[CTRL] [2] Syndicate Abroad

[Kris Millegan]

 -Caveat Lector-

an excerpt from:
Syndicate Abroad
Hank Messick©1969
The Macmillan Company
London-Tronoto
LCCCN 69-11590
246 pps. – First/only edition – Out-of-print
--[1]--

1
Rise of the Syndicate

AMERICANS, uneasily sensing that organized crime is but a logical extension
of their cherished free enterprise system, have stubbornly avoided learning
too much about the subject. Investigators who try to dig are certain to incur
the wrath of the John Birch Society, which wants you to support your local
police regardless of how corrupt your local police may be.

Million of words have been written and spoken about crime, but there has been
very little research worthy of the name. Nevertheless, law enforcement
agencies on local, state, and federal levels have amassed a tremendous amount
of information while investigating individual cases. Many of the answers to
the problems of organized crime are buried in dusty file cabinets from coast
to coast. Some day, when citizens fear gangsters more than politicians, a
central agency will be created to collect and coordinate these millions of
isolated facts and permit investigators for the first time to know what is
going on and why. When that happens, a war on crime can begin to achieve
results.

In the absence of any real understanding of the problem, certain
misconceptions have been foisted on an ignorant public by officials more
interested in empire-building than crime-busting. Newspapers, while
occasionally living up to their traditions, have welcomed the misconceptions,
because they made it possible to treat crime on a day to day basis.

Thus it was in the Depression decade following Prohibition, the emphasis was
not on syndicate gangsters, who even then were consolidating their power, but
upon such "public enemies" as John Dillinger, Ma Barker, and Pretty Boy
Floyd. The FBI, aided by a flock of semi-official books, won great renown
during this so-called "Gang era" and became so identified with crime fighting
as to exclude from public consciousness such other effective federal agencies
as the Secret Service or the Intelligence Division of the Internal Revenue
Service.

Nevertheless, it was apparent by 1950 that despite the great work of the FBI,
a lot of gangsters were operating almost openly. The Kefauver Committee in
1950-1951 dug for the first time into the compost pile of crime and politics
and traced the careers of men and organizations back to Prohibition. The
committee's work made it plain that crime was not the special province of any
one ethnic group, although it did recognize the existence of the Mafia and
called it the "cement" that binds together various syndicates.

Despite the fantastic revelations of the Kefauver Committee, and a degree of
public indignation it aroused, very little was done to follow through with
new legislation or new investigation in the next decade. The McClellan
Committee did produce a mass of testimony that more than confirmed the
findings of Kefauver, but its preoccupation with the sins of the Teamsters
prevented other findings from being put into perspective. As a result, the
labor movement got a lot of heat that could better have been applied to the
businessmen of organized crime, who had made league with Jimmy Hoffa to
exploit the pension funds of honest truckdrivers. Ironically, although Hoffa
at last went to prison, many sincere liberals perferred to overlook his
crimes and blame a Bobby Kennedy "vendetta" for the pursuit of Hoffa.

Uninformed liberals notwithstanding, Kennedy learned enough about what he
called "the enemy within" to launch a Coordinated War on Crime when he became
Attorney General in 1961 The big problem was to bring the FBI into the
battle. J. Edgar Hoover had long maintained there was no syndicate, no Mafia,
no organized crime. Kennedy could and did get laws passed that put the FBI
into the areas of gambling and racketeering for the first time, but more was
needed to get Hoover off the limb where he had roosted so long above the
battle.

La Cosa Nostra was the answer.

Joe Valachi, a minor punk, was arrested and convicted by the Federal
Narcotics Bureau, which had been talking about the Mafia for decades. Joe,
seeking a break, began squealing. The narcotics bureau dutifully reported the
development to the Organized Crime Section set up by Kennedy in the Justice
Department to coordinate the work of a dozen agencies. Who had the
inspiration remains a classified secret, but it was quickly decided to turn
over Valachi and his tales of the old days in New York to the FBI.

Nothing that Valachi said was new except the name he gave the old "Honored
Society" of the Sicilians. Yet such was public ignorance, and credulity, that
La Cosa Nostra was hailed as a breakthrough in the fight against crime. The
McClellan Committee, which had plowed much the same ground in 1957,
cooperated in 1963 by giving Joe maximum publicity. The FBI took bows left
and right for exposing the New Menace, and everything that conflicted with La
Cosa Nostra as expounded by Valachi was ignored.

Five years after Valacbi revealed the alleged secrets of La Cosa Nostra,
organized crime was a bigger problem than ever-and even more misunderstood.
Some law enforcement officials blamed various Supreme Court decisions, and
others groaned about the "apathy of the public." Very few of those talking
knew anything about the true nature of the problem, but so long as the public
knew even less, it didn't seem to matter.

If "public apathy" was indeed a factor, it can be traced back many years.
Americans, with their curious tendency to admire something big, have
throughout their history found excuses for the robber barons who stole
railroads or banks and condemned the small-time punk who occasionally held up
the trains or robbed the banks. We dimly recognize that several big
fortunes—Ford's, the Rockefellers'—were built by methods that today would be
considered not only illegal but immoral. Yet we continue to admire the men
who amassed those fortunes.

