1 00:00:00,835 --> 00:00:02,234 New York City. 2 00:00:02,336 --> 00:00:04,803 Happy new year! 3 00:00:04,905 --> 00:00:08,340 At the dawn of the 80s, it was exploding with opportunity. 4 00:00:09,243 --> 00:00:11,510 [newsreader] Boom times, that's what the markets signal today. 5 00:00:11,612 --> 00:00:14,446 An economy that's on a roll in this country. 6 00:00:14,548 --> 00:00:18,250 A place to seek money, power, fame. 7 00:00:18,352 --> 00:00:22,654 Amid the glitz and greed, five titans seized their moment. 8 00:00:24,492 --> 00:00:27,993 But in 1987, the boom times came to a halt. 9 00:00:28,095 --> 00:00:31,663 And with the party over, the backlash began. 10 00:00:31,766 --> 00:00:34,266 A Wall Street cheat found his reputation in ruins. 11 00:00:34,368 --> 00:00:37,636 [newsreader] Boesky admitted to profiting from insider trading. 12 00:00:37,738 --> 00:00:39,638 And decided he wouldn't go down alone. 13 00:00:39,740 --> 00:00:42,641 Boesky ratted out everybody. 14 00:00:42,743 --> 00:00:45,544 A Hotel Queen faced a city full of angry subjects. 15 00:00:45,646 --> 00:00:47,279 And I hope she gets everything that comes to her. 16 00:00:47,381 --> 00:00:49,048 And a future behind bars. 17 00:00:49,150 --> 00:00:51,283 She had been indicted on a great many counts. 18 00:00:51,385 --> 00:00:52,885 I'm innocent. 19 00:00:52,987 --> 00:00:55,287 A gilded gangster continued to taunt the feds. 20 00:00:55,389 --> 00:00:57,623 He was just out there, thumbing his nose at law enforcement. 21 00:00:57,725 --> 00:00:59,725 Even as he handed them a smoking gun. 22 00:00:59,827 --> 00:01:03,495 Tape recorded conversations were a gold mine for the FBI, they were a jackpot. 23 00:01:03,597 --> 00:01:06,465 And while a politically minded prosecutor pounced on them all... 24 00:01:06,567 --> 00:01:10,736 Giuliani earned this reputation as this law and order person. 25 00:01:10,838 --> 00:01:14,206 If you violate the law, you go to prison. 26 00:01:14,308 --> 00:01:16,575 A developer from Queens kept pushing his luck. 27 00:01:16,677 --> 00:01:21,180 Eventually, word started to get out. It was time to take him down. 28 00:01:28,255 --> 00:01:31,457 It was a toxic wind that was ripe to blow up. 29 00:01:32,827 --> 00:01:38,931 He said, "I wish you could see her naked." Even today, it makes me uncomfortable. 30 00:01:39,033 --> 00:01:44,570 These five titans would reshape the city and the world we live in today. 31 00:01:44,672 --> 00:01:47,906 But as the 90s neared, they'd finally face their day of reckoning. 32 00:01:48,008 --> 00:01:49,875 -Are you surprised? -No comment. 33 00:01:49,977 --> 00:01:52,444 And empires would fall. 34 00:01:52,546 --> 00:01:54,880 We are very honorable people. 35 00:02:18,472 --> 00:02:20,539 [shouting] 36 00:02:20,641 --> 00:02:25,744 Black Monday, October 19th, 1987 when the stock market went into a free fall. 37 00:02:26,480 --> 00:02:29,982 Today's precipitous plunge struck fear in the hearts and pocket books 38 00:02:30,084 --> 00:02:31,450 of even Wall Street veterans. 39 00:02:31,552 --> 00:02:35,120 The market is now down 221 points. 40 00:02:35,222 --> 00:02:36,555 Does that make you nervous? 41 00:02:36,657 --> 00:02:38,290 No, I died already. 42 00:02:38,392 --> 00:02:41,560 Black Monday was the inflection point at which all of a sudden 43 00:02:41,662 --> 00:02:44,630 the party screeched to a halt. 44 00:02:44,732 --> 00:02:48,100 [newsreader] In trading rooms on Wall Street there was panic. 45 00:02:48,202 --> 00:02:51,603 Sell orders flooded in from big institutional investors, 46 00:02:51,705 --> 00:02:54,306 from private investors. From mutual funds. 47 00:02:55,075 --> 00:02:57,509 A bull market that had gone on too far and too long 48 00:02:57,611 --> 00:03:01,146 without enough corrections suddenly just went down. 49 00:03:01,248 --> 00:03:06,518 [newsreader] The largest drop in stock market history, falling 508 points on the Dow. 50 00:03:06,887 --> 00:03:11,023 It was this absolutely terrifying event where the market was plummeting 51 00:03:11,125 --> 00:03:13,358 and it didn't feel like it would ever stop. 52 00:03:13,460 --> 00:03:18,664 [newsreader] More than 604 million shares changed hands with the decline of 22.6 percent 53 00:03:18,766 --> 00:03:23,335 far greater than the single-day loss of 1929 which ignited The Great Depression. 54 00:03:23,437 --> 00:03:26,271 Panic, complete panic. Everyone's going crazy. 55 00:03:31,512 --> 00:03:33,879 What happens when everybody tries to leave the room at the same time? 56 00:03:33,981 --> 00:03:38,383 Well, nobody can get out. And that's the 1987 crash in a nutshell. 57 00:03:38,485 --> 00:03:42,988 There were moments where Washington bureaucrats believed that not only 58 00:03:43,090 --> 00:03:46,158 Wall Street but the American economy could melt down. 59 00:03:46,260 --> 00:03:50,462 The chastening that everybody who went through Black Monday went through. 60 00:03:50,564 --> 00:03:56,201 There was a new found caution that it instilled in everybody I knew on Wall Street. 61 00:03:56,303 --> 00:04:04,076 We'd now seen what was possible when the confetti years suddenly turned dark. 62 00:04:04,178 --> 00:04:08,146 It was a devastating blow to public confidence in the markets. 63 00:04:08,249 --> 00:04:13,185 But it wasn't the first. For months, a drum beat of revelations had cast a shadow 64 00:04:13,287 --> 00:04:18,357 on Wall Street. Starting with the spectacular collapse of an arbitrager. 65 00:04:18,459 --> 00:04:21,159 [newsreader] Ivan Boesky came to the US District Court today 66 00:04:21,262 --> 00:04:23,528 squeezed into a Japanese compact car. 67 00:04:23,831 --> 00:04:27,833 He's already paid 100 million in penalties for insider trading violations, 68 00:04:27,935 --> 00:04:33,338 is barred from the securities industry for life, disbarred, and, his lawyer says, broke. 69 00:04:34,108 --> 00:04:39,745 [Sorkin] The Boesky story represented this rags-to-riches guy who came from nothing 70 00:04:39,847 --> 00:04:44,182 who rode the Wall Street wave. He became emblematic 71 00:04:44,285 --> 00:04:48,453 of what Wall Street was in the 1980s and the idea that he was rubbing 72 00:04:48,555 --> 00:04:52,624 his success in people's faces 'cause he was so out there with his success, 73 00:04:52,726 --> 00:04:58,363 he was so public about his success. When he came undone, the lips curled. 74 00:04:58,465 --> 00:05:01,266 People smiled. The schadenfreude was thick. 75 00:05:04,772 --> 00:05:08,473 [inaudible] 76 00:05:11,111 --> 00:05:13,078 [Stewart] When Boesky agreed to plead guilty, 77 00:05:13,180 --> 00:05:15,947 he knew he's be sentenced to some kind of prison term. 78 00:05:16,050 --> 00:05:18,383 Depending on the value of his cooperation. 79 00:05:18,485 --> 00:05:23,088 [Madrick] Boesky decided to cooperate 'cause he didn't think he had any way to fight it out. 80 00:05:23,190 --> 00:05:25,957 He was guilty and he wanted to save his ass. 81 00:05:26,060 --> 00:05:32,964 [newsreader] Boesky faces up to five years in prison and a fine of $250,000. 82 00:05:33,067 --> 00:05:35,634 It had been a remarkable run for the kid from Detroit. 83 00:05:35,736 --> 00:05:38,170 But now he knew it had come to an end. 84 00:05:38,272 --> 00:05:44,343 And if he had to end other careers to minimize the fallout, well, so be it. 85 00:05:44,445 --> 00:05:46,645 So Boesky ratted out everybody. 