New York City.
Happy new year!
At the dawn of the 80s, it was exploding with opportunity.
[newsreader] Boom times, that's what the markets 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 1987, the boom times came to a halt.
And with the party over, the backlash began.
A Wall Street cheat found his reputation in ruins.
[newsreader] Boesky admitted to profiting from insider trading.
And decided he wouldn't go down alone.
Boesky ratted out everybody.
A Hotel Queen faced a city full of angry subjects.
And I hope she gets everything that comes to her.
And a future behind bars.
She had been indicted on a great many counts.
I'm innocent.
A gilded gangster continued to taunt the feds.
He was just out there, thumbing his nose at law enforcement.
Even as he handed them a smoking gun.
Tape recorded conversations were a gold mine for the FBI, they were a jackpot.
And while a politically minded prosecutor pounced on them all...
Giuliani earned this reputation as this law and order person.
If you violate the law, you go to prison.
A developer from Queens kept pushing his luck.
Eventually, word started to get out. It was time to take him down.
It was a toxic wind that was ripe to blow up.
He said, "I wish you could see her naked." Even today, it makes me uncomfortable.
These five titans would reshape the city and the world we live in today.
But as the 90s neared, they'd finally face their day of reckoning.
-Are you surprised? -No comment.
And empires would fall.
We are very honorable people.
[shouting]
Black Monday, October 19th, 1987 when the stock market went into a free fall.
Today's precipitous plunge struck fear in the hearts and pocket books
of even Wall Street veterans.
The market is now down 221 points.
Does that make you nervous?
No, I died already.
Black Monday was the inflection point at which all of a sudden
the party screeched to a halt.
[newsreader] In trading rooms on Wall Street there was panic.
Sell orders flooded in from big institutional investors,
from private investors. From mutual funds.
A bull market that had gone on too far and too long
without enough corrections suddenly just went down.
[newsreader] The largest drop in stock market history, falling 508 points on the Dow.
It was this absolutely terrifying event where the market was plummeting
and it didn't feel like it would ever stop.
[newsreader] More than 604 million shares changed hands with the decline of 22.6 percent
far greater than the single-day loss of 1929 which ignited The Great Depression.
Panic, complete panic. Everyone's going crazy.
What happens when everybody tries to leave the room at the same time?
Well, nobody can get out. And that's the 1987 crash in a nutshell.
There were moments where Washington bureaucrats believed that not only
Wall Street but the American economy could melt down.
The chastening that everybody who went through Black Monday went through.
There was a new found caution that it instilled in everybody I knew on Wall Street.
We'd now seen what was possible when the confetti years suddenly turned dark.
It was a devastating blow to public confidence in the markets.
But it wasn't the first. For months, a drum beat of revelations had cast a shadow
on Wall Street. Starting with the spectacular collapse of an arbitrager.
[newsreader] Ivan Boesky came to the US District Court today
squeezed into a Japanese compact car.
He's already paid 100 million in penalties for insider trading violations,
is barred from the securities industry for life, disbarred, and, his lawyer says, broke.
[Sorkin] The Boesky story represented this rags-to-riches guy who came from nothing
who rode the Wall Street wave. He became emblematic
of what Wall Street was in the 1980s and the idea that he was rubbing
his success in people's faces 'cause he was so out there with his success,
he was so public about his success. When he came undone, the lips curled.
People smiled. The schadenfreude was thick.
[inaudible]
[Stewart] When Boesky agreed to plead guilty,
he knew he's be sentenced to some kind of prison term.
Depending on the value of his cooperation.
[Madrick] Boesky decided to cooperate 'cause he didn't think he had any way to fight it out.
He was guilty and he wanted to save his ass.
[newsreader] Boesky faces up to five years in prison and a fine of $250,000.
It had been a remarkable run for the kid from Detroit.
But now he knew it had come to an end.
And if he had to end other careers to minimize the fallout, well, so be it.
So Boesky ratted out everybody.
[newsreader] All over the US, people have been shocked by scenes like this.
Investment banker Martin Siegel ducking reporters after pleading guilty to insider trading.
