rink
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and to dispense
with any profits or expenses.
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[newsreader] How you get things
done? And come in under budget?
I mean what's the trick?
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Well it's a lot of work
and it's knowledge
and it's a lot of things.
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It's a whole vast coterie
of things. And we'll talk
about that later I suspect.
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The developer from Queens
had delivered on his promise
in his own unique way.
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A feat that would only burnish
his myth in the minds
of New Yorkers.
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But he wasn't the only
real estate magnet making news.
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For years now his fiercest rival
had also been reaping the reward
of an empire built on image.
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Harry's owned
about 200 buildings.
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And now she was hard at work
on the newest monument
to her ego.
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I own this. I own this.
I own this. And that one.
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One that would prove to be
her undoing.
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[newsreader] Leona Helmsley
rules her kingdom like she's
the star of her own movie.
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Her co-star is her husband,
Harry, a man of unimaginable
wealth and power.
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Together they oversee
this extravagant property.
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[Charles Bagli] When
the Helmsleys bought Dunellen,
Leona took charge
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of the renovations.
And renovation aplenty.
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She loved making it beautiful.
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[newsreader] The Helmsleys spent
$4 million refurbishing their
28-room estate in Greenwich, CT.
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Including a marble dance floor
above one of their two pools
for $1 million.
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They installed
an expensive indoor-
outdoor stereo system
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and spent thousands more
on landscaping,
art and ornaments.
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At Dunellen when she signed
a contract with a contractor
to do some work,
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she was always renegotiating
downward.
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[Feldshuh] On one deal
she just refused
to pay the contractor.
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The contractor said please,
I have six children.
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And she said, "Well you should
have kept your pants on.
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"If you kept your [expletive]
in your pants you wouldn't have
such problems."
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[Bill Dowling] Everyone
was afraid of Leona Helmsley
because of that reptilian brain
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she had
where she could turn
on you in a split second.
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I'm a woman. I'm a tough
business woman. What is that got
to do, I'm running a business?
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[Dowling] You could think
that you were her favorite
employee in one minute.
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00:13:22,903 --> 00:13:25,403
And find yourself
out on the street
the next minute.
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One day she started berating
a highly respected member
of Harry's management team.
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And told Harry
he had to fire him.
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And Harry said,
'I'm not gonna fire him, he's
one of my oldest associates."
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00:13:36,650 --> 00:13:40,785
And that's when she said,
"If you don't fire him, I'm
gonna stop having sex with you
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00:13:40,787 --> 00:13:46,825
"and move to the apartment
in Palm Beach." I thought Harry
would never fire him,
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00:13:46,827 --> 00:13:48,760
he's too loyal to him,
he wouldn't do it.
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00:13:48,762 --> 00:13:52,931
But Harry came in that day
and he fired him. [laughs]
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00:13:54,467 --> 00:13:59,671
Harry Helmsley was known
for being as extremely ethical,
honest man.
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But she changed all of that.
208
00:14:01,842 --> 00:14:06,611
She did not care at all about
anyone else. She did what she
wanted to do. And that was it.
209
00:14:06,613 --> 00:14:08,847
And she hurt a lot of people.
210
00:14:09,282 --> 00:14:12,584
[Feldshuh] There was a period
called the bloodbath.
When Leona Helmsley
211
00:14:12,586 --> 00:14:19,424
fired four of Harry Helmsley's
stalwarts that had been in his
organization for decades.
212
00:14:19,693 --> 00:14:21,559
Those that were fired...
213
00:14:22,963 --> 00:14:28,499
either thought they were
our partners, undeclared,
214
00:14:28,501 --> 00:14:31,302
they had their hand
in the cookie jar. All right.
215
00:14:31,304 --> 00:14:35,173
Or they just
couldn't cut the mustard.
216
00:14:35,475 --> 00:14:40,378
But Leona Helmsley forgot
the most important lesson which
is you keep your friends close
217
00:14:40,380 --> 00:14:42,480
and you keep your enemies
closer.
218
00:14:43,850 --> 00:14:49,120
In December of 1985,
a tipster called
the New York Post .
219
00:14:49,122 --> 00:14:55,393
And claimed that he had
information on the Helmsleys
that would clearly prove
220
00:14:55,395 --> 00:14:59,330
that they were defrauding
the United States Government,
in several areas.
221
00:14:59,332 --> 00:15:02,767
She was trying to construe
222
00:15:02,769 --> 00:15:06,537
personal expenses
as business expenses.
223
00:15:07,474 --> 00:15:11,142
She regarded Dunnellen
as a place of business.
Not as a mere residence.
224
00:15:11,144 --> 00:15:14,913
So everything had to be charged
for Dunnellen
through the business of course.
225
00:15:15,715 --> 00:15:20,685
She had no ethics whatsoever.
She was a conniver, a schemer.
226
00:15:20,687 --> 00:15:24,822
She was always trying
to manipulate things.
227
00:15:24,824 --> 00:15:28,626
She thought nothing
about cheating on taxes.
228
00:15:29,896 --> 00:15:35,133
When the headline came out,
'Helmsley Scam Bared"
229
00:15:35,135 --> 00:15:36,200
it was a kill.
230
00:15:38,505 --> 00:15:41,172
She had fired enough people,
231
00:15:41,841 --> 00:15:45,543
acted in an imperial way
enough times,
232
00:15:45,545 --> 00:15:47,779
people were open for blood
233
00:15:48,248 --> 00:15:50,515
[newsreader] Former friends
and employees lined up
234
00:15:50,517 --> 00:15:53,584
to spill the beans
on Leona's tyrannical behavior.
235
00:15:54,020 --> 00:15:56,754
[Elaine Gordon] She was greedy.
She was mean.
236
00:15:57,157 --> 00:16:01,960
She was all the things
that they wanted to accuse her
because she flaunted her success
237
00:16:02,262 --> 00:16:04,395
They have no right
to evade the taxes.
238
00:16:04,397 --> 00:16:06,597
Hang her, man.
Hang her, that's what I think.
239
00:16:06,599 --> 00:16:10,234
The people of New York,
having once bought into
the whole glamorous package,
240
00:16:10,236 --> 00:16:13,504
had now viciously turned
on their one-time queen.
241
00:16:13,506 --> 00:16:16,941
But it was one prominent
New Yorker who jeered
the loudest of all.
