01x04 - 1986-87: Secrets & Lies

[bunniefuu]

[Narrator] New York City.

[Woman] Happy new year!

At the dawn of the 80s it
was exploding with opportunity.

[Newsreader] Boom times,
that's what the numbers signal today,

an economy that's on a roll
in this country.

A place to seek money,
power, fame.

Amid the glitz and greed,
five titans seized their moment.

But in 1986, we started to learn the
very dark secrets behind their success.

A striver from Detroit had transformed
himself into a titan of wall street.

[Ivan Boesky] You have to
understand that I'm a professional.

But his house of lies was
about to collapse.

[Bryan burrough]
Ivan knew once levine

started talking that he
was dead. He was dead.

A real estate star had seemingly
perfected the art of the deal.

But could not run his debts
for long.

[Donald Trump] We'll talk
about that later I suspect.

The queen of the palace had
turned meanness into a winning brand.

[Leona Helmsley] I'm a woman.
I'm a tough business woman.

But her subjects
were about to revolt.

[Tovah Feldshuh] She had fired
enough people,

acted in an imperial way,
people were open for blood.

And as Gotham's new hero
went after his biggest villains yet...

[Rudy giuliani] They do not pay
millions of dollars in taxes.

[Graham weatherspoon] Giuliani
has always been out for giuliani.

The dapper Don looked
danger in the face...

[Jerry capeci] The button
was pushed. The car blew up.

And laughed.

[John Gotti] I know
you didn't believe I was guilty.

People asked did he have
a guilty conscience?

Guilty smilty. There was such a
sense of every man for himself.

She said well you should
have kept your pants on.

If you kept your [expletive] in your
pants you wouldn't have such problems.

[James b. Stewart] I remember
when that news struck.

It was like all the air went out of
the room. Paranoia ran rampant.

These five titans would reshape
the city and the world we live in today.

And when in 1986 we
began to see them for who

they really were,
it was already too late.

A new gilded age defined by opulence
and extravagance was reaching its apex.

New York City,
all by left for dead less than

a decade ago had
been shocked back to life

by an expl*si*n of development,
culture, and

money. It looked like the
party would never stop.

But looks, as they say,
can be deceiving.

[Newsreader] Investment banker,
Dennis levine,

has been arrested and
charged with insider trading

[newsreader 2] Dennis levine
collected $12.5 million in ill*gal profits.

He did it by gaining advance
knowledge of 54 pending takeovers.

[Dennis levine] I now realize
that I committed very serious crimes

which I'm very sorry and it was
a very painful lesson to learn.

[Newsreader 3] Rudy giuliani,
us attorney for the southern district,

was the driving force
behind his arrest.

[Bethany mclean] He's young
and he's incredibly aggressive.

And he takes those same techniques that
he had used to bring down mafia figures

to go after
white collar criminals.

[Jeff madrick] What credit it will do
to my reputation says Rudy to himself.

[Newsreader] Was anyone else
involved in this at all? Knowingly?

Yes, at this point, though,
I can't identify anyone else.

No one else
has been publicly identified.

[Ken auletta] When the Dennis
levine news broke in the press,

the reaction on wall street
was shock.

One rotten apple. Get rid of him.
This is not typical of our industry.

[Andrew Ross sorkin] At the time
this information was flowing everywhere.

Nobody thought anyone
was ever gonna get in

trouble. It almost
became part of the culture.

[James b. Stewart] What Dennis himself had
done was bad. But it wasn't cataclysmic.

The reason Dennis levine
was cataclysmic

was because what he knew.
Who he knew.

Ivan Boesky, the man. He
became the biggest in his profession.

His meteoric rise to the top
of wall street was built on lies.

And with his web of deceit
about to unravel,

he would discover that there
was no honor amongst thieves.

Ivan Boesky made a lot of money.

His assets in 1986
came to about $131 million.

He was clearly
one of the wealthiest people,

had amassed one of the
great fortunes in the 80s.

What's the biggest
payoff day you have ever had?

How much... a tacky question,
I'm sorry.

Well we don't,
we don't talk numbers.

[Stewart] Ivan Boesky had to have
known that he was now in mortal danger.

The day Dennis levine was arrested in 1986,
and that news went out,

Ivan Boesky came out
of a conference room.

Someone in the office said,
"hey look at this",

"did you hear this news?
Dennis levine was arrested."

And he said, "who?"
He said, "Dennis who?"

And they said, "Dennis levine."
He said I've never heard of him.