[Stewart] Siegel said always felt guilty for feeding information to Boesky
and now Martin Siegel is over and Boesky was at the heart of the case
of securities law violations against Michael Milken.
He was the center of this information hub.
That's the most powerful position you can possible be on in Wall Street.
[newsreader] He was worth more than a billion dollars when he got caught cooking the books.
[Stewart] Michael Milken eventually pleaded guilty to six felonies
and agreed to pay 600 million in fines.
[Guiliani] Mr. Boesky has been extremely valuable, without his cooperation
there would be people who would be involved in ongoing fraudulent transactions.
While the arbitrager downfall destroyed the careers of those around him,
it bolstered the career of one cunning prosecutor who made the most
of every white collar crook he could cuff.
[newsreader] Since 1984 there have been more than 48 cases of insider trading,
many involving the financial community, brought by New York's US Attorney, Rudolph Giuliani.
They're seen usually as very shrewd, very capable, very industrious.
Yet there's this whole other side to their life
in which they are cheating and lying and stealing.
Which they keep secret.
[Kirtzman] Rudy Giuliani wanted to be the center of attention and to give enormous power
to ruin people's lives. There was a famous case of Giuliani going after traders
at Kidder Peabody and handcuffing them
and marching them across the trading room floor.
How much did you make from your inside information?
[Mahler] A perp walk is the idea of arresting people in this very public and almost theatrical way
marching them out of offices so that the news cameras would capture these guys.
Do you think the others are doing the same thing you are?
[Mahler] Publicly parading these Wall Street millionaires, as if they were common criminals
It was intended to be a form of deterrence, look what'll happen if you break the law.
But you could just as easily argue that he was showboating.
Everything was kind of a PR campaign for Giuliani.
He's busting these guys, he's locking 'em up, he's indicting them.
He did that on purpose and it enhanced his reputation as the Sheriff of New York.
Part of the criticism was, "Well, those are decent white collar guys.
"They, they, and white guys, to boot. they shouldn't be subjected
"to this kind of thing that actual criminals are subjected to."
I, I thought, "No, this is good."
[Stewart] To this day there are people on Wall Street who criticize him
but the American people needed to see these people being held accountable,
that these very wealthy, so- called Masters of the Universe were not above the law.
They committed crimes. Why not go after 'em? Why not go after the big fish?
All this profligate behavior started to begin to move very much out of vogue.
The so-called "Masters of the Universe"
were trading their penthouses for prison cells.
Once the heroes of the decade, they were now its villains.
Anyone who embodied these areas of New York City power, Giuliani took aim at.
If you violate the law, whether it's insider trading or tax evasion,
or fraud or bribery, and so-called "white collar crime,"
the overwhelming general rule is that you go to prison.
As the disgraced trader awaited his sentencing, the prosecutor savored his victory.
But not for long because he'd already set his sights on an even juicier target.
It is now alleged that they did not pay millions of dollars in taxes.
[newsreader] US Attorney Rudolph Giuliani said if the Helmsleys are found guilty,
they will serve some jail time.
It was the late 80s in New York and the cultural tide was turning.
For years, some of the city's elite had treated their wealth and fame
as a license to act with impunity.
But now the public was growing tired of their antics and a hard-driving prosecutor
was capitalizing on their outrage,
going after the formerly untouchable with a vengeance.
[newsreader] Former Miss America and New York City official Bess Myerson
is facing a possible 30 years in prison and a half a million dollars in fines.
We prosecute all sorts of people.
Little people, in-between people,
and some of the wealthiest billionaires in the United States.
And there was no better target among New York's high society
than the Queen of Real Estate, who had been outed as a tax cheat in the press.
She might have been a scapegoat for the greed and excess of the 80s,
but she brought it on herself.
The Helmlseys, one of the world's wealthiest couples, were indicted
in New York today on state and federal charges involving a tax scam.
She was an easy target. So imperious, so mean.
[inaudible]
Leona Helmsley was supposed to have impeccable taste,
you'd expect to have impeccable morals and she didn't.
New Yorkers had loved her as the queen who stood guard,
tending to her customers' every whim.
But a queen who defrauded the government and stiffed her contractors?
That they found far less charming.