242
00:16:16,943 --> 00:16:19,243
[Glenn Plaskin] Donald and Leona
did not like each other.
243
00:16:19,245 --> 00:16:24,382
I think that Donald felt
that Leona had tarnished
Harry Helmsley's name.
244
00:16:24,384 --> 00:16:30,221
He called her a disgrace
to humanity. Truly evil, sick,
a living nightmare.
245
00:16:30,223 --> 00:16:33,658
[newsreader] On Leona Helmsley,
I feel sorry for Harry.
246
00:16:33,994 --> 00:16:35,560
[laughter]
247
00:16:35,562 --> 00:16:37,462
So that wasn't too positive.
248
00:16:39,099 --> 00:16:43,634
Let's say I'm the [inaudible],
that isn't a crime.
249
00:16:43,636 --> 00:16:48,172
That's not a crime being how
I've done nothing criminal.
250
00:16:48,174 --> 00:16:51,376
The same headlines that used
to bolster
this real estate empire
251
00:16:51,378 --> 00:16:54,045
were now being used
to tear it down.
252
00:16:54,047 --> 00:16:56,581
It was
the biggest New York story
there was.
253
00:16:56,583 --> 00:17:00,885
And it played right
into the hands
of one very ambitious law man.
254
00:17:01,121 --> 00:17:05,823
Leona Helmsley, again another
New York figure that people
kind of loved to hate.
255
00:17:05,825 --> 00:17:09,227
It was a no lose situation
for Giuliani to go after her.
256
00:17:09,229 --> 00:17:11,729
[Kurt Andersen] It was just
a good move to say oh no,
257
00:17:11,731 --> 00:17:15,633
but look the rich and powerful
will you know face consequences.
258
00:17:15,635 --> 00:17:21,005
It is now alleged that,
that they did not pay millions
of dollars in taxes
259
00:17:21,007 --> 00:17:23,041
that they were required
by law to pay.
260
00:17:23,043 --> 00:17:24,942
[Kirtzman] He was on the side
of the angels
261
00:17:24,944 --> 00:17:29,847
and also it was such
a larger-than-life tabloid story
262
00:17:29,849 --> 00:17:32,283
then that was kind of
a home run for him.
263
00:17:32,719 --> 00:17:38,056
I'm innocent.
My only crime
is that I'm Leona Helmsley.
264
00:17:40,026 --> 00:17:45,196
[newsreader] The bold, the brave
and the beautiful rummaged
through their costume collection
265
00:17:45,198 --> 00:17:48,499
and came out tonight
for the opening
of the Palladium.
266
00:17:48,501 --> 00:17:51,869
By the mid 80s,
New York's nightlife scene
had become
267
00:17:51,871 --> 00:17:53,671
one of the most exciting
in the world.
268
00:17:53,673 --> 00:17:57,341
And New Yorkers felt free
to explore anything
and everything.
269
00:17:57,343 --> 00:17:59,477
The city had become
a fantasy land.
270
00:17:59,479 --> 00:18:02,413
[Michael Musto] New York
had become known as Fun City.
271
00:18:04,451 --> 00:18:06,551
Clubs would put on shows
and extravaganzas.
272
00:18:06,719 --> 00:18:11,122
[Susanne Bartsch] New York
was exploding, everyone was
indulging, couldn't get enough.
273
00:18:11,124 --> 00:18:15,226
[Michael Holman] New York had
an attitude. And we just wanted
to be part of it.
274
00:18:15,228 --> 00:18:17,061
[newsreader] Is it a success?
275
00:18:17,063 --> 00:18:19,764
[Steve Rubell] I don't know,
is it? You tell me.
I don't know. I hope so.
276
00:18:21,101 --> 00:18:24,202
[Peter Gatien] There was just
like sort of a organic synergy
in the city.
277
00:18:24,204 --> 00:18:27,638
But it felt very decadent
and, and hedonist also.
278
00:18:28,408 --> 00:18:30,374
And it wasn't just gay.
It wasn't just straight.
279
00:18:30,376 --> 00:18:33,611
Everybody was exploring
their own identity
and cultures were mixing.
280
00:18:33,613 --> 00:18:38,783
[Holman] To come share
their stories, that's when
we met like minded souls.
281
00:18:39,052 --> 00:18:42,453
Incredible.
Fantasy world come alive.
282
00:18:42,856 --> 00:18:44,188
Drink till you drop.
283
00:18:44,190 --> 00:18:46,657
People needed to go out
to meet other people.
284
00:18:46,659 --> 00:18:49,260
And the main motivation was
to actually to hook up.
285
00:18:50,463 --> 00:18:51,829
It was complete freedom.
286
00:18:51,831 --> 00:18:54,365
Susanne Bartsch became
one of the main
A-club promoters.
287
00:18:54,367 --> 00:18:58,336
She would have a performer
at her parties named
Lady Hennessy Brown.
288
00:18:58,872 --> 00:19:04,108
Her talent was kind of squirting
milk out of her breasts
at the crowd. On cue.
289
00:19:04,110 --> 00:19:09,147
People would come
with umbrellas, coffee cups.
We did everything. Nobody cared.
290
00:19:09,149 --> 00:19:12,116
You could live
this incredible fantasy life
till you dropped.
291
00:19:14,587 --> 00:19:18,322
New Yorkers
were living louder and larger
than they had for years.
292
00:19:20,226 --> 00:19:23,161
But a terrifying change
was in the air.
293
00:19:26,266 --> 00:19:29,167
[newsreader] The lifestyle
of some male homosexuals
294
00:19:29,169 --> 00:19:33,804
has triggered an epidemic
of a rare form of cancer.
295
00:19:33,806 --> 00:19:36,107
[Jonathan Mahler] A story
appears in the New York Times
296
00:19:36,109 --> 00:19:41,045
that there has been a cancer
identified in the gay community.
297
00:19:41,047 --> 00:19:43,281
I got a call that a friend
of mine named Hibiscus,
298
00:19:43,283 --> 00:19:46,584
who was with the San Francisco
drag troop, was sick.
299
00:19:46,586 --> 00:19:51,122
He died very quickly of horrible
horrible symptoms.
They called it the gay cancer.
300
00:19:51,124 --> 00:19:55,293
[newsreader] Many victims get
a rare form of cancer
called Kaposi sarcoma.