Now Dennis levine made promises
to his collaborators all along

that he'd be a, "stand-up guy
who would never talk."

Dennis levine turned out
to be a chatterbox.

[Newsreader] In return for a lighter
sentence he agreed to tell all he knew.

And what he knew was dynamite.

[Madrick] Dennis levine
ratted on Ivan Boesky.

He should have known
that was possible all along.

The fact that Boesky would
associate with levine was an example

of the deep nature of his greed.

It shows how ambitious and blind
Ivan was in the pursuit of money.

[Gary lynch] I was shocked. When Dennis
levine provided the name of Ivan Boesky

it was clear that this would be even
bigger so we geared up for a lengthy fight.

And we launched an investigation of
Ivan Boesky with a barrage of subpoenas.

[Harvey pitt] The notion that there
were 27 subpoenas made it quite clear

that this was
a massive investigation.

I thought we were in for a,
you know, a long, long fight.

I called Ivan Boesky and
told him about the subpoenas.

And I suggested that we needed
to have a face-to-face meeting.

Boesky's lawyers said,
"look, you're guilty."

"You've been doing this
rampantly. You have no defense."

And your only hope is to cooperate and
get some lenience. So who can you give up?

People asked did Ivan Boesky have
a guilty conscience? Guilty smilty.

Ivan knew once levine started
talking that he was dead. He was dead.

It was such a sense
of every man for himself.

Ivan Boesky had
very intense drive

to climb the social
and financial ladder.

He lived in his image.

He wanted to be accepted.

[Stewart] And now he was panicking.
This was gonna come crashing down on him.

I'm sure he called
his lawyer right away.

He basically had a
lawyer joined at the hip.

Mr. Boesky made the decision

to initiate settlement
discussions with the sec.

[Lynch] Ivan Boesky was ready to
provide very intriguing information

about other people involved
in ill*gal activity.

I mean this is like John Gotti stuff.
You know omerta, you shouldn't talk.

This is not the mafia.
These people, they're affluent.

They don't wanna spend
the rest of their lives in jail.

They are going to start
turning on each other.

And who could Ivan Boesky offer
to help reduce his own sentence?

No less than the most important
person in American finance.

[Newsreader] Junk bond king,

Michael milken, the financier who has
transformed American corporate finance.

[Newsreader] Milken is said to be the
most influential money man on wall street.

For giuliani who was trying
to make a point about greed,

about wall street,
about insider trading,

milken was the holy grail.
The white whale.

New York,


money men were
skating on very thin ice.

While further up
town in a once bustling

part of the city,
no one was skating at all.

[Newsreader] Remember the
wollman skating rink in central park?

It was supposed to reopen
this weekend finally.

Across from the Plaza hotel,
this icon of New York,

in central park there was
an ice skating rink.

And people loved it. I mean even if you
didn't ice skate there just looking at it,

it was just a wonderful thing in the city
in the winter. And the mechanicals failed.

The city kept saying it's gonna
restore wollman rink. And failed to.

Much to the embarrassment
of ed koch.

People were annoyed. And
Donald Trump saw an opportunity.

[Auletta] Trump, from his office,
could look down upon the wollman rink

and in his brash way said,
"I can restore it in a year."

Ed koch doesn't want
trump touching this

thing. He doesn't want
anything to do with him.

So Donald starts
a little campaign.

You know koch is trying to
deny the people this glorious Jewel.

[George arzt] Koch just believed
that Donald was a massive bloviator.

[Trump] The city of New York had
that rink closed for almost seven years.

It was a total disaster.

You know it, I know it. Everybody
knows it. I got fed up watching it.

And I offered to build it.

So koch gives in.

[Belmont Freeman] Trump milked
the wollman rink to the Max

for his own PR purposes.

It was a victory for Donald Trump.
And was a defeat for ed koch.

I give ed koch tremendous credit
for having the courage to say,

"Donald, go and do it."

[Ed koch] You just saw
the modest Donald Trump.

[Gil Troy] Give him credit. The koch
administration is absolutely paralyzed.

They cannot fix
wollman skating rink.

Donald Trump came
along and said "I can do this"

"in six months." And
he got it done in five.

[Cheering]

[Trump] It's been a tremendous
success. We opened last weekend.

We had the biggest crowds in the history
of the rink. And in the history of america.

[Belmont Freeman] It later came
out that he accomplished this feat

largely by screwing
all the contractors.

