of ex-convict Charles Ward, millionaire calendar printer. Ward has
many ties with the underworld all over the country, and was one of
the financial backers of Anna Roosevelt’s attempt to start a daily
newspaper in Phoenix, Arizona. This was once he was outsmarted in
a money deal. As is not unknown in the Roosevelt tradition, he got
one cent on the dollar back. Bill O’Dwyer said he found a direct tie
between Ward and Brooklyn’s Murder, Inc.
Under such auspices, the underworld is establishing a firm grip on
Minnesota. Its attempt to take over the Minneapolis and St. Paul
traction systems is a part of the general picture across the land
and was exposed by Lait last summer in his _Daily Mirror_ column. It
resulted in the indictment of one of the mobsters, Kid Cann, so called
because of his many incarcerations.
The New Dealers have been kind to the underworld ever since their
victorious election in 1932, after Costello and Jimmy Hines, with
Ed Kelly, had successfully managed the convention fight in Chicago.
While Frank Murphy was Attorney-General he saw to it that prosecuting
attorneys laid off the boys. Internal Revenue agents prepared a tax
case against Costello and Frank Erickson, but the U.S. Attorney was
ordered to pigeonhole it.
Following Frank Erickson’s conviction in New York on gambling charges,
District Attorney’s investigators seized his books and papers. Among
them was a memo reading, “Phone Daddy Long Legs.”
The sleuths jumped on this. They figured it was a code or nickname for
one of the mob aces. That is one of the toughest problems encountered
by racket-busters, i.e., breaking down the aliases used by the kings of
the underworld on their books and in their records.
The gumshoes rushed over to the Island and interviewed Erickson in his
cell.
“Who is Daddy Long Legs?” they asked. “And what did you want to call
him for?”
Erickson laughed uproariously. “Why shouldn’t I phone him?” he
inquired. “After all, I’m related to him by marriage and he’s the Vice
President.”
After the investigators had recovered from their shocks, this is what
Erickson told them:
“An in-law of mine is an in-law of Barkley’s. Barkley visited me in my
Long Island home. My grand-kids are crazy about him. They nicknamed him
‘Daddy Long Legs.’”
The story of the Binaggio killing in Kansas City, anticipated in
_Chicago Confidential_, is recent, but the full background of the case
has never been aired before.
President Truman is and was a loyal member of his county Democratic
organization. And as such--a party man who never split his ticket--he
was forced to go along, though unwillingly, when the Chicago hoodlums
put Binaggio in as the leader.
When the President first went into politics, the Mafia was just one of
the mobs. It had not organized the country. In the 1920s, most of the
big city machines were owned by Irish bosses, who were tied up with the
local Irish underworld gangs. Each city was independent of all other
cities.
On the surface, the conviction of Tom Pendergast by U.S. Attorney
Maurice Milligan was a smashing victory for law and order. But it was,
at the same time, a greater victory for the Capone and Costello mob.
There are high government cops--not friends of the administration,
either--who have the wild idea that the only effect of Pendergast’s
conviction was to permit Charley Fischetti’s ambassador to Kansas
City, Tony Gizzo, to put in his own man, Binaggio, as county leader.
Milligan’s brother Tuck was counsel for Joe de Luca, a Mafia boss and
convicted dope smuggler, during and after his brother’s term as United
States attorney. Milligan prosecuted few Sicilian hoodlums. T-men
demanded 20 years for De Luca. Milligan’s office asked for only 3 for
his brother’s client; he was sprung shortly thereafter and the stool
pigeon who convicted him was murdered. We looked up the official record
and that is so.
As new Democratic leader of the President’s home county, Binaggio had
great influence. Naturally, the President wanted to carry his own state
in local and federal elections, so he had to work through his home
organization. The presence in it of people like Binaggio and Gizzo may
have turned his stomach, but that was politics.
We have explained that the Big Mob does not operate directly in
Washington on the street and sewer levels, such enterprises being
franchised out to locals. The Syndicate does do business in the
District in connection with its legitimate affairs and some of
its larger sub-rosa undertakings. In the latter category are
black-marketing, the sale and resale of government surplus, padding
of war contracts, etc. The boys had an office in the Thomas Circle
Building during World War II, in which they dished out war contracts.