[newsreader] Harry and Leona are in trouble because they spent millions of dollars
on renovations at their Connecticut estate.
Twenty-nine acres, 28 rooms, and allegedly charged it to their businesses for deductions.
[Plaskin] She was allegedly deducting personal expenses
as business expenses or expenses for her hotels.
[Feldshuh] She was indicted on one count of conspiracy to defraud the United States.
Three counts of tax evasion, three counts of falsifying personal tax returns.
Ten counts of mail fraud. She had been indicted on a great many counts.
[newsreader] The Feds also allege that Mrs. Helmsley extorted money from suppliers,
demanded and received kickbacks in exchange for Helmsley business.
Well, you wouldn't call her cheap. You would call her tight. She thought that,
"I'm paying him a lot of money, why won't he do this for me for next to nothing or nothing?"
I confronted her, I said, "Is it true that, you know, you didn't pay contractors
"or you tried to get services for free?"
She said, "Well, the bill that he gave me was too high."
She started talking about feeling victimized by the government.
After all, she paid millions of dollars in taxes.
She didn't think she did anything wrong and she stuck to that.
It isn't fair. It isn't fair. Plus I look like [inaudible]
It was clear from the beginning that Leona Helmsley was not interested in pleading guilty.
I have done nothing wrong.
[Plaskin] By the time she went to trial, she was so famous and so notorious,
it would have been almost impossible to find a jury of her peers
who didn't have that image of her that had been painted in the press.
Harry and Leona Helmlsey are so rich they could practically start
their own country and if they did they wouldn't have to pay taxes,
since it appears that they're not too fond of them anyway.
[newsreader] Leona Helmsley made an understated entrance to court no lima, no husband Harry.
[Dowling] The story was that he was no longer mentally able to go through a trial.
But I think what actually happened was Harry had done
so many favors for every judge, every official
that they were not about to prosecute their friend for something that his wife did.
[Feldshuh] Leona Helmlsey hired Gerald Feffer to defend her.
He took an unorthodox point of view that he had hoped would save her.
[Devita] What he actually said in opening statement is,
"You may hear that Leona Helmsley is a tough bitch.
"It's not a crime to be a tough bitch."
Feldshuh He tried to prove that you cannot send a person to prison just for being
a tough bitch, just for not liking them, just for thinking that they were imperialistic.
These were oversights that she didn't know what was going on,
that she was more concerned with dust in the corner than she was with her accounting firm.
Did we steal somebody's money?
Oh, the government says you stole theirs.
Did they prove it?
[newsreader] Prosecution called 44 witnesses, many of them former employees
who described Leona as greedy and arrogant.
Everybody who was around her knew what a terror she was.
And that always catches up with people. And it did.
[newsreader] Former employees testified about doctored invoices for everything
from Louis XVI furniture to carrots and potatoes.
You could see that she was unhappy at some of the testimony.
Certainly, there must be one person in this entire world
that would say I'm a decent person. They didn't bring anyone in.
[Silverstein] The coup de grâce was when her housekeeper testified that Leona had said,
"Only little people pay taxes." So everybody hated her after that.
I sat down with a housemaid ?
And said, "Let's have tea?" Or where was it?
In the bedroom, what? And I said, "Do you know only the little people pay taxes?"
Does this make sense to intelligent people? Huh? This story was concocted.
And contrived. And boy did that make the newspapers, didn't it?
"Paying taxes is for the little people." Wow, such a great line.
It'll be on her gravestone, it probably is on her gravestone, actually.
"RIP Taxes are for the little people."
"Only the little people pay taxes." That was her against us.
We were the downtrodden, poor, misunderstood public
and she was the big bad wolf.
Sooner or later you gotta pay the piper and I hope she gets everything that comes to her.
It's poor, middle class who have to pay taxes.
But the little people don't just pay taxes. They sit on juries too.
And they were about to hand the Queen of Mean a verdict that would seal her fate.
Ms. Helmsley, do you have any response to these allegations at all?
While a day of reckoning had arrived for some New York titans
who'd overplayed their hands, others continued to push their luck.
By the late 1980s, Donald Trump was building seemingly everywhere.