While admiring them, we overlook the fact that the first "gangs" of this
century were, in the main, private armies of the big industrialists.
Newspaper circulation wars before World War I brought together many of the
toughs who later were to find opportunity in Prohibition. That many of the
recruits were newly arrived immigrants from eastern and southern Europe is a
fact we have tried to forget. Introduction to Democracy for many of them was
a chance to break a strike or drive a newsboy off a choice comer.

Inspired by the example of the Boss, it isn't surprising that many of the
newcomers took advantage of every possible shortcut they could find to pursue
the fast buck. A strange marriage of the Protestant ethic and hedonistic
qualities in the religions of southern and eastern Europe took place. The new
citizens ended with a working philosophy that enabled them to get rich quick
without worrying about moral values or man-made laws. Exponents of the
philosophy call themselves "liberals," but more often than not they are
conservative in politics and conventional economics.

A combination of circumstances gave these amoral young men an opportunity to
become lords instead of serfs. A reaction to the idealism of the First World
War was one factor. The election of Warren Harding as President was another.
Harding represented the businessman-in-politics concept, and the businessmen
were the type who saw no wrong in maintaining armies of goons to destroy a
competitor or a union.

Add to these developments the fact of Prohibition, and the stage is set. A
delayed child of the now scorned idealism of the Wilson era, prohibition had
no chance in the twenties. It might have been repealed earlier than it was
had it not been such a source of graft for the politicians.

Yet the immense wealth amassed by the amoral newcomers to America would not,
in itself alone, have been sufficient to create the monster that organized
crime has become. Certainly, the gangsters had money to bum, but in that wild
decade so did everyone who could play the stock market or invest in a land
boom such as Florida's. The old rich may even have had more money than the
sons of immigrants, but the difference was not as great as Fitzgerald and
Hemingway seemed to think.

Many bootleggers, of course, spent their money as fast as they made
it-heedless of the American Way. Easy come, easy 90, a short life and a merry
one was their motto and often their fate. Others, who had learned something
of their new country, prepared against the day the stream of liquid gold
would cease to flow. They stashed away their profits. Few desposited[sic]
money in banks or invested in the stock market—both were too risky in those
days before insulation. Instead, they built "plants" in their homes, where
the cash could be hidden and yet be immediately available in case of need or
opportunity.

Opportunity came knocking long before Prohibition ended. Suddenly,
respectable money men were jumping out of skyscraper offices as the stock
market collapsed and a financial empire built on credit largely evaporated.
How many less respectable money men saved themselves by turning to the one
group with ready cash—bootleggers—may never be known, but enough did turn to
make the gangster-in-business a reality.

And now a greater opportunity loomed: a chance to put all of crime on an
organized basis. Before the National Syndicate could be created, however, a
bloody process of self-education was required.

Almost all ethnic groups were involved in the gang wars of Prohibition, and
one group seldom achieved domination over the others. Ironically, Al Capone
became America's most famous gangster only because he found it necessary to
kill so many people in his unsuccessful attempt to conquer Chicago.
Ultimately, in almost every city, an alliance of the competing factions was
accomplished. Usually it was known as the "Combination."

Immigrants from Italy and Sicily had a big advantage over other ethnic groups
in that secret societies were part of the way of life they had always known.
Organizations such as the Camorristi and the Mafia—the latter known in Sicily
as the Onorata Societa—had existed for centuries. Unfortunately—from the
point of view of organization men—the perverted sense of honor and hot temper
of the members kept the societies in a constant state of civil war. Betrayal
and secret murder were almost mandatory, and a man achieved "Capo" status by
killing off his rivals. Vendetta was a favorite occupation of a people more
concerned with personal loyalties than allegience to an abstract ideal of
brotherhood.

Borgates—meaning "sections" or "families"—were formed in several American
cities before Prohibition. In those days, using the symbol of the Black Hand,
the fratellos preyed largely on their own people in what amounted to a
"protection" racket. Bootleg wealth changed things, however, and rival
leaders fought bloody battles for control of the corn-sugar business. Later,
as imported booze replaced the rotgut manufactured at home, the individual
Capos sought to dominate the retail end of the business.

Inevitably, as local families grew more wealthy and the liquor industry less
localized, conflicts arose between cities. In an effort to resolve such
disputes a "Capo di Capi Re" was elected with authority to act as arbitrator.
This produced on a national level the same kind of struggle for power that
hitherto had been confined to individual cities. Strong men were replaced by
weak ones as local Capos revolted, but a weak Capo di Capi Re was an
invitation to the ambitious to attempt to take from him the supreme authority.

The Capo di Capi Re at the beginning of Prohibition was Piddu Morello. He was
soon to be murdered and replaced by Toto D'Aquila, who also was murdered. Joe
(the Boss) Masseria took command only to be challenged by Salvatore Maranzano.

