[narrator] new york city: By the end of the 1970s, it was a city on its knees,
In a country that was losing its mind.
[man] it's a war out on the street.
The american dream had become a nightmare,
And no place felt as rotten and as hopeless as new york.
[man 2] they're gonna make a ghost town out of the city of new york.
[darryl mcdaniels] it was a war zone, without tanks and planes and people dropping bombs.
But, suddenly...
[woman] happy new year!
...At the dawn of a new decade...
[woman 2] it felt like really good sex.
...There was something else in the air: Opportunity.
[man 3] boom times.
It was everywhere in the 80s, and five new yorkers pounced.
[news reader] ivan boesky, wall street's biggest independent speculator,
And according to forbes, one of the richest men in this country.
One of the great things about this nation is that we can seek profit.
[news reader] leona helmsley, the emblem of the helmsley hotel empire.
[leona helmsley] I'm a dangerous character. Watch out, everybody.
[news reader] trump, it's taking on new meaning; tycoon, billionaire, maverick.
[donald trump] the concept of what I'm trying to do,
In terms of real estate, is the best.
[news reader] john gotti, alias the godfather, the boss.
[john gotti] you guys [inaudible].
[news reader] giuliani has sewn himself into the fabric of this city.
[rudolph giuliani] this is a terrible, terrible emergency.
They broke rule, flaunted their wealth...
42 million.
...Bulldozed anyone in their way...
Hey, tell me about it.
...And we worshiped them for it.
[andrew j. Maloney] he's a murderer. He's not a folk hero.
By the end of the decade, they had reshaped the city in their own image...
Look at this. I mean, wouldn't you want your daughter to bring this guy home?
...And at what cost?
[tovah feldshuh] a tipster had information that would clearly prove
That they were defrauding the united states government.
[charles bagli] he agreed to act as an undercover agent.
[bethany mclean] it's really a shocking turn of events.
You know it's all gonna come to a crashing halt.
Pick your poison.
It might be money, it might be sex, it might be drugs.
[gil troy] he said, "I wish you could see her naked."
Even today, it makes me uncomfortable.
[david cay johnston] if you think I just slandered you, sue me.
These five titans would change the meaning of the american dream,
And help define the way we live now.
The city,
Our country,
The world,
Good evening, and welcome to nbc news's coverage of the 1980 presidential election.
Our team of correspondents, analysts, pollsters, and commentators
Is assembled here in new york and around the country
To see if jimmy carter can win re-election,
Or if ronald reagan will be going to the oval office
-[reagan] are you better off than you were four years ago? -No.
[jimmy carter] it is a crisis of confidence.
[gil troy] jimmy carter was a perfect fit for the 1970s:
A misfire of a president for a misfire of a decade.
It's a decade of inflation, of vietnam, of watergate...
[richard nixon] I shall resign the presidency, effective at noon tomorrow.
...A decade where americans are starting to wonder whether the american dream is over.
It's a decade where, all of a sudden,
The greatest city in the world, new york city, might go bankrupt.
[news reader] the city of dreams is becoming a nightmare.
$13 billion in debt and teetering on bankruptcy.
New york is hanging by a thread, and only seems to be getting worse.
[news reader] 19,000 municipal workers
Lost their jobs today, because of budget cuts.
[michael holman] a whole block would be covered with garbage bags,
That would sit there for weeks
And stink up the place, and this was normal.
[news reader] about 5,000 policeman, also, were laid off.
This is comparable to laying off soldiers during a war.
[news read] four people are murdered here every day.
There's a violent crime every four minutes
[darryl mcdaniels] "it's just like a jungle sometimes.
It makes me wonder how I keep from going under," was the vibe of everybody.
[news reader] some people once called new york "fun city."
Now, police and firemen unions in new york are calling it "fear city."
[troy] new york city becomes the center and the symbol of america's decline.
[mcdaniels] new york was finished.
But, in the midst of chaos lies opportunity.
And some savvy new yorkers were ready to make their move in 1980,
When an unlikely candidate shocked the world.