And buying seemingly everything.
[newsreader] He already owns Trump Tower, Trump Plaza, Trump Park, and Trump Castle.
He bought the Eastern Shuttle and renamed it Trump Shuttle.
We were the first plane out this morning, we were the most successful flight this morning.
We had more people than anybody else and I think we had better service than anybody else.
All of these things were not money makers. So they added to his overall debt.
[Kruse] The banks continued to give him more money.
the press he received largely was uncritical.
He was living this consequence-free existence.
So there was no reason for him to dial back his behavior.
By 1988, the striver from Queens had become a national celebrity.
And his thirst for attention was leading him to make one bold move after another.
But there were certain things he wasn't sharing with the press.
And it was those that would threaten to undo him.
It's gonna be fancier than ever. The Plaza Hotel is getting a face lift
and the new owners, the Trumps, reveal their ambitious plans today.
The purchase of the Plaza Hotel for $400 million was simply a trophy purchase.
And using junk bond, high interest rate financing, just complicated it more.
I think that Donald thought that he was capable of pulling this off.
You know, I, I think he was delusional.
The first thing that he did was announce to the world
that he was making Ivana Trump the president of the Plaza Hotel
and that he was going to pay her in dresses.
That she could have as many dresses, buy as many dresses as she wants.
I thought the greatest toy that I could give Ivana would be to put her at the Plaza Hotel.
[Kruse] When she started running the Plaza, this created friction.
He was Donald Trump but she was Ivana Trump.
She was becoming a character in her own right.
Donald was so intent on building his empire and Ivana was sort of a piece in the empire.
She was a beautiful, smart woman who could fit into his life.
A lot of women in your position would feel overshadowed by their husband.
-Do you ever feel that? -Not at all. Not at all.
[Brown] I think people forget what a big figure Ivana Trump was in the 80s.
I mean, we did as many pieces about Ivana as we did about The Donald.
Of course Ivana and he together were the ultimate glitzy duo
who were out every night and who you could not miss.
She and he shared a certain aesthetic sensibility of blond and gold
and cosmeticized to within an inch of her life.
[Res] I always thought Ivana would do whatever he asked her to do.
It was always about pleasing him and impressing him.
[O'Donnell] She absolutely worshiped Donald Trump but they had a business relationship too
Now all of us that ran these properties had screaming matches with Donald.
And she did as well. She was not a pushover and anybody that suggests
that she was just didn't know, you know, really how smart and how tough Ivana Trump was.
Is there anything you wouldn't support you man in?
Oh sure. [laughs] Oh sure. I wouldn't support him a few things.
I wouldn't support if Donald would be running around and fooling around.
You know, that I couldn't live with.
I used to say to her, "Ivana, you know, you better keep your eye on the ball here
"because, you know, Donald is young, handsome, and now very rich and powerful."
[O'Donnell] I did see Donald talk publicly about Ivana in a way that he hadn't done
up to that time. It was more negative, more jokingly, putting her down.
And he talked about how women were after him. "This one wants me, that one wants me."
[Fox] He loved beautiful women and he loves something that would stroke his ego.
Trump had spent his entire life believing he can get away with anything.
[inaudible]
As I was writing The Art of The Deal , it wasn't clear to me
that he was simultaneously carrying on an affair.
[Evans] Every year there was an American Booksellers Association Convention.
This particular year was going to be in Las Vegas. Donald said,
"Hey, let's just go out in my plane."
What fun. His plane was set up like a living room.
It was very glamorous, lots of velvet.
And just as we land and are getting our things together, a door opens.
A door to, I think a bedroom or something.
All along, a stowaway, Marla Maples, comes out.
She's been on the plane with us the entire time. I am so shocked, it's like,
I don't know, the scarlet letter or something right in front of me of like,
"Oh." It was such a scandal, you cannot imagine. Everybody's mouth dropped.
[O'Donnell] Marla Maples was a fun loving, "let's have a party" kind of woman.
Ivana and Marla were polar opposites.
[Fox] Marla Maples grew up in Georgia,
she was definitely a southern belle and Georgia peach.