The excuse of Maranzano's revolt was the murder of Gaspare Milazzo, Capo of
Detroit and a native of Castellammare del Golfo. Maranzano, also a native of
that city, blamed Masseria for his countryman's death and called for all
brothers from the same city to avenge the murder. As his power grew, he
appealed to another group of dissidents-men from Palermo whose former leader
had been the late Toto D'Aquila. One high-ranking member of the Mafia has
described the budding revolt in this fashion: "A lot of youths desiring to
avenge their friends put themselves at the disposition of this new
head—Maranzano. The group began to enlarge. The outlaws, so-called, began to
meet on the farms of friends, taking possession of them. From there they
initiated their purging operations, eliminating those that Maranzano disliked
and inviting others, with threats, to pass to his side.. With this system
Maranzano succeeded in penetrating a lot of cities of the United States,
planting terror everywhere."

While this civil war was developing within the Mafia, other gangsters had
achieved a degree of unity for business purposes. Various bootleg outfits
along the East Coast formed a loose alliance known as the "Big Seven," with
the aim of ending hijacking and achieving price and quality control. Included
among men of Irish and Jewish backgrounds were such "enlightened" young
"Italians" as Frank Costello, Joe Adonis, and Charles (Lucky) Luciano—to use
the versions of their names that later became famous. These men had nothing
but contempt for the "Mustache Petes" of the Mafia and their endless blood
feuds. The so-called "Wars of the Sicilian Succession" brought nothing but
"heat" and interfered with business.

Largely because so many members of the Mafia were busy fighting each other,
the Bugs and Meyer Mob won the job of guarding the booze shipments of the Big
Seven, and in general, taking care of any other muscle work that arose in the
normal course of business. Cobosses were Benjamin (Bugsy) Siegel and Meyer
Lansky, and a crack crew of gunmen obeyed their orders. A close associate was
Louis Buchalter, later to be famous as "Lepke," who finally took over the
killers of the Bugs and Meyer Mob and made them into the outfit known as
Murder, Inc., the enforcement arm of the National Syndicate.

But that development was still some years away, as in December 1930 a
"General Assembly of the Mafia" was called to meet in Boston. The session was
forced by Luciano and his allies, who wanted an end to the civil war. Top
Capos from around the country attended, and Gaspare Messina, Capo of the host
city, presided. The assembly, following the pattern of more legitimate
politicians, ducked the issue by appointing a special commission to meet with
Maranzano and work out a compromise. Giuseppe Traina, an old aide of the dead
D'Aquila, was made chairman. Other members included Toto Lo Verde, Capo of
Chicago, and Peppina Siracusa, Capo of Pittsburgh.

The commission met at the Hotel Pennsylvania in New York City, shortly after
Christmas, and sent word to Maranzano it wanted to see him. The outlaw chief,
however, reacted much like the Viet Cong in 1968, and mounted a new
offensive. Bodies began to litter the streets, and not all the dead were
members of the Mafia. A few innocent citizens got into the line of fire and
finally the chief of police felt compelled to intervene. According to one
veteran of the war, the chief called in Masseria—the recognized boss-and told
him if he didn't stop the killing, the police would arrest the entire Mafia.
Masseria ordered his men to stop shooting, but then as now it takes two to
make a peace, and Maranzano refused to cooperate.

The commission was beginning to feel frustrated when one day Paul (the
Waiter) Ricca appeared at the hotel with a message from Al Capone. Nominally
only a Capo Decina, head of ten, Capone had put together a combination of his
own in Chicago. While not powerful enough to defeat his enemies, he still
controlled enough firepower to be respected by Capos of less belligerent
cities. The struggle between rival Mafia groups groups was interfering with
his battle for Chicago, so he authorized the commission to warn Marazano to
cooperate or face an airborne invasion from the Windy City.

Maranzano responded by sending a car for the commission members and taking
them to a secret meeting place. After four days of talk, nothing was
accomplished. Nothing was accomplished in other meetings over the next few
months. Maranzano grew stronger as Joe the Boss sought an honorable peace and
refused to fight back. Ultimately, it became apparent to the "third force"the
group of young businessmen led by Luciano-that Masseria was about finished.
Since someone was sure to kill him anyway, the Luciano faction decided it
might as well do the job and reap the benefits. Vito Genovese was given the
assignment.

Joe the Boss was lured to a restaurant in the Coney Island section of
Brooklyn. His executioners entered as he waited at a table and shot him six
times in the back. One of the plotters, arriving too late for the murder,
drove quickly to Lucky's home. Among those present was Vincenzo Troia, an old
friend of Maranzano. Lucky turned to Troia and ordered: "Don Vincenzo, tell
your compare Maranzano we have killed Masseria—not to serve him but for our
own personal reasons. Tell him that if he should touch even a hair of even a
personal enemy of ours, we will wage war to the end. Tell him that within
twenty-four hours he must give us an affirmative answer for a meeting at a
locality which we this time will pick out."

Luciano was Italian, but speaking through his lips was not the Mafia but the
"Combination"—and the National Syndicate-to-be. In effect, he was telling
Maranzano he could be Capo di Capi Re if he desired, but only if he
acknowledged a greater power than the Mafia now existed.

At first it appeared that Maranzano would bow to the new reality. He met next
day with Luciano's representatives and agreed to call a new General Assembly
to plan the future of the Honored Society. The assembly met in Chicago, with
Capone footing the bill, and a revolutionary idea was proposed to abolish the
Capo di Capi Re system and replace it with a six-man "Grand Council."