[news reader] reagan is our projected winner.
Ronald wilson reagan of california: A sports announcer, a film actor
This man, who's dismissed. Ronald reagan? He's a joke.
Ronald reagan? He's an actor. Ronald reagan? He's an imbecile.
[news reader] I don't think anyone anticipated
That it eventually would become a floodgate,
Of one kind or another, where the votes would just flood in for ronald reagan.
[troy] but ronald reagan understood that hope is a drug,
And he sold this story of america on the way back.
[reagan] this country needs a new administration,
Where there will be new dedication to the dream of america:
An administration that will give that dream new life, and make america great again.
[ken auletta] reagan comes in in 1980, and he believes in capitalism.
He believes that we have to lower taxes for the wealthy,
Because that will trickle down to everyone else.
And we have to deregulate businesses, so business would be freer to create jobs.
[reagan] I would like to have a crusade today,
To take government off the backs of the great people of this country.
[andrew ross sorkin] all of a sudden, reagan shows up on the doorstep and says,
"no, no, no. We're deregulating everything." one of the first things he does is he says,
"look at this case. There's an anti-trust case against ibm."
He said, "it's over." the justin department ended the case.
The message was: Game on; everything is for sale.
Ronald reagan opens this spigot. Ronald reagan starts getting the money flowing again.
It brings back a confidence to wall street. It brings back a confidence to the stock market.
It brings back a confidence to the american investor. And, in fact, changes all of them.
It enabled the rise of this much more aggressive,
Much more hostile, much more money-oriented culture.
[andrew ross sorkin] so, as animal spirits are filling the air everywhere,
This new class of investor arrives on the scene, to become a takeover artist.
Using debt from wall street, they're gonna go buy companies
That never would have been takeover bait before.
[news reader] takeover mania in america. Huge corporations are gobbling one another,
At a rate unmatched in history.
[natalie byfield] this was the era of mergers and acquisitions,
And they were being celebrated as heroes.
Wall street becomes a symbol of the new gilded age,
And the best symbol of that...
...Is ivan boesky.
A man who came from nothing, and reinvented himself on wall street.
He was a master of secrets,
With an aggressiveness the financial world had never seen before.
And he had nowhere to go, but up.
[bryan burrough] ivan boesky was this great white shark, out there in the ocean.
You knew he was out there. Every now and then, he would attack.
Very few of us had any real sense of ivan boesky as a person,
But the picture that emerged was this kind of classic,
Archetypal thing of this spectral, gaunt, white haired guy,
Always in black.
He was just this ghost.
Ivan boesky was a trader, who is known as an arbitrager.
[news reader] "what is an arbitrager?" you ask.
It is a person, such as boesky, who buys up stock
And takes a big gamble that prices will rise,
So that he can sell the stock at a higher price. Of course, if no takeover occurs,
An arbitrager like boesky could end up losing a bundle.
His specialty in life was betting on deals,
When one company was buying another company, whether the deal would close.
[bryan burrough] arbs trafficked in information:
What was going on? Who was in play? Who was gonna be attacked next?
[sorkin] everybody's calling each other on the phone, trying to get that little morsel.
What is that one little thing, that's gonna give them an edge?
And so, boesky had this reputation for literally living on the telephone,
All day and night, and literally like this, all day long.
Pacing in front of monitors, barking at his traders
[boesky] if we have that shot, we'd like to [inaudible] again.
Screaming at just about anybody who would move,
And if it didn't work out for him, he was throwing things.
[jeff madrick] I was in boesky's office once. He was shouting at his traders,
And he would say, "act one, scene one." he said that to me, like he was play-acting.
He did a lot of play-acting. His employees would do anything, however,
Because he made a heck of a lot of money, and they thought he was a magician.
Almost anything that you can think
Of the michael douglas character in the movie wall street...
[douglas] you keep on buying. Dilute the son of a bitch.
...A lot of that was based on boesky,
And not just his famous "greed is good" speech, which came from boesky
Greed, for lack of a better word, is good.
Ivan boesky is, in some ways, kind of a great gatsby character, right?