86 00:05:46,747 --> 00:05:50,615 [newsreader] All over the US, people have been shocked by scenes like this. 87 00:05:50,718 --> 00:05:56,488 Investment banker Martin Siegel ducking reporters after pleading guilty to insider trading. 88 00:05:56,590 --> 00:06:02,260 [Stewart] Siegel said always felt guilty for feeding information to Boesky 89 00:06:02,363 --> 00:06:06,698 and now Martin Siegel is over and Boesky was at the heart of the case 90 00:06:06,800 --> 00:06:10,535 of securities law violations against Michael Milken. 91 00:06:10,637 --> 00:06:13,105 He was the center of this information hub. 92 00:06:13,207 --> 00:06:16,775 That's the most powerful position you can possible be on in Wall Street. 93 00:06:16,877 --> 00:06:21,113 [newsreader] He was worth more than a billion dollars when he got caught cooking the books. 94 00:06:21,215 --> 00:06:25,350 [Stewart] Michael Milken eventually pleaded guilty to six felonies 95 00:06:25,452 --> 00:06:28,754 and agreed to pay 600 million in fines. 96 00:06:29,089 --> 00:06:32,023 [Guiliani] Mr. Boesky has been extremely valuable, without his cooperation 97 00:06:32,126 --> 00:06:38,663 there would be people who would be involved in ongoing fraudulent transactions. 98 00:06:38,766 --> 00:06:42,467 While the arbitrager downfall destroyed the careers of those around him, 99 00:06:42,569 --> 00:06:46,505 it bolstered the career of one cunning prosecutor who made the most 100 00:06:46,607 --> 00:06:48,740 of every white collar crook he could cuff. 101 00:06:49,710 --> 00:06:54,980 [newsreader] Since 1984 there have been more than 48 cases of insider trading, 102 00:06:55,082 --> 00:07:00,719 many involving the financial community, brought by New York's US Attorney, Rudolph Giuliani. 103 00:07:00,821 --> 00:07:06,057 They're seen usually as very shrewd, very capable, very industrious. 104 00:07:06,160 --> 00:07:09,728 Yet there's this whole other side to their life 105 00:07:09,830 --> 00:07:11,663 in which they are cheating and lying and stealing. 106 00:07:11,765 --> 00:07:14,032 Which they keep secret. 107 00:07:14,134 --> 00:07:17,369 [Kirtzman] Rudy Giuliani wanted to be the center of attention and to give enormous power 108 00:07:17,471 --> 00:07:22,474 to ruin people's lives. There was a famous case of Giuliani going after traders 109 00:07:22,576 --> 00:07:26,111 at Kidder Peabody and handcuffing them 110 00:07:26,213 --> 00:07:28,880 and marching them across the trading room floor. 111 00:07:28,982 --> 00:07:31,349 How much did you make from your inside information? 112 00:07:31,452 --> 00:07:36,721 [Mahler] A perp walk is the idea of arresting people in this very public and almost theatrical way 113 00:07:36,824 --> 00:07:40,625 marching them out of offices so that the news cameras would capture these guys. 114 00:07:40,727 --> 00:07:43,028 Do you think the others are doing the same thing you are? 115 00:07:43,130 --> 00:07:48,366 [Mahler] Publicly parading these Wall Street millionaires, as if they were common criminals 116 00:07:48,469 --> 00:07:52,237 It was intended to be a form of deterrence, look what'll happen if you break the law. 117 00:07:52,339 --> 00:07:55,807 But you could just as easily argue that he was showboating. 118 00:07:55,909 --> 00:07:59,044 Everything was kind of a PR campaign for Giuliani. 119 00:07:59,146 --> 00:08:02,080 He's busting these guys, he's locking 'em up, he's indicting them. 120 00:08:02,182 --> 00:08:07,052 He did that on purpose and it enhanced his reputation as the Sheriff of New York. 121 00:08:07,154 --> 00:08:12,157 Part of the criticism was, "Well, those are decent white collar guys. 122 00:08:12,259 --> 00:08:15,894 "They, they, and white guys, to boot. they shouldn't be subjected 123 00:08:15,996 --> 00:08:18,930 "to this kind of thing that actual criminals are subjected to." 124 00:08:19,032 --> 00:08:21,566 I, I thought, "No, this is good." 125 00:08:21,668 --> 00:08:25,737 [Stewart] To this day there are people on Wall Street who criticize him 126 00:08:25,839 --> 00:08:31,076 but the American people needed to see these people being held accountable, 127 00:08:31,178 --> 00:08:36,781 that these very wealthy, so- called Masters of the Universe were not above the law. 128 00:08:36,884 --> 00:08:41,086 They committed crimes. Why not go after 'em? Why not go after the big fish? 129 00:08:41,188 --> 00:08:48,994 All this profligate behavior started to begin to move very much out of vogue. 130 00:08:49,096 --> 00:08:50,929 The so-called "Masters of the Universe" 131 00:08:51,031 --> 00:08:53,465 were trading their penthouses for prison cells. 132 00:08:53,567 --> 00:08:57,002 Once the heroes of the decade, they were now its villains. 133 00:08:57,404 --> 00:09:04,109 Anyone who embodied these areas of New York City power, Giuliani took aim at. 134 00:09:04,211 --> 00:09:08,179 If you violate the law, whether it's insider trading or tax evasion, 135 00:09:08,282 --> 00:09:11,716 or fraud or bribery, and so-called "white collar crime," 136 00:09:11,818 --> 00:09:15,186 the overwhelming general rule is that you go to prison. 137 00:09:15,289 --> 00:09:20,825 As the disgraced trader awaited his sentencing, the prosecutor savored his victory. 138 00:09:20,928 --> 00:09:26,131 But not for long because he'd already set his sights on an even juicier target. 139 00:09:26,233 --> 00:09:30,802 It is now alleged that they did not pay millions of dollars in taxes. 140 00:09:31,572 --> 00:09:35,407 [newsreader] US Attorney Rudolph Giuliani said if the Helmsleys are found guilty, 141 00:09:35,509 --> 00:09:37,642 they will serve some jail time. 142 00:09:41,648 --> 00:09:45,617 It was the late 80s in New York and the cultural tide was turning. 143 00:09:45,719 --> 00:09:49,421 For years, some of the city's elite had treated their wealth and fame 144 00:09:49,523 --> 00:09:51,890 as a license to act with impunity. 145 00:09:53,894 --> 00:09:56,561 But now the public was growing tired of their antics and a hard-driving prosecutor 146 00:09:56,663 --> 00:09:58,430 was capitalizing on their outrage, 147 00:09:59,933 --> 00:10:01,533 going after the formerly untouchable with a vengeance. 148 00:10:02,970 --> 00:10:05,570 [newsreader] Former Miss America and New York City official Bess Myerson 149 00:10:05,672 --> 00:10:09,407 is facing a possible 30 years in prison and a half a million dollars in fines. 150 00:10:09,509 --> 00:10:11,309 We prosecute all sorts of people. 151 00:10:11,411 --> 00:10:13,111 Little people, in-between people, 152 00:10:13,213 --> 00:10:16,114 and some of the wealthiest billionaires in the United States. 153 00:10:16,216 --> 00:10:18,750 And there was no better target among New York's high society 154 00:10:18,852 --> 00:10:23,288 than the Queen of Real Estate, who had been outed as a tax cheat in the press. 155 00:10:23,991 --> 00:10:28,259 She might have been a scapegoat for the greed and excess of the 80s, 156 00:10:28,362 --> 00:10:29,728 but she brought it on herself. 