301
00:19:55,295 --> 00:19:58,095
Others get an infection known as
Pneumocystis pneumonia.
302
00:19:58,097 --> 00:20:03,734
Researchers know of 413 people
who have contracted the
condition in the past year.
303
00:20:03,736 --> 00:20:08,439
Started hearing rumors, starting
to lose friends
or friends of friends.
304
00:20:08,441 --> 00:20:10,441
Guess who else has it?
305
00:20:13,713 --> 00:20:15,379
Guess who just died?
306
00:20:15,915 --> 00:20:17,648
Then you'd run
into an old friend
307
00:20:18,117 --> 00:20:22,687
and they looked very thin
and had sort of a grayish pallor
and you realized they had it.
308
00:20:22,855 --> 00:20:28,159
AIDS. Acquired Immune
Deficiency Syndrome is
a terrifying mysterious disease.
309
00:20:28,328 --> 00:20:29,994
And it's killing
a lot of people.
310
00:20:29,996 --> 00:20:33,998
[newsreader] Almost half
the known cases are
in New York City.
311
00:20:34,000 --> 00:20:36,367
And we didn't know much
about what this virus was.
312
00:20:37,103 --> 00:20:40,304
Nobody knew for sure
how you got it.
313
00:20:40,306 --> 00:20:44,976
[Allison Field] AIDS is baffling
There is no known cure.
No one knows what causes it.
314
00:20:44,978 --> 00:20:50,581
We didn't know if you could
get AIDS from kissing someone,
from saliva, from sneezing.
315
00:20:50,950 --> 00:20:54,318
There was fear that
if you touched someone with AIDS
you could get AIDS.
316
00:20:54,320 --> 00:20:58,155
It created an atmosphere
of downright panic.
317
00:20:58,157 --> 00:21:03,194
It was a monster. People didn't
go home with each other anymore.
That was huge.
318
00:21:03,196 --> 00:21:05,863
Suicides shot through
the ceiling in the 80s.
319
00:21:05,865 --> 00:21:11,702
AIDS was so horrific
that people preferred
to take their life.
320
00:21:11,904 --> 00:21:14,171
Sometimes people come in
and meet a stranger
321
00:21:14,173 --> 00:21:16,641
and ten minutes later
you see 'em leaving.
322
00:21:16,643 --> 00:21:18,609
That you're not seeing anymore.
323
00:21:18,945 --> 00:21:24,615
Before AIDS it was like you went
and had sex with somebody
different every night.
324
00:21:24,917 --> 00:21:26,851
Tonight there's a padlock
on the Mineshaft.
325
00:21:26,853 --> 00:21:30,087
[newsreader] To the gay men
who went to the Mineshaft,
the whips and chains,
326
00:21:30,089 --> 00:21:33,391
the anonymous sex there,
provided a sexual fantasy land.
327
00:21:33,393 --> 00:21:36,794
But reality closed
the bar's doors
early this morning.
328
00:21:36,796 --> 00:21:39,530
And the city hopes the courts
will close them for good.
329
00:21:39,532 --> 00:21:44,001
Places where death
can be distributed,
we don't want that to go on.
330
00:21:44,003 --> 00:21:47,905
This place is not selling death
anymore than the heterosexual
clubs are selling death.
331
00:21:47,907 --> 00:21:52,276
They don't give a damn about it
apparently because it's going on
and they're making money.
332
00:21:52,278 --> 00:21:56,514
No gay men in this city wants
to die. Nor does he want
his friends and lovers to die.
333
00:21:56,516 --> 00:21:59,817
People were dropping left,
right and center.
It wasn't just gay people.
334
00:22:00,219 --> 00:22:04,588
[newsreader] It's not only
homosexual clubs that are
affected by this new regulation.
335
00:22:04,590 --> 00:22:07,925
Heterosexual sex clubs
are also being targeted.
336
00:22:07,927 --> 00:22:11,028
[Larry Levinson] We permit
people to have sex
if they so desire here.
337
00:22:11,030 --> 00:22:13,331
[newsreader] Anal intercourse
and fellatio here?
338
00:22:13,333 --> 00:22:16,667
We never had a situation
we had to make a rule
on something like that.
339
00:22:17,270 --> 00:22:22,907
Over time we started to see
who was dying and why. Are they
straight? Were they gay?
340
00:22:23,242 --> 00:22:28,346
Were they doing drugs? Were they
wearing protection? Were they
not wearing protection?
341
00:22:28,681 --> 00:22:35,052
There's a new HIV infection
every single minute. There's a
new AIDS death every half hour.
342
00:22:36,622 --> 00:22:39,323
[newsreader] There are
an estimated 200,000 people
343
00:22:39,325 --> 00:22:41,959
in New York City today
who shoot drugs.
344
00:22:41,961 --> 00:22:45,363
The majority of them,
according to experts,
share their needles.
345
00:22:45,365 --> 00:22:51,268
And that majority, they say,
is not only shooting heroin
or cocaine, but also AIDS.
346
00:22:51,604 --> 00:22:54,338
[quiet music playing]
347
00:22:57,410 --> 00:23:02,012
The community was torn
between grief and terror
348
00:23:02,215 --> 00:23:05,182
and rage that no one was doing
anything about it.
349
00:23:05,351 --> 00:23:08,152
[Mahler] It became
a real political problem
for Mayor Koch
350
00:23:08,154 --> 00:23:12,289
because he is getting
a lot of pressure from the gay
community to do more.
351
00:23:12,825 --> 00:23:17,895
[Musto] You're spending half
your time in hospitals visiting
or at funerals.
352
00:23:18,631 --> 00:23:22,967
And there was a hopelessness
and you know
why isn't anyone helping us?
353
00:23:22,969 --> 00:23:28,472
It wasn't until Act Up formed
in 87 that you could focus
all of those emotions.
354
00:23:28,474 --> 00:23:32,510
Protesters denounce
Ed Koch in a bitter
demonstration over AIDS.
355
00:23:32,512 --> 00:23:37,681
[newsreader] An army
of 2500 protesters
were mobilized by Act Up,
356
00:23:37,683 --> 00:23:39,817
the coalition of gay groups.
357
00:23:39,819 --> 00:23:45,489
And their target was a man who's
long expressed sympathy for
their community. Mayor Ed Koch.
358
00:23:45,758 --> 00:23:50,694
We're letting Koch know
that we're not going to tolerate
his killing New York City.
