The Twisted History of a Mobster and the PGA Tour

"As crass as it sounds," wrote Arnold Palmer in his autobiography A Golfer's Life, "the issue was really money—more precisely, television money." While modern sports fans are used to labor strife interrupting seasons and even outright canceling championships, it is often forgotten that a similar dispute, fought over the control of millions of dollars, created the modern PGA Tour after nearly destroying it in the late 1960s. Perhaps more shockingly, according to a recently uncovered FBI memo, organized crime may have had a hand influencing the dispute's victor.

When people speak of the PGA today, they are often mistakenly referring to the PGA Tour. These are two separate entities. Established in 1916, the Professional Golfers' Association of America (PGA) has a variety of golf professionals under its umbrella—ranging from country club pros to golf course operators. Originally, the PGA organized golf tournaments featuring the best of these semi-pro players as a way to publicize the sport. As the interest in and business of golf grew, so too did the prize purses offered in these PGA-sponsored events. By 1958, the total purse for the tour reached $1 million. Within 10 years, it had eclipsed $5 million.

Around 1968, there were 225 touring pros, which accounted for less than 4 percent of the PGA's 6,000-plus total membership. Yet within that small percentage were household names like Arnold Palmer, Jack Nicklaus, and Gary Player. Television had helped make these men stars, yet it was the money generated from golf's broadcast rights that were about to tear the PGA asunder.

The first true rip between the PGA and its touring pros occurred in 1966 when the players scheduled a $200,000 tournament sponsored by Frank Sinatra at the Canyon Country Club in Palm Springs, California. This was to be played within two weeks of the long-standing Bob Hope Desert Classic, also held in Palm Springs. The PGA didn't feel the area could support both, and for the first time in its history, the PGA's Executive Committee used its veto power and strike down the Frank Sinatra event. Players lobbied to get the PGA's veto power removed, going so far as threatening to boycott the 1967 PGA Championship.

The "last straw," as Arnold Palmer called it, came in the summer of 1968 when the PGA entered into "secret" contract negotiations for the rights to two popular television programs—Shell's Wonderful World of Golf and the World Series of Golf. Despite being the featured performers on both shows, the players had no say in these contract talks. This rankled the pros because the money earned from these TV deals did not go directly to them or their prize purses.

Having reached their tipping point, the players organized a revolt. Four led the charge: Jack Nicklaus, Gardner Dickinson, Doug Ford, and Frank Beard. The initial clash took place between lawyers. On the PGA's side was Robert Creasy, who had worked under President Truman and possessed a strong background in labor relations. For the players, Dickinson sought out Jimmy Hoffa's lawyer, William Buffalino, but he was soon replaced by Doug Ford's attorney, Samuel Gates, a senior partner at a Park Avenue law firm.

Gates and Creasy agreed that the PGA should have a separate branch for its touring professionals. They went so far as to rewrite the PGA's Constitution to reflect this; however, when the four officers of the PGA's Tournament Committee saw that the new Tournament Program was to be completely controlled by the players, it was soundly rejected.

Late in 1968, the players responded by announcing the formation of a new golf entity, the American Professional Golfers, Inc (APG). In a scathing "rebuttal" directed at PGA treasurer Leo Fraser and published in Sports Illustrated, Jack Nicklaus laid out six reasons why the players needed to be freed from the PGA's iron grip. He summed it up thusly, "As you can see, the PGA controls the golf tour. Now we want the right to cast the decisive vote in matters that affect our livelihood. We have gone as far as we can in these deliberations. We have formed the APG. This is not designed to destroy the PGA. Instead, we want to provide a better vehicle for the operation of professional golf tournaments. The next action rests with the PGA."

PGA President Max Elbin saw the formation of the APG as a power play by entitled pros.According to author Adam Schupak in the book Deane Beman: Golf's Driving Force, Elbinlabeled the players' action, "a thirst for power resulting possibly from too much prosperity."

The APG was missing two key cogs to get its wheels effectively turning. The first was Arnold Palmer, whose allegiance would be a lynchpin to success for either side. But wooing Palmer took work. "Arnold Palmer never takes a stand on anything," lamented Doug Ford in The Wicked Game. "He's very involved in his image with the public and he won't do anything that would mar it in any way." But it wasn't only his image that was at stake. As Elbin told Sports Illustrated's Mark Mulvoy at the time, "Palmer has a multimillion dollar golf-club-manufacturing business, and his prime selling outlets are the pro shops run by the members of the PGA."

In an attempt to secure his allegiance, Elbin made a special trip to Palmer's home in Latrobe, PA. After a five hour meeting, Elbin confidently proclaimed, "Arnold and I both agreed that a split would not be advantageous to anyone." Palmer himself wrote, "Despite its arrogance and foolish attitudes, and its history of excluding the handicapped and minorities, I simply couldn't turn my back on the PGA of America. I knew the revolution had to come from within the palace walls." However, when Palmer suggested the pros run the tour for a year on a trial basis and Elbin refused, he saw the light.