157 00:10:30,330 --> 00:10:33,298 The Helmlseys, one of the world's wealthiest couples, were indicted 158 00:10:33,400 --> 00:10:37,235 in New York today on state and federal charges involving a tax scam. 159 00:10:37,337 --> 00:10:43,508 She was an easy target. So imperious, so mean. 160 00:10:43,610 --> 00:10:48,413 [inaudible] 161 00:10:49,016 --> 00:10:52,951 Leona Helmsley was supposed to have impeccable taste, 162 00:10:53,053 --> 00:10:57,088 you'd expect to have impeccable morals and she didn't. 163 00:10:59,559 --> 00:11:02,494 New Yorkers had loved her as the queen who stood guard, 164 00:11:02,596 --> 00:11:05,830 tending to her customers' every whim. 165 00:11:05,932 --> 00:11:09,801 But a queen who defrauded the government and stiffed her contractors? 166 00:11:09,903 --> 00:11:12,437 That they found far less charming. 167 00:11:13,607 --> 00:11:16,441 [newsreader] Harry and Leona are in trouble because they spent millions of dollars 168 00:11:16,543 --> 00:11:18,810 on renovations at their Connecticut estate. 169 00:11:18,912 --> 00:11:24,049 Twenty-nine acres, 28 rooms, and allegedly charged it to their businesses for deductions. 170 00:11:24,151 --> 00:11:28,186 [Plaskin] She was allegedly deducting personal expenses 171 00:11:28,288 --> 00:11:32,390 as business expenses or expenses for her hotels. 172 00:11:33,126 --> 00:11:38,530 [Feldshuh] She was indicted on one count of conspiracy to defraud the United States. 173 00:11:38,632 --> 00:11:44,502 Three counts of tax evasion, three counts of falsifying personal tax returns. 174 00:11:44,604 --> 00:11:50,208 Ten counts of mail fraud. She had been indicted on a great many counts. 175 00:11:50,310 --> 00:11:54,646 [newsreader] The Feds also allege that Mrs. Helmsley extorted money from suppliers, 176 00:11:54,748 --> 00:11:58,416 demanded and received kickbacks in exchange for Helmsley business. 177 00:11:58,518 --> 00:12:04,756 Well, you wouldn't call her cheap. You would call her tight. She thought that, 178 00:12:04,858 --> 00:12:10,729 "I'm paying him a lot of money, why won't he do this for me for next to nothing or nothing?" 179 00:12:10,831 --> 00:12:14,866 I confronted her, I said, "Is it true that, you know, you didn't pay contractors 180 00:12:14,968 --> 00:12:17,068 "or you tried to get services for free?" 181 00:12:17,170 --> 00:12:19,604 She said, "Well, the bill that he gave me was too high." 182 00:12:20,574 --> 00:12:24,576 She started talking about feeling victimized by the government. 183 00:12:24,678 --> 00:12:28,012 After all, she paid millions of dollars in taxes. 184 00:12:28,115 --> 00:12:31,416 She didn't think she did anything wrong and she stuck to that. 185 00:12:31,518 --> 00:12:36,688 It isn't fair. It isn't fair. Plus I look like [inaudible] 186 00:12:36,790 --> 00:12:41,192 It was clear from the beginning that Leona Helmsley was not interested in pleading guilty. 187 00:12:41,294 --> 00:12:43,361 I have done nothing wrong. 188 00:12:43,463 --> 00:12:49,400 [Plaskin] By the time she went to trial, she was so famous and so notorious, 189 00:12:49,503 --> 00:12:53,104 it would have been almost impossible to find a jury of her peers 190 00:12:53,206 --> 00:12:57,342 who didn't have that image of her that had been painted in the press. 191 00:12:57,444 --> 00:13:00,779 Harry and Leona Helmlsey are so rich they could practically start 192 00:13:00,881 --> 00:13:03,982 their own country and if they did they wouldn't have to pay taxes, 193 00:13:04,084 --> 00:13:06,718 since it appears that they're not too fond of them anyway. 194 00:13:07,888 --> 00:13:13,625 [newsreader] Leona Helmsley made an understated entrance to court no lima, no husband Harry. 195 00:13:14,961 --> 00:13:19,764 [Dowling] The story was that he was no longer mentally able to go through a trial. 196 00:13:19,866 --> 00:13:23,601 But I think what actually happened was Harry had done 197 00:13:23,703 --> 00:13:27,105 so many favors for every judge, every official 198 00:13:27,207 --> 00:13:30,975 that they were not about to prosecute their friend for something that his wife did. 199 00:13:31,812 --> 00:13:34,846 [Feldshuh] Leona Helmlsey hired Gerald Feffer to defend her. 200 00:13:34,948 --> 00:13:41,085 He took an unorthodox point of view that he had hoped would save her. 201 00:13:41,188 --> 00:13:44,756 [Devita] What he actually said in opening statement is, 202 00:13:44,858 --> 00:13:48,159 "You may hear that Leona Helmsley is a tough bitch. 203 00:13:48,261 --> 00:13:50,595 "It's not a crime to be a tough bitch." 204 00:13:50,697 --> 00:13:55,033 Feldshuh He tried to prove that you cannot send a person to prison just for being 205 00:13:55,135 --> 00:13:59,237 a tough bitch, just for not liking them, just for thinking that they were imperialistic. 206 00:13:59,339 --> 00:14:01,773 These were oversights that she didn't know what was going on, 207 00:14:01,875 --> 00:14:05,877 that she was more concerned with dust in the corner than she was with her accounting firm. 208 00:14:05,979 --> 00:14:08,813 Did we steal somebody's money? 209 00:14:08,915 --> 00:14:11,049 Oh, the government says you stole theirs. 210 00:14:11,151 --> 00:14:13,184 Did they prove it? 211 00:14:13,286 --> 00:14:17,388 [newsreader] Prosecution called 44 witnesses, many of them former employees 212 00:14:17,490 --> 00:14:20,058 who described Leona as greedy and arrogant. 213 00:14:20,160 --> 00:14:23,661 Everybody who was around her knew what a terror she was. 214 00:14:23,763 --> 00:14:26,331 And that always catches up with people. And it did. 215 00:14:26,433 --> 00:14:31,336 [newsreader] Former employees testified about doctored invoices for everything 216 00:14:31,438 --> 00:14:34,706 from Louis XVI furniture to carrots and potatoes. 217 00:14:34,941 --> 00:14:37,675 You could see that she was unhappy at some of the testimony. 218 00:14:37,777 --> 00:14:41,512 Certainly, there must be one person in this entire world 219 00:14:41,615 --> 00:14:48,486 that would say I'm a decent person. They didn't bring anyone in. 220 00:14:48,588 --> 00:14:54,926 [Silverstein] The coup de grâce was when her housekeeper testified that Leona had said, 221 00:14:55,028 --> 00:14:58,997 "Only little people pay taxes." So everybody hated her after that. 222 00:14:59,099 --> 00:15:03,334 I sat down with a housemaid ? 223 00:15:03,436 --> 00:15:06,604 And said, "Let's have tea?" Or where was it? 224 00:15:06,706 --> 00:15:12,677 In the bedroom, what? And I said, "Do you know only the little people pay taxes?" 225 00:15:12,779 --> 00:15:17,782 Does this make sense to intelligent people? Huh? This story was concocted. 226 00:15:17,884 --> 00:15:22,754 And contrived. And boy did that make the newspapers, didn't it? 227 00:15:22,856 --> 00:15:26,724 "Paying taxes is for the little people." Wow, such a great line. 228 00:15:26,826 --> 00:15:29,761 It'll be on her gravestone, it probably is on her gravestone, actually. 229 00:15:29,863 --> 00:15:32,597 "RIP Taxes are for the little people." 230 00:15:33,033 --> 00:15:39,370 "Only the little people pay taxes." That was her against us. 231 00:15:39,472 --> 00:15:44,642 We were the downtrodden, poor, misunderstood public 232 00:15:44,744 --> 00:15:47,612 and she was the big bad wolf. 233 00:15:47,714 --> 00:15:51,916 Sooner or later you gotta pay the piper and I hope she gets everything that comes to her. 234 00:15:52,018 --> 00:15:55,787 It's poor, middle class who have to pay taxes. 