At the start of the decade of the 1960s, almost four-and-a-half years after the signing of the Hawksbill Creek Agreement, Wallace Groves was not pleased with the pace of Freeport's industrial development.

Although this would remain the mainstay of his plans for Freeport's growth, Groves decided that Freeport had all of the physical attributes to be developed into a tourist resort.

What's more, he may very well have been encouraged in this direction by his lawyer, Sir Stafford Sands. According to a 1967 article in Life Magazine, "When their hopes for a great industrial development in Grand Bahama began to fade, Groves and Sir Stafford turned to the one thing that would draw the tourists like nothing else and make the resort turn a profit: Big-time gambling."

Consequently, on July 11, 1960, the Hawksbill Creek Agreement was amended in order to allow the Port Authority to build a "first-class deluxe resort hotel."

Unbeknown to those members of the government who were not included in Sir Stafford's inner circle, there were plans already on the drawing board for a casino to be a part of the hotel, although the application for a certificate of exemption for this purpose was not submitted until some three years later.

Sir Stafford and Groves obviously had to play their cards close to their chests, for had it leaked out that a casino was a part of their plan, this idea would have been nipped in the bud.

In fact, the section of the hotel which was turned into the Lucayan Beach Casino was designated as something totally different on the architectural plans for the hotel.

To take advantage of the Freeport area's potential as a resort, Groves formed a partnership with Louis Arthur Chesler of Toronto, Canada, and together they created the Grand Bahama Development Company (DEVCO).

According to Alan A. Block, in his book Masters of Paradise, DEVCO "would prove to be a consequential company in the life of Freeport in particular, and The Bahamas in general."

Block, who was a professor in the Administration of Justice Department at The Pennsylvania State University at the time he wrote Masters of Paradise, obviously did exhaustive research in putting together this scholarly work.

Block's description of Chesler and how he got involved in Freeport is far from flattering.

"Groves' new partner, the three-hundred-pound Chesler (called Uncle Lou, Big Lou, and The Moose) was born in Belleville, Ontario, in 1913," Block writes.

"He was a sometime student and athlete at the University of Toronto, and then became active in various Canadian mining ventures. Chesler made his first million by 1946 trading in mining stocks, and subsequently in land development in Florida. In 1959 his Florida real estate firm, the General Development Company, was reportedly worth $50 million."

Block claims that Big Lou had "an intriguing range of associates," including most of the Meyer Lansky crime syndicate. Another of Chesler's associates, according to Block, was Charles Allen, the head of Allen & Co., a family-centered investment banking house that bought a 25 percent interest in the Port Authority around the same time Sir Charles Hayward purchased a 25 percent share of The Port.

After Chesler and Groves formed DEVCO, to get the development company moving, they purchased "a bit more than 100,000 acres from the Port Authority by trading DEVCO stock for the acreage."

"In a further series of predictably complicated moves," Block claims, "Chesler and two of his Canadian companies (Lorado of Bahamas Limited and Canadian Dyno Mines Ltd.) acquired most of the rest of DEVCO's stock. DEVCO was now almost totally a Chesler and Port Authority company. The land bought by DEVCO was named Lucaya, and along one of its beaches the 'deluxe' hotel called for in the Hawksbill amendment was built."

In his dealings here in Freeport in the early 60s, Chesler clearly created some enemies among the powerbrokers in the then government. Nonetheless, it was through DEVCO that "consultancy agreements" were made with members of the Executive Council when Sir Stafford was seeking to convince them to grant the certificate of exemption for the casino.

While he maintained close ties through Sir Stafford with members of the then governing United Bahamian Party (UBP), Chesler was simultaneously forging a relationship with the then opposition Progressive Liberal Party.

Indeed, Mike McClaney, who had managed Chesler's Miami Beach club, developed very close ties with some top-ranking members of the PLP and was instrumental in arranging a fleet of aircraft and other transportation used by the PLP in the campaign for the 1967 general election, which the PLP won.

Claims of Mafia involvement in the introduction of big-time gambling in Freeport were also in Life Magazine's 1967 article, which noted that long before gambling "was authorized or even mentioned out loud, the blueprints for Freeport's Lucayan Beach Hotel depicted a large room specifically ordered at a Miami meeting attended by Groves's representatives, the architect and Meyer Lansky."

"On the plans, the 9,000-square-foot room was called a 'handball court,' but it was ultimately to become the Monte Carlo casino," the article claimed.

The Life article claimed that not long after the gambling franchise for Freeport was secured, Groves and Chesler "moved into open conflict, for it had become apparent that Grand Bahama was not big enough for the both of them."

"Chesler made the first move towards a showdown, offering to buy out Groves's 48 percent interest in the Grand Bahama Development Company for $17 million," Life said. "Groves countered with an offer to buy enough of Chesler's stock to gain control of the company, and Chesler — bowing to the feudal lord of Freeport — meekly accepted."

The article added: "By this time Groves's development company, financially shaky, began to change rapidly. The Lucayan Beach Hotel, which had been built under Chesler's aegis at the cost of $8.6 million — one of the costliest hotels in the world on a per-room basis — had been sold, at a loss of $1 million, to Allen Manus, a Canadian entrepreneur (Sir Stafford got a fee of $125,000 for arranging the papers). Manus had no better luck with the hotel: Despite a subsidy of $500,00 a year from the Monte Carlo Room, the Lucayan Beach was in receivership after 18 months."

By the end of 1966, according to the Life article, the last of "Lou Chesler's holdings on Grand Bahama had been sold off and his friends, relatives and hangers-on were gone."

"But Chesler had left his mark on the resort," the article said. "He had introduced Meyer Lansky and the late Jim Norris, millionaire boxing promoter and friend of the mob, to The Bahamas' gambling picture...From its opening night in January 1964, the Monte Carlo Room prospered, never had a losing night. At the end of five months it had made $1 million, and before the year was over it had repaid the $600,000 lent by the Lansky mob to equip the casino and provide the initial bankroll. By the end of 1966, the casino was grossing $8 million a year by available records."

This was the climate that existed in Freeport when the Progressive Liberal Party came to power after its historic January 10, 1967 election — an election in which it received some financial support from associates of mob boss Meyer Lansky.

Indeed, as the Life article noted, "Whatever the Pindling government decides to do about these gamblers, one of their colleagues has turned up in the midst of Pindling's party. He is Mike McLaney, who managed one of Havana's big casinos in the days when Lansky was the top mobster in the Cuban capital. During the recent election campaign, McLaney showed up in the Out Islands, providing free airlift for PLP candidates. The mob always tries to hedge its bets."

But early in the PLP administration, McLaney was placed on the "stop list" by the Pindling government.

Oswald T. Brown is editor and general manager of The Freeport News. Comments on this

column can be sent to: oswald@nasguard.com