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MEMO, -SACs August 21, 1948 Re: BENJAMIN "BUGS" SIEGEL construction of the casino at the Flamingo Hotel, asking him 2 const was started and where the money was coming cron 1c 2: he gave the agents everything they asked for an: told them everyt it the Flamingo which he t was very 2. A stated tha ‘iii that he was going to call the F.B.J., that he has a lot of friends res uld find out just what the F.B,I. is looking for. Later he told that he had called the F.B.I. and found out that they are trying to determine two things. First, did any one receive a bribe in connection pu with the construction of the Fl © Hotel and second does BEN SISGEL get his money? then suggested to! thathe have SIEGEL go to the F.B.I. in Las Vegas and ask them wha ey wanted. aid no he would not do that; that the F.B.I. should come to him. then said that the F.B.I. would not come to SIBGEL, that he would have to go to the L d-he would think that over. STIZGEL then stated that he <=" =o yesterday for campaign expenses. He said C. 8 already cooperating with them. In this connection, old SIEGEL that when he next sees Senator MC CARRAN to tell MC CARRAN that if the F.B.I. should ie that he should play dumb and advise that he knows nothing about SIEGEL, et al. The discussion then turned again to obtaining a loan and they talked about getting s loan from the Reconstruction Finance Corporation. Their discussion also indicated that they believe we are interested in determining whether a bribe was given to to secure approval for px the construction of the Flamingo Hotel. said if that is what the “ F.B.I. is after let them go ahead and investigate thet; indicating that he was not worried about such an investigation, They then discussed plans they have for pouringaconcrete floor, concrete walls and roofs which will physically connect all of the buildings at the Flamingo Hotel project. They feel that this will completely fool the C,P.A. They are also going to erect « high fence completely around the Flamingo Hotel project in order that no one can see what is going on there. at this time I told QMEMBRnst in view of the attitude of the C.P.4. toward me at San Francisco, we would hold up our open investigation of the Flamingo Hotel until after the next C,P.A. hearing bx on September Sth. I st,ted that since the C.P.A. at San Francisco told me that they feel they could make a case, we would await the outcome of their investigation and if they have another hearing it might prowke STEGRL into again attempting to bribe or corrupt some offioii which might giwe us an opportunity to get a better violation on him. agreed with this procedure. “ LOO A. B. OSTHOLTHOFF ASO : 62: pr ~4