235 00:15:55,889 --> 00:16:00,224 But the little people don't just pay taxes. They sit on juries too. 236 00:16:00,327 --> 00:16:04,929 And they were about to hand the Queen of Mean a verdict that would seal her fate. 237 00:16:06,433 --> 00:16:09,067 Ms. Helmsley, do you have any response to these allegations at all? 238 00:16:09,169 --> 00:16:12,136 While a day of reckoning had arrived for some New York titans 239 00:16:12,238 --> 00:16:16,307 who'd overplayed their hands, others continued to push their luck. 240 00:16:17,644 --> 00:16:22,680 By the late 1980s, Donald Trump was building seemingly everywhere. 241 00:16:22,782 --> 00:16:25,616 And buying seemingly everything. 242 00:16:25,719 --> 00:16:30,421 [newsreader] He already owns Trump Tower, Trump Plaza, Trump Park, and Trump Castle. 243 00:16:30,523 --> 00:16:34,158 He bought the Eastern Shuttle and renamed it Trump Shuttle. 244 00:16:34,260 --> 00:16:37,862 We were the first plane out this morning, we were the most successful flight this morning. 245 00:16:37,964 --> 00:16:40,999 We had more people than anybody else and I think we had better service than anybody else. 246 00:16:41,101 --> 00:16:46,571 All of these things were not money makers. So they added to his overall debt. 247 00:16:47,974 --> 00:16:51,509 [Kruse] The banks continued to give him more money. 248 00:16:51,611 --> 00:16:55,546 the press he received largely was uncritical. 249 00:16:55,648 --> 00:16:59,784 He was living this consequence-free existence. 250 00:16:59,886 --> 00:17:04,055 So there was no reason for him to dial back his behavior. 251 00:17:07,994 --> 00:17:11,863 By 1988, the striver from Queens had become a national celebrity. 252 00:17:11,965 --> 00:17:16,768 And his thirst for attention was leading him to make one bold move after another. 253 00:17:16,870 --> 00:17:19,404 But there were certain things he wasn't sharing with the press. 254 00:17:19,506 --> 00:17:22,407 And it was those that would threaten to undo him. 255 00:17:24,177 --> 00:17:27,378 It's gonna be fancier than ever. The Plaza Hotel is getting a face lift 256 00:17:27,480 --> 00:17:30,882 and the new owners, the Trumps, reveal their ambitious plans today. 257 00:17:30,984 --> 00:17:37,722 The purchase of the Plaza Hotel for $400 million was simply a trophy purchase. 258 00:17:37,824 --> 00:17:43,094 And using junk bond, high interest rate financing, just complicated it more. 259 00:17:44,064 --> 00:17:49,000 I think that Donald thought that he was capable of pulling this off. 260 00:17:49,102 --> 00:17:51,069 You know, I, I think he was delusional. 261 00:17:51,971 --> 00:17:54,839 The first thing that he did was announce to the world 262 00:17:54,941 --> 00:17:59,844 that he was making Ivana Trump the president of the Plaza Hotel 263 00:17:59,946 --> 00:18:02,080 and that he was going to pay her in dresses. 264 00:18:02,182 --> 00:18:05,450 That she could have as many dresses, buy as many dresses as she wants. 265 00:18:06,152 --> 00:18:11,956 I thought the greatest toy that I could give Ivana would be to put her at the Plaza Hotel. 266 00:18:12,058 --> 00:18:15,593 [Kruse] When she started running the Plaza, this created friction. 267 00:18:15,695 --> 00:18:18,262 He was Donald Trump but she was Ivana Trump. 268 00:18:18,364 --> 00:18:22,300 She was becoming a character in her own right. 269 00:18:22,769 --> 00:18:29,373 Donald was so intent on building his empire and Ivana was sort of a piece in the empire. 270 00:18:29,476 --> 00:18:34,045 She was a beautiful, smart woman who could fit into his life. 271 00:18:34,781 --> 00:18:39,617 A lot of women in your position would feel overshadowed by their husband. 272 00:18:39,719 --> 00:18:42,653 -Do you ever feel that? -Not at all. Not at all. 273 00:18:42,755 --> 00:18:47,291 [Brown] I think people forget what a big figure Ivana Trump was in the 80s. 274 00:18:47,393 --> 00:18:51,863 I mean, we did as many pieces about Ivana as we did about The Donald. 275 00:18:51,965 --> 00:18:56,400 Of course Ivana and he together were the ultimate glitzy duo 276 00:18:56,503 --> 00:18:58,703 who were out every night and who you could not miss. 277 00:18:58,805 --> 00:19:05,510 She and he shared a certain aesthetic sensibility of blond and gold 278 00:19:05,612 --> 00:19:08,579 and cosmeticized to within an inch of her life. 279 00:19:09,382 --> 00:19:12,750 [Res] I always thought Ivana would do whatever he asked her to do. 280 00:19:12,852 --> 00:19:15,153 It was always about pleasing him and impressing him. 281 00:19:15,255 --> 00:19:21,225 [O'Donnell] She absolutely worshiped Donald Trump but they had a business relationship too 282 00:19:21,327 --> 00:19:24,896 Now all of us that ran these properties had screaming matches with Donald. 283 00:19:24,998 --> 00:19:29,567 And she did as well. She was not a pushover and anybody that suggests 284 00:19:29,669 --> 00:19:36,007 that she was just didn't know, you know, really how smart and how tough Ivana Trump was. 285 00:19:36,109 --> 00:19:38,509 Is there anything you wouldn't support you man in? 286 00:19:38,611 --> 00:19:43,614 Oh sure. [laughs] Oh sure. I wouldn't support him a few things. 287 00:19:43,716 --> 00:19:49,220 I wouldn't support if Donald would be running around and fooling around. 288 00:19:49,322 --> 00:19:52,456 You know, that I couldn't live with. 289 00:19:52,559 --> 00:19:56,027 I used to say to her, "Ivana, you know, you better keep your eye on the ball here 290 00:19:56,129 --> 00:19:59,964 "because, you know, Donald is young, handsome, and now very rich and powerful." 291 00:20:00,867 --> 00:20:06,370 [O'Donnell] I did see Donald talk publicly about Ivana in a way that he hadn't done 292 00:20:06,472 --> 00:20:11,142 up to that time. It was more negative, more jokingly, putting her down. 293 00:20:12,779 --> 00:20:17,615 And he talked about how women were after him. "This one wants me, that one wants me." 294 00:20:17,717 --> 00:20:22,386 [Fox] He loved beautiful women and he loves something that would stroke his ego. 295 00:20:22,822 --> 00:20:27,458 Trump had spent his entire life believing he can get away with anything. 296 00:20:27,560 --> 00:20:32,263 [inaudible] 297 00:20:32,365 --> 00:20:35,600 As I was writing The Art of The Deal , it wasn't clear to me 298 00:20:35,702 --> 00:20:38,469 that he was simultaneously carrying on an affair. 299 00:20:40,039 --> 00:20:44,408 [Evans] Every year there was an American Booksellers Association Convention. 300 00:20:45,345 --> 00:20:49,113 This particular year was going to be in Las Vegas. Donald said, 301 00:20:49,215 --> 00:20:50,781 "Hey, let's just go out in my plane." 302 00:20:50,883 --> 00:20:55,620 What fun. His plane was set up like a living room. 303 00:20:55,722 --> 00:20:57,855 It was very glamorous, lots of velvet. 304 00:20:58,591 --> 00:21:03,694 And just as we land and are getting our things together, a door opens. 305 00:21:03,796 --> 00:21:06,797 A door to, I think a bedroom or something. 306 00:21:07,600 --> 00:21:12,336 All along, a stowaway, Marla Maples, comes out. 307 00:21:13,606 --> 00:21:18,175 She's been on the plane with us the entire time. I am so shocked, it's like, 308 00:21:18,278 --> 00:21:22,213 I don't know, the scarlet letter or something right in front of me of like, 309 00:21:22,315 --> 00:21:26,984 "Oh." It was such a scandal, you cannot imagine. Everybody's mouth dropped. 310 00:21:27,520 --> 00:21:32,023 [O'Donnell] Marla Maples was a fun loving, "let's have a party" kind of woman. 311 00:21:32,125 --> 00:21:35,893 Ivana and Marla were polar opposites. 