It was no coincidence billionaire Howard Hughes asked E. Parry Thomas, chief executive officer of Bank of Las Vegas, to acquire a Las Vegas home for Hughes’ actress wife, Jean Peters, in the late 1960s.
Bob Maheu, a former FBI agent who was Hughes’ top aide, can’t recall any major piece of valley real estate Hughes acquired without consulting Thomas, including six casinos.
The banker bought properties as nominee for Hughes so the seller wouldn’t know the richest man in the world was bidding for the property.
Thomas, probably more than any other single person, fostered the development of Las Vegas’ casino industry and with it Las Vegas, business leaders say.
Before Thomas’ arrival, Las Vegas casinos were forced to rely on their own cash for projects, says Jack Binion, former president of Binion’s Horseshoe and now chairman of Horseshoe Gaming. "If Vegas had to be built for cash all these years, figure how it would be stunted for growth," Binion said.
Thomas and his late partner, Jerry Mack, ran the only bank willing to make loans to Las Vegas casinos for 20 years. They rode the gaming industry’s growth and prosperity, making higher than normal profits on their loans.
Thomas also encouraged insurance companies and the Teamsters Central States Pension Fund to lend money to Las Vegas casinos. He is widely known as a mentor to Steve Wynn, chairman of Mirage Resorts Inc., but also supported other entrepreneurs in the gaming business.
Parry Thomas was born June 29, 1921, in the Mormon town of Ogden, Utah, where he grew up. He stopped attending the Church of Latter-day Saints at age 14, though he later married a church member and his family is active in the church. Thomas’ LDS upbringing would later help him establish strong ties with successful Mormon businessmen in Las Vegas.
His father was a successful plumbing contractor, so successful that he found himself the biggest depositor in a bank that failed during the Depression. His father took over the bank, and Parry helped him collect loan payments.
When World War II started, Thomas was trained as a paratrooper-skier and worked for an intelligence unit in Europe.
Parry’s heroes were two banking brothers: Marriner and George Eccles. Marriner Eccles was chairman of the Federal Reserve Board from 1936 to 1948. George Eccles ran First Security Bank in Salt Lake City.
"George Eccles was kind of my dad’s godfather," Peter Thomas, Parry’s son, says. Yet, Parry realized First Security was a family-owned bank and felt he might have more opportunities elsewhere.
He joined Continental Bank & Trust Co. of Salt Lake City, instead. Walter Cosgriff, who headed Continental Bank, also owned a stake in the Bank of Las Vegas, which opened in 1954.
The Bank of Las Vegas was struggling, so Cosgriff sent Thomas to find out whether the bank should be closed. Thomas was enthusiastic about the potential and ended up assigned to work here full-time.
Thomas was smart, hard working, handsome, likable, a good judge of character, a risk taker and an opportunist.
Thomas viewed Las Vegas’ gaming industry in terms of basic economics. First came the pioneering phase. Then, if that proved successful, expansion followed. And finally, the industry entered into a consolidation.
The Utah banker arrived during the pioneering phase. "We had a road map in front of us," Thomas explained. "All we had to do was to follow it."
If other bankers wouldn’t lend to Las Vegas casinos, Thomas would. "We felt a great obligation to deal with all legitimate enterprises within the state," Thomas said.
In 1955, the Bank of Las Vegas made its first casino loan to Milton Prell for the Sahara. The $750,000 enabled Prell to build the Congo Room, 120 hotel rooms and to make other improvements.
Harley E. Harmon, another retired Las Vegas banker and businessman, remembers meeting Parry Thomas in the 1950s. Thomas wanted to sell him stock in Bank of Las Vegas. Harmon said he didn’t have money to spare for investments. So Thomas made a loan to him.
"When you pay for it, I’ll give you the shares," Thomas said. They shook hands.
Nate Mack was chairman of Bank of Las Vegas, and Nate’s only son, Jerry, was involved in real estate. At the suggestion of Nate Mack, Jerry and Parry became business partners.
"Jerry was closer to my dad than his own brothers and sisters," Peter Thomas said.
When Cosgriff died in 1961, Parry was promoted to bank president.
By the 1960s, the owners of the casinos were getting old. Many were ready to sell, but Nevada law required that all owners be licensed which resulted in casinos selling at a discount. The law prevented publicly held companies from acquiring casinos, because it was impractical for every stockholder to obtain a license.
Some thought corporate control would open the industry to hidden ownership. "Just the opposite was true," Parry Thomas said.
He proposed changing the law about 1965. Northern Nevada controlled the Legislature, and Bill Harrah of Harrah’s casinos figured he didn’t need investors on Wall Street. He persuaded legislators to kill the bill, Thomas said.
So Thomas urged Harrah and his attorney, Mead Dixon, to join him in supporting the bill. Otherwise, "what was (Harrah’s company) going to do when he died?"
Dixon "understood immediately. He convinced Bill Harrah it was the proper thing to do," Thomas said. The bill became law in 1967 and was refined with a 1969 amendment. Since then, small investors have been allowed to buy shares of casino corporations without obtaining a gaming license. Only those holding 10 percent or more are required to be licensed.
In 1968, Bank of Las Vegas merged with Valley Bank of Reno, which had the same major stockholders. Thomas and Mack named the combined institution Valley Bank. The proud people of Reno wouldn’t do business with an institution called the Bank of Las Vegas, which they considered a disreputable, dusty desert town.
By 1975, Thomas and Mack could view the city from the 17th floor of the $15 million Valley Bank Plaza in downtown Las Vegas. Thomas "wanted to build Valley Bank into a Southwest banking powerhouse," explained Irwin Molasky, who developed the bank building.