One day a man was killed there, but so great was their influence that
no record was made on the police blotter. The newspapers still know
nothing about it.
A couple of hotels in Washington are owned by interests known to be
backed by underworld coin. Many chain stores owned by mob money have
branches there. Money of “Lepke” Buchalter, executed head of Murder,
Inc., is in Jarwood’s men’s clothing store, across the street from the
Department of Justice. The history of this chain makes a human interest
story.
When Lepke surrendered, to be turned over to J. Edgar Hoover, he
understood the boys put in a “fix” so he would be tried on federal
charges and not turned over to Brooklyn’s crusading District Attorney,
Bill O’Dwyer, on the Murder, Inc., rap, which meant the chair in Sing
Sing.
But Hoover would have nothing to do with such a deal, and gave him up
to New York State. Lepke was convicted of first-degree murder. He knew
he had been railroaded by the Mafia, which had wanted to get rid of
its Jewish partner. He threatened to blow the whistle, and was promised
leniency if he would talk. His wife, an attractive brunette, went to
see him in his cell and told him her life had been threatened, she
would be croaked if he spilled. That was not so. Lepke loved her, so he
went to the hot seat with his lips sealed to protect her.
Most of his illegal profits had been stashed away in secret safe
deposit vaults. He told her where they were. While Lepke was in
the death-chamber, his wife was often seen with Arthur Jawitz, a
slick-looking young guy, who had attracted the attention of the Feds
when they were looking for Lepke, whose bed he was keeping warm.
Shortly after Lepke’s electrocution, his widow married the black-haired
young man, and set him up in the men’s clothing business. They changed
their name to Jarwood. The underworld says Lepke left her $20,000,000
in U.S. currency. A former wife of Jawitz showed up, charged he had
married Betty Buchalter bigamously. She said Betty was “keeping” Jawitz
while her gangster husband was still alive.
After the Kefauver Committee quizzed Lou Wolfson, head of the Capital
Transit Company, which owns the street-cars and buses in Washington,
seeking gangster-ties, it went no further. There was no evidence.
Wolfson, who lives in Jacksonville, Florida, says he is a legitimate
businessman. We have no knowledge to the contrary. But it was developed
under oath at a Senatorial hearing that Wolfson and one William B.
Johnston had, between them, raised a fund of half-a-million dollars for
the campaign of Florida’s governor, Fuller Warren. Wolfson and Johnston
each put $154,000 into this private, special campaign kitty, and were
intimately associated during the campaign. Johnston is president
of Sportsman’s Park racetrack in Chicago, and several dog-tracks
in Florida, which were owned by the late Al Capone. Johnston makes
frequent payments to Capone associates as “loans.” He admitted he had
been associated with mob-owned enterprises.
Another witness, Leo J. Carroll, testified that it was general
knowledge in 1948, that with the election of Governor Warren, one-third
of whose campaign Wolfson financed, “the Mob would take over Florida.”
It did.
A few months after Wolfson secured control of the Washington transit
system, he was permitted to raise the fare to 15 cents a ride, on the
plea of extreme poverty. Right after that, the company doubled its
quarterly dividends from 50 cents to $1 a share. Company stock scored
a sensational advance, reaching $39. When Wolfson landed control he
bought 109,000 shares at $20.
Wolfson’s campaign to buy the local transit system was authorized by
the ICC and the Securities Exchange after an adverse recommendation
of the examiner and over opposition of minority stockholders. In less
than ten months, the Wolfson group succeeded in dominating the board of
directors and placing its own men in strategic executive spots, one of
whom is Frank E. Weakly, president of the Wardman Park Hotel.
Now the SEC has granted Wolfson permission to sell some of his stock
at the inflated price, which gives him the company and his money back.
At this writing, he is negotiating to buy the Washington Redskins from
George Marshall.
You can feel the presence of the mob in Washington. You can see
evidence in many directions that it is there. John L. Laskey,
immediate past president of the District Bar Association, resigned
the chairmanship of its law enforcement committee because he
had represented three witnesses called before the Senate Crime
Investigating Committee in connection with Florida gambling. He was a
former U.S. attorney.