Individual members, perhaps influenced by Luciano's modem ideas, argued for
an end to dictatorships and civil war. Despite the opposition of Maranzano,
they carried the day, and a nominating committee was picked to select
candidates for the Grand Council. Charges of misconduct were immediately
filed against committee members, and in the confusion Maranzano's men
persuaded the assembly to abandon the plan. The election of Maranzano as Capo
di Capi Re became only a formality.

Drunk with the power he had so long sought, Maranzano forgot the fate of Joe
the Boss and moved to consolidate his position. He installed himself in a
plush apartment behind the Hotel Commodore in New York. The apartment flanked
Grand Central Station, a busy place swarming with policemen. The new boss
reasoned it would be more difficult to kill him in such a location. When he
left the apartment, he rode in an armored car. The apartment included a
studio, which was used as a guardroom. Two teams of carefully selected men
worked 12-hour shifts. The "Grand Sultan," as some disgruntled brothers
called him, felt secure.

The Capos of the country, hopeful that peace had come at last, decided they
should honor their new leader with a banquet. Maranzano, recognizing in the
proposal the same opportunities certain senators later discovered, ordered
thousands of tickets printed and sent to the various cities to be sold at
$6.00 each. Capone, anxious to maintain the prestige he had acquired within
the Honored Society, bought 1,000. Stefano Magaddino of Buffalo coughed up a
like amount.

At the banquet the huge extortion racket continued. According to an eye
witness: "On a costly and sumptuously decorated table towered a majestic tray
in which those who came placed handfuls of dollars. A group of high-spirited
boys were provided to receive guests. The boys greeted the guests with 'Long
live our Capo' and conducted them to the tray, watching the offering. Many
guests, although peasants trying to look like noblemen, did not make
offerings of less than $500. On that night Maranzano picked up $100,000."

Not bad for a testimonial dinner.

Following the banquet, Maranzano expressed mixed feelings. He was delighted
with the loot, and the prospect of more to come, but he apparently realized
he would be lucky to maintain his power. He was overheard to say: "I wish I
was going to Germany to be more secure."

Realities made flight impossible, so Maranzano decided to follow Mafia
tradition instead. He drew up a list of sixty names—top men in the Mafia and
possible rivals—and ordered them executed. Heading the list was Lucky Luciano.

The men of the Combination had no choice. It was now apparent the Mafia
was—as one hood put it—"a pimple on the ass of progress." If ever crime was
to be organized on a business basis, the Mafia had to be brought under
control. A conference was called. Attending were the same men who had plotted
the execution of Masseria. The decision to eliminate Maranzano was easy to
reach, but execution would be more difficult. Ile new Capo di Capi Re was not
going to be lured into a trap and killed over the dinner table. Much more was
involved than the death of one man. There was no point in repeating the
mistake of the past by killing one leader only to have a worse one replace
him. A purge of all the "Mustache Petes" was deemed necessary.

The execution of Maranzano was turned over to the killers of the Bugs and
Meyer Mob. Siegel and Lansky, as partners in the Combination with Luciano,
realized the importance of the task assigned. They asked only for the aid of
one Italian, who could identify the target for them.

A highly placed Mafia leader has described the action when six members of the
Bugs and Meyer mob, accompanied by "a certain Peppino," went to Maranzano's
office at 230 Park Avenue. They knocked on the door of the "Eagle Building
Corporation" and identified themselves as federal agents when Maranzano's
bodyguards opened the door. Then they pulled pistols.

"While the Jews with leveled pistols held the followers of Maranzano
motionless, one of the Jews went out into the corridor and called in Peppino,
asking the Italian which of these men was Maranzano."

According to the Mafia leader, Maranzano recognized Peppino and told him:
"Peppino, you know that I am Maranzano and that I am responsible for this
office. They can make any search they want, because there is no contraband
here. This office is commercial."

The killers led Maranzano into his private office "and in order to avoid
noise tried to strangle him. Thereafter, they tried to finish him off by
stabbing him. But the doomed man, by virtue of his desperation, got loose
and, because he possessed a certain strength augmented by fear, sought to
fight. The others emptied their pistols into him, killing him instantly."

It was September 30, 1931. Maranzano had ruled five days less than five
months. With him died the Mafia as a dominating force in organized crime.

Years later, Joe Valachi gave a distorted version of the murder and
identified one of the killers as "Red Levine." When a member of the McClellan
Committee asked to what Mafia family Levine belonged, Valachi replied: "Meyer
Lansky."

Answers like that are inevitable when one can't see the forest for the trees.

The killers found Luciano's men waiting on the street below. Assured the Capo
di Capi Re was dead, the young Italians rushed to telephones. Word was passed
to all parts of the country. That night the slaughter began. Mustache Petes
in high places were purged. Estimates vary as to the number killed. Police in
their isolated cities had no way of connecting up the murders or even
relating them to the Mafia. No federal agency was aware of what was going
on-the FBI didn't believe there was a Mafia.

Some writers have since pictured the purges as simply the inevitable blood
bath that followed the rise of another boss-in this case, Luciano. The truth
is confirmed by events. The General Assembly of the Mafia-its numbers now
much depleted-met in Chicago and voted to abolish the office of Capo di Capi
Re in favor of a "Commission" or "Grand Council." Named to the new ruling
body were:

Luciano, Capo of the Mafia family formerly bossed by Masseria.