This self-made person, very much invented.
[jeff madrick] he was a classic outsider.
Ivan boesky was deeply insecure. He didn't do well in school.
He didn't go to harvard law school. That was certain.
[burrough] ivan boesky didn't really wanna tell the truth about where he'd come from,
And so he often made these hints of mysterious things in his background.
Maybe he'd gone to harvard. Well, no, he actually bought his way into the harvard club.
Maybe he'd been with the cia in iran. No, he was just visiting a friend's family.
But all that's much better to say than, "I came to new york
'cause I needed a job, after bankrupting my family's strip joint."
Ivan was the son of russian immigrants.
From an early age, he had his eyes to the sky,
And one of the things he did was he married well.
Seema silberstein came from a very wealthy real estate family.
They owned the beverley hills hotel. And so, he gets a lot more money
A lot more capital, and they allowed ivan to move up the social ladder.
[madrick] ivan had a friend who was in risk arbitrage, and the guy was doing very well,
So he went home to seema and he said,
"seema, this sounds like the thing for me." so, ivan went to wall street.
[james b. Stewart] one of the ironies of the boesky story
Is that, at his first job, he lost money.
He got fired. He tried to get other jobs. He couldn't get a job anywhere.
Thanks, in part, to his wife's family money, who bankrolled a new operation,
He started his own arbitrage firm.
Ivan boesky quickly became one of the best known risk arbitragers.
[burrough] when you look at his career, early on, some big wins.
Ivan has rebounded.
It's a type of reinvention that, there are very few places in america you can achieve.
It's often a field that's described in gambling terms:
A roll of the dice, high stakes, speculators. Are you a gambler?
Part of the magic of wall street in the 1980s was this almost lottery-like element.
I really think it's a highly conservative activity, that is often misunderstood.
I don't feel like I'm a gambler and I hope you don't think I look like one.
No, but I'll bet you have nerves of steel.
Well, I can't say that,
Except that one has to be able to withstand a certain amount of pressure.
[sorkin] all of a sudden, you're doubling your money.
And that can be a very empowering feeling,
But also a dangerous one, because it creates an enormous amount of confidence
And that confidence, I think, very quickly turns into over confidence.
[news read] new york city, it is a paradox.
Amid the frenzy of chasing a dream, and perhaps a fortune,
It is a decaying metropolis where charles dickens would find a lot to write about:
A city literally falling apart.
[nikki haskell] in the 70s and the beginning of the 80s, new york was really at a low ebb
I was still having a good time, mind you.
There were great clubs, great restaurants.
I went dancing every night. There was a club called la club, and it was a private club.
It was very chic, had a little dance floor, and everybody went there.
And a man walked in, and I saw him walk in, and I went up to the maître d'
And I said, "who is that?"
He said, "oh, you know, he's a new member.
His name is donald trump."
A kid from queens, with charisma to spare and something to prove.
In a city where image was everything,
He knew that to be the king of new york real estate
He only needed to act like it.
Well, I'm very happy, and I think the city of new york is going to be very happy.
Donald was a man about town. He was someone who was going to all of the fanciest restaurants
With a beautiful wife, trying to make the zaniest real estate deals.
He was someone who really wanted to make his name, and make his mark.
[charles bagli] and that meant getting something going in manhattan.
And to establish his reputation, he needed to do something splashy.
We're going to do something, which is going to be
A great stride forward for new york city.
[bagli] you've got this crisis of confidence. Is the city gonna come out of the doldrums?
Is there gonna be new development?
And trump, very craftily, wanted to take advantage of that.
When you need to re-develop an area, the first mover gets the best deal.
When new york was almost broke, and other builders were jumping ship,
Trump took a chance on the old commodore hotel.
[trump] the commodore hotel, an abandoned building,
Next to grand central terminal in new york.
The city was in serious trouble. That location was not considered good.
This was gonna prove that he could compete with the big guys,
With the prominent manhattan developers.
[news reader] trump spent millions transforming it into the grand hyatt,
And the city got a shot in the arm.