312 00:21:36,729 --> 00:21:39,130 [Fox] Marla Maples grew up in Georgia, 313 00:21:39,232 --> 00:21:41,732 she was definitely a southern belle and Georgia peach. 314 00:21:43,102 --> 00:21:48,005 She was someone who competed and won the Miss Hawaiian Tropic pageant. 315 00:21:48,775 --> 00:21:52,543 [O'Donnell] Donald Trump just saw beauty in her and I think he saw youth. 316 00:21:52,645 --> 00:21:56,647 He loved that image so much of being with a younger woman. 317 00:21:58,251 --> 00:22:02,586 One time at a dinner, he said, "I wish you could see her naked." 318 00:22:03,156 --> 00:22:09,694 And I was... I just cringed. Even today it makes me, it makes me uncomfortable. 319 00:22:10,730 --> 00:22:13,531 [Fox] Marla was a struggling, young model. 320 00:22:13,633 --> 00:22:17,735 Each opportunity that you find can be so instrumental in your future. 321 00:22:17,837 --> 00:22:23,240 She had nothing and needed him. And I think he loved that need to be needed. 322 00:22:23,676 --> 00:22:28,212 -My wife Ivana, who's accepted-- -[applause] 323 00:22:28,314 --> 00:22:33,050 [Fox] Eventually, word started to get out that Donald was dating another woman. 324 00:22:33,152 --> 00:22:35,820 And I don't think she wanted to believe it was true, 325 00:22:35,922 --> 00:22:38,289 no one wants to believe that about their husband. 326 00:22:38,725 --> 00:22:42,526 [Carswell] Ivana knew that Donald liked blond, busty women. 327 00:22:42,628 --> 00:22:48,099 So she went to California to meet with Michael Jackson's plastic surgeon. 328 00:22:48,634 --> 00:22:52,803 And she comes back, she no longer looked like Ivana Trump. 329 00:22:53,539 --> 00:22:58,075 I do remember saying to him, "Donald, look at what Ivana is doing for you. 330 00:22:58,177 --> 00:23:01,379 "I mean, she's completely changed every part of her." 331 00:23:01,481 --> 00:23:05,549 And he disdained what she was doing. He was never going back to her. 332 00:23:05,651 --> 00:23:10,221 [O'Donnell] Common sense would tell you that this is not gonna be a secret for long. 333 00:23:10,323 --> 00:23:13,023 And so we were waiting for the blow up. 334 00:23:13,526 --> 00:23:17,561 [Evans] And then all of a sudden the tabloids start churning these stories out 335 00:23:17,663 --> 00:23:22,133 on Marla Maples, Marla with Donald, Ivana, the whole triangle. 336 00:23:22,235 --> 00:23:26,170 [O'Donnell] I think Donald was very shocked by the publicity that he got. 337 00:23:26,272 --> 00:23:32,176 But he also loved it but he believes this philosophy of all press is good press. 338 00:23:32,745 --> 00:23:37,748 He believed if you handle it in a certain way, you can get away with it. 339 00:23:37,850 --> 00:23:43,154 And the affair was not the only big gamble he was making at the time. 340 00:23:43,256 --> 00:23:47,124 At the end of the decade, the brash developer embarked on his biggest project yet. 341 00:23:47,226 --> 00:23:50,928 Donald Trump today opened the doors to his billion dollar gamble, 342 00:23:51,030 --> 00:23:54,598 his new Atlantic City casino, the Taj Mahal. 343 00:23:54,700 --> 00:23:58,169 Financed entirely through debt, the Taj Mahal would need to earn 344 00:23:58,271 --> 00:24:03,808 over one million dollars a day to stay afloat. An amount no casino had ever raked in. 345 00:24:03,910 --> 00:24:07,311 [O'Donnell] I thought that the Taj Mahal was gonna be in desperate shape. 346 00:24:07,847 --> 00:24:10,681 The red flags were up prior to the deal being done. 347 00:24:11,350 --> 00:24:15,519 [Johnston] After Donald Trump gets control of the Taj Mahal, he can't pay his bills. 348 00:24:15,621 --> 00:24:20,958 And it was all Donald's reality running up against the hard numbers of banking. 349 00:24:21,394 --> 00:24:26,864 [O'Donnell] It really was only a matter of time before this stuff was gonna catch up with him. 350 00:24:27,066 --> 00:24:32,136 He was hiding too many things for there not to be a day of reckoning. 351 00:24:32,238 --> 00:24:37,174 His deals were crumbling. Eventually they're gonna catch up with the scam. 352 00:24:37,276 --> 00:24:41,679 [newsreader] Donald Trump, the larger-than-life New York developer celebrity. 353 00:24:41,781 --> 00:24:45,883 Could it be that he's built his empire on 90 percent ego? 354 00:24:45,985 --> 00:24:51,589 The headlines are screaming "death of a legend," calling him the has-been of high finance. 355 00:24:51,991 --> 00:24:54,091 It was time to take him down. 356 00:24:57,363 --> 00:25:00,998 [newsreader] It was a monster parade, even by New York standards.han 357 00:25:01,100 --> 00:25:02,666 to cheer the Mets. 358 00:25:02,768 --> 00:25:06,237 In October of 1986, the Mets' legendary World Series victory 359 00:25:06,339 --> 00:25:09,573 over the Boston Red Sox united New Yorkers in celebration. 360 00:25:10,142 --> 00:25:12,243 [Deveney] The Mets really should have been a dynasty 361 00:25:12,345 --> 00:25:15,246 and perhaps should have won multiple world series. 362 00:25:15,348 --> 00:25:18,782 They had these young players, Darryl Strawberry, Dwight Gooden. 363 00:25:19,752 --> 00:25:21,752 But on the day of the parade 364 00:25:21,854 --> 00:25:25,556 in which The Mets were celebrating the 1986 World Series, 365 00:25:26,192 --> 00:25:30,761 Dwight Gooden is in Queens in a housing project, high on coke 366 00:25:30,863 --> 00:25:36,033 and watching the parade on TV because he's still so high on coke he hasn't left the room. 367 00:25:36,836 --> 00:25:40,304 The Mets were never the same after that. 368 00:25:40,406 --> 00:25:44,241 A drug epidemic that had been ravaging the city didn't spare the Mets. 369 00:25:44,343 --> 00:25:47,311 And down the road from Shea Stadium in Queens, 370 00:25:47,413 --> 00:25:52,082 an even deadlier threat was emerging. Hitting low-income communities hard. 371 00:25:53,519 --> 00:25:57,087 [McDaniels] I grew up in Queens, New York, which was like the suburbs. 372 00:25:57,356 --> 00:25:59,890 We wasn't rich but people would mow their lawn. 373 00:25:59,992 --> 00:26:03,627 And the kids would play in the sprinklers and ride their big wheels. 374 00:26:03,729 --> 00:26:10,501 You had the candy store. You had the delicatessen. You had the real estate office. 375 00:26:11,704 --> 00:26:16,740 In the 80s, I came back to my neighborhood and everybody started looking different. 376 00:26:16,842 --> 00:26:20,177 My friend's sister, who was the sexiest girl in the neighborhood, 377 00:26:20,279 --> 00:26:26,951 came looking like someone out "The Walking Dead." It was a plague when crack came. 378 00:26:27,053 --> 00:26:32,022 [newsreader] Purveyors of the drug cocaine are now selling it in its purest form called crack. 379 00:26:32,124 --> 00:26:35,125 Much of the nation's crack problem is concentrated in New York. 380 00:26:35,227 --> 00:26:39,430 Crack is basically just cocaine with a couple of ingredients added 381 00:26:39,532 --> 00:26:42,299 and you throw it in the microwave. You had a situation 382 00:26:42,401 --> 00:26:46,303 where if you smoke crack, you're going to immediately love it. 383 00:26:46,405 --> 00:26:50,040 [newsreader] Crack is smoked freebase and those who've used crack 384 00:26:50,142 --> 00:26:53,911 describe the drug as the most powerful high they've ever had. 385 00:26:54,013 --> 00:26:59,683 It is what they call "the instant high." Once you ingest it, you're done. 386 00:26:59,785 --> 00:27:05,689 That high that you would get off that freebase would make all your troubles fade away. 387 00:27:06,225 --> 00:27:09,126 [Deveney] That high only lasts about 15 minutes. 