She was someone who competed and won the Miss Hawaiian Tropic pageant.
[O'Donnell] Donald Trump just saw beauty in her and I think he saw youth.
He loved that image so much of being with a younger woman.
One time at a dinner, he said, "I wish you could see her naked."
And I was... I just cringed. Even today it makes me, it makes me uncomfortable.
[Fox] Marla was a struggling, young model.
Each opportunity that you find can be so instrumental in your future.
She had nothing and needed him. And I think he loved that need to be needed.
-My wife Ivana, who's accepted-- -[applause]
[Fox] Eventually, word started to get out that Donald was dating another woman.
And I don't think she wanted to believe it was true,
no one wants to believe that about their husband.
[Carswell] Ivana knew that Donald liked blond, busty women.
So she went to California to meet with Michael Jackson's plastic surgeon.
And she comes back, she no longer looked like Ivana Trump.
I do remember saying to him, "Donald, look at what Ivana is doing for you.
"I mean, she's completely changed every part of her."
And he disdained what she was doing. He was never going back to her.
[O'Donnell] Common sense would tell you that this is not gonna be a secret for long.
And so we were waiting for the blow up.
[Evans] And then all of a sudden the tabloids start churning these stories out
on Marla Maples, Marla with Donald, Ivana, the whole triangle.
[O'Donnell] I think Donald was very shocked by the publicity that he got.
But he also loved it but he believes this philosophy of all press is good press.
He believed if you handle it in a certain way, you can get away with it.
And the affair was not the only big gamble he was making at the time.
At the end of the decade, the brash developer embarked on his biggest project yet.
Donald Trump today opened the doors to his billion dollar gamble,
his new Atlantic City casino, the Taj Mahal.
Financed entirely through debt, the Taj Mahal would need to earn
over one million dollars a day to stay afloat. An amount no casino had ever raked in.
[O'Donnell] I thought that the Taj Mahal was gonna be in desperate shape.
The red flags were up prior to the deal being done.
[Johnston] After Donald Trump gets control of the Taj Mahal, he can't pay his bills.
And it was all Donald's reality running up against the hard numbers of banking.
[O'Donnell] It really was only a matter of time before this stuff was gonna catch up with him.
He was hiding too many things for there not to be a day of reckoning.
His deals were crumbling. Eventually they're gonna catch up with the scam.
[newsreader] Donald Trump, the larger-than-life New York developer celebrity.
Could it be that he's built his empire on 90 percent ego?
The headlines are screaming "death of a legend," calling him the has-been of high finance.
It was time to take him down.
[newsreader] It was a monster parade, even by New York standards.han
to cheer the Mets.
In October of 1986, the Mets' legendary World Series victory
over the Boston Red Sox united New Yorkers in celebration.
[Deveney] The Mets really should have been a dynasty
and perhaps should have won multiple world series.
They had these young players, Darryl Strawberry, Dwight Gooden.
But on the day of the parade
in which The Mets were celebrating the 1986 World Series,
Dwight Gooden is in Queens in a housing project, high on coke
and watching the parade on TV because he's still so high on coke he hasn't left the room.
The Mets were never the same after that.
A drug epidemic that had been ravaging the city didn't spare the Mets.
And down the road from Shea Stadium in Queens,
an even deadlier threat was emerging. Hitting low-income communities hard.
[McDaniels] I grew up in Queens, New York, which was like the suburbs.
We wasn't rich but people would mow their lawn.
And the kids would play in the sprinklers and ride their big wheels.
You had the candy store. You had the delicatessen. You had the real estate office.
In the 80s, I came back to my neighborhood and everybody started looking different.
My friend's sister, who was the sexiest girl in the neighborhood,
came looking like someone out "The Walking Dead." It was a plague when crack came.
[newsreader] Purveyors of the drug cocaine are now selling it in its purest form called crack.
Much of the nation's crack problem is concentrated in New York.
Crack is basically just cocaine with a couple of ingredients added
and you throw it in the microwave. You had a situation
where if you smoke crack, you're going to immediately love it.
[newsreader] Crack is smoked freebase and those who've used crack
describe the drug as the most powerful high they've ever had.