[Michael kruse] Trump, in essence,
was going to pay some of the people

who were fixing wollman rink

in attention. He was going to pay them
in hype. Once wollman rink was fixed,

trump emerged as the king of the hill and
did not ultimately share that spotlight.

In reality what, what he was asking us to
do was to supply the services for the rink

and to dispense
with any profits or expenses.

[Newsreader] How you
get things done? And

come in under budget?
I mean what's the trick?

Well it's a lot of work and it's
knowledge and it's a lot of things.

It's a whole vast coterie of things.
And we'll talk about that later I suspect.

The developer from queens had delivered
on his promise in his own unique way.

A feat that would only burnish his
myth in the minds of new yorkers.

But he wasn't the only
real estate magnet making news.

For years now his
fiercest rival had also been

reaping the reward of
an empire built on image.

Harry's owned
about 200 buildings.

And now she was hard at work on
the newest monument to her ego.

I own this. I own this.
I own this. And that one.

One that would prove to be
her undoing.

[Newsreader] Leona
Helmsley rules her

kingdom like she's the
star of her own movie.

Her co-star is her husband, Harry,
a man of unimaginable wealth and power.

Together they oversee
this extravagant property.

[Charles bagli] When the helmsleys
bought dunellen, Leona took charge

of the renovations.
And renovation aplenty.

She loved making it beautiful.

[Newsreader] The
helmsleys spent $4 million

refurbishing their 28-room
estate in greenwich, ct.

Including a marble dance floor above
one of their two pools for $1 million.

They installed an expensive
indoor-outdoor stereo system

and spent thousands more on landscaping,
art and ornaments.

At dunellen when she signed a
contract with a contractor to do some work,

she was always renegotiating
downward.

[Feldshuh] On one deal she
just refused to pay the contractor.

The contractor said please,
I have six children.

And she said, "well you should
have kept your pants on."

"If you kept your [expletive] in your
pants you wouldn't have such problems."

[Bill Dowling] Everyone was afraid of Leona
Helmsley because of that reptilian brain

she had where she could
turn on you in a split second.

I'm a woman. I'm a tough
business woman. What

is that got to do,
I'm running a business?

[Dowling] You could think that you
were her favorite employee in one minute.

And find yourself out on
the street the next minute.

One day she started
berating a highly

respected member of
Harry's management team.

And told Harry
he had to fire him.

"And Harry said, 'I'm not gonna fire him,
he's one of my oldest associates."

And that's when she said,
"if you don't fire

him,
I'm gonna stop having sex with you"

"and move to the apartment in palm beach."
I thought Harry would never fire him,

he's too loyal to him,
he wouldn't do it.

But Harry came in that day
and he fired him. [Laughs]

Harry Helmsley was known for
being as extremely ethical, honest man.

But she changed all of that.

She did not care at all
about anyone else. She

did what she wanted
to do. And that was it.

And she hurt a lot of people.

[Feldshuh] There was a period called
the bloodbath. When Leona Helmsley

fired four of Harry
Helmsley's stalwarts that

had been in his
organization for decades.

Those that were fired...

Either thought they were
our partners, undeclared,

they had their hand
in the cookie jar. All right.

Or they just
couldn't cut the mustard.

But Leona Helmsley
forgot the most important

lesson which is you
keep your friends close

and you keep your enemies
closer.

In December of 1985,
a tipster called the New York post.

And claimed that he had information
on the helmsleys that would clearly prove

that they were defrauding the united
states government, in several areas.

She was trying to construe

personal expenses
as business expenses.

She regarded dunnellen as a place
of business. Not as a mere residence.

So everything had to be charged for
dunnellen through the business of course.

She had no ethics whatsoever.
She was a conniver, a schemer.

She was always trying
to manipulate things.

She thought nothing
about cheating on taxes.

"When the headline came out,
'Helmsley scam bared"

it was a k*ll.

She had fired enough people,

acted in an imperial way
enough times,

people were open for blood

[newsreader] Former friends
and employees lined up

to spill the beans
on Leona's tyrannical behavior.

[Elaine Gordon] She was greedy.
She was mean.

She was all the things that they wanted to
accuse her because she flaunted her success

they have no right
to evade the taxes.

Hang her, man.
Hang her, that's what I think.

The people of New York, having once
bought into the whole glamorous package,

had now viciously turned
on their one-time queen.

But it was one prominent new
yorker who jeered the loudest of all.

[Glenn plaskin] Donald and Leona
did not like each other.

