He reached, Howard Hughes pulled back his empire

Ed Koch and Mary Manning

Tuesday, June 5, 2007 | 6:52 a.m.

Bill Gay had Howard Hughes' vast empire within his grasp in the early 1970s, but before the end of the decade his reclusive billionaire boss was dead, and Gay had fallen from the Southern Nevada gaming picture.

Gay's meteoric rise began with the Nov. 25, 1970, disappearance of Hughes from his residence at the Desert Inn. Gay's 1978 resignation as president of Hughes' then-powerful gaming arm, Summa Corp., ended an intriguing period of local history.

In between, a pair of Hughes memos published by the Sun helped doom Gay's ambitious takeover plans.

Hughes wrote in one that he had lost trust in Gay as an employee and in the other accused Gay of being responsible for the demise of Hughes' 14-year marriage to actress Jean Peters.

Still, Gay went on to carve out a less public, but still rewarding, career as a trustee of the Hughes Medical Institute in Chevy Chase, Md.

Frank William "Bill" Gay, who worked for Hughes' companies in various capacities over seven decades, died May 21 in a Kingwood, Texas, hospital. He was 86.

No cause of death was given for the resident of Humble, Texas.

Gay, who was born in Provo, Utah, and served in the Marines during World War II, became Hughes' chauffeur after the war and climbed the corporate ladder at Hughes Tool Co., the predecessor to Summa.

Gay appeared in Las Vegas just days after the Sun reported Hughes' disappearance in a Dec. 2, 1970, front-page article by Publisher Hank Greenspun.

Gay produced a proxy dated about three weeks earlier and purportedly signed by Hughes - one hand writing expert at the time testified against the signature's validity - putting Gay and another Hughes Tool executive in charge of Hughes' then-$300 million Las Vegas casino empire.

Gay then fired Hughes' confidant Robert Maheu, who, since Hughes' arrival in Las Vegas in November 1966, had overseen the millionaire's purchase of several Strip hotels that ushered in the town's corporate age.

Ironically, Maheu previously had defended Gay in a memo to Hughes, telling his boss, "Bill Gay came forward when everyone else collapsed and was ready to protect you to the hilt."

Hughes responded in a memo: "I thought that when we came here (Las Vegas), and I told you not to invite Bill up here, and not to permit him to be privy to our activities, you had realized that I no longer trusted him."

On discovering that memo and similar documents, Greenspun and his staff wrote scores of columns and news stories about Gay's takeover, including one on Dec. 12, 1971, that questioned "Gay's sudden switch from Hughes' deepest disfavor to his recent position of power."

Gay did not like the coverage.

"Gay set out to 'bury me' because I questioned some of the happenings," Greenspun wrote in a retrospective "Where I Stand" column published on Sept. 12, 1978.

"Bill Gay masterminded the most malevolent scheme as he deposed some and elevated others in the Hughes hierarchy while Hughes was in a drugged condition," Greenspun wrote.

"Gay, who took control of Summa Corp. ... plus wound up as trustee of Hughes Medical Foundation, a billion-dollar, tax-exempt outfit that controls Hughes Aircraft, did so with questioned documents under the most suspicious of circumstances."

One Sun story focused on Gay's involvement in the Hughes-Peters breakup.

At the time, Hughes would disappear for long periods, leaving messages for Gay to deliver to Peters. When the marriage broke up, Hughes blamed Gay - in effect, shooting the messenger.

On Dec. 13, 1971, the Sun published the contents of a memo from Hughes to Maheu, talking about Gay's indifference in delivering the memos to Peters "and laxity to my pleas for help in the domestic area, voiced urgently to him week by week throughout the past seven or eight years. (They) have resulted in a complete and, I'm afraid, irrevocable loss of my wife.

"I am sorry, but I blame Bill completely for this unnecessary debacle."

Peters was granted an uncontested divorce from Hughes in June 1971 in Hawthorne and two months later married movie producer Stanley Hough.

When Hughes died in April 1976 Gay's days at Summa were numbered.

"He never had the ability to obtain his ambitions," said Maheu, who lives in Las Vegas. Maheu declined to comment further out of respect for Gay's family, which includes Gay's wife of 63 years, Mary, and five children.

Maheu acknowledged, however, that on a number of occasions he and others, including Hughes' cousin and eventual heir to Hughes' fortune, William Lummis, have accused Gay of "trying to steal the empire."

Gay also was noted for hiring five of the six executive aides who tended to Hughes' needs when he lived at the Desert Inn. Five of them, like Gay, were members of the Church of Jesus Christ of Latter-day Saints. They were often called "The Mormon Mafia."

On Thanksgiving Day 1970 those aides escorted an ailing Hughes from the Desert Inn to Nellis Air Force Base, where a jet took Hughes to the Bahamas, never to return to Las Vegas.

In November 1977 speculation began to circulate that Gay was on his way out at Summa. In March 1978 Lummis announced Gay's retirement.

Observers at the time said Gay's departure was part of a house-cleaning sweep of old-line Hughes executives by Lummis, who became Summa chairman after Hughes died.

In 1984 Gay, who had previously served as a Hughes Medical Institute trustee, was again appointed to the post and held it until his retirement last year.

At the time of his death, Gay was being sued for part of the Hughes fortune by Melvin Dummar, a Utah man who has long insisted he rescued Hughes in the Nevada desert and was supposed to have received $156 million from a handwritten Hughes will.

In 1978 a District Court jury in Las Vegas said the will was a fake, and Thursday a federal judge in Salt Lake City tossed out Dummar's latest claim.

Dummar's original claim was the subject of the 1980 film "Melvin and Howard."

An angry Gay told reporters after the most recent suit was filed that there was no reason he should have been named in it.

archive