It is what they call "the instant high." Once you ingest it, you're done.
That high that you would get off that freebase would make all your troubles fade away.
[Deveney] That high only lasts about 15 minutes.
When you get through those 15 minutes, you're gonna need more.
[interviewee] You're speeding like 100 miles an hour.
And when the mind is going that fast, it's just normal for you to become violent.
People were out of their minds, literally.
You go through such a low when you're out and you can't get any more
that you're ready to kill.
I remember one case,
this young man had murdered his mother for money to buy crack.
This was going on all over the city.
[Weatherspoon] People sold their souls to not live in their reality.
[newsreader] Crack is cocaine marketed to a lower-income people.
It's a very, very cheaply made drug. You could buy it for five bucks at a time.
[Weatherspoon] Jobs disappear. Housing goes down the tube. Schools are not good.
And then you bring in the drugs and the hustle to make a dollar. And you get it going.
Crack dealers were making so much money off it. It made success easy.
You could sell it for five bucks because you knew that once somebody smoked it once,
they'd be back probably in a half hour.
[chanting] We want our buildings back, no more crime, no more crack.
They have to take a stand, just like we're doing.
If they wanna get these drugs out of the neighborhood, they've got to take a stand.
[Weatherspoon] You have decent people living in poor neighborhoods.
That's where they can afford to live.
While those involved in the drug trade are surrounding them and smothering them.
[newsreader] Crack use has grown so fast that it's outstripping the ability
of law enforcement and drug treatment authorities to cope with it.
This has reached epidemic portions.
[Guilianni] I don't think we incapacitate drug dealers.
We do not put them away for long enough periods of time to really make a difference.
As soon as crack becomes a high profile problem, Giuliani instantly seizes on it.
We do not give 40- and 50-year prison sentences that put the major drug dealers away.
[Byfield] Giuliani earned this reputation as this law-and-order person.
"The War on Drugs." He took that up as a part of his mantle.
We will prosecute the biggest drug cases, the medium-sized drug cases,
and the street drug cases in areas where the local courts for one reason or another
aren't able to deliver a deterrent effect.
[Mahler] As US Attorney, Giuliani decided to demand stricter sentences
for low-level drug dealers.
In most cases, these low-level drug dealers were people of color.
The prosecutor's crusade for stricter federal sentences largely impacted
the city's poorer communities. With mandatory five-year prison terms for dealers and users.
[newsreader] Narcotics police in northern Manhattan
arrest small time dealers almost every night.
While crack is being used in poorer communities,
the people who are using the powdered version of cocaine
all across wealthy communities are not demonized in the press in the same way.
The fear that was generated around crack allowed huge disparities
in arrests, prosecutions, sentencing.
Crack cocaine would get you a ten-year sentence
while cocaine might get you probation.
[Byfield] People didn't think twice about the lengthening of sentencing
and police abuse of power in fighting the drug problem.
[newsreader] This is called Operation Pressure Point. Local police make the arrests
and turn the suspects over to US Attorney Giuliani's staff for prosecution.
I take on things that nobody else has ever taken on
and I accomplish things that others haven't accomplished.
While the prosecutor's tough stance played well in the press,
his harsh policies devastated neighborhood after neighborhood.
Angering many people in those communities.
And it wouldn't be long before they made their voices heard.
By the late 1980s, homicide rates had hit record highs in New York City
and pressure was mounting to curb the violence.
And despite major blows to organized crime,
the US attorney's office had yet to catch public enemy number one.
John Gotti understood power and strength.
[Gabriel] It was important for him to show everyone he was an invincible boss.
You just didn't wanna cross him. To his own people, he was ruthless.
He was a tough guy and he wasn't afraid of anything.
He truly believed that nobody would ever convict him.
The FBI had been hunting the new godfather since he knocked off his boss.
And so far, he'd escaped every trap they'd set.
They knew they had to find a new approach and fast.
[newsreader] Gotti has been tried and tailed for five years now.
In that time never convicted of a crime. Outfoxing the foxes
in a big stakes game of cops and robbers that has made Gotti kind of a legend.