I think that Donald felt that Leona
had tarnished Harry Helmsley's name.

He called her a disgrace to humanity.
Truly evil, sick, a living nightmare.

[Newsreader] On Leona Helmsley,
I feel sorry for Harry.

[Laughter]

So that wasn't too positive.

Let's say I'm the [inaudible],
that isn't a crime.

That's not a crime being how
I've done nothing criminal.

The same headlines that used
to bolster this real estate empire

were now being used
to tear it down.

It was the biggest new
York story there was.

And it played right into the hands
of one very ambitious law man.

Leona Helmsley, again another New York
figure that people kind of loved to hate.

It was a no lose situation
for giuliani to go after her.

[Kurt andersen] It was just
a good move to say oh no,

but look the rich and powerful
will you know face consequences.

It is now alleged that, that they did
not pay millions of dollars in taxes

that they were required
by law to pay.

[Kirtzman] He was on the side
of the angels

and also it was such
a larger-than-life tabloid story

then that was kind of
a home run for him.

I'm innocent. My only crime
is that I'm Leona Helmsley.

[Newsreader] The bold,
the brave and the beautiful

rummaged through
their costume collection

and came out tonight for
the opening of the palladium.

By the mid 80s,
New York's nightlife scene had become

one of the most exciting
in the world.

And new yorkers felt free to
explore anything and everything.

The city had become
a fantasy land.

[Michael musto] New York
had become known as fun city.

Clubs would put on shows
and extravaganzas.

[Susanne bartsch]
New York was exploding,

everyone was indulging,
couldn't get enough.

[Michael holman] New York had an attitude.
And we just wanted to be part of it.

[Newsreader] Is it a success?

[Steve Rubell] I don't know, is it?
You tell me. I don't know. I hope so.

[Peter gatien] There was just like
sort of a organic synergy in the city.

But it felt very decadent
and, and hedonist also.

And it wasn't just g*y.
It wasn't just straight.

Everybody was exploring their
own identity and cultures were mixing.

[Holman] To come share their stories,
that's when we met like minded souls.

Incredible.
Fantasy world come alive.

Drink till you drop.

People needed to go out
to meet other people.

And the main motivation was
to actually to hook up.

It was complete freedom.

Susanne bartsch became one
of the main a-club promoters.

She would have a performer at her
parties named lady hennessy brown.

Her talent was kind of squirting milk
out of her breasts at the crowd. On cue.

People would come with umbrellas, coffee
cups. We did everything. Nobody cared.

You could live this incredible
fantasy life till you dropped.

New yorkers were living louder
and larger than they had for years.

But a terrifying change
was in the air.

[Newsreader] The lifestyle
of some male h*m*

has triggered an epidemic
of a rare form of cancer.

[Jonathan mahler] A story
appears in the New York times

that there has been a cancer
identified in the g*y community.

I got a call that a friend
of mine named hibiscus,

who was with the San Francisco
drag troop, was sick.

He died very quickly of horrible horrible
symptoms. They called it the g*y cancer.

[Newsreader] Many victims get a rare
form of cancer called kaposi sarcoma.

Others get an infection known as
pneumocystis pneumonia.

Researchers know of 413 people who have
contracted the condition in the past year.

Started hearing rumors, starting
to lose friends or friends of friends.

Guess who else has it?

Guess who just died?

Then you'd run
into an old friend

and they looked very
thin and had sort of a

grayish pallor and
you realized they had it.

A*DS. Acquired immune deficiency syndrome
is a terrifying mysterious disease.

And it's k*lling
a lot of people.

[Newsreader] Almost half the
known cases are in New York City.

And we didn't know much
about what this virus was.

Nobody knew for sure
how you got it.

[Allison field] A*DS is baffling there is
no known cure. No one knows what causes it.

We didn't know if you
could get A*DS from

kissing someone,
from saliva, from sneezing.

There was fear that if you touched
someone with A*DS you could get A*DS.

It created an atmosphere
of downright panic.

It was a monster. People didn't go home
with each other anymore. That was huge.

Suicides shot through
the ceiling in the 80s.

A*DS was so horrific that
people preferred to take their life.

Sometimes people come in
and meet a stranger

and ten minutes later
you see 'em leaving.

That you're not seeing anymore.

Before A*DS it was like you went and had
sex with somebody different every night.

Tonight there's a padlock
on the mineshaft.

[Newsreader] To the g*y men who went
to the mineshaft, the whips and chains,

the anonymous sex there,
provided a sexual fantasy land.