"He knew that the way to do that that was through appearances," Molasky said. "Parry wanted the biggest building in downtown Las Vegas."
Thomas and Mack started scouting real estate near the University of Nevada, Las Vegas for a computer center. They discovered UNLV itself owned only 55 acres. The bankers knew land prices around UNLV would skyrocket if UNLV waited until the state appropriated funds. The university would be forced to erect high-rise buildings or to use a split campus.
The two bankers formed the Nevada Southern University Land Foundation, then personally guaranteed loans to it. The foundation used that money to acquire 300 acres and resell it to the university at cost whenever the college had money to buy.
Thomas, Mack and others felt the Community Chest, a local charity fund, was controlled by a few charities. They established the United Way to distribute funds based on merit, rather than personal ties.
Thomas considers the land bank, United Way and his understanding of Las Vegas’ potential his greatest legacies — but there are others.
At a Boy Scout testimonial recently, Molasky asked the audience to visualize how different Las Vegas would be without Thomas. "It is still 1998, but the Strip looks different. There is no Mirage, Treasure Island, Bellagio, No MGM or New York-New York," the developer said.
"Caesars Palace, the Desert Inn and the Flamingo are all small, 300 to 500 room hotels," Molasky added.
"No Sunrise Hospital, over 2 million patients would never have been cured," Molasky observed. "Boulevard Mall, not there, instead maybe a post office and grocery store."
Thomas took risks with projects like these, but "the gaming industry protected the bank against problems," Peter Thomas said. Financially strong casinos bought out the ones that were failing and assumed the debt. "They didn’t want their only bank to have a problem," Peter Thomas said.
Parry Thomas became a boss of casino managers himself at one point. He was chairman of Continental Connectors Corp. in May 1969 when the Woodside, N.Y.-based conglomerate acquired all of the stock in the Dunes Hotel.
In December, the Securities and Exchange Commission sued Continental Connector alleging company reports contained fraudulent and false information. Parry Thomas blames Continental Connectors’ accountants for failing to audit the company’s books correctly.
The audits were reworked, and the SEC removed the restrictions.
Both Peter and Parry believe the SEC suit was intended to pressure Parry into revealing confidential information about Las Vegas casinos.
"The government in a lot of those years was coming after the big casino owners. That was the big antlers kind of situation," Peter Thomas said. "Anytime, they could they would put pressure (on him) by any means. It almost blew my faith in the government." But Parry never violated his clients’ trust, Peter said.
Bank of Las Vegas couldn’t support the gaming industry without help from other financial institutions.
"I started looking around. We found that our best reception was in the Bible Belt, Dallas," Parry Thomas said. Hundreds of insurance companies were headquartered there.
In putting a loan together for Del Webb’s Sahara, Parry Thomas "had a lot of these Bible Belt insurance companies in it," son Peter said.
The insurance loan officers didn’t want to tell people at home that slot machines were the collateral. So Parry suggested referring to the slots as "one bicycle and other recreational equipment." Peter Thomas added with a laugh: "And then he told Del Webb to go out and buy one bicycle."
Parry Thomas also helped casinos tap Teamster pension funds in the 1960s. Casinos paid higher interest than other businesses and lending to casinos "helped put their members to work" in Las Vegas, Peter Thomas said.
"The Teamsters are good people to work with," Parry told Review-Journal columnist Jude Wanniski in 1964. "I’m not talking about (Teamster boss Jimmy) Hoffa — I don’t know about him one way or another, but the people that handle the pension fund are extremely knowledgeable. They have the best researchers, the best appraisers and top lawyers. And the loans they make are good loans. Why, the federal government scrutinizes them so closely that whenever I deal with the Teamsters I put together a separate file just for the government."
The banker continued: "I can’t allow any failures in this — I’ve got to see that this community stays healthy. I’ll take dollars from the devil himself if it’s legal — and I don’t mean anything disparaging toward the Teamsters by that."
Thomas became a mentor to several casino entrepreneurs.
"He’s like a son to me. He’s like a fifth son," Parry Thomas said of casino executive Steve Wynn. "I like him personally. I like his attitude. He’s brilliant. He’s bright."
Parry Thomas helped Wynn get a liquor distributing company and was impressed with Wynn’s success.
Thomas saw an opportunity for a coup at the Golden Nugget in downtown Las Vegas. "The Golden Nugget, of all the properties downtown, was by far and away the most attractive to me personally," Thomas said. The Nugget’s managers, "a small clique of old timers," didn’t own much stock in the Golden Nugget.
"The management really wasn’t doing anything, and it was going to languish if somebody didn’t give it a swift kick," Thomas said. Stock in the Golden Nugget didn’t reflect the enormous value of the real estate the company owned. So Wynn and a group of investors decided to buy a controlling interest in the company and throw out the old regime.
"Parry called me up, and told me to buy (some Golden Nugget) stock," said Michael Gaughan, now chairman of Coast Resorts, owner of the Gold Coast, The Orleans and Barbary Coast.
Gaughan said he didn’t have any money, but Thomas made him a loan for the investment.
The executives at the Golden Nugget "were very nice people," Thomas said. "It was just pure business. Steve proved me right."
Parry also helped Margaret Elardi start her career as a casino entrepreneur when women executives were an oddity and even rarer in gaming.
In 1992, BankAmerica Corp. bought Valley Bank. It had $630 million in loans outstanding to gaming companies. Peter Thomas said Valley Bank realized it was too small to continue satisfying the growing financial needs of gaming companies in Las Vegas.
Bank of America still claims to lead the banking industry nationally for gaming loans.
Bank of Las Vegas started in 1954 with $250,000 in equity or net worth. By the time Bank of America took over in 1992, the Valley Bank’s stockholders had $400 million in equity.Part II: Resort Rising