[hugh carey] hyatt regency is now an architectural gem.
Its mirrored finish reflects a new day on this, the street of dreams,
42nd street.
Donald trump deserves tremendous credit for coming into new york in the late 1970s,
Seeing a hulking, depressing, decaying hotel,
And turning it into the magic of the grand central station hyatt.
[news read] donald trump would probably say he's already proven himself a master builder.
He feels the grand hyatt hotel proved him a man of vision.
[barbara res] I think the hyatt was a water ship for trump's career,
Because he was really not well known. It was a turning point where you said,
"okay, we have to take this guy seriously. He's accomplished something."
[troy] the new york times is impressed by his bravado.
They called him, "the brash adonis from the outer boroughs."
And donald trump, in the 1980s, in many ways becomes a symbol of new york's return.
Donald plays right into this. He presents himself as this super genius of business
From a real estate standpoint, it's probably become the hottest city in the world.
People are flocking here by droves,
And I guess a lot of things had to do with it.
Mostly it was the psychology of making new york a winner, as opposed to a loser.
But, donald's success with his first project was very much tied to his father
Whether he acknowledged it, or not, publicly.
His father was a very big outer borough developer.
He had built many buildings for middle and working class people in brooklyn.
It was a sort of meat and potatoes, but he was a millionaire
And he was very well connected, politically.
[johnston] when his older son, fred jr., turned out to be a rather sensitive fellow,
Who couldn't put up with his tyrannical father's nature and coldness,
Donald saw opportunity, and he stepped forward and became the favored son.
But donald didn't wanna be his father, at the end of avenue z in brooklyn.
He wanted to be a star in manhattan.
If he failed, he'd have to retreat to queens and become just another one
Of the faceless outer borough developers. And that was his worst fear.
Trying to scrape up a down payment
For a little fixer-upper in your neighborhood?
Take a look at my next guest.
There's a report around wall street, that this is what he has in mind.
This is donald trump, 33 years old,
And some people think that he wants to buy the world trade center,
110-story manhattan skyscraper that anyone can pick up, if they've got the coins.
Donald trump, as I say, is just 33 years old.
He took his father's rather modest, by current standards,
Real estate empire in brooklyn and expanded it considerably.
He now has an apartment for sale in a new trump building,
Called the trump tower, going up on fifth avenue.
There it is. You can buy this apartment, one floor of it -
One whole floor of that building, that is - $11 billion altogether.
[res] donald trump wanted trump tower to be iconic.
He wanted it to be the first of its kind. He wanted it to be world famous.
He wanted to make a ton of money from it, and he wanted to become the new york developer.
It was a statement.
The commodore was just replenishing something that existed.
This was building something that was new.
[news reader] donald trump is the young entrepreneur,
Whose buildings keep popping up all over town like mushrooms.
He wants a certain tax abatement on one of them, the trump tower.
[bagli] pretty early on, donald discovered that the best way to operate
Is with other people's money.
So, he had his hand out to the city for a tax break,
That was designed to stimulate low income housing.
He felt that he qualified for that,
Even though trump tower was for the most elite of new yorkers.
[news reader] trump is an expert at getting what he wants, particularly from politicians.
He's gotten tax abatements and other concessions.
Politicians have gotten campaign contributions - big ones.
But then, you get a new mayor.
[ed koch] how have you the chutzpah to say
That this government has been anti-development?
Ed koch was elected mayor, and he injected great spirit into new york.
He was a little bit more of a populist, and wasn't so enamored of donald trump.
[george arzt] donald had contributed something like $700,000 to koch's campaigns,
And he felt that he could just walk in the door at city hall, and get what he wanted.
He found that, under koch, it was never true.
[michael kruse] with respect to trump tower,
Ed koch was pushing back pretty hard on the idea of a tax break.
So, when trump applied for it, they said, "rejected."
[news reader] place of prosperity, for sure.
Too prosperous, in the eyes of state appeals court judges,
Who turned down trump's attempt to get a tax abatement for the project.
This did not make donald trump happy.