388 00:27:09,228 --> 00:27:12,796 When you get through those 15 minutes, you're gonna need more. 389 00:27:13,399 --> 00:27:15,532 [interviewee] You're speeding like 100 miles an hour. 390 00:27:15,635 --> 00:27:18,669 And when the mind is going that fast, it's just normal for you to become violent. 391 00:27:18,771 --> 00:27:21,038 People were out of their minds, literally. 392 00:27:21,140 --> 00:27:24,742 You go through such a low when you're out and you can't get any more 393 00:27:24,844 --> 00:27:25,976 that you're ready to kill. 394 00:27:26,612 --> 00:27:28,278 I remember one case, 395 00:27:28,381 --> 00:27:33,150 this young man had murdered his mother for money to buy crack. 396 00:27:33,252 --> 00:27:35,853 This was going on all over the city. 397 00:27:36,589 --> 00:27:41,225 [Weatherspoon] People sold their souls to not live in their reality. 398 00:27:41,327 --> 00:27:44,762 [newsreader] Crack is cocaine marketed to a lower-income people. 399 00:27:44,864 --> 00:27:49,400 It's a very, very cheaply made drug. You could buy it for five bucks at a time. 400 00:27:49,902 --> 00:27:54,338 [Weatherspoon] Jobs disappear. Housing goes down the tube. Schools are not good. 401 00:27:54,440 --> 00:27:59,443 And then you bring in the drugs and the hustle to make a dollar. And you get it going. 402 00:28:00,012 --> 00:28:04,715 Crack dealers were making so much money off it. It made success easy. 403 00:28:04,817 --> 00:28:10,521 You could sell it for five bucks because you knew that once somebody smoked it once, 404 00:28:10,623 --> 00:28:12,523 they'd be back probably in a half hour. 405 00:28:12,625 --> 00:28:15,793 [chanting] We want our buildings back, no more crime, no more crack. 406 00:28:15,995 --> 00:28:18,228 They have to take a stand, just like we're doing. 407 00:28:18,330 --> 00:28:21,365 If they wanna get these drugs out of the neighborhood, they've got to take a stand. 408 00:28:21,934 --> 00:28:25,235 [Weatherspoon] You have decent people living in poor neighborhoods. 409 00:28:25,337 --> 00:28:27,404 That's where they can afford to live. 410 00:28:27,506 --> 00:28:32,810 While those involved in the drug trade are surrounding them and smothering them. 411 00:28:32,912 --> 00:28:36,280 [newsreader] Crack use has grown so fast that it's outstripping the ability 412 00:28:36,382 --> 00:28:38,816 of law enforcement and drug treatment authorities to cope with it. 413 00:28:38,918 --> 00:28:42,619 This has reached epidemic portions. 414 00:28:42,722 --> 00:28:45,122 [Guilianni] I don't think we incapacitate drug dealers. 415 00:28:45,224 --> 00:28:49,460 We do not put them away for long enough periods of time to really make a difference. 416 00:28:50,663 --> 00:28:56,366 As soon as crack becomes a high profile problem, Giuliani instantly seizes on it. 417 00:28:56,469 --> 00:29:01,305 We do not give 40- and 50-year prison sentences that put the major drug dealers away. 418 00:29:01,407 --> 00:29:05,943 [Byfield] Giuliani earned this reputation as this law-and-order person. 419 00:29:06,045 --> 00:29:09,913 "The War on Drugs." He took that up as a part of his mantle. 420 00:29:10,015 --> 00:29:13,016 We will prosecute the biggest drug cases, the medium-sized drug cases, 421 00:29:13,119 --> 00:29:17,688 and the street drug cases in areas where the local courts for one reason or another 422 00:29:17,790 --> 00:29:20,124 aren't able to deliver a deterrent effect. 423 00:29:20,226 --> 00:29:25,262 [Mahler] As US Attorney, Giuliani decided to demand stricter sentences 424 00:29:25,364 --> 00:29:27,297 for low-level drug dealers. 425 00:29:27,399 --> 00:29:30,968 In most cases, these low-level drug dealers were people of color. 426 00:29:31,070 --> 00:29:35,973 The prosecutor's crusade for stricter federal sentences largely impacted 427 00:29:36,075 --> 00:29:41,311 the city's poorer communities. With mandatory five-year prison terms for dealers and users. 428 00:29:41,413 --> 00:29:43,046 [newsreader] Narcotics police in northern Manhattan 429 00:29:43,149 --> 00:29:45,682 arrest small time dealers almost every night. 430 00:29:45,918 --> 00:29:49,887 While crack is being used in poorer communities, 431 00:29:49,989 --> 00:29:53,457 the people who are using the powdered version of cocaine 432 00:29:53,559 --> 00:29:58,962 all across wealthy communities are not demonized in the press in the same way. 433 00:29:59,732 --> 00:30:05,068 The fear that was generated around crack allowed huge disparities 434 00:30:05,171 --> 00:30:07,471 in arrests, prosecutions, sentencing. 435 00:30:07,573 --> 00:30:10,841 Crack cocaine would get you a ten-year sentence 436 00:30:10,943 --> 00:30:13,477 while cocaine might get you probation. 437 00:30:13,946 --> 00:30:19,183 [Byfield] People didn't think twice about the lengthening of sentencing 438 00:30:19,285 --> 00:30:23,187 and police abuse of power in fighting the drug problem. 439 00:30:23,289 --> 00:30:27,825 [newsreader] This is called Operation Pressure Point. Local police make the arrests 440 00:30:27,927 --> 00:30:32,362 and turn the suspects over to US Attorney Giuliani's staff for prosecution. 441 00:30:32,464 --> 00:30:34,898 I take on things that nobody else has ever taken on 442 00:30:35,000 --> 00:30:38,435 and I accomplish things that others haven't accomplished. 443 00:30:38,537 --> 00:30:41,371 While the prosecutor's tough stance played well in the press, 444 00:30:41,473 --> 00:30:44,775 his harsh policies devastated neighborhood after neighborhood. 445 00:30:46,645 --> 00:30:49,112 Angering many people in those communities. 446 00:30:49,215 --> 00:30:53,083 And it wouldn't be long before they made their voices heard. 447 00:30:55,855 --> 00:30:59,756 By the late 1980s, homicide rates had hit record highs in New York City 448 00:30:59,859 --> 00:31:02,359 and pressure was mounting to curb the violence. 449 00:31:03,829 --> 00:31:05,362 And despite major blows to organized crime, 450 00:31:05,464 --> 00:31:09,867 the US attorney's office had yet to catch public enemy number one. 451 00:31:10,703 --> 00:31:13,270 John Gotti understood power and strength. 452 00:31:14,540 --> 00:31:18,442 [Gabriel] It was important for him to show everyone he was an invincible boss. 453 00:31:18,544 --> 00:31:22,312 You just didn't wanna cross him. To his own people, he was ruthless. 454 00:31:23,382 --> 00:31:25,883 He was a tough guy and he wasn't afraid of anything. 455 00:31:25,985 --> 00:31:29,453 He truly believed that nobody would ever convict him. 456 00:31:29,555 --> 00:31:34,258 The FBI had been hunting the new godfather since he knocked off his boss. 457 00:31:34,360 --> 00:31:37,060 And so far, he'd escaped every trap they'd set. 458 00:31:37,162 --> 00:31:41,398 They knew they had to find a new approach and fast. 459 00:31:43,168 --> 00:31:46,770 [newsreader] Gotti has been tried and tailed for five years now. 460 00:31:46,872 --> 00:31:50,841 In that time never convicted of a crime. Outfoxing the foxes 461 00:31:50,943 --> 00:31:55,445 in a big stakes game of cops and robbers that has made Gotti kind of a legend. 