[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 explosion 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 illegal 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 illegal 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, 1986. On Wall Street some unscrupulous 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 kill.
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 gay. 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 homosexuals
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 gay 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 gay 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.
AIDS. Acquired Immune Deficiency Syndrome is a terrifying mysterious disease.
And it's killing 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] AIDS is baffling There is no known cure. No one knows what causes it.
We didn't know if you could get AIDS from kissing someone, from saliva, from sneezing.
There was fear that if you touched someone with AIDS you could get AIDS.
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.
AIDS 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 AIDS it was like you went and had sex with somebody different every night.
Tonight there's a padlock on the Mineshaft.
[newsreader] To the gay 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 gay 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 gay people.
[newsreader] It's not only homosexual 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] Anal 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 gay?
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 AIDS death every half hour.
[newsreader] There are an estimated 200,000 people
in New York City today who shoot drugs.
The majority of them, according to experts, share their needles.
And that majority, they say, is not only shooting heroin or cocaine, but also AIDS.
[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 gay 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 AIDS.
[newsreader] An army of 2500 protesters were mobilized by Act Up,
the coalition of gay 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 killing 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 AIDS 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 gay, are sick to death of being made victims
by those who are ashamed of being gay.
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 AIDS would have just played into his critics.
For Koch, it was no secret that he was rumored to be a closeted homosexual 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 illegal. 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 gun.
[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 killed 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 murder,
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 murder.
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 killed 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 killing 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 kill him.
Killing 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 killed his boss.
Police in New York City are worried about a mob war this morning
after an apparent gangland killing Sunday in Brooklyn. A car bomb killed one man,
reportedly a lieutenant in one of the country's most powerful mafia families.
A bomb was planted under a car that Gotti was expected to be driving
after a meeting at a social club in Brooklyn.
You plant a bomb 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 murder. 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, 1986. The SEC announced a press conference.
[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 illegal 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.