[bagli] so, donald trump sued the city.
[news reader] donald trump to fight the city in the court,
Demanding tens of millions of dollars in tax abatements.
[andrew kirtzman] you had these two titanic egos, in donald trump and ed koch.
What was most interesting, was kind of watching them clash with one another.
We're not able to say to donald trump,
"donald, get richer on the backs of the people of the city and their treasury."
I can't do that.
I would say he's got no talent, and only moderate intelligence.
Donald trump learned from his father, you're a winner or you're a loser.
The ends justify the means.
What ed koch has is nothing. The man has not got it.
Here he is, suing the city and arguing with the mayor in the most bitter terms.
And, on the other hand, he was also telling the public that this was for their good.
He was gonna build a golden-hued tower, that would put new york back on the map.
Who could argue with that?
Trump went to court, and he won. He got his abatement.
This tax break was never intended for a luxury project,
And after a long court fight, he did get a tax break.
[news reader] developer donald trump will enjoy the largess of the city,
In the form of what the city says is a tax abatement
Worth $20 million, over the next ten years.
From then on, it was off to the races. And the trump brand began.
[kruse] but the more successes he had, the bolder and the more brazen he got.
What could he possibly do, that would trump trump tower?
A few years into the 80s, change was literally in the air.
Driven by visionaries with an insatiable appetite for success,
Stunning new construction exploded across the new york skyline.
Sold. Two trades at six.
On wall street, charts were rising with no limit in sight.
But while certain corners of new york were thriving,
Others were being left to fend for themselves.
And they, too, would find a way to break through.
Out of the darkness, despair, destruction, and death
Of the late 70s and early 80s,
It wasn't politics that was gonna save us, and it wasn't religion. It was the arts.
[rap music playing]
[michael holman] takes a city like new york, with so many different tribes
And so many different people.
New york influences them.
It permeates, and they influence new york.
Whatever you wanted to do, you could do,
Because there was nobody there to police any of this.
And now, you see graffiti on every block,
But they're doing all this incredible, creative work.
So many different artists came here during that time, saying "new york, I'm here."
It creates a competitiveness, a cultural competition.
Keith haring started doing it in the subway,
By doing chalk drawings on old advertisements.
[keith haring] at that time, graffiti in new york was really at a peak,
And I think that was also a main source of inspiration.
[holman] jean-michel basquiat had come up with equally revolutionary ways
Of expressing himself, by finding doors in the garbage and using them as a canvass,
And painting on them.
And I'm thinking to myself,
New york is like a theme park.
It's a magical place for cool people.
It's like disneyland for the hip.
Very quickly, it was recognized that we've got something special here.
[news reader] certainly, one man's vandalism is another man's masterpiece.
Graffiti is entering the mainstream art scene.
[thurston moore] there was this art that I had been seeing on doors and walls of buildings,
All around soho and the east village.
And I remember thinking, they're actually turning this into real art [laughs]
As opposed to just street art.
[news reader] now, as post-graffiti artists,
They are getting upwards of $3,000 per canvas.
[moore] I remember going to the fun gallery,
And seeing jean-michel's big coming out show,
And the entire community of downtown was just like at this fun gallery.
[michael musto] basquiat mixed sort of a graffiti element, a voodoo element,
And racial inequality screeds, and social commentary.
It's all extremely original.
Jean-michel basquiat's work was so brilliant, so beautiful, so powerful,
And so new that he became a star overnight.
New york was the perfect city
To receive this wave of creative power and talent.
And when you can make it here, you can make it anywhere
Because this is the city of competition, and the winner takes all.
For self-invented dreamers and schemers,
New york in the early 80s was the place to be.
A new city was rising like a phoenix from the ashes,
And while artists were leaving their mark for all to see downtown,
Uptown, a real estate battle was brewing.
By the time the smoke cleared, the skyline would never be the same.
You're gonna have to start pusa little ridiculousow, as far as I'm concerned. Itg
So, just start pushing, and start pushing as hard as possible.
As much as donald trump wanted to be known as the developer for the wealthy, for the elite,
He had a rival that was already established in manhattan.