But reality closed the bar's
doors early this morning.

And the city hopes the courts
will close them for good.

Places where death can be distributed,
we don't want that to go on.

This place is not selling
death anymore than

the heterosexual
clubs are selling death.

They don't give a
damn about it apparently

because it's going on
and they're making money.

No g*y men in this city wants to die. Nor
does he want his friends and lovers to die.

People were dropping left, right
and center. It wasn't just g*y people.

[Newsreader] It's not only h*m* clubs
that are affected by this new regulation.

Heterosexual sex clubs
are also being targeted.

[Larry Levinson] We permit people
to have sex if they so desire here.

[Newsreader] a**l intercourse
and fellatio here?

We never had a situation we had to
make a rule on something like that.

Over time we started to see who was dying
and why. Are they straight? Were they g*y?

Were they doing drugs?
Were they wearing

protection? Were they
not wearing protection?

There's a new HIV
infection every single minute.

There's a new A*DS
death every half hour.

[Newsreader] There are
an estimated 200,000 people

in New York City today
who sh**t drugs.

The majority of them,
according to experts, share their needles.

And that majority, they say, is not only
sh**ting heroin or cocaine, but also A*DS.

[Quiet music playing]

The community was torn
between grief and terror

and rage that no one was doing
anything about it.

[Mahler] It became a real
political problem for mayor koch

because he is getting a lot of pressure
from the g*y community to do more.

[Musto] You're spending half your
time in hospitals visiting or at funerals.

And there was a hopelessness and
you know why isn't anyone helping us?

It wasn't until act up formed in 87 that
you could focus all of those emotions.

Protesters denounce ed koch in
a bitter demonstration over A*DS.

[Newsreader] An army of 2500
protesters were mobilized by act up,

the coalition of g*y groups.

And their target was a
man who's long expressed

sympathy for their
community. Mayor ed koch.

We're letting koch
know that we're not

going to tolerate his
k*lling New York City.

[Crowd protesting]

We're dying. The city is dying.

We're willing to discuss with them
where they think we can do more.

We'll look at any proposal they have.
It all has to be within our fiscal means.

People with A*DS live in
the streets of New York City.

And that's the policy of this
administration. It's not a mistake.

We, who are proud of being g*y,
are sick to death of being made victims

by those who are ashamed
of being g*y.

For koch, there's a lot of countervailing
pressure, not to devote any resources.

To devote any meaningful resources,
or to put any real energy

behind the effort to combat A*DS
would have just played into his critics.

For koch,
it was no secret that he was

rumored to be a closeted
h*m* himself.

This has nothing to do with sexual
orientation, with what you do in your home.

[Mahler] Koch had years to do something,
to do more. And really did nothing.

I mean it's one of
the most shameful

aspects of koch's
legacy. Koch really fails.

The glitz and glamour were fading
and the fun had turned into fear.

The fantasy was coming
to an end.

As the 80s wore on,
a rot was setting in acroet.

A stunning arrest had left traders
with dark secrets of their own

scrambling
to keep up appearances.

But one financial wizard
knew the game was almost up.

And he'd play his final hand
in a bid to save himself.

[Stewart] Boesky's lawyers said,
"you're guilty."

"And your only hope is to
cooperate and get some lenience."

Boesky agreed to act as an undercover
agent on behalf of the government.

Making a deal with
Boesky was going to

allow giuliani to bring
down Michael milken.

Michael milken

he wasn't just a big fish.
He was the biggest fish.

Mike milken
is only 42 years old.

And yet in 1986,
Manhattan ink magazine said

he may have earned
over $200,000 million.

This is how big Mike
milken was. If he wrote a

letter saying he could
finance a very big deal

maybe a couple
of billion dollars,

that letter was like money to
wall street. Nobody doubted it.

[Newsreader] Milken has raised
millions

by selling high interest, high risk
junk bonds to take over companies.

Including $600 million for a
deal involving Ivan Boesky.

If you were Ivan, the most important
person in the world is Michael milken.

The takeover era,
none of it happens without Michael milken.

He is the wizard of oz
that makes it all possible.

He creates the sea that
Ivan Boesky swims in.

[Madrick] Milken had
a lot of information

about deals because
people would come to him

to finance their bids
for another companies.

[Stewart] Part of this relationship
was milken would tell Boesky

that he wanted him to take
positions in various companies.

Boesky did it.
None of this was disclosed.

Milken would get half,
Boesky would get half.