359
00:23:50,997 --> 00:23:53,431
[crowd protesting]
360
00:23:55,535 --> 00:23:57,501
We're dying. The city is dying.
361
00:23:57,503 --> 00:24:02,506
We're willing to discuss
with them where they think
we can do more.
362
00:24:02,508 --> 00:24:07,311
We'll look at any proposal
they have. It all has to be
within our fiscal means.
363
00:24:07,313 --> 00:24:09,580
People with AIDS
live in the streets
of New York City.
364
00:24:09,582 --> 00:24:12,683
And that's the policy
of this administration.
It's not a mistake.
365
00:24:12,685 --> 00:24:17,955
We, who are proud of being gay,
are sick to death
of being made victims
366
00:24:17,957 --> 00:24:20,357
by those who are ashamed
of being gay.
367
00:24:21,961 --> 00:24:26,997
For Koch, there's a lot
of countervailing pressure,
not to devote any resources.
368
00:24:27,633 --> 00:24:31,101
To devote
any meaningful resources,
or to put any real energy
369
00:24:31,103 --> 00:24:35,973
behind the effort to combat AIDS
would have just played
into his critics.
370
00:24:36,175 --> 00:24:42,112
For Koch, it was no secret
that he was rumored to be
a closeted homosexual himself.
371
00:24:42,114 --> 00:24:48,252
This has nothing to do
with sexual orientation,
with what you do in your home.
372
00:24:49,121 --> 00:24:54,191
[Mahler] Koch had years
to do something, to do more.
And really did nothing.
373
00:24:54,193 --> 00:25:01,565
I mean it's one of the most
shameful aspects of Koch's
legacy. Koch really fails.
374
00:25:01,567 --> 00:25:05,870
The glitz and glamour
were fading and the fun
had turned into fear.
375
00:25:05,872 --> 00:25:08,606
The fantasy was coming
to an end.
376
00:25:12,245 --> 00:25:15,679
As the 80s wore on,
a rot was setting in
acroet.
377
00:25:15,681 --> 00:25:19,216
A stunning arrest
had left traders
with dark secrets of their own
378
00:25:19,218 --> 00:25:21,919
scrambling
to keep up appearances.
379
00:25:21,921 --> 00:25:25,623
But one financial wizard
knew the game was almost up.
380
00:25:25,625 --> 00:25:29,260
And he'd play his final hand
in a bid to save himself.
381
00:25:29,262 --> 00:25:31,395
[Stewart] Boesky's lawyers said,
"You're guilty.
382
00:25:31,397 --> 00:25:36,200
"And your only hope is
to cooperate
and get some lenience."
383
00:25:36,602 --> 00:25:42,239
Boesky agreed to act
as an undercover agent
on behalf of the government.
384
00:25:43,809 --> 00:25:49,313
Making a deal with Boesky
was going to allow Giuliani
to bring down Michael Milken.
385
00:25:49,315 --> 00:25:52,750
Michael Milken
386
00:25:52,752 --> 00:25:55,953
He wasn't just a big fish.
He was the biggest fish.
387
00:25:55,955 --> 00:25:58,689
Mike Milken
is only 42 years old.
388
00:25:58,691 --> 00:26:04,595
And yet in 1986, Manhattan Ink
Magazine said he may have earned
over $200,000 million.
389
00:26:04,597 --> 00:26:11,035
This is how big Mike Milken was.
If he wrote a letter saying
he could finance a very big deal
390
00:26:11,037 --> 00:26:13,337
maybe a couple
of billion dollars,
391
00:26:13,339 --> 00:26:18,642
that letter was like money
to Wall Street.
Nobody doubted it.
392
00:26:18,644 --> 00:26:20,444
[newsreader] Milken has raised
millions
393
00:26:20,446 --> 00:26:24,181
by selling high interest,
high risk junk bonds
to take over companies.
394
00:26:24,183 --> 00:26:28,852
Including $600 million
for a deal
involving Ivan Boesky.
395
00:26:28,854 --> 00:26:34,058
If you were Ivan,
the most important person
in the world is Michael Milken.
396
00:26:34,060 --> 00:26:38,295
The takeover era,
none of it happens
without Michael Milken.
397
00:26:38,297 --> 00:26:42,099
He is the Wizard of Oz
that makes it all possible.
398
00:26:42,101 --> 00:26:46,537
He creates the sea that
Ivan Boesky swims in.
399
00:26:47,073 --> 00:26:51,742
[Madrick] Milken had a lot
of information about deals
because people would come to him
400
00:26:51,744 --> 00:26:54,478
to finance their bids
for another companies.
401
00:26:55,114 --> 00:26:58,449
[Stewart] Part
of this relationship was Milken
would tell Boesky
402
00:26:58,451 --> 00:27:01,185
that he wanted him
to take positions
in various companies.
403
00:27:01,187 --> 00:27:04,822
Boesky did it.
None of this was disclosed.
404
00:27:04,824 --> 00:27:06,790
Milken would get half,
Boesky would get half.
405
00:27:06,792 --> 00:27:11,962
That's illegal. Boesky was
a foot soldier compared
to Michael Milken,
406
00:27:11,964 --> 00:27:17,401
the general who orchestrated
takeover after takeover. And
they developed this relationship
407
00:27:17,403 --> 00:27:22,840
where eventually Milken raised
a billion dollars in capital
for Boesky.
408
00:27:22,842 --> 00:27:29,046
Michael Milken was the king fish
and if he could bring
the king fish down,
409
00:27:30,449 --> 00:27:32,416
why wouldn't they give him
a deal?
410
00:27:34,654 --> 00:27:37,488
[Stewart] Ivan Boesky was over.
He was dead.
411
00:27:37,490 --> 00:27:41,025
And so he agreed to cooperate
with the government.
412
00:27:41,027 --> 00:27:46,163
And wear a wire and meet
with Michael Milken.
413
00:27:47,900 --> 00:27:51,835
So he went out to Los Angeles
and set up a meeting.
414
00:27:51,837 --> 00:27:56,707
Where else?
Well, Ivan Boesky's hotel,
the Beverley Hills Hotel.
415
00:27:57,343 --> 00:28:02,513
[Pitt] When Mr. Boesky
was outfitted with a wire,
416
00:28:02,515 --> 00:28:05,516
the agent who was assigned
to the case
417
00:28:05,518 --> 00:28:12,389
gave him a t-shirt for him
to wear, to which the wire
would be attached.