[news reader] the helmsley palace hotel,
A 100-year-old roman renaissance mansion,
Which has been lovingly restored is a tribute to the vision of mr. And mrs. Harry helmsley.
[glenn plaskin] at the same time that donald trump
Is the up and coming king of real estate in new york city,
There was the helmsleys.
Leona and harry helmsley were truly the king and queen of new york real estate,
And they had recently opened the helmsley palace.
[tovah feldshuh] the grand hyatt hotel,
Which opened two weeks after the palace, and was trump's boutonnière,
Was a commercial hotel. It was a hotel for conferences.
It didn't compare to the grace and up-stat
Of the helmsley palace.
And the queen of the palace was leona helmsley.
And of new york real estate, queen she was.
She made sure everybody knew it, too.
The old guard embraced modesty and graciousness.
She ushered in a new way of doing business,
Not just in new york, but in america.
Off with the heads of anyone who didn't bend the knee.
If you pet me, I'll purr. But if you hit me, I might scratch.
The fact that leona helmsley had risen to this level of fame and wealth
Is because she was determined to prevail, and be number one, and to win.
Leona was born into a very pedestrian, working class family,
So they did not have a lot of money.
She had struggled for years through divorces, trying to raise a son with no money,
Having to move in with her mother when she was 40.
[elaine taylor-gordon] but she had fire in the belly from the start,
And she wanted to be rich,
And she knew she was not going to stay where she was.
She worked her way up, selling commercial real estate.
She went to work for helmsley, and that's how she met harry.
When harry and leona met,
Harry was one of the biggest real estate moguls in new york.
[plaskin] he had worked for decades to create this empire,
So when leona met him, it was like meeting god.
Harry helmsley was someone that donald trump idolized and looked up to.
Donald trump's father never had that kind of glamorous properties.
But harry helmsley was the king.
[news reader ] everybody knows the helmsleys in new york,
Because sometimes it seems they own everything.
[plaskin] and his holdings amounted to more than $5 billion.
He owned icons, like the empire state building.
Harry helmsley was raised as a quaker.
He was very ethical and he was known to be a gentleman.
[feldshuh] leona fell fast and hard for harry helmsley.
She went after him like a bee to honey.
But, at the time he was married, and she just literally whirled into his life.
[bill dowling] well, she was a very sexy, attractive woman, and that got his attention.
He was a very successful and wealthy businessman, and that got her attention.
How their personal relationship developed after that,
I would attribute more to leona's aggressiveness than harry's.
[taylor-gordon] her next big vision was to become mrs. Leona helmsley,
So she was having a torrid love affair with harry.
[dowling] a couple years later, he divorced his wife and married leona.
She would say, "can you believe a little jewish girl, from coney island,
Could snag the richest real estate mogul in new york city?
Look at his head. You notice it?
Yeah, it's a good looking head.
-He's got a beautiful head. Turn your head, darling. -[laughs]
-But look, I'll show you. -I don't believe it. -I swear, I'll show you.
I don't believe it either, 'cause I'm behind it. What do I know? [laughs]
Darling, no. I'll show you something. Turn around. Look at the shape of the head.
You can see, the brain just sits there. I'm very serious. Beautiful head.
It's very easy to caricature leona helmsley with the old cliché,
"she got her money the old-fashioned way: She married into it."
It misses the fact
That she actually had a real estate experience and a real estate vision,
And who may have been responsible for helping harry helmsley
Take his empire to a whole other level.
[feldshuh] once he joined forces with her, the helmsley palace was born
And the name went up, not just in lights, in gold.
Harry called me one day and said "I've decided to put leona in charge of the hotel company."
He made her the chief executive of the hotel chain,
So her word was the final word.
He gave her total authority.
And that's the american dream: We start at the bottom, and we hope to get to the top.
[feldshuh] harry helmsley had tremendous faith in her,
And that was the tragedy. Harry, in his quaker way of life
Saw his name as a signature at the bottom of a contract.
Leona saw harry's name across the new york skyline.