Vincent Mangano, Capo of D'Aquila's former family.

Joe Profaci, Capo of a Brooklyn family.

Peppino (Joe Bananas) Bonnano, Capo of another Brooklyn family.

Ciccio Milano, Capo of Cleveland.

Masi Gagliano, Capo of the family formerly headed by Gaetano Reina.

Alphonso Capone, a Capo Decina in the Mafia but a power in Chicago.

Note how the Commission was weighed in favor of New York. Five of the seven
members were from that city, and all had been allied with Luciano and the
non-Mafia members of the Combination.

In the decades to come individual members of the Mafia would obtain wealth
and influence within the National Syndicate. The Honored Society, however,
was relegated to a secondary role. Even so, a loyalty to the tradition of
violence made it a dangerous vehicle on which to ride to power. Occasionally,
hot blood had to find an outlet, and old fashioned civil wars made headlines
in such cities as Youngstown and Brooklyn.

Ironically, it was this ability of the Mafia to make headlines that proved
most valuable to the syndicate. Such men as Lansky found they could operate
in silence while the Mafia got the heat.

It was all very convenient and rather amusing as well.

The third and fourth stages of Prohibition-smuggling and the manufacture of
illicit alcohol in huge distilleries—provided the economic basis for regional
cooperation, which led ultimately to the National Syndicate.

After bloody battles between ethnic groups, combinations were formed in such
major cities as Boston, New York, Phildelphia, Cleveland, Detroit, Chicago,
Minneapolis-St. Paul, Kansas City, Denver, and San Francisco. The men in
charge found that just as cooperation was profitable on the local level, it
was also of value on a broader scale. Thus it was that a speakeasy in New
York might sell booze brought ashore from Canada in Cleveland or Detroit.
Similarly, a Buffalo bar might offer gin bought in the Bahamas and landed at
Galveston, Miami, or New York. Buyers from individual syndicates went to
Nassau and London only to discover that competition drove up the price. Joint
ventures became the order of the day.

Because of its central location and huge population, New York City became a
focal point. Some twelve miles off its coast was the largest "Rum Row" in
existence—a line of ships laden with booze from Canada and the Bahamas. The
Erie Canal provided a physical link with the armored rummies of the Cleveland
Syndicate, and much booze came by barge down the canal. A good railroad
system north to New Haven and Boston and south to Savannah and Florida made
it possible for liquor to land at almost any point along the East Coast and
still reach New York quickly and efficiently.

Across the river in New Jersey, Waxey Gordon ruled for a time. Waxey, whose
real name was Irving Wexler, came up through the ranks. As early as 1905 he
was convicted as a pickpocket, and later for petty and grand larcency. He
also operated a brothel and peddled narcotics, before hitting the big time wit
h beer. An old friend of the Bugs and Meyer Mob, Waxey might have had a great
future with the syndicate had not the Intelligence Division of the Internal
Revenue Service nabbed him on income tax charges in 1933. The jury required
forty minutes to deliberate, and the judge gave Gordon 10 years in prison.

Dutch Schultz, who as an independent built a multimilliondollar empire out of
gambling, booze, and assorted rackets, tried to take over in New Jersey.
Ultimately, the syndicate bumped Dutch off and divided up his empire. Abner
(Longie) Zwillman succeeded him and won in time the title of "Al Capone of
New Jersey." More to the point, he won a place at the council table of the
syndicate, and he occupied it for many years.

To the south, in Phildelphia, Micky Duffy proved the Irish could be as
stubborn as the Sicilians. When he refused to cooperate, he was knocked off
in Atlantic City, and his place was taken by Nig Rosen in the City of
Brotherly Love. Rosen was a New York boy who served his apprenticeship with
the Bugs and Meyer Mob.

To the north, the big boss was Charles (King) Solomon, who had built an
organization around the city of Boston. Among his lieutenants were such
bootleggers as Joe Linsey, Hyman Abrams, and Louis Fox. All three enjoyed
prosperous careers long after Solomon was gunned down in the Cotton Club in
south Boston on January 24, 1933. Fox became the boss of Revere, a Boston
suburb as notorious as Newport, Kentucky, or Cicero, Illinois.

Abrams turned to casino gambling, and as an associate of Lansky owned pieces
of the action in Las Vegas and Havana. Linsey remained in the liquor business
but branched out into a variety of ventures including dog tracks, horse
tracks, and country clubs.

Lansky, who as a child had lived in Boston after coming to this country from
Russia, retained a special fondness for Boston and often visited there.

To the west was Cleveland. Early in Prohibition the smuggling business came
under the control of four men: Moe Dalitz, Sam Tucker, Morris Kleinman, and
Louis Rothkopf. An alliance with the Mafia-known locally as the Mayfield Road
Mob-was established, and such men as Frank and Tony Milano, Al and Chuck
Polizzi, became lieutenants. Working relations were established with
combinations in such other Midwestern cities as Detroit, where the Purple
Gang imported Yonnie and Peter Licavoli, who took over later, when the Purple
Gang was forced to scatter. Dalitz, who had lived in Detroit, united the
mobsters and made deals with such local Mafia leaders as Joe Massei.