That's ill*gal. Boesky was a foot
soldier compared to Michael milken,

the general who
orchestrated takeover after

takeover. And they
developed this relationship

where eventually milken raised a
billion dollars in capital for Boesky.

Michael milken was the king fish
and if he could bring the king fish down,

why wouldn't they give him
a deal?

[Stewart] Ivan Boesky was over.
He was dead.

And so he agreed to cooperate
with the government.

And wear a wire and meet
with Michael milken.

So he went out to Los Angeles
and set up a meeting.

Where else? Well, Ivan Boesky's hotel,
the beverley hills hotel.

[Pitt] When Mr. Boesky
was outfitted with a wire,

the agent who was assigned
to the case

gave him a t-shirt for him to wear,
to which the wire would be attached.

This was problematic
because Mr. Boesky was known

to break out in a rash

if any material
worth less than $600

touched his skin.

Nonetheless,
he put the t-shirt on and wore the wire.

[Stewart] The drama
of that meeting

where Boesky knew he was
recording the most important man

in American finance,
and was in the course of implicating him,

somebody must have been sweating
in that room. Maybe they both were.

It didn't start as well as Boesky
might have been hoping for.

It wasn't like milken stepped right up and,
you know, helped himself to a fruit plate

and then started saying, "oh right Ivan,
remember when we did this, this and this.

"And what we're gonna do
about it"?

But then Boesky brought up
a $5.3 million payment.

[Pitt] At some point in their business
relationship there was a demand

for a payment by Mr. Milken
of $5.3 million.

[Stewart] And milken didn't say, "oh I
don't know what you're talking about."

Or "where did that come from?" He
knew about the $5.3 million payment.

Boesky said something like, "you know I
think I still owe you more money on that."

"How should I pay you?"

That was as close as there was

to what in common verbiage
would be called a smoking g*n.

[Stewart] Michael milken
was doomed.

[Newsreader]
On this Columbus day,

the man leading the parade
as grand Marshall

was Rudolph giuliani. If he is a
hero to Americans of Italian descent,

it may be because he has attained
the prestigious position of us attorney.

It may be because he has come to be
regarded as the most dynamic crime buster

since the days of Thomas Dewey
in New York City. Or it may be

because he has jailed the heads of four
of the five mafia families in New York.

[Jerry capeci] Once Gotti
k*lled Paul Castellano

obviously he became
public enemy number one.

[George Gabriel] The focus
is on John and his power.

He made himself the target
'cause he was the boss.

It just created a sort
of a frenzy within law

enforcement to try and
make a case on him.

[Capeci} It's something that
we have to go after right now.

We gotta go get Gotti.
We gotta go get Gotti.

A celebrity godfather unlike anything
the world had ever seen before.

[Bruce mouw] He looks the part,
like a rock star.

He's living the life.

The more famous he got, the more the public
seemed to forget how ruthless he was.

Whenever I see him walking he
always has a marvelous smile on his face.

In fact I admire
the way he dresses.

And the feds were growing
increasingly frustrated.

John fancied himself to be
a mobster's mobster.

It was important for him
to show everyone he was the...

Not just the toughest as far as fiercest,
but he was an invincible boss.

You just didn't wanna cross him.

[Newsreader] Earlier this year,
Romuald Piecyk

, a refrigeration mechanic,
accused Gotti

and an associate of beating and robbing
him in a dispute over a double parked car.

I mean that's just typical John. Commands
power over hundreds of ruthless people.

And he gets into a parking dispute with a
guy and gets out of the car and smacks him.

"You don't know who I am?" And
the guy didn't really know who he was.

[Newsreader] When the victim,
Romuald Piecyk, learned who Gotti was,

he suddenly couldn't remember
who hit him.

Romuald Piecyk knew
not to be in court

pointing his finger at the boss
of the Gambino crime family.

He all of a sudden got amnesia.

He wouldn't testify,
he knew nothing.

And it became known
as the "I forgotti case."

John Gotti walked out of court
a free man.

Because he was so respected and feared,
he had a banner that you can't touch him.

So he was doing
whatever he wants.

Law enforcement officials
decided we definitely

have to figure out
a way to stop him.

The eastern district started
their own case on John Gotti.

Based on historical rico,
some hijackings, some other stuff.

[Capeci] So John Gotti
was charged with m*rder,

with being involved in several
racketeering activities along the way.

Including loan sharking,
gambling...

[Newsreader] It's alleged
that Gotti operated

out of the Bergen
hunt and fish club.