Though Palmer's yearly earnings had surpassed the $1 million mark in 1968, the APG (which quickly became mocked as "Arnold Palmer's Golfers") had a money problem. Namely, the new tour had no funds to get things going.

The PGA set up roadblocks preventing the APG from gaining any footing. For one, it announced that any players joining the APG would be banned from PGA events. This was followed by a restraining order issued by the U.S. District Court in Delaware which prevented the APG from entering into any event agreements.

With the APG's back against the wall, where could it turn for funding? The answer may have been organized crime. In a recently uncovered FBI memo dated October 9, 1968, Elbin questioned whether the APG was being funded by the mob. The memo, in part, reads:

"Elbin advised that in checking into the status of the APG they [the PGA] have determined that the players have not contributed financially to this new organization and it is rumored that the APG has been started with Mafia money. Elbin added that according to unverified information, Moe Dalitz and [name redacted] Stardust Hotel, Las Vegas, Nevada, are allegedly involved in the financial backing of the APG.

"Elbin inquired as to whether the FBI could comment on the alleged Mafia connections of the APG and whether, based upon the facts available, the FBI could conduct an investigation. Elbin was informed of the confidential nature of our files and readily acknowledged our position in this matter. He was also told that based upon the data furnished, there did not appear to be any violation of law over which the FBI has jurisdiction. He was thanked for furnishing this information to us."

What was Elbin's motivation for going to the FBI with such information? Was he trying to bury the APG by triggering an FBI investigation? Or is it possible that the APG sought financial assistance from Vegas mobsters like Dalitz?

Unfortunately, most of the key players in this saga—including Elbin, Dalitz, Dickinson, and Fraser—have passed away. Attempts were made to reach Doug Ford and Jack Nicklaus without success. Gary Player commented on his "behind the scenes," role in the formation of the APG, but had no knowledge of Elbin's accusations. Upon learning of this FBI memo, Arnold Palmer stated, "I don't recall ever hearing any such story," and had no further comment.

So, who was Moe Dalitz? He began as a bootlegger in Michigan and Ohio, smuggling hooch in his family's laundry service trucks. When Prohibition ended, Dalitz turned to operating illegal gambling casinos throughout the Midwest. After serving in World War II, his interests crossed paths with those of Jimmy Hoffa and the International Brotherhood of Teamsters. With the federal government cracking down on illegal gambling, Dalitz moved to Las Vegas, and with loans courtesy of Hoffa's Teamsters union, he gained control of the Desert Inn and later the Stardust. To draw attention to these casino properties—and by extension, the oasis of Las Vegas—Dalitz founded a major PGA event, the Tournament of Champions, in which only winners of other PGA tour events could compete (it's now known as the SBS Championship and is played in Hawaii).

Established in 1953, the Tournament of Champions drew the biggest names in golf and entertainment to the Nevada desert. Legend has it that inaugural winner Al "the Blonde Adonis" Besselink gambled away his prize money—$10,000 in silver dollars delivered in a wheelbarrow—within 24 hours. Arnold Palmer taught Jack Nicklaus how to play craps after Nicklaus won the event the first time he played in it in 1963. Golfers would often bet on themselves in the casino to win the tournament prior to competing. Both Player and Palmer stated they knew Dalitz "pretty well" as he treated all the pros like royalty, comping them rooms and food while they played.

In 1968, when Elbin questioned Dalitz's relationship with the APG, Dalitz was, at the very least, tied to several mobsters. A congressional committee once described him as a "racketeer" with organized crime connections. He sued Penthouse magazine in 1976 for making similar allegations, but the case was thrown out.

Either way, soon after Elbin met with the FBI, the APG began lining up sponsors and tournaments. According to Jack Nicklaus' autobiography, by December 1968 the APG had 28 tournaments set up for 1969 with only four PGA sponsors holding out against them. A schedule was created and a qualifying school at Doral Country Club in Miami was planned. At the PGA's 52nd annual meeting, the Player of the Year award was not presented. None of the touring pros attended.

Then both sides caught a break. Max Elbin was ousted from his role as PGA President and replaced with PGA Treasurer Leo Fraser in November. Although Fraser initially spoke out against the touring pros, even making a statement deemed a "personal assault" by Nicklaus, he came around to the players' side. As Palmer told this writer, "Leo was a man who was clearly open-minded and willing to consider all sides of the situation."

The final drop of glue that held the PGA together came in the form of Joe Dey. The executive director of the United States Golf Association since 1934, Dey was a champion of amateur golf. But with convincing from both Palmer and Nicklaus, Dey joined the professional ranks and was named commissioner of the new Tournament Players Division of the PGA, soon to be known as the PGA Tour.

The APG was quickly disbanded and become a footnote in golf history. There is little doubt that had it began its planned season in 1969 that the APG would have thrived. It had all the stars fans wanted to see, leaving the PGA with just its good name to go on. Whether organized crime had a stake in all this remains an open question.