The Cleveland-Detroit combination had close working relations with the Kidd
Cann Mob of Minneapolis-St. Paul. Composed of an unusually violent group of
hoods, the gang was led by the three brothers whose real name was Blumenfeld
but who became famous as Kidd Cann, Yiddy Bloom, and Harry Bloom. Other
lieutenants were Abe Brownstein and Ed Berman. Many years passed before the
boys tired of flexing their muscles, but eventually they settled down and
became part of the complex financial structure that made organized crime
possible.

In Chicago, Capone had long demonstrated his willingness to work with men in
other cities and had played a vital role in attempting to modernize the
Mafia. While unable to capture Chicago, he did become the most powerful
gangster there. After the Internal Revenue Service sent him to prison, the
combination he had created found it possible to expand, and the Chicago
Syndicate became a reality. Nevertheless, there was enough to keep it busy in
its home town, and the Chicago Syndicate—with a few blundering exceptions
never played a vital role in the national organization's varied interests.
This didn't prevent the unofficial press agents of the Mob from spreading the
notion that the Chicago boys were the meanest and smartest in the nation.
Enough gang killings continued to keep alive the Capone image, and the hood
of Chicago became the bogeyman of organized crime.

Syndicate gangsters from other cities were entirely willing to let the
"Capone Syndicate" take the blame. Like the Mafia, it became a convenient
legend behind which to hide. This statement is made in full recognition of
the fact it will bring howls of protest from Chicago writers and law
enforcement officials. A perverse kind of civic pride has developed in
connection with Chicago's reputation, and all efforts to put that reputation
into perspective are resisted.

Other gangs existed in other cities and volumes could be written about each
one. The pattern, however, was very much the same everywhere, for the same
economic and social forces were at work. All pointed inevitably toward closer
cooperation and ultimate union in a loose alliance.

Several meetings over the years preceeded the final decision. Out of them
came what Dixie Davis, the young "mouthpiece" of the late Dutch Schultz,
called "the NRA idea."

The National Recovery Administration, known as NRA, was a short-lived New
Deal program, but it had a tremendous impact and touched the lives of
all—including the gangsters. Industry codes were created under which industry
was supposed to regulate itself subject to supervision from the top by an
administrator and four boards set up for the purpose.

When "the NRA idea" was applied to crime, few major changes were require&
Local autonomy was confirmed and regional divisions ratified. In some areas
such as New York further divisions were made according to racket as well as
geography.

Using the solution already applied to the Mafia, a Grand Council was
appointed with representation based upon the only reality-wealth. With wealth
you could hire troops. Not too surprisingly, the New York combination, known
in some circles as the "Three L's"—Luciano, Lansky, and Lepke—dominated the

Grand Council. Leaders in other cities who had cooperated most closely in
liquor deals with New York were confirmed in power. Thus Dixie Davis was to
write in 1939: "Moey Davis became the power in Cleveland and anyone who
questioned it would have to deal with Lucky and Meyer and the Bug."

"Moey Davis" was really Moe Dalitz, and with his partners in the Cleveland
Syndicate had long enjoyed business relations with New York. Their most
spectacular joint venture was the Molaska Corporation, which manufac[t]ured
illicit alcohol long after Prohibition ended. Lansky's father-in-law, Moses
Citron, was an officer of the corporation. The Cleveland partners were
represented by nominees.

Perhaps the most significent development in establishing peace and unity were
the rules adopted on murder. If anyone was to be "hit" outside a local
jurisdiction, approval of the Grand Council was required. To relieve gangs of
the necessity of maintaining squad of expensive "enforcers"—or perhaps hiring
some unreliable help in an emergency—the Brooklyn outfit later known as
Murder, Inc., was set up. The killers, most of them former members of the
Bugs and Meyer Mob, were experts, and prices were standard and reasonable.
Lepke had over-all control, but Albert Anastasia handled many of the
practical details.

In later years, as the bribe supplanted the bullet, the need for such
specialists faded. When murder was deemed necessary, there were always enough
young toughs to take on the assignment. Mafia members were especially eager,
since a willingness to kill still was considered a mark of manhood, but even
the Mafia ran out of killers in New England.

By late 1934 the National Syndicate was a reality, and the bright young men
who ruled were shoving aside the veterans. Typical is this complaint: "The
papaveri [important men] cornered the positions that were most profitable.
These men had forgotten me, whom they had used to resolve many risky
situations. Meanwhile, the fruits of my labors were harvested by these
papaveri who continued to use me—pushing me around from one point in the
United States to another. O, ingratitude of humanity!"

The Mafia can become quite emotional at times.

Events were soon to prove how right the young men of the Combination had been
to demand a more sophisticated approach to the business of crime. Less than a
year after the National Syndicate was formed, public reaction to the
corruption of the Prohibition era began at last to assert itself. Early in
1935 a New York grand jury utilized its authority and demanded a special
prosecutor. It got Thomas E. Dewey.