[Gabriel] The government couldn't get him. So by the time he gets acquittal number two,
he's becoming this folk hero even to the mob.
His third acquittal, people are now even more fearful of the mob
because, god, you can't even put this guy in jail, everyone knows he killed the boss,
he's doing all this stuff, you can't touch him.
He was just out there and almost thumbing his nose at law enforcement.
[Mouw] He became a magical figure in the city of New York.
[Gabriel] Everybody was pulling for John Gotti.
They've dismissed how bad of a guy he was.
[newsreader] Gotti is somewhat of a local hero here.
A lot of people said, "Boy, you're never gonna catch him.
"You will never get this guy, he's untouchable. He's beaten all these cases."
And it just created a sort of, almost a frenzy within law enforcement
to try and make a case on him. And at that point, we had already been investigating Gotti
The FBI felt it needed taped conversations.
[Mouw] Our goal was to find out where John conducts his criminal activities
and put a microphone there and record all the conversations.
And it quickly became apparent that John established his headquarters
at the old Ravenite Social Club, 247 Mulberry Street.
And after a few months we are able to pick up a pattern
where he was coming there four to five nights a week.
[newsreader] On the northern end of Little Italy, a brick façade
has replaced a wooden store front. It is the Ravenite Social Club.
And more importantly for us, all the captains of the Gambino family
were summoned to meet him there.
So every night you'd have four or five captains, 30 or 40 soldiers,
the associates in this club or outside the club. Which is a godsend for law enforcement.
[McDonald] We were up doing physical surveillance and listening to devices
for a period of about eight months, struggling to get audible conversations.
There's just a lot of people in a small room, all talking at the same time.
We were getting bits and pieces that led us to understand we were in the right place
but nothing we could indict with.
And a lot of people this time said, "You're wasting your time, you'll never get him."
In the summer of '89 we finally got a nice break.
The FBI found out that Gotti was using an apartment two stories
above the Ravenite Social Club to discuss important family business.
[Mouw] We found out that they're using an apartment up there owned by this widow
named Mrs. Cirelli, whose husband used to be a Gambino soldier,
Mike Cirelli, used to run the club.
[Capeci] One particular weekend, when the widow was out of town,
the FBI got in and they put a bug in her apartment.
[McDonald] We had a location to observe comings and goings
and we were tape recording conversations.
[Mouw] We hear him clomping up the stairs.
We hear the front door open. John Gotti is deaf in his left ear so they had to talk loud.
[Capeci] The FBI captured Gotti
admitting to voluminous organized crime activity as well as murders.
Tape recorded conversations were a gold mine for the FBI. They were a jackpot for them.
[Gabriel] Very much to our surprise, we hear John on a diatribe
about why he killed Paul Castellano. He starts the conversation,
"When that guy Paul got sick." that was Paul died.
You know, here we are, several years after they killed this guy, it was astonishing to us.
Fortunately for law enforcement, Gotti supplied many smoking guns
through his own words. He was intercepted taking about, you know,
ordering the executions of people, saying that he was responsible for their murders.
The smoking gun was Gotti himself.
Just by listening to the tapes that we had, we knew we had a case that was solid,
the game was over. The end was near.
January, 1989. New York City.
A blunt spoken prosecutor with boundless ambition had felled giant after giant.
And now the end game was in sight.
Crime buster, US Attorney Rudolph Giuliani announced that he is stepping down
at the end of this month. He didn't say why but many believe
that he will be a Republican candidate for mayor of New York City.
Giuliani was probably the most effective US Attorney
for the Southern District in history.
During his years as US Attorney, he really changed the nature of the office
so that it became much more aggressive.
Rudy takes down all of the big villains of New York City, you know, a cast of bad guys.
The prosecutor had been hounding the mafia for years
and the last domino to fall would be the Dapper Don himself.
[newsreader] John Gotti, the reputed boss of the nation's largest mafia family
was arrested tonight along with his top three associates
in a move by the FBI to crush the Gambino crime family.
We decided to arrest him at the Ravenite.
And I walked down there later, it was like shock and awe right after, you know,
bombing attack, 'cause there are like 20 Gambino guys in there.
And they're all sitting out there smoking, looking around. They were amazed.