418
00:28:12,391 --> 00:28:17,261
This was problematic
because Mr. Boesky was known
419
00:28:17,263 --> 00:28:19,730
to break out in a rash
420
00:28:19,732 --> 00:28:26,170
if any material
worth less than $600
421
00:28:26,172 --> 00:28:27,771
touched his skin.
422
00:28:28,040 --> 00:28:33,444
Nonetheless,
he put the t-shirt on
and wore the wire.
423
00:28:34,113 --> 00:28:36,513
[Stewart] The drama
of that meeting
424
00:28:36,515 --> 00:28:40,617
where Boesky knew
he was recording
the most important man
425
00:28:40,619 --> 00:28:45,789
in American finance,
and was in the course
of implicating him,
426
00:28:46,625 --> 00:28:50,160
somebody must have been sweating
in that room.
Maybe they both were.
427
00:28:51,530 --> 00:28:56,533
It didn't start as well
as Boesky might have
been hoping for.
428
00:28:56,535 --> 00:29:01,205
It wasn't like Milken stepped
right up and, you know,
helped himself to a fruit plate
429
00:29:01,207 --> 00:29:04,975
and then started saying,
"Oh right Ivan, remember
when we did this, this and this.
430
00:29:04,977 --> 00:29:06,343
"And what we're gonna do
about it"?
431
00:29:07,279 --> 00:29:11,915
But then Boesky brought up
a $5.3 million payment.
432
00:29:12,351 --> 00:29:17,755
[Pitt] At some point
in their business relationship
there was a demand
433
00:29:17,757 --> 00:29:22,192
for a payment by Mr. Milken
of $5.3 million.
434
00:29:22,194 --> 00:29:24,728
[Stewart] And Milken didn't say,
"Oh I don't know
what you're talking about."
435
00:29:24,730 --> 00:29:28,632
Or "where did that come from?"
He knew about
the $5.3 million payment.
436
00:29:28,934 --> 00:29:33,504
Boesky said something like,
"You know I think I still
owe you more money on that.
437
00:29:33,506 --> 00:29:34,905
"How should I pay you?"
438
00:29:34,907 --> 00:29:37,474
That was as close as there was
439
00:29:37,476 --> 00:29:43,847
to what in common verbiage
would be called a smoking gun.
440
00:29:45,751 --> 00:29:48,719
[Stewart] Michael Milken
was doomed.
441
00:29:51,056 --> 00:29:52,589
[newsreader]
On this Columbus Day,
442
00:29:52,591 --> 00:29:55,058
the man leading the parade
as Grand Marshall
443
00:29:55,060 --> 00:29:59,496
was Rudolph Giuliani.
If he is a hero to Americans
of Italian descent,
444
00:29:59,498 --> 00:30:04,568
it may be because he has
attained the prestigious
position of US Attorney.
445
00:30:04,570 --> 00:30:09,039
It may be because he has come
to be regarded
as the most dynamic crime buster
446
00:30:09,041 --> 00:30:12,543
since the days of Thomas Dewey
in New York City.
Or it may be
447
00:30:12,545 --> 00:30:17,147
because he has jailed the heads
of four of the five
mafia families in New York.
448
00:30:17,149 --> 00:30:19,516
[Jerry Capeci] Once Gotti
killed Paul Castellano
449
00:30:19,518 --> 00:30:22,386
obviously he became
public enemy number one.
450
00:30:22,388 --> 00:30:25,289
[George Gabriel] The focus
is on John and his power.
451
00:30:25,291 --> 00:30:27,591
He made himself the target
'cause he was the boss.
452
00:30:27,593 --> 00:30:31,562
It just created a sort of
a frenzy within law enforcement
to try and make a case on him.
453
00:30:31,564 --> 00:30:34,231
[Capeci} It's something
that we have
to go after right now.
454
00:30:34,233 --> 00:30:36,767
We gotta go get Gotti.
We gotta go get Gotti.
455
00:30:39,171 --> 00:30:43,307
A celebrity godfather
unlike anything
the world had ever seen before.
456
00:30:44,343 --> 00:30:47,878
[Bruce Mouw] He looks the part,
like a rock star.
457
00:30:47,880 --> 00:30:50,047
He's living the life.
458
00:30:50,049 --> 00:30:53,116
The more famous he got,
the more the public seemed
to forget how ruthless he was.
459
00:30:53,118 --> 00:30:56,687
Whenever I see him walking
he always has a marvelous smile
on his face.
460
00:30:56,689 --> 00:30:59,022
In fact I admire
the way he dresses.
461
00:30:59,024 --> 00:31:01,892
And the Feds were growing
increasingly frustrated.
462
00:31:01,894 --> 00:31:05,329
John fancied himself to be
a mobster's mobster.
463
00:31:05,331 --> 00:31:08,632
It was important for him
to show everyone he was the...
464
00:31:08,634 --> 00:31:13,604
not just the toughest
as far as fiercest,
but he was an invincible boss.
465
00:31:13,606 --> 00:31:15,639
You just didn't wanna cross him.
466
00:31:15,641 --> 00:31:19,409
[newsreader] Earlier this year,
Romuald Piecyk, a refrigeration
mechanic, accused Gotti
467
00:31:19,411 --> 00:31:24,114
and an associate of beating
and robbing him in a dispute
over a double parked car.
468
00:31:25,584 --> 00:31:29,887
I mean that's just typical John.
Commands power over hundreds
of ruthless people.
469
00:31:29,889 --> 00:31:34,291
And he gets into a parking
dispute with a guy and gets out
of the car and smacks him.
470
00:31:34,293 --> 00:31:38,161
"You don't know who I am?"
And the guy didn't really know
who he was.
471
00:31:38,163 --> 00:31:42,065
[newsreader]
When the victim, Romuald Piecyk,
learned who Gotti was,
472
00:31:42,067 --> 00:31:43,934
he suddenly couldn't remember
who hit him.
473
00:31:43,936 --> 00:31:46,336
Romuald Piecyk knew
not to be in court
474
00:31:46,338 --> 00:31:49,306
pointing his finger at the boss
of the Gambino crime family.
475
00:31:49,308 --> 00:31:50,540
He all of a sudden got amnesia.
