Black Dahlia Confidential

Is LA's Most Famous Murder Mystery Solved? James Ellroy Thinks So

He lived in an exotic house in the middle of Los Angeles that was as eccentric as its owner. "I would describe it as looking like a Mayan temple. It was a fortress from the world," says Tamar Hodel, one of 11 children the doctor had by five different women.

Tamar and her half-brother, Steve, remember their father's house as a place where artists and movie people came for flamboyant parties presided over by the dynamic George Hodel.

In 1999, the doctor died in his high-rise apartment in San Francisco at the age of 91. Hodel says he came across two pictures while going through his father's favorite photo album with his father's widow.

"I said, 'June, who is this?' And June said, 'I don't know. Someone your father knew from a long time ago,'" recalls Steve. "I was trying to pull it in, where do I know this picture? Why do I know this woman? Somewhere deep within me, I made the connection. The Black Dahlia."

To this day, Hodel isn't sure what it was that made him compare pictures of the Black Dahlia to snapshots his father had saved of a mystery woman. But the search for answers soon became an obsession.

Hodel spent months and months combing through newspaper accounts, talking to old-timers and traveling back to his childhood.

He re-visited his father's house in Hollywood, where he and his brothers lived off and on with their father in the late '40s. He suspects one of the pictures from his father's album was taken at the house, which was literally a house of secrets, complete with a secret room where the children were never allowed to go.

It was in this fortress of a house, Steve says, where George Hodel did what he wanted, no matter how immoral or illegal.

Tamar says that at the age of 11, her father wanted to teach her oral sex. She remembers her father's friends, among them, famous photographer Man Ray, who took nude photos of her as a child.

She also remembers the young, beautiful women: "There was always a line of beautiful women waiting to see my father, or to go into his quarters, the golden bedroom."

Michelle Phillips, former singer with The Mamas and the Papas, has been Tamar's friend since 1958. "She told me how she had grown up in this crazy environment with her father," says Phillips. "She obviously had been used as a sexual object with him and his friends. It was all amazing to me."

It wasn't until some years later, after one of her concerts, that Phillips finally met George Hodel. "I felt a chill, and a lot of it was because I knew that he knew that she had told me," says Phillips. "And I recently started thinking about the way he looked at me. I think he wanted to kill me."

Tamar must have felt a similar chill when, as a teenager in 1949, she ran away from her father's home. She told police what had been going on there: incest.

The well-known doctor was put on trial, and charged with offering his 14-year-old daughter to several of his friends at an orgy. "My father had intercourse with me. It wasn't loving," recalls Tamar. "He acted guilt-ridden, ashamed. It was very bad."

But in the courtroom, a parade of family members testified that Tamar made up the story.

"No one wanted George Hodel to go to jail, because George Hodel was the one making all the money," says Phillips. "And he was supporting all the people surrounding this tale."

The jury found George Hodel not guilty, but his troubles with the law were far from over.

As Steve began sorting out the details of his father's past and the Black Dahlia case, he found the two stories merging.

He was convinced the photos in his father's album were indeed of the Black Dahlia. But what caught him by surprise was one of the many taunting cards and letters the killer sent to newspapers. It was written by hand: "Turning in Wednesday, Jan. 29. Had my fun with police. Black Dahlia avenger."

"It was my father's handwriting," says Steve, who took his suspicions to an old friend, deputy district attorney Stephen Kay. "There was no question about it. So at that point, I thought, 'Oh my God, this is the real deal.'"

Kay tracked down the Black Dahlia file in the DA's office: a box of investigative notes and transcripts that no one had touched for over half a century. Steve started going through it, and found a picture of George Hodel. "This is the smoking gun," says Steve. "This is the proof I've been waiting for."

When investigators for the Los Angeles DA's office began questioning Tamar about her father, it was clear there was more than the 1949 orgy on their minds. "They also suspected that he had committed the murder of the Black Dahlia," says Tamar. "They told me that."

But she never told her half-brother, Steve. So years later, when going through the DA's file on the Black Dahlia case, Steve got the shock of his life. In 1949, two years after Short was murdered, the district attorney began to zero in on a suspect.

Kay says that in the file was information from a female witness who told authorities that George Hodel knew Short.

Investigator Walter Morgan is 90 now, but back then, he was a young investigator working for the DA's office, which had taken over the Black Dahlia investigation in 1949. Back then, he did something that couldn't have been legally done today. He, along with police detectives, slipped into Hodel's house, and planted eavesdropping devices all over the house. For the next 40 days, detectives listened to hundreds of Hodel's private conversations.

The recordings no longer exist, but the transcripts are in the DA's file. At one point, according to the transcript, George Hodel is heard saying: "Supposing I did kill the Black Dahlia. They couldn't prove it now. They can't talk to my secretary any more because she's dead. They can't talk to my secretary any more because she's dead."

His secretary, Ruth Spaulding, died of an apparent drug overdose.

Despite the statements caught on wire recordings, the Dahlia investigation was abruptly shut down in the spring of 1950. And even more surprising, chief investigator Frank Jemison summed up the audiotape evidence, saying it "tends to eliminate the suspect."

"How can you say those tapes clear Dr. Hodel," asks Kay. "If anything, they sound like a guilty man, who is ready to take it on the lam."

So why was the investigation closed? The answer may be in those secret audiotapes. At one point, according to the transcript, George Hodel is heard saying, "This is the best payoff I've seen between law enforcement agencies. And I'd like to get a connection made in the DA's office."

"The only thing I can think of is some money must have transpired between people," says Morgan. "Everybody thought that [there was a cover-up.]"

In fact, "48 Hours" has learned that the probe was shut down, even though several within the investigation later told their relatives that they knew who the killer was.