From there, he led his men in
an number of criminal activities,

including extortion,
racketeering and m*rder.

The expectation, really, from the
squad was he was gonna get convicted.

When he showed up at the courthouse,
there were more news reporters

and cameras there than had
ever been there before I think.

[Newsreader] Mr. Gotti,
are you concerned about the trial?

[Capeci] He had a smile on his
face and when he was asked...

[Newsreader] Are you the new
head of the Gambino family?

You know, about being the boss
of the crime family,

he said I'm the boss of my wife
and kids at home.

This is how brazen this guy was.

At his own trial on a break,
he singles me out in the back of the room,

"hey who are you?"
So I told him who I was.

I said, "yeah, you know,
I work on the Gambino squad

with Bruce mouw." He said, "oh well
you go back and tell Bruce I'm going home."

I said, "all right I'll deliver
the message. I'll tell you what."

"You go home, I'll come
and congratulate you."

[Bruce Cutler] Do you know what
was meant by that?

Do you know what was in
Mr. Gotti's mind when he said that?

[Investigator Wright] Yes sir.

You read his mind?

I think it's fairly obvious...

Do you know what's in his mind now,
investigator Wright?

No, sir, I do not.

Take a look at him and tell
me what he's thinking about.

I wish I knew.

[Capeci] Bruce Cutler
was John Gotti's attorney.

He was an outspoken,
in-your-face defense lawyer.

At John Gotti's trial he
picked up the indictment

and slammed it into
the waste paper basket.

And said it was garbage.

In a New York courtroom today
there was elation and shock.

John Gotti is said
by federal prosecutors

to be the newest,
most powerful mafia...

The trial lasted half a year.

[Newsreader] Witnesses allege that
when the verdict was read, Gotti smirked

and shouted at prosecutors,
"shame on them."

[Capeci] It was
a stunning victory for him.

And a stunning defeat
for the government.

My partner and I the day of his
acquittal just go right to the queens club,

that's where this guy's going.

We see John, I jump out of
the car and I walk up and said,

"right I don't know
if you remember me,"

"I'm George Gabriel, I told you I'd
come and congratulate you if you won."

"Congratulations.
I'll be seeing you."

Thank god they weren't armed because
John probably thought he was getting hit.

[Capeci] As it turned out,
however, it was a bogus acquittal.

The jury had been
bought and paid for.

One of the jurors agreed on a price
of $60,000. Which they gave to him

and he was to hold out
during the trial.

And he was one of the reasons
why they got an acquittal.

[Capeci] During deliberations,
the juror

convinced the jury that
John Gotti was not guilty

of the crimes
that he was accused of.

[Gabriel] By the time be gets
acquitted from that trial,

he's becoming this folk hero,
even to the mob.

The government can't
get him. People are now

even more fearful of the mob because,
god,

you can't even put this guy in jail.
Everyone knows he k*lled a boss.

He's doing all this stuff.
You can't touch him.

The guy against whom charges
could not and would not stick.

You'll never get this guy.
He's untouchable.

In New York today they are
calling John Gotti the teflon Don.

But it wasn't just law enforcement who
had a score to settle with this mob star.

He'd broken the rules of la
cosa nostra by k*lling the boss.

And now the families
wanted blood.

The genovese family and
lokasi family were really upset.

Cause they liked Paul
Castellano and he's a

traditional boss. There's
no reason to k*ll him.

k*lling the boss is
like the cardinal rule

you just don't go and
do that. That was nuts.

The lokasi and genovese crime families
decided that Gotti had violated the rules

and was deserving of death
for having k*lled his boss.

Police in New York City are
worried about a mob w*r this morning

after an apparent gangland k*lling Sunday
in Brooklyn. A car b*mb k*lled one man,

reportedly a lieutenant in one of the
country's most powerful mafia families.

A b*mb was planted under a car
that Gotti was expected to be driving

after a meeting
at a social club in Brooklyn.

You plant a b*mb
right under John's car.

Fortunately for John Gotti he
decided not to go to that social club.

When frank dicico and someone who
looked liked John Gotti got into the car,

a button was pushed,
the car blew up.

[Newsreader] Dicico was blown
to bits a short time later.

Police believe his death was arranged
by older members of the Gambino family

who were still angry about Castellano's
m*rder. Gotti was clearly in trouble.

He was in trouble with castlellano's
loyalists and was in trouble with the law.

John Gotti escaped
for the moment.