The prosecutor—be he known as the district attorney, the state's attorney, or
the commonwealth's attorney—is a key official. Not only does he ultimately
have the responsibility for prosecuting, but as advisor to the grand jury he
can often determine who and what will be investigated. He can protect the
guilty by withholding evidence or giving bad legal advice. No criminal
conspiracy of any size can long operate without at least the tacit permission
of the prosecutor, unless, of course, he is simply incompetent.

Sensing this relationship between crime and politics, the New York grand jury
sought freedom of action. Dewey proved that an able and courageous prosecutor
can almost become President by doing his duty. Unfortunately, many
prosecutors would rather be rich than President.

The "heat" went on in New York City, and two top men in the National
Syndicate were burned—one more fatally than the other. Luciano was ultimately
sent to prison and then deported, but Lepke went to the "hot seat."

The fall of Lepke illustrates how, in such a massive operative as organized
crime, chance often is decisive. Old records of the United State Customs
Service tell the story.

Lepke, Lansky, and Bugsy Siegel were partners in a plant at 2919 Seymour
Avenue in the Bronx. The plant extracted morphine from an opium base and was
the heart of a lucrative narcotics business. On February 25, 1935—before
Dewey could get organized—the plant blew up. A fire put it completely out of
operation.

Lansky and Siegel, their eyes on the "cleaner" gambling racket, dropped out.
Lepke, borrowing some of the men who had once been liquor smugglers, started
importing narcotics from the Far East in huge amounts. To get the "stuff"
ashore, he bribed some Customs Service men. Soon, however, both Customs and
the Federal Narcotics Bureau were investigating, and Lepke was indicted by a
federal grand jury. He went into hiding, but eventually surrendered to J.
Edgar Hoover—who had nothing else to do with it—and was sentenced to federal
prison. Meanwhile, Dewey probed deeply into other aspects of Lepke's rackets
and developed an extortion case against him. Conviction followed, and to the
fourteen-year sentence Lepke received in federal court was added thirty years
in state court. Shortly thereafter, Burton Turkus, an assistant district
attorney in Brooklyn, secured an indictment charging Lepke with murder. For
the first time the existence of a National Syndicate, complete with Murder,
Inc., as an enforcement arm, was documented.

In the early hours of December 1, 1941, a jury found Lepke guilty of murder.
Six days later the Japanese bombed Pearl Harbor. Once again the National
Syndicate was able to hide behind other gangsters. By the time the war was
won, organized crime had completed the transition from the bullet to the
bribe.

And the bloody profits made by Lepke, now clean and camoflouged, began paying
dividends in Boston.

The "Dewey heat" actually speeded the transformation of the syndicate by
forcing its members to take protective measures. Helping also was the fact
that, considering New York too hot, some of them began to travel and
discovered vast unexploited areas.

Siegel asked for, and was given, the job of developing the West Coast. From
the vantage point of Los Angeles he was able to put Nevada with its legalized
gambling into perspective. Las Vegas was a direct result.

While Bugsy was enjoying Hollywood, California, his partner, Meyer Lansky,
explored the Gold Coast of Florida and settled in Hollywood—a city in Broward
County, north of Miami. Ultimately, plush casinos bloomed all along the coast
and in the Caribbean as well as a direct result of Lansky's vision.

Frank Costello, an old rum-runner and associate of the Combination, took
Luciano's place when Lucky went to prison, and sent Dandy Phil Kastel—who got
his start with Arnold Rothstein before Prohibition—to New Orleans. Slot
machines were installed, and later the Beverly Club, of which Lansky had a
piece, offered casino gambling in comfortable surroundings. Ultimately Kastel
moved on to Las Vegas, where the Tropicana Club remains a monument to his
memory.

As sometimes happens in America, the reaction to the violence of Prohibition
produced individual reform movements in not one but several cities. While the
local crusades may have done some immediate good, they also had the effect of
forcing gangsters all about the country to expand into other, and safer,
areas. The Cleveland Syndicate, for example, operated casinos around Ohio and
then expanded into Kentucky and West Virginia. The old happy relationship
with Lansky opened the gates of the Magic City—as Miami likes to be called—to
the Clevelanders. Later they moved into Las Vegas on a big scale.

Joint ventures were conducted in such states as Arizona by the National
Syndicate. It became more and more difficult to find a major operation
anywhere that did not include representatives of several cities. This was the
Casino Era, in its own way as brazen and as vicious as the takeover of the
garment industry by Lepke, or the organized brothels of Luciano The bribe
became more and more important, but strong-arm collectors made sure the
suckers coughed up the cash.

Meanwhile, since Depression days, the syndicate had been investing in
legitimate businesses. Liquor was a logical one, in view of the practical
experience many gangsters had gained, and so-called "unreformed bootleggers"
took over multimillion-dollar companies. Service industries supplying the
nightclubs, restaurants, and ultimately, the hotels of the syndicate were
taken over and expanded to serve the general public. Real estate, especially
in such fast-growing states as Florida, became a huge investment item. World
War II, with its civilian shortages, provided many black market deals which
brought syndicate hoods into new fields, and there they remained after the
war ended.

It took some years before the syndicate overcame its distrust of banks and
the stock market, but the opportunities for profit in both were too great to
overlook. "Hoodlum banks" came into existence in almost every major city and
were used in ways that will be illustrated later, to rob the public
"legitimately." In the same fashion, the stock market was employed to get
control of a prosperous company and milk it dry, or to push up the stock of a
worthless company and make a killing just before the bottom fell out. But
more of that is yet to come.