When Frank Costello testified briefly last year before the Senate
Interstate Commerce Committee investigating the transportation of
slot-machines across state lines, the photo of a Senate attache calling
a cab for him while Capitol policemen pushed nosy spectators away,
was widely published. But what hasn’t been printed is that a table
was reserved for him in advance in the Senators’ private dining-room
in the Capitol, and while the great Costello dined with his staff of
lawyers, a couple of U.S. Senators humbly waited for seats. The Senate
dining-room is operated on a concession basis by the son-in-law of a
Chicago vending-machine manufacturer.
It could be some of the Senators are on Costello’s payroll. The law
firms of at least 40 Senators and Congressmen regularly represent the
wire service and local gamblers in their home towns.
Now let’s gander the Kefauver Committee.
26. TERROR FROM TENNESSEE
The House and the Senate have unlimited power and initiative in one
function only--they can investigate anything.
No President can veto a resolution for an investigation or by law curb
its activities or its scope. Theoretically, the purpose is to acquire
facts on which to base future legislation. Some of the mightiest of
our historical moves have sprung from such inquiries. Giants have
risen in the course of them. Harry Truman would probably have remained
an obscure little nonentity were it not that he became chairman of a
comparatively inconsequential Senate body which got to asking questions.
One of the surest ways to grab public attention is for a legislator to
propose a resolution for a special investigation. If it passes it is
not submitted to a standing committee, but its author is by established
custom chosen as its chairman.
This is the story of a special Senatorial investigating committee.
In many ways it is typical of such things under the Fair Deal, where
politics can strangle this last independent prerogative of Congress.
The central character of this tale is Estes Kefauver, who sprung a
Senate motion to investigate crime. Your authors have a personal
property right in this venture. For Senator Kefauver had read _Chicago
Confidential_, and what he found there made his hair stand on end. This
is no conjecture. His resolution was prompted by what we had discovered
and published.
He was sincere, impulsive and ambitious--if you can call a yen to be
Vice-President an ambition. He is our friend, and as such we wish
him well and, as Americans who know a little more than most of their
fellow-citizens about what is going on, we cheered the possibilities of
an untrammeled turning of the turf that would show up officially any
important portion of the staggering facts for which we risked our lives.
Kefauver began bravely. He realized that he had lightning bolts in both
hands; that he not only could become one of the foremost men of his
time, but that he could accomplish priceless service to his country.
With the infinite power that was his, he could expose and perhaps
destroy the Syndicate and the Mafia which rules it, and save us from
the creeping, leaping conspiracy of criminals which already in many
elements of our life has superseded constituted government.
But he wants to be Vice-President.
At this writing, he is 47; Barkley is 73. Political wisdom would
dictate that the second man on the next national Democratic ticket
should come from a border state. Kefauver is from Tennessee. He became
a headliner when he licked boss Ed Crump. He is of Dutch-American stock
and a Protestant.
He has four years more on his Senate term and could be re-elected. But
for a national nomination one needs a majority of the delegates at a
convention. Delegates are party men, designated by the party.
He had no more than taken his first bold steps when the party went to
work on him. No Democrat can fight the Mafia and get anything from most
Democrats except obstruction. They are so intimately and intricately
interwoven with the underworld plunderworld through all political
strata that they must protect it.
Kefauver was too naive to foresee this. He comes from one of the few
states where there is no gangsterism except in picayune city and county
affairs, and in those the Republicans share the chicken-feed rewards.
Kefauver campaigned in a coonskin cap and unhorsed the Memphis machine,
which had no great state-wide strength from within and no tie-ups to
bring it help from without. But the explosion that followed when his
bill passed rocked the whole national party.
Kefauver, in his innocence, had read our book of disclosures, but
like thousands of others, he failed to grasp the significance of the
political forces which have become integrated with the system, without
which it could not have spread, and to which it has contributed and
does contribute incalculable money, leadership and votes. It was
inconceivable to him that mayors and governors he knew and many of the
statesmanlike Senators with whom he mingled, could be beholden to, not
to say slaves of, swarthy, sinister men, many of them ex-convicts, who
traffic in bodies of women, making and supplying dope-fiends, dealing
in extortion, smuggling, bootlegging, hijacking, bribing and murdering
in the principal cities and states of the union; that these hyenas were
a controlling influence in nominations and elections; that they owned
vast commercial and industrial enterprises, labor unions, even some
newspapers, and that their pirate hands gripped the steering wheels of
enormous financial fleets.