The greatest fear was that John Gotti got arrested. These are like the untouchables.
In many respects, I have to say the guy was a very good wise guy.
But what draws against that is the fact that he did everything so publicly,
made so many stupid mistakes and really brought down the Gambino family.
So where he was a good wise guy, he wasn't good at how he executed it.
[newsreader] Arrested with Gotti tonight was his under boss Sammy "The Bull" Gravano,
his consigliere, or family advisor, Frank Locascio.
And one of his top capos or captains, Tommy Gambino.
If he beats this massive federal case brought on by the FBI,
it could make him the biggest gangster in America since the legendary Al Capone.
If he loses, it's likely Gotti will spend the rest of his life in jail.
And just as he chased gangsters in Queens, the prosecutor also took aim
at traders in Manhattan. His biggest catch? The king of arbitrage himself.
Picture this. Ivan Boesky jail bird.
[Guiliani] The three-year sentence given by Judge Lasker
gives the real world of what happens in criminal proceedings
and in federal courts around this country. A heavy sentence.
Mr. Boesky accepts the court's decision.
He now must pick up the remnants
and try to get on with the business of living
a constructive and useful life.
For Boesky to go from Master of the Universe to a prisoner, surely humbled him.
I think surely it depressed him.
Ivan Boesky, who was used to earning more than a million dollars in a single day,
will now be paid 11 cents an hour for his work at the prison.
Ivan Boesky spent a couple of years at a low security prison out in California.
You go, you do your time and with luck, you know, no one shivs you.
He got shamed. He's not a guy who's gonna be celebrated in gossip columns.
He's gonna be, guy's gonna walk down the street and people are gonna whisper,
"Hey, that's Ivan Boesky. That's the guy who went to jail."
He's got a scarlet letter on his head.
But people are capable of having second acts.
And there was the Queen of the Palace herself, prosecuted for tax fraud.
Many embittered associates testified against her
but in the end, it was her own words that would truly seal her fate.
Leona's line that only the little people pay taxes resonated so much
after this exhausting decade
of the big shots getting richer while others were not.
Here was a perfect expression of the ruling class.
She has a reputation that is a woman who really has no scruples.
Greed will do you in and I guess that's what they, motto that they live by.
After a two-month trial, a jury found her guilty.
[Devita] Leona Helmsley was convicted of income tax evasion.
She was convicted of aiding, assisting in the filing of false tax returns.
She was convicted of mail fraud in connection with her New York state income tax returns.
[Feldshuh] She stepped over bodies to make sure she had her marble dance floor.
And that was her downfall.
She was brought to account for her misdeeds.
[newsreader] Many New Yorkers consider her the personification of greed.
Leona Helmsley had become a symbol of excess and of greed
and of just how money can just make someone awful.
Leona Helmsley was so awful that even Donald Trump took pleasure in her fall.
Harry would never fire him, he's... [inaudible]
Perhaps unsurprisingly, she immediately planned an appeal.
I have done nothing wrong. I'm innocent. My only crime is that I'm Leona Helmsley.
As the decade's icons faced a day of reckoning,
the former sheriff of New York moved to seize control of the whole city.
[announcer] The man who's gonna be our next Mayor,
who's gonna give the City of New York back its soul, Rudy Giuliani.
[applause]
[Kirtzman] In New York there's no greater stage than mayor.
The mayor is the center of the tabloid's focus.
New York is a city overwhelmed by crime, crack, and corruption.
There was a sense the New York was out of control and Giuliani,
his whole thing is control. And so it was a natural office for him to run for.
Now is the time to take our city back from the violent criminals on the streets
and the white collar criminals in their office suites.
Coming in as a hard lying guy, the cops are backing him, the days are numbered for that.
The candidate's years of combative tactics would lead to his own day of reckoning
when he faced his toughest opponent yet: the citizens of New York City.
Before the night is over, New Yorkers will either elect David Denkins,
the first black mayor of New York City history,
or one-time US Attorney Rudolph Giuliani
will become the first Republican mayor in 20 years.
For a person who had mastered the New York media,
Giuliani's mayoral run was a total disaster.