462 00:31:56,415 --> 00:32:01,218 [Gabriel] The government couldn't get him. So by the time he gets acquittal number two, 463 00:32:01,320 --> 00:32:04,788 he's becoming this folk hero even to the mob. 464 00:32:04,890 --> 00:32:09,593 His third acquittal, people are now even more fearful of the mob 465 00:32:09,695 --> 00:32:13,163 because, god, you can't even put this guy in jail, everyone knows he killed the boss, 466 00:32:13,265 --> 00:32:15,198 he's doing all this stuff, you can't touch him. 467 00:32:15,301 --> 00:32:18,502 He was just out there and almost thumbing his nose at law enforcement. 468 00:32:18,604 --> 00:32:23,040 [Mouw] He became a magical figure in the city of New York. 469 00:32:24,009 --> 00:32:26,109 [Gabriel] Everybody was pulling for John Gotti. 470 00:32:26,211 --> 00:32:29,513 They've dismissed how bad of a guy he was. 471 00:32:29,615 --> 00:32:32,049 [newsreader] Gotti is somewhat of a local hero here. 472 00:32:32,451 --> 00:32:34,551 A lot of people said, "Boy, you're never gonna catch him. 473 00:32:34,653 --> 00:32:37,487 "You will never get this guy, he's untouchable. He's beaten all these cases." 474 00:32:37,589 --> 00:32:41,358 And it just created a sort of, almost a frenzy within law enforcement 475 00:32:41,460 --> 00:32:47,030 to try and make a case on him. And at that point, we had already been investigating Gotti 476 00:32:47,533 --> 00:32:51,568 The FBI felt it needed taped conversations. 477 00:32:52,271 --> 00:32:55,839 [Mouw] Our goal was to find out where John conducts his criminal activities 478 00:32:55,941 --> 00:32:59,009 and put a microphone there and record all the conversations. 479 00:32:59,111 --> 00:33:02,579 And it quickly became apparent that John established his headquarters 480 00:33:02,681 --> 00:33:06,383 at the old Ravenite Social Club, 247 Mulberry Street. 481 00:33:07,052 --> 00:33:09,152 And after a few months we are able to pick up a pattern 482 00:33:09,254 --> 00:33:11,855 where he was coming there four to five nights a week. 483 00:33:11,957 --> 00:33:15,025 [newsreader] On the northern end of Little Italy, a brick façade 484 00:33:15,127 --> 00:33:19,062 has replaced a wooden store front. It is the Ravenite Social Club. 485 00:33:20,232 --> 00:33:23,400 And more importantly for us, all the captains of the Gambino family 486 00:33:23,502 --> 00:33:25,102 were summoned to meet him there. 487 00:33:26,538 --> 00:33:29,906 So every night you'd have four or five captains, 30 or 40 soldiers, 488 00:33:30,009 --> 00:33:36,146 the associates in this club or outside the club. Which is a godsend for law enforcement. 489 00:33:37,516 --> 00:33:41,351 [McDonald] We were up doing physical surveillance and listening to devices 490 00:33:41,453 --> 00:33:45,255 for a period of about eight months, struggling to get audible conversations. 491 00:33:45,357 --> 00:33:50,093 There's just a lot of people in a small room, all talking at the same time. 492 00:33:50,195 --> 00:33:54,631 We were getting bits and pieces that led us to understand we were in the right place 493 00:33:54,733 --> 00:33:56,967 but nothing we could indict with. 494 00:33:57,069 --> 00:34:00,537 And a lot of people this time said, "You're wasting your time, you'll never get him." 495 00:34:02,775 --> 00:34:05,275 In the summer of '89 we finally got a nice break. 496 00:34:07,012 --> 00:34:12,582 The FBI found out that Gotti was using an apartment two stories 497 00:34:12,684 --> 00:34:17,654 above the Ravenite Social Club to discuss important family business. 498 00:34:18,190 --> 00:34:21,224 [Mouw] We found out that they're using an apartment up there owned by this widow 499 00:34:21,326 --> 00:34:24,494 named Mrs. Cirelli, whose husband used to be a Gambino soldier, 500 00:34:24,596 --> 00:34:26,329 Mike Cirelli, used to run the club. 501 00:34:27,900 --> 00:34:32,769 [Capeci] One particular weekend, when the widow was out of town, 502 00:34:33,906 --> 00:34:39,076 the FBI got in and they put a bug in her apartment. 503 00:34:40,746 --> 00:34:43,847 [McDonald] We had a location to observe comings and goings 504 00:34:43,949 --> 00:34:47,417 and we were tape recording conversations. 505 00:34:50,522 --> 00:34:52,522 [Mouw] We hear him clomping up the stairs. 506 00:34:54,326 --> 00:35:00,097 We hear the front door open. John Gotti is deaf in his left ear so they had to talk loud. 507 00:35:02,000 --> 00:35:04,234 [Capeci] The FBI captured Gotti 508 00:35:04,336 --> 00:35:10,674 admitting to voluminous organized crime activity as well as murders. 509 00:35:24,456 --> 00:35:28,825 Tape recorded conversations were a gold mine for the FBI. They were a jackpot for them. 510 00:35:29,862 --> 00:35:34,397 [Gabriel] Very much to our surprise, we hear John on a diatribe 511 00:35:34,500 --> 00:35:38,168 about why he killed Paul Castellano. He starts the conversation, 512 00:35:38,270 --> 00:35:42,305 "When that guy Paul got sick." that was Paul died. 513 00:35:42,774 --> 00:35:47,911 You know, here we are, several years after they killed this guy, it was astonishing to us. 514 00:35:48,380 --> 00:35:52,983 Fortunately for law enforcement, Gotti supplied many smoking guns 515 00:35:53,085 --> 00:35:56,987 through his own words. He was intercepted taking about, you know, 516 00:35:57,089 --> 00:36:00,357 ordering the executions of people, saying that he was responsible for their murders. 517 00:36:00,592 --> 00:36:02,192 The smoking gun was Gotti himself. 518 00:36:02,995 --> 00:36:06,696 Just by listening to the tapes that we had, we knew we had a case that was solid, 519 00:36:06,798 --> 00:36:09,366 the game was over. The end was near. 520 00:36:12,571 --> 00:36:17,073 January, 1989. New York City. 521 00:36:17,176 --> 00:36:23,113 A blunt spoken prosecutor with boundless ambition had felled giant after giant. 522 00:36:23,215 --> 00:36:25,582 And now the end game was in sight. 523 00:36:26,018 --> 00:36:29,753 Crime buster, US Attorney Rudolph Giuliani announced that he is stepping down 524 00:36:29,855 --> 00:36:32,923 at the end of this month. He didn't say why but many believe 525 00:36:33,025 --> 00:36:36,693 that he will be a Republican candidate for mayor of New York City. 526 00:36:36,795 --> 00:36:40,363 Giuliani was probably the most effective US Attorney 527 00:36:40,465 --> 00:36:42,199 for the Southern District in history. 528 00:36:44,303 --> 00:36:47,637 During his years as US Attorney, he really changed the nature of the office 529 00:36:47,739 --> 00:36:49,806 so that it became much more aggressive. 530 00:36:51,577 --> 00:36:54,945 Rudy takes down all of the big villains of New York City, you know, a cast of bad guys. 531 00:36:55,047 --> 00:36:58,882 The prosecutor had been hounding the mafia for years 532 00:36:58,984 --> 00:37:02,619 and the last domino to fall would be the Dapper Don himself. 533 00:37:02,721 --> 00:37:06,156 [newsreader] John Gotti, the reputed boss of the nation's largest mafia family 534 00:37:06,258 --> 00:37:09,559 was arrested tonight along with his top three associates 535 00:37:09,661 --> 00:37:13,396 in a move by the FBI to crush the Gambino crime family. 536 00:37:13,565 --> 00:37:15,665 We decided to arrest him at the Ravenite. 537 00:37:15,767 --> 00:37:18,301 And I walked down there later, it was like shock and awe right after, you know, 538 00:37:18,403 --> 00:37:21,137 bombing attack, 'cause there are like 20 Gambino guys in there. 