He read it. But he couldn’t believe it. And what he did believe of it
he couldn’t digest.
Now he finds himself in the middle of a giant whitewash. He is the
chump whose good name is used to shield the key figures of the Mafia
and obfuscate their tie-up with the big city Democratic machines. He
does not admit it publicly but he is heartbroken.
Senate Republicans, seeking an issue, jumped in to support the proposed
investigation. Kefauver’s bill at once became a hot potato the
Democrats couldn’t drop.
Dave Niles, Bill Boyle, J. Howard McGrath, and Scott Lucas huddled.
They found it was too late to sidetrack the proposed investigation;
it had to go on, but with “sensible” safeguards. Suggestions that
the probe be transferred to other committees were waved aside as
impractical; it was necessary to have a front for this and Kefauver
was perfect for the job. He is a man of personal honesty, with no
embarrassing machine or underworld connections.
The committee was voted, but with the surprising proviso that the
Vice President should name the minority party members. This was
unprecedented. Minority leaders always choose their own committee
members. The purpose of this tactic was to deal Michigan Senator Homer
Ferguson, the Republican’s top investigator, out. Membership was
limited to five, three Democrats and two Republicans. Thereupon Vice
President Barkley followed orders, named two GOPers, one harmless.
Both were in the middle of violent primary campaigns, fighting for
political survival. It was known they could not spend much time with
the committee. Wiley, a good man, is a ranking minority member of
the Foreign Relations Committee. He was kept close to that post by
the Korean mess. Julius Cahn, Wiley’s intelligent aide, was rendered
impotent. And Tobey is more a New Dealer than most Democrats. He got
campaign support from the administration, and in payment gratuitously
but muddle-headedly blamed gambling in New York on Dewey.
The motor of a Senatorial investigating committee is its counsel and
the staff. The members have other duties, must attend other committee
meetings, must be on the floor for roll-calls. And they are not
usually professional prosecutors. They are at the mercy of their staffs.
That’s when the shenanigans began. Kefauver had no experience with such
shenanigans. He didn’t know whom to retain. Tom Murphy, Alger Hiss’
nemesis and later Police Commissioner of New York, was recommended. But
Murphy was persona non grata in Washington because he had guts enough
not to throw the Hiss prosecution, after he had learned that would
please the Attorney General’s office.
Dave Niles told Kefauver to ask Ferdinand Pecora for advice. Pecora,
then a Justice of the New York State Supreme Court, was getting by on
the reputation of having exposed the money barons of Wall Street in the
early 1930’s. Pecora is a thoroughgoing New Dealer and Kefauver is one
of the faithful. They failed to tell the man from Tennessee that Pecora
is Bronx boss Ed Flynn’s man. Flynn is head of the machine in which
Frank Costello is a power. Pecora attended Costello’s celebrated party
at the Copacabana nightclub, with half the local bench, a number of
jurists who owed their robes to Costello.
Pecora recommended his protégé, Rudolph Halley, of the law firm of
Fulton, Walter and Halley, for counsel and Felix Frankfurter phoned
to confirm it. Halley had been on the staff of the Truman Committee
when Fulton was its chief counsel, so he looked good to Estes as an
experienced prober. But Halley had been an attorney for the Hudson &
Manhattan Railroad, in which it was alleged underworld characters owned
stock. Kefauver told your reporters he had heard a rumor Halley might
have represented them, and had asked him about it before hiring him.
Kefauver looked us in the eyes and stated, “Halley said it wasn’t so.
Naturally, I took his word for it.”
After the Kefauver Committee had been functioning some months, Halley
admitted to your reporters before witnesses, that he knew there were
large underworld holdings in that company, which had been his client.
We have a sworn affidavit which reads as follows:
“Mr. Halley stated that the statement in the book _Chicago
Confidential_, to the effect that the underworld syndicate has bundles
of stock in the Hudson & Manhattan tubes, was substantially correct;
that it was his own personal knowledge, as former counsel for the
Hudson & Manhattan Railroad, that the underworld owned large blocks of
stock in that company.”