And there was the difference. Harry helmsley came up from the bottom,
And would have remained at the top of the top
- Both morally, and as one of the great philanthropists of new york -
Had he not married leona helmsley.
[news reader] 1982 has, so far, been a great year for movies.
And today, e.T. Opens across the city.
[burrough] new york is many, many things, but it has always been the place
Where the best and brightest of a generation come to prove themselves.
And when you get those highly ambitious,
High concentration of them in a zeitgeist,
Which has no shame about displays of wealth, you get a moment in history
Unlike any we've ever seen. Ambition was not a bad thing, anymore.
It was about what you could get for yourself.
It is not wrong to want a profit in capitalist america. It's fair.
[jeff madrick] ivan boesky had bottomless ambitions. There's no question about that.
But, for him, money was the coin of the realm. That's what made him important.
With wall street on the rebound, and in the midst of a hostile takeover boom,
Profits were pouring in fast and easy for the king of arbitrage.
[stewart] ivan boesky became, far and away,
The most successful of the so-called risk arbitragers.
He was a legendary figure on wall street.
But, in a city always looking for the next big thing, he wanted more, much more.
So, as soon as he got wind of the next massive takeover target he was ready to go all in.
One of the industries that was ripe for consolidation
When the 80s dawned was oil and gas.
So there was a wave of mergers. And soon, another oil company got teed up: Cities service.
Ultimately, a bidding war erupted. It went on.
There were multiple suitors who came in.
[news reader] when the markets reopened trading in cities service,
The company's stock price jumped more than $6,
Reflecting investor hopes of more generous takeover offers ahead.
Gulf oil was bidding for it.
Gulf oil came through, with a hefty $63 a share bid.
Gulf comes in, and boesky effectively bet that this deal was gonna happen.
[stewart] boesky had this huge stake.
He had used a lot of borrowed money to buy.
He was so sure this was gonna happen.
And he watched the stock go up, and up, and up, and up.
He thinks he's won the game.
[news reader] after government concerns in washington
About anti-trust made gulf nervous, they withdrew.
Ivan was fully invested.
Suddenly, the plug was pulled and he lost an enormous amount of money.
It was a major surprise across wall street.
[news reader} the big news on wall street today
Was still the big oil merger, that didn't go through.
That has to have been a huge blow to his ego.
To lose, and lose so publicly, and lose so big, has gotta be devastating.
[stewart] and this was what drove boesky.
He needed to find a way to make these deals risk free.
And to really eliminate risk, he had to get inside information.
And to get inside information, that's a tall order.
I mean, it's illegal for people to give it to you.
[harvey pitt] boesky had friendships with a number of people,
Who could provide information about things that were under consideration.
One of his friends was martin siegel.
He was an investment banker at the firm of kidder peabody and company.
Siegel was advising the kind of companies that were often the takeover targets.
He would hear when bids were going to be raised, so he had a wealth of inside information.
Siegel was wildly successful. He seemed to have everything going for him,
But like a lot of people on wall street,
He was always worrying about, "well, okay, this year was good, but what about next year?"
He had financial anxiety, and so boesky took advantage of that. He immediately suggested,
"look, I could help you out." and then, boesky really baits the hook.
He says, "if you could put me in things with some lead time, that would really be valuable."
And siegel says,
"maybe at the end of the year, we'd work out a bonus."
[mclean] so, ivan boesky and martin siegel became true partners in crime,
Because it was siegel who provided boesky with the information he needed
To make his big profits.
And it was boesky who provided siegel, in turn, with cash.
[stewart] they came up with this scheme to hand over the money,
Where siegel would show up in the lobby of the plaza hotel,
And a courier would hand over a bag.
Siegel had this fear, this kind of guilt, this nightmare
That this was gonna come crashing down on him,
And he was panicking.
And then, he saw the man he assumed was the courier with the case.
[dramatic music playing]
They had code words. The courier's code was to pass siegel and say,
"red light." if siegel said, "green light,"
Then he handed the bag over and they kept moving.