476
00:31:50,542 --> 00:31:52,109
He wouldn't testify,
he knew nothing.
477
00:31:52,111 --> 00:31:54,678
And it became known
as the "I forgotti case."
478
00:31:56,215 --> 00:31:59,983
John Gotti walked out of court
a free man.
479
00:32:02,187 --> 00:32:07,190
Because he was so respected
and feared, he had a banner
that you can't touch him.
480
00:32:07,760 --> 00:32:09,593
So he was doing
whatever he wants.
481
00:32:10,229 --> 00:32:15,098
Law enforcement officials
decided we definitely have
to figure out a way to stop him.
482
00:32:15,100 --> 00:32:17,834
The eastern district started
their own case on John Gotti.
483
00:32:17,836 --> 00:32:21,805
Based on historical Rico,
some hijackings,
some other stuff.
484
00:32:22,207 --> 00:32:24,207
[Capeci] So John Gotti
was charged with murder,
485
00:32:24,209 --> 00:32:29,413
with being involved in several
racketeering activities
along the way.
486
00:32:29,415 --> 00:32:31,481
Including loan sharking,
gambling...
487
00:32:31,483 --> 00:32:36,219
[newsreader] It's alleged
that Gotti operated out of
the Bergen Hunt and Fish Club.
488
00:32:36,221 --> 00:32:39,489
From there, he led his men
in an number
of criminal activities,
489
00:32:39,491 --> 00:32:42,159
including extortion,
racketeering and murder.
490
00:32:42,394 --> 00:32:45,595
The expectation, really,
from the squad was
he was gonna get convicted.
491
00:32:46,298 --> 00:32:50,200
When he showed up
at the courthouse,
there were more news reporters
492
00:32:50,202 --> 00:32:53,036
and cameras there
than had ever been there before
I think.
493
00:32:53,038 --> 00:32:55,305
[newsreader] Mr. Gotti,
are you concerned
about the trial?
494
00:32:55,307 --> 00:32:58,442
[Capeci] He had a smile
on his face
and when he was asked...
495
00:32:58,444 --> 00:33:00,310
[newsreader] Are you
the new head
of the Gambino family?
496
00:33:00,312 --> 00:33:02,713
You know, about being the boss
of the crime family,
497
00:33:02,715 --> 00:33:06,083
he said I'm the boss of my wife
and kids at home.
498
00:33:06,952 --> 00:33:08,952
This is how brazen this guy was.
499
00:33:08,954 --> 00:33:12,122
At his own trial on a break,
he singles me out
in the back of the room,
500
00:33:12,124 --> 00:33:14,725
"Hey who are you?"
So I told him who I was.
501
00:33:14,727 --> 00:33:17,160
I said, "Yeah, you know,
I work on the Gambino squad
502
00:33:17,162 --> 00:33:22,833
with Bruce Mouw." He said,
"Oh well you go back
and tell Bruce I'm going home."
503
00:33:23,335 --> 00:33:26,670
I said, "All right I'll deliver
the message.
I'll tell you what.
504
00:33:27,740 --> 00:33:30,273
"You go home, I'll come
and congratulate you.
505
00:33:30,743 --> 00:33:33,543
[Bruce Cutler] Do you know what
was meant by that?
506
00:33:33,545 --> 00:33:37,781
Do you know what was
in Mr. Gotti's mind
when he said that?
507
00:33:37,783 --> 00:33:38,949
[Investigator Wright] Yes sir.
508
00:33:39,184 --> 00:33:40,517
You read his mind?
509
00:33:40,519 --> 00:33:42,085
I think it's fairly obvious--
510
00:33:42,087 --> 00:33:44,354
Do you know
what's in his mind now,
Investigator Wright?
511
00:33:44,356 --> 00:33:45,956
No, sir, I do not.
512
00:33:45,958 --> 00:33:47,257
Take a look at him
and tell me
what he's thinking about.
513
00:33:47,259 --> 00:33:48,925
I wish I knew.
514
00:33:49,828 --> 00:33:52,029
[Capeci] Bruce Cutler
was John Gotti's attorney.
515
00:33:52,031 --> 00:33:55,766
He was an outspoken,
in-your-face defense lawyer.
516
00:33:56,435 --> 00:34:02,506
At John Gotti's trial he picked
up the indictment and slammed it
into the waste paper basket.
517
00:34:02,508 --> 00:34:04,141
And said it was garbage.
518
00:34:04,410 --> 00:34:07,944
In a New York courtroom today
there was elation and shock.
519
00:34:07,946 --> 00:34:10,047
John Gotti is said
by federal prosecutors
520
00:34:10,049 --> 00:34:12,549
to be the newest,
most powerful mafia--
521
00:34:12,551 --> 00:34:14,184
The trial lasted half a year.
522
00:34:14,753 --> 00:34:18,221
[newsreader] Witnesses allege
that when the verdict was read,
Gotti smirked
523
00:34:18,223 --> 00:34:21,925
and shouted at prosecutors,
"Shame on them."
524
00:34:25,764 --> 00:34:27,564
[Capeci] It was
a stunning victory for him.
525
00:34:27,566 --> 00:34:29,599
And a stunning defeat
for the government.
526
00:34:30,536 --> 00:34:34,204
My partner and I the day
of his acquittal just go
right to the Queens Club,
527
00:34:34,206 --> 00:34:35,772
that's where this guy's going.
528
00:34:35,774 --> 00:34:38,775
We see John, I jump out
of the car and I walk up
and said,
529
00:34:38,777 --> 00:34:40,610
"Right I don't know
if you remember me,
530
00:34:40,612 --> 00:34:43,647
"I'm George Gabriel,
I told you I'd come
and congratulate you if you won.
531
00:34:43,649 --> 00:34:45,615
"Congratulations.
I'll be seeing you."
532
00:34:45,617 --> 00:34:49,286
Thank god they weren't armed
because John probably thought
he was getting hit.
533
00:34:50,289 --> 00:34:53,857
[Capeci] As it turned out,
however, it was
a bogus acquittal.
534
00:34:53,859 --> 00:34:55,692
The jury had been
bought and paid for.
535
00:34:55,694 --> 00:35:00,030
One of the jurors
agreed on a price of $60,000.
Which they gave to him
536
00:35:00,032 --> 00:35:01,798
and he was to hold out
during the trial.