After a change in management, Halley was dismissed from the H & M,
and went to work for the Kefauver Committee at $120 a week. The new
management of the railroad said it had virtually eliminated suspicious
stockholders and emasculated shady directors who could not be fired.
Among the investigators hired by the committee were ex-cops,
disappointed lawyers and the usual Washington hanger-on-ers,
recommended for jobs by influential friends.
Kefauver’s principal source of information about the underworld was
what he had read in _Chicago Confidential_, He knew no more. He asked
Mortimer to take a leave of absence from his newspaper and act as paid
adviser to the committee. Mortimer accepted, but said that he would
take no compensation. Over the weekend, Kefauver withdrew his offer in
a telegram in which he blamed other Senators. He said they feared other
newspapermen would be offended. That was an alibi, quickly arranged
when influential Democrats vetoed the idea. But he took advice from Nat
Perlow, editor of the Police Gazette!
At the first open hearing of the committee, subpenaed gamblers
were represented by Morris Shenker, St. Louis lawyer, formerly on
the Missouri Democratic committee. As a result of his good work in
obtaining campaign donations, Shenker was named by Bill Boyle to the
Democratic finance committee. He hastily resigned after the deal was
exposed in Lait’s column.
Every effort was made to keep Kefauver concentrated on gambling.
Syndicate heads know the nation is not shocked over bookmaking.
Whenever witnesses or informers got hot on narcotics, the spine of the
Syndicate system, or began to talk about the huge investments of the
underworld in legitimate business, they were brushed off. There were
rumors of fixes, payoffs and other such skulduggery, though Kefauver
was absolutely in the clear. But whenever he was warned such things
were happening, Kefauver, a softie at heart, who believes evil of no
one, said it was impossible.
Though he promised your reporters his committee would hold open
hearings in New York and Chicago before election, at which no punches
would be pulled, he folded up like a frightened puppy. After one day in
New York, at which no one of importance was questioned, the committee
adjourned until after the election, with the statement that Joe Adonis,
who had been allegedly sought for 90 days, was unavailable. Your
reporters saw Adonis every night at the corner of 50th Street and
Broadway while committee investigators were supposed to be searching
for him. While the great man-hunt was supposed to be on, Adonis
voluntarily surrendered himself to New Jersey authorities who wanted to
prosecute him for gambling.
When asked why Costello hadn’t been called before election, a committee
spokesman stated “We have nothing to ask Mr. Costello.”
Similar wariness was shown in Chicago. When former police captain Dan
Gilbert, who was Jake Arvey’s hand-picked candidate for sheriff of
Cook County, was on the stand at a secret hearing, he was questioned
about his wealth. Your authors had exposed him as the richest cop in
the world, a millionaire. Gilbert’s salary had never topped $9,000
a year, yet he admitted at the closed hearing he owned more than
$350,000--which he said he had acquired through “speculation.” The
committee dropped it then. Senator Kefauver, in an interview, said,
“Captain Gilbert was a forthright witness.” When the _Chicago Sun
Times_, a Democratic New Deal newspaper, got hold of the minutes of
the secret hearing and splashed the text on Page 1 a few days before
election, Kefauver threatened to hold someone in contempt for the
leak. Yet the committee did not explain why this information of public
interest had been bottled up before election, and why Gilbert’s bank
accounts and securities had not been scrutinized.
Later, Kefauver imperiously “directed” Eugene C. Pulliam, publisher
of the _Indianapolis Star_ and _News_, “to discontinue” publication
of a series exposing gambling as revealed by previous committee
investigations, under penalty of a contempt citation.
While Estes was threatening other newspapermen with jail, columnist
Drew Pearson, his fervent supporter, was permitted to obtain access
to secret committee records, including highly confidential income tax
returns.
Wherever the committee held hearings, its staff tried to pick on the
little guys, fingered as the goats. The procedure in Miami was to put
six local Jewish bookmakers out of business. The Mafia was muscling in
on them anyway. The dispossessed were scheduled to be closed up so the
Chicago Sicilian mob would have clear sailing in Miami as soon as the
hullabaloo about the crime investigation blew over next year.