New York,
in all its greedy seedy glory, had re

we're dying. The city is dying.

The signs were everywhere
if you knew where to look.

It was a powder keg
waiting to explode.

And one of wall street's richest
men would be the spark that lit the fuse.

[People yelling
and bells ringing]

It's November 14th,


[Newsreader] After
the stock markets closed,

the sec announced
the biggest crackdown ever

in an insider trading case. Ivan
Boesky admitted that he had cashed in

on insider information,
which was not available to the public.

The sec put out a press
release saying that Ivan

Boesky had been
charged with insider trading.

That became known as Boesky day.

[Newsreader] Boesky
said he would plead

guilty and cooperate
with federal authorities

in a widening investigation
of insider trading,

which experts believe could involve
other prominent wall street figures.

[Auletta] The rotten apple theory
that applied to Dennis levine

was a defense
that was crumbling.

The barrel had some problems.
And some rot in it.

When all of a sudden Ivan became,
truly, Ivan the terrible,

when that headline ripped
across the street,

I think true paranoia really set in
that everybody could be exposed.

Because he touched
so much of wall street.

[Newsreader] To try to win
leniency for himself,

Boesky cooperated
with federal officials

in secretly taping telephone conversations
with other wall street operators.

I remember when that news struck .it
was like all the air went out of the room.

He dealt with everyone.

[Newsreader] For those
who dealt and spoke

with Boesky,
now a period of anxious waiting.

[Newsreader] All over wall street,
they're practically jumping out windows.

Paranoia ran rampant. It was
like everybody on wall street

was suddenly thinking,
"oh god, did I ever talk

to Ivan Boesky? What'd
I say? What did he say?"

And of course there were some
people who realized they were in trouble.

[Rita braver] As one former sec
official put it, this is like arresting

the madam of a brothel and
finding her private book of clients.

[Burrough] Boesky day was a deep
and profound shock to the system.

And because of the nebulous
nature of insider trading,

the fact that you may just be

trading on a tip and not know
that it came from ill*gal information,

you know,
that's a legitimate fear.

If I traded on a bunch of tips
in 1987

and I suddenly learned that my
cousin's cousin knew Ivan Boesky,

I'm worried.
Is Boesky naming me?

As further disclosures
resulting from the Boesky affair

may weaken public confidence
in financial markets...

[Stewart] And that fear had
an impact on the stock market.

[Newsreader] In addition to
stunning the financial world,

the Ivan Boesky affair
has had an immediate effect

on takeover stocks.

As the sec continues its
big chill against insider trading.

Wall street
is based on psychology.

People are guessing and if
suddenly the guessing turns dark

and you, "say oh my god, more people
are gonna get indicted on insider trading,"

panic sets in and people start
abandoning stocks.

And the abandoned stocks,
the stock market drops.

The market was
off more than 40 points.

[Newsreader] Small
investors checking on their

stocks during their lunch
hour blamed Boesky.

It's not fair. It's like if you've got
money you can do whatever you want.

I don't think it's fair for someone
to really know so much before I do.

Small investors have a right to
believe that our markets are honest.

That they are not being manipulated.
That there are no boeskys out there.

It's incredibly important
that the market

function in a way
that's as fair as possible.

And that people believe
that it's functioning

in a way that's
as fair as possible.

For every dollar of profit that's made
by an Ivan Boesky, who breaks the rules,

there's a dollar that's lost
by somebody else in the market.

Millions of Americans depend on the stock
market for financial security, retirement.

If people begin to think
that the game is rigged,

then the stock market
as we know it is over.

[Susan Lee] Unless you're an inside member
of this inside club, you cannot make money.

Boesky was a really big deal. It was a
signal moment in modern American history.

Both because
of the gaudy displays of wealth.

Because of the financial
overreach. Because of the crimes.

[Newsreader] Boesky's troubles
may not end

with the $100 million repayment
of profits and penalties.

[Newsreader] Boeksy has agreed
to plead guilty to a criminal charge.

The maximum sentence
is five years.

[L. William seidman] If he's
guilty as charged,

and if we had capital punishment
for white collar crimes,

I'd say he'd be
a prime candidate.

Wall street's biggest enigma
had been exposed

and the repercussions
would be far reaching.

[Troy] The hangover is
economic. The hangover

is cultural. The
hangover is political.

But most disturbing of all,
the hangover is moral.

We start seeing that behind many
of these great fortunes,

in the 1980s is the old cliché:
A greed crime.