As usual, the syndicate as a whole was able to profit by misfortune. The
Kefauver Committee in 1950-1951 could have been a near-fatal development for
organized crime. Some big shots were hurt—Joe Adonis, Frank Costello, Ed
Curd, and the like—but most of the heat evaporated as the public turned to
other things. Yet the investigation smoothed away a number of rough spots and
reminded everyone of the value of insulation and indirection.

Labor racketeering got the spotlight during the Eisenhower years, and much
was exposed that related organized crime to such men as James R. Hoffa. Again
it was shown that the basis of power was not muscle—although it still had its
uses—but cash. The millions in the Teamsters pension funds made Hoffa a big
man with the syndicate, and no doubt made Hoffa wealthy as well. Ultimately,
after Robert F. Kennedy became Attorney General, Hoffa went to prison, but
"Teamsters loans" remained an important asset of organized crime.

Over the decades there had been a certain attrition among syndicate hoods.
Few of the top men who had formed the National Syndicate remained active in
1960 although, of course, hundreds of the lower ranks were still profitably
employed. The syndicate, like the economy, while ever-changing was
self-renewing.

Lansky had survived to become undisputed chairman of the board. Actually, the
Grand Council seldom held formal sessions. They were not only dangerous but
unnecessary. Couriers traveling by jet planes provided a communication link
as well as a means of distributing cash profits. Occasionally Jerry Catena in
New York or Moe Dalitz in Las Vegas would fly to Miami Beach to consult in
person with Lansky. Or the chairman might visit his old friend, Hy Abrams, in
Boston and, while there, meet with executives of the New England branch. When
hot weather made the Gold Coast uncomfortable, Lansky would fly to Europe
and, in the words of a federal agent, "visit his money in Switzerland." While
there, he could also meet with jet-set gangsters from Los Angeles or Montreal.

One session might concern a new investment opportunity. Top members of the
syndicate were always given a chance to invest in anything good a colleague
might discover. Typical was New Mylamaque Explorations, Ltd.

Sam Garfield, long an associate of gamblers in business deals, bought 100,000
shares of New Mylamaque in September 1958, through the Toronto Stock
Exchange. Of the total, 50,000 shares were transferred to Edward Levinson, a
veteran gambler who had operated in Newport, Kentucky; Miami, Florida; Las
Vegas, Nevada; and most recently, in Havana. One-fourth of the total, 25,000
shares, went to Moe Dalitz, first among equals of the Cleveland Syndicate,
who even then was in the process of turning the Nacional in Havana over to
Mike McLaney. The remainder of the stock was transferred to Allard Roen, one
of the second generation executives the Cleveland Syndicate had developed.

That was just the beginning. In November Roen transferred his stock. Benjamin
Sigelbaum of Miami Beach—a "money man" in many syndicate deals-got 15,000
shares, and Meyer Lansky got 10,000. Soon thereafter, another large hunk of
stock was transferred by other purchasers. Dalitz got 10,000 shares;
Sigelbaum, 15,000; and Lansky, 25,000.

Chairman of the board of New Mylamaque was Maxwell Golhar, a partner of Louis
Chesler in many ventures. "Uncle Lou," as the curly-headed Chesler was known,
was destined to have a big part in the development of gambling in the Bahamas.

"Money men" were vital to Lansky and the sophisticated financial dealings of
the syndicate. Many who filled the need were respectable citizens often
referred to in their hometown newspaper as "philanthropist" or "sportsman."
Usually they were directors of at least one bank and trustees of a
university. Often they were asked to head fund drives. That former "tough"
bootlegger of Boston, Joe Linsey, raised millions for Brandeis University.
Among the contributors he wooed was his old friend Meyer Lansky.

Meanwhile Lansky's second wife lived quietly in a new and modest home in
Golden Isle subdivision, just east of Gulfstream Park. The former manicurist
at the Embassy Hotel in New York watched her pennies and sold her used
clothing. Interested observers noted that Meyer never tipped heavily when his
wife was along. Each year he rented two new Chevrolets for family use.
Obviously, tales that he had $300 million in a Swiss bank must be
exaggerated. At least Thelma thought so.

Stafford Sands wasn't so sure. He told Robert (the Needle) Peloquin, ace
troubleshooter for the U.S. Department of Justice, that Lansky visited him
one day in 1960 and offered him $1 million in cold cash.

The money, Sands quoted Lansky as saying, would be deposited to Sands's
account in a Swiss bank. In return, all Sands had to do was get permission
for Lansky to operate a casino in the Bahamas.

Needless to say, said Sands, the offer was rejected.

Some time later, after it had become known that Sands received $1.8 million
to arrange for gambling in the Bahamas, Stafford changed his story a bit.
Lansky offered him not $1 million but $2 million, he insisted.

The chairman of the board said nothing.

pps.  11-33
--[cont]—
Aloha, He'Ping,
Om, Shalom, Salaam.
Em Hotep, Peace Be,
All My Relations,
Omnia Bona Bonis,
Adieu, Adios, Aloha.
Amen.
Roads End

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