There are elements to this that are all like a heist movie. It's like ocean's eleven.
They're running around with briefcases.
They got their code names, and I think they loved that.
The mystery of marty siegel was always, "why the heck would you do this?"
I mean, he already had everything. He was making millions.
[stewart] siegel later said that he always felt guilty from that day on.
But the line had been crossed.
Ultimately, boesky made over $30 million on tips from siegel.
Once they'd crossed the line, they'd crossed it.
All the elements of the crime were now in place.
There was no going back.
By 1982, new york city was reborn, uptown and downtown.
New royalty had been anointed, new fortunes made.
We put them on pedestals, this new class of the super rich.
In time, the whole world would.
But there was more to new york than high society.
In many other corners of the city, crime and chaos still reigned.
[winerip] in terms of crime, new york was coming apart a little bit.
It was a dangerous time. It was lawless, in that way.
[news reader] former beatle, john lennon, is dead tonight of gunshot wounds.
[news reader 2] the biggest city in the country has a very serious crime problem.
There are more people, more criminals, and more guns on the streets.
[news reader 3] a lot of people are afraid of crime in new york city.
Operative crime statistics that keep increasing,
And a criminal justice system that can't keep up.
New york needed a superhero, the sheriff coming in with his white hat.
[classical music playing]
[news reader] this is rudolph giuliani's idea of mood music.
The us attorney has been listening to italian composers like vivaldi lately,
While he works on indicting alleged mafia kingpin.
Into this circus came rudy giuliani.
Crippled by corruption and crime, new york city needed a hero.
An ambitious young prosecutor knew it, and he knew what it would do for him.
If ever there was a shortcut to power, it's fame,
And he would give new york one hell of a show.
[randy mastro] the irony of the situation
Was that rudy giuliani left the number three position in the justice department,
To go be one of over 100 us attorneys around the country.
But, rudy wanted to come back home.
[winerip] and he came with big ambitions.
He was gonna make a name for himself.
The number three guy doesn't get on tv very much, in the justice department.
The number one guy in new york can get on tv as much as he or she wants,
And rudy took full advantage of that.
[giuliani} we have to do securities fraud,
Because we have two stock markets here in new york.
If we don't do it, nobody's gonna do it.
We have to do drug work, because we have a big drug problem in this city.
And we have to do organized crime work,
Because we have five organized crime families that have decided,
Since the turn of the century, to locate themselves here in new york.
When giuliani became us attorney he had, you know, any number of targets, right?
So, there were the excesses on wall street. There was the mob.
[george gabriel] the mob, in the 80s,
Was probably as big and powerful and ruthless as it had ever been.
They owned the streets. I mean, they were a force to be reckoned with.
[sean deveney] you had this dignified older generation of mob bosses,
Being replaced by a younger more violent generation, like john gotti.
This guy is a violent killer.
Come on, you know I don't know what he was talking about, john.
At the same time, giuliani comes in with the clear goal...
Are we all set?
...Of bringing down the heads of the families.
Hopefully, with an organization like the mafia, we will wear them down.
[andrew kirtzman] in his eyes, these were bastions of immorality.
And also, they were kind of stepping stones towards fame.
Rudy wanted to make himself a hero. He wanted all the attention he could get.
Giuliani comes across like the hollywood stereotype
Of the tough, dedicated crime buster.
[deveney] he wanted power in new york city.
[giuliani] I am tired of being asked,
"which type of crime is more dangerous: Violent crime or white collar crime?
Organized crime or public corruption?"
All of these areas of crime are dangerous and destructive of our society.
This is a war that can be won,
If we do not rest on our accomplishments, but rather redouble our efforts.
[deveney] rudy giuliani was a bulldog, and this was his moment.
New york city, the 80s: A collision of ego and opportunity.
Titans of industry, crime bosses, law men.
Over the coming decade, this new elite would redefine
The meaning of success, the world over.
Battle lines would be drawn, and limits tested.
[troy] new york had these larger-than-life personalities,
And that ultimately headed for a clash.
You have a perfect storm.
[dramatic music playing]