537
00:35:01,800 --> 00:35:03,767
And he was one of the reasons
why they got an acquittal.
538
00:35:03,936 --> 00:35:10,073
[Capeci] During deliberations,
the juror convinced the jury
that John Gotti was not guilty
539
00:35:10,075 --> 00:35:12,876
of the crimes
that he was accused of.
540
00:35:13,312 --> 00:35:16,947
[Gabriel] By the time be gets
acquitted from that trial,
541
00:35:16,949 --> 00:35:19,850
he's becoming this folk hero,
even to the mob.
542
00:35:19,852 --> 00:35:24,621
The government can't get him.
People are now even more fearful
of the mob because, god,
543
00:35:24,623 --> 00:35:28,058
you can't even put this guy
in jail. Everyone knows
he killed a boss.
544
00:35:28,060 --> 00:35:29,826
He's doing all this stuff.
You can't touch him.
545
00:35:29,828 --> 00:35:34,531
The guy against whom charges
could not and would not stick.
546
00:35:34,533 --> 00:35:36,199
You'll never get this guy.
He's untouchable.
547
00:35:36,201 --> 00:35:40,303
In New York today
they are calling John Gotti
the Teflon Don.
548
00:35:40,305 --> 00:35:44,174
But it wasn't just
law enforcement who had a score
to settle with this mob star.
549
00:35:44,176 --> 00:35:47,677
He'd broken the rules
of La Cosa Nostra
by killing the boss.
550
00:35:47,679 --> 00:35:50,480
And now the families
wanted blood.
551
00:35:50,482 --> 00:35:53,617
The Genovese family
and Lokasi family
were really upset.
552
00:35:53,952 --> 00:35:58,488
Cause they liked Paul Castellano
and he's a traditional boss.
There's no reason to kill him.
553
00:35:59,158 --> 00:36:03,527
Killing the boss is like
the cardinal rule you just don't
go and do that. That was nuts.
554
00:36:03,529 --> 00:36:09,399
The Lokasi and Genovese
crime families decided that
Gotti had violated the rules
555
00:36:09,401 --> 00:36:14,004
and was deserving of death
for having killed his boss.
556
00:36:19,178 --> 00:36:21,578
Police in New York City
are worried about a mob war
this morning
557
00:36:21,580 --> 00:36:26,316
after an apparent gangland
killing Sunday in Brooklyn.
A car bomb killed one man,
558
00:36:26,318 --> 00:36:29,953
reportedly a lieutenant
in one of the country's
most powerful mafia families.
559
00:36:30,556 --> 00:36:35,825
A bomb was planted
under a car that Gotti
was expected to be driving
560
00:36:35,827 --> 00:36:39,129
after a meeting
at a social club in Brooklyn.
561
00:36:41,033 --> 00:36:43,233
You plant a bomb
right under John's car.
562
00:36:45,437 --> 00:36:50,106
Fortunately for John Gotti
he decided not to go
to that social club.
563
00:36:50,442 --> 00:36:55,879
When Frank DiCico and someone
who looked liked John Gotti
got into the car,
564
00:36:56,682 --> 00:36:59,516
a button was pushed,
the car blew up.
565
00:36:59,751 --> 00:37:02,652
[newsreader] DiCico was blown
to bits a short time later.
566
00:37:02,654 --> 00:37:06,456
Police believe his death
was arranged by older members
of the Gambino family
567
00:37:06,458 --> 00:37:11,394
who were still angry
about Castellano's murder.
Gotti was clearly in trouble.
568
00:37:11,396 --> 00:37:15,699
He was in trouble
with Castlellano's loyalists
and was in trouble with the law.
569
00:37:15,701 --> 00:37:18,835
John Gotti escaped
for the moment.
570
00:37:21,273 --> 00:37:25,742
New York,
in all its greedy seedy glory,
had re
571
00:37:26,578 --> 00:37:28,945
We're dying. The city is dying.
572
00:37:28,947 --> 00:37:31,314
The signs were everywhere
if you knew where to look.
573
00:37:33,018 --> 00:37:35,652
It was a powder keg
waiting to explode.
574
00:37:37,656 --> 00:37:42,192
And one of Wall Street's
richest men would be
the spark that lit the fuse.
575
00:37:42,194 --> 00:37:43,560
[people yelling
and bells ringing]
576
00:37:44,029 --> 00:37:50,300
It's November 14th, 1986.
The SEC announced
a press conference.
577
00:37:50,802 --> 00:37:52,602
[newsreader] After
the stock markets closed,
578
00:37:52,604 --> 00:37:55,205
the SEC announced
the biggest crackdown ever
579
00:37:55,207 --> 00:38:00,010
in an insider trading case.
Ivan Boesky admitted
that he had cashed in
580
00:38:00,012 --> 00:38:03,313
on insider information,
which was not available
to the public.
581
00:38:03,315 --> 00:38:10,220
The SEC put out a press release
saying that Ivan Boesky had been
charged with insider trading.
582
00:38:10,222 --> 00:38:13,023
That became known as Boesky Day.
583
00:38:14,960 --> 00:38:18,995
[newsreader] Boesky said he
would plead guilty and cooperate
with federal authorities
584
00:38:18,997 --> 00:38:22,265
in a widening investigation
of insider trading,
585
00:38:22,267 --> 00:38:27,270
which experts believe
could involve other
prominent Wall Street figures.
586
00:38:27,706 --> 00:38:31,374
[Auletta] The rotten apple
theory that applied
to Dennis Levine
587
00:38:31,376 --> 00:38:32,842
was a defense
that was crumbling.
588
00:38:33,011 --> 00:38:35,945
The barrel had some problems.
And some rot in it.
589
00:38:37,349 --> 00:38:40,417
When all of a sudden Ivan
became, truly,
Ivan the Terrible,
590
00:38:40,419 --> 00:38:43,019
when that headline ripped
across the Street,
591
00:38:43,422 --> 00:38:47,791
I think true paranoia
really set in that everybody
could be exposed.
592
00:38:47,793 --> 00:38:50,727
Because he touched
so much of Wall Street.
593
00:38:50,729 --> 00:38:53,530
[newsreader] To try to win
leniency for himself,
594
00:38:53,532 --> 00:38:55,999
Boesky cooperated
with federal officials
595
00:38:56,001 --> 00:39:01,037
in secretly taping telephone
conversations with other
Wall Street operators.