539 00:37:21,240 --> 00:37:24,407 And they're all sitting out there smoking, looking around. They were amazed. 540 00:37:24,509 --> 00:37:29,012 The greatest fear was that John Gotti got arrested. These are like the untouchables. 541 00:37:29,114 --> 00:37:33,216 In many respects, I have to say the guy was a very good wise guy. 542 00:37:33,318 --> 00:37:38,755 But what draws against that is the fact that he did everything so publicly, 543 00:37:38,857 --> 00:37:43,927 made so many stupid mistakes and really brought down the Gambino family. 544 00:37:44,029 --> 00:37:48,531 So where he was a good wise guy, he wasn't good at how he executed it. 545 00:37:48,634 --> 00:37:52,535 [newsreader] Arrested with Gotti tonight was his under boss Sammy "The Bull" Gravano, 546 00:37:52,638 --> 00:37:55,972 his consigliere, or family advisor, Frank Locascio. 547 00:37:56,074 --> 00:37:59,876 And one of his top capos or captains, Tommy Gambino. 548 00:37:59,978 --> 00:38:03,179 If he beats this massive federal case brought on by the FBI, 549 00:38:03,282 --> 00:38:07,450 it could make him the biggest gangster in America since the legendary Al Capone. 550 00:38:07,552 --> 00:38:12,622 If he loses, it's likely Gotti will spend the rest of his life in jail. 551 00:38:12,724 --> 00:38:17,694 And just as he chased gangsters in Queens, the prosecutor also took aim 552 00:38:17,796 --> 00:38:23,466 at traders in Manhattan. His biggest catch? The king of arbitrage himself. 553 00:38:23,969 --> 00:38:26,703 Picture this. Ivan Boesky jail bird. 554 00:38:26,805 --> 00:38:29,572 [Guiliani] The three-year sentence given by Judge Lasker 555 00:38:29,675 --> 00:38:33,843 gives the real world of what happens in criminal proceedings 556 00:38:33,945 --> 00:38:37,180 and in federal courts around this country. A heavy sentence. 557 00:38:37,282 --> 00:38:40,817 Mr. Boesky accepts the court's decision. 558 00:38:41,553 --> 00:38:44,421 He now must pick up the remnants 559 00:38:44,523 --> 00:38:48,425 and try to get on with the business of living 560 00:38:48,527 --> 00:38:51,528 a constructive and useful life. 561 00:38:51,630 --> 00:38:56,433 For Boesky to go from Master of the Universe to a prisoner, surely humbled him. 562 00:38:56,535 --> 00:38:59,703 I think surely it depressed him. 563 00:38:59,805 --> 00:39:04,374 Ivan Boesky, who was used to earning more than a million dollars in a single day, 564 00:39:04,476 --> 00:39:09,279 will now be paid 11 cents an hour for his work at the prison. 565 00:39:09,514 --> 00:39:14,217 Ivan Boesky spent a couple of years at a low security prison out in California. 566 00:39:14,319 --> 00:39:17,687 You go, you do your time and with luck, you know, no one shivs you. 567 00:39:17,789 --> 00:39:23,927 He got shamed. He's not a guy who's gonna be celebrated in gossip columns. 568 00:39:24,029 --> 00:39:27,197 He's gonna be, guy's gonna walk down the street and people are gonna whisper, 569 00:39:27,299 --> 00:39:30,800 "Hey, that's Ivan Boesky. That's the guy who went to jail." 570 00:39:30,902 --> 00:39:33,303 He's got a scarlet letter on his head. 571 00:39:34,206 --> 00:39:36,806 But people are capable of having second acts. 572 00:39:39,044 --> 00:39:44,114 And there was the Queen of the Palace herself, prosecuted for tax fraud. 573 00:39:44,216 --> 00:39:46,649 Many embittered associates testified against her 574 00:39:46,752 --> 00:39:51,888 but in the end, it was her own words that would truly seal her fate. 575 00:39:51,990 --> 00:39:57,794 Leona's line that only the little people pay taxes resonated so much 576 00:39:57,896 --> 00:39:59,996 after this exhausting decade 577 00:40:00,098 --> 00:40:05,335 of the big shots getting richer while others were not. 578 00:40:05,437 --> 00:40:10,840 Here was a perfect expression of the ruling class. 579 00:40:10,942 --> 00:40:14,611 She has a reputation that is a woman who really has no scruples. 580 00:40:14,713 --> 00:40:19,749 Greed will do you in and I guess that's what they, motto that they live by. 581 00:40:19,851 --> 00:40:22,852 After a two-month trial, a jury found her guilty. 582 00:40:24,222 --> 00:40:27,424 [Devita] Leona Helmsley was convicted of income tax evasion. 583 00:40:27,526 --> 00:40:31,161 She was convicted of aiding, assisting in the filing of false tax returns. 584 00:40:31,263 --> 00:40:36,266 She was convicted of mail fraud in connection with her New York state income tax returns. 585 00:40:36,368 --> 00:40:40,637 [Feldshuh] She stepped over bodies to make sure she had her marble dance floor. 586 00:40:40,739 --> 00:40:42,705 And that was her downfall. 587 00:40:42,808 --> 00:40:48,211 She was brought to account for her misdeeds. 588 00:40:48,313 --> 00:40:52,182 [newsreader] Many New Yorkers consider her the personification of greed. 589 00:40:52,284 --> 00:40:57,687 Leona Helmsley had become a symbol of excess and of greed 590 00:40:57,789 --> 00:41:00,557 and of just how money can just make someone awful. 591 00:41:00,659 --> 00:41:04,961 Leona Helmsley was so awful that even Donald Trump took pleasure in her fall. 592 00:41:05,063 --> 00:41:07,063 Harry would never fire him, he's... [inaudible] 593 00:41:07,165 --> 00:41:10,700 Perhaps unsurprisingly, she immediately planned an appeal. 594 00:41:11,436 --> 00:41:18,041 I have done nothing wrong. I'm innocent. My only crime is that I'm Leona Helmsley. 595 00:41:22,113 --> 00:41:24,747 As the decade's icons faced a day of reckoning, 596 00:41:24,850 --> 00:41:29,252 the former sheriff of New York moved to seize control of the whole city. 597 00:41:29,621 --> 00:41:31,387 [announcer] The man who's gonna be our next Mayor, 598 00:41:31,490 --> 00:41:34,991 who's gonna give the City of New York back its soul, Rudy Giuliani. 599 00:41:35,093 --> 00:41:37,360 [applause] 600 00:41:37,462 --> 00:41:39,929 [Kirtzman] In New York there's no greater stage than mayor. 601 00:41:40,031 --> 00:41:43,366 The mayor is the center of the tabloid's focus. 602 00:41:43,468 --> 00:41:48,238 New York is a city overwhelmed by crime, crack, and corruption. 603 00:41:48,340 --> 00:41:52,208 There was a sense the New York was out of control and Giuliani, 604 00:41:52,310 --> 00:41:57,180 his whole thing is control. And so it was a natural office for him to run for. 605 00:41:57,282 --> 00:42:02,919 Now is the time to take our city back from the violent criminals on the streets 606 00:42:03,021 --> 00:42:06,055 and the white collar criminals in their office suites. 607 00:42:06,157 --> 00:42:12,228 Coming in as a hard lying guy, the cops are backing him, the days are numbered for that. 608 00:42:12,330 --> 00:42:16,199 The candidate's years of combative tactics would lead to his own day of reckoning 609 00:42:16,301 --> 00:42:20,937 when he faced his toughest opponent yet: the citizens of New York City. 610 00:42:21,039 --> 00:42:24,240 Before the night is over, New Yorkers will either elect David Denkins, 611 00:42:24,342 --> 00:42:26,709 the first black mayor of New York City history, 612 00:42:26,811 --> 00:42:29,212 or one-time US Attorney Rudolph Giuliani 613 00:42:29,314 --> 00:42:31,481 will become the first Republican mayor in 20 years. 614 00:42:31,583 --> 00:42:35,084 For a person who had mastered the New York media, 615 00:42:35,186 --> 00:42:39,622 Giuliani's mayoral run was a total disaster.