596
00:39:01,039 --> 00:39:05,842
I remember when that news struck
.It was like all the air went
out of the room.
597
00:39:05,844 --> 00:39:08,545
He dealt with everyone.
598
00:39:08,714 --> 00:39:13,483
[newsreader] For those
who dealt and spoke with Boesky,
now a period of anxious waiting.
599
00:39:13,485 --> 00:39:16,586
[newsreader] All over
Wall Street, they're practically
jumping out windows.
600
00:39:16,988 --> 00:39:20,690
Paranoia ran rampant.
It was like everybody
on Wall Street
601
00:39:20,692 --> 00:39:26,229
was suddenly thinking, "Oh god,
did I ever talk to Ivan Boesky?
What'd I say? What did he say?"
602
00:39:26,231 --> 00:39:29,299
And of course there were some
people who realized
they were in trouble.
603
00:39:29,301 --> 00:39:32,936
[Rita Braver] As one former
SEC official put it,
this is like arresting
604
00:39:32,938 --> 00:39:37,073
the madam of a brothel
and finding her private book
of clients.
605
00:39:37,976 --> 00:39:42,779
[Burrough] Boesky Day was a deep
and profound shock
to the system.
606
00:39:42,781 --> 00:39:46,182
And because
of the nebulous nature
of insider trading,
607
00:39:46,184 --> 00:39:47,984
the fact that you may just be
608
00:39:47,986 --> 00:39:51,521
trading on a tip and not know
that it came
from illegal information,
609
00:39:51,523 --> 00:39:53,423
you know,
that's a legitimate fear.
610
00:39:53,425 --> 00:39:56,025
If I traded on a bunch of tips
in 1987
611
00:39:56,027 --> 00:39:59,829
and I suddenly learned
that my cousin's cousin
knew Ivan Boesky,
612
00:39:59,831 --> 00:40:02,465
I'm worried.
Is Boesky naming me?
613
00:40:02,467 --> 00:40:05,602
As further disclosures
resulting from the Boesky affair
614
00:40:05,604 --> 00:40:09,205
may weaken public confidence
in financial markets...
615
00:40:09,808 --> 00:40:13,743
[Stewart] And that fear
had an impact
on the stock market.
616
00:40:14,212 --> 00:40:16,079
[newsreader] In addition
to stunning
the financial world,
617
00:40:16,081 --> 00:40:18,915
the Ivan Boesky affair
has had an immediate effect
618
00:40:18,917 --> 00:40:20,316
on takeover stocks.
619
00:40:20,318 --> 00:40:24,454
As the SEC continues
its big chill
against insider trading.
620
00:40:24,456 --> 00:40:26,256
Wall Street
is based on psychology.
621
00:40:26,258 --> 00:40:30,693
People are guessing
and if suddenly
the guessing turns dark
622
00:40:30,695 --> 00:40:34,564
and you, "Say oh my god,
more people are gonna get
indicted on insider trading,"
623
00:40:34,566 --> 00:40:37,901
panic sets in and people start
abandoning stocks.
624
00:40:37,903 --> 00:40:41,404
And the abandoned stocks,
the stock market drops.
625
00:40:41,406 --> 00:40:43,540
The market was
off more than 40 points.
626
00:40:43,542 --> 00:40:48,111
[newsreader] Small investors
checking on their stocks during
their lunch hour blamed Boesky.
627
00:40:48,113 --> 00:40:52,382
It's not fair. It's like
if you've got money you can do
whatever you want.
628
00:40:52,384 --> 00:40:57,220
I don't think it's fair
for someone to really know
so much before I do.
629
00:40:57,489 --> 00:41:02,659
Small investors have a right
to believe that our markets
are honest.
630
00:41:03,028 --> 00:41:07,730
That they are not
being manipulated. That there
are no Boeskys out there.
631
00:41:07,732 --> 00:41:13,403
It's incredibly important
that the market function in a
way that's as fair as possible.
632
00:41:13,405 --> 00:41:17,073
And that people believe
that it's functioning in a way
that's as fair as possible.
633
00:41:17,075 --> 00:41:22,011
For every dollar of profit
that's made by an Ivan Boesky,
who breaks the rules,
634
00:41:22,013 --> 00:41:26,015
there's a dollar that's lost
by somebody else in the market.
635
00:41:26,017 --> 00:41:31,554
Millions of Americans depend
on the stock market for
financial security, retirement.
636
00:41:31,556 --> 00:41:34,090
If people begin to think
that the game is rigged,
637
00:41:34,092 --> 00:41:36,559
then the stock market
as we know it is over.
638
00:41:36,561 --> 00:41:41,431
[Susan Lee] Unless you're
an inside member of this inside
club, you cannot make money.
639
00:41:42,634 --> 00:41:49,005
Boesky was a really big deal.
It was a signal moment
in modern American history.
640
00:41:49,007 --> 00:41:52,041
Both because
of the gaudy displays of wealth.
641
00:41:52,043 --> 00:41:55,812
Because
of the financial overreach.
Because of the crimes.
642
00:41:55,814 --> 00:41:57,547
[newsreader] Boesky's troubles
may not end
643
00:41:57,549 --> 00:42:01,584
with the $100 million repayment
of profits and penalties.
644
00:42:01,887 --> 00:42:05,355
[newsreader] Boeksy has agreed
to plead guilty
to a criminal charge.
645
00:42:05,357 --> 00:42:07,490
The maximum sentence
is five years.
646
00:42:07,826 --> 00:42:10,493
[L. William Seidman] If he's
guilty as charged,
647
00:42:10,495 --> 00:42:13,496
and if we had capital punishment
for white collar crimes,
648
00:42:13,498 --> 00:42:16,766
I'd say he'd be
a prime candidate.
649
00:42:16,768 --> 00:42:19,002
Wall Street's biggest enigma
had been exposed
650
00:42:19,004 --> 00:42:21,437
and the repercussions
would be far reaching.
651
00:42:22,507 --> 00:42:27,544
[Troy] The hangover is economic.
The hangover is cultural.
The hangover is political.
652
00:42:27,546 --> 00:42:30,880
But most disturbing of all,
the hangover is moral.
653
00:42:31,716 --> 00:42:35,585
We start seeing that behind many
of these great fortunes,
654
00:42:35,587 --> 00:42:39,889
in the 1980s is the old cliché:
A greed crime.