It Pays to Organize

(See Cover)

In a telephone booth in the lobby of Los Angeles' post office building, a thin, bright-eyed 17-year-old talked excitedly into the phone: "Gee, Mom, you shoulda seen it. Gangsters and crooks everywhere. They were telling Mr. Kefauver about murders and losing millions of dollars gambling. It was just like the movies . . . Just listen, Mom, the Senator's coming past right now . . ."

Tennessee's Estes Kefauver stopped. "I'll talk to your mom, son," he said. "I'm very glad to talk to you, Mom," he said into the phone. "And I enjoyed meeting your son Philip. He's a fine boy . . ."

Last week homely, rawboned Estes Kefauver, always eager to please, was trudging through California, doggedly intent on the trail of Big Crime. His gait was steady and a little flatfooted. His air was mildly astonished, as befitted a wary Tennessee mountain man inspecting the sinful sight of the big cities.

Before a massed bank of newspaper reporters and the peering snouts of television cameras, Kefauver had spent the afternoon listening, as a motley crew of mobsters admitted what they could not deny, chanted insolently when cornered: "I don't remember."

Debonair Al Smiley, ex-partner of Mobster "Bugsy" Siegel, inspected Kefauver contemptuously. He refused to explain why, after Siegel's untimely death, a Houston man had asked him to come down to Texas, and why Smiley had shuttled back & forth between Houston and the Beverly Club, the gambling casino near New Orleans controlled by New York's Frank Costello. Smiley's reward for these questionable services was "a small piece of property." What kind of property? "Well, it may have had a few oil wells on it/' said Al, and departed with curled lip.

Found: A Pattern. Estes Kefauver was used to such evasive replies and sullen reticence; they were the stock-in-trade of the nation's leading mystery men. But in grudging admissions and half-explanations under persistent questioning, by matching a piece here with another piece 2.000 miles away, Kefauver and his Senate Crime Investigating Committee had turned up a sinister pattern of organized crime in the U.S.

Last week, in an all-but-final report on ten months of sleuthing, the committee said: "The evidence demonstrates quite clearly that organized crime today is not limited to any single community of any single state, but occurs all over the country." Big Crime's big men know each other, deal with each other, meet frequently, "and on occasion do each other's dirty work when a competitor must be eliminated, an informer silenced, or a victim persuaded."

What the committee found most shocking was "the extent of official corruption and connivance in facilitating and promoting organized crime." In every big city top mobsters remain "immune from prosecution and punishment." The committee found cops bribed, political leaders bought or pressured, sheriffs indifferent or even encouraging, well-meaning officials made helpless by others who worked hand-in-glove with crime. "At the local level, this committee received evidence of corruption of law-enforcement officers and connivance with criminal gangs in practically every city in which it held hearings."

Two Gangs & the Arbiter. Piecing together its evidence, the committee concluded that organized crime in the U.S. is Big Business, dominated by at least two major crime outfits:

P:The Capone syndicate. Headquarters: Chicago. Command and staff: the heirs of Al Capone--vulture-eyed Tony Accardo; dapper Charles Fischetti, Al Capone's cousin; Jake ("Greasy Thumb") Guzik. The Capone Syndicate's specialty: bookmaking. with a secondary interest in policy wheels.

P:The New York syndicate. Headquarters: Manhattan. The command: Frank Costello and his No. 1 man, swart Joe Doto, alias Joe Adonis. Its specialties: gambling casinos, slot machines, crap games.

Both syndicates have heavy interests, during the winter season, in Miami. Apparently, said the committee, "there is a gentleman's agreement . . . not to infringe on the activities of each other." The "adhesive" which holds the two syndicates together, the committee suggested, seriously if a little tentatively, is the Mafia. the Sicilian secret society specializing in bootlegging, narcotic smuggling and "Black Hand" extortion. Presiding over both syndicates as an arbitrator by remote control, said the committee, is Mafia Chief Charles ("Lucky"') Luciano in Italy.

To the average U.S. citizen, such a conelusion, presented as fact by a congressional committee, was at least sobering. In Italy, where Manhattan's onetime King of Prostitution takes his luxurious ease after his deportation in 1946, a Luciano lieutenant complained: "Any time anything happens anywhere, they turn the heat on us. Sure, Lucky and I played around with bootlegging and the numbers rackets--who didn't? But all that stuff about narcotics and vice rings is just a crock of baloney."

Chasing Crapshooters. There were others besides Lucky Luciano who had always thought Estes Kefauver's investigation was a crock of baloney. Fellow Democrats had viewed with some skepticism the first moves of the earnest, energetic do-gooding Senator from Tennessee. No trained investigator, he is a 47-year-old lawyer (Yale '27), a liberal Southerner who opposed filibusters on principle and advocated Atlantic Union, an industrious student who has written a book on modernizing Congress, a reformer whose chief accomplishment as a politician was his defeat of Memphis' Boss Ed Crump in getting himself elected.

As his investigations progressed, many criticized his tendency to bugle off on any side trail in search of a headline, and his scattergun methods which seemed to flush many birds but drop few of them. Some, like Texas' Tom] Connally, dismissed the whole project as "chasing crap-shooters." And many professional crimebusters took a slightly amused view of the committee's melodramatic approach to the Mafia, a scapegoat dear to the hearts of Sunday-supplement writers and students of the devious Dr. Fu Manchu. But no one 'could charge Kefauver with pulling his shots on political grounds: his investigation into the unaccountable wealth of the Democrats' candidate for Cook County sheriff, Police Captain Dan ("Tubbo") Gilbert, unquestionably cost Majority Leader Scott Lucas the election. And by last week, Estes Kefauver's determined sleuthing had produced the most detailed portrait in a generation of the face of organized U.S. crime.

The New Bonanza. Time and circumstances, he found, had worked some major changes on the face of U.S. gangland. Big-scale prostitution, the big pre-World War I racket, had been spoiled by the Mann Act. Repeal had put an end to the era of bootleggers, gang war and magnificent funerals. The U.S.'s fast-buck boys had moved in on a bonanza which proved richer than their wildest dreams. The new bonanza: big-time gambling, organized on a big-time scale.

Gambling requires no fleets of trucks, cutting and bottling plants, secret garages, machine-gun battles with Coast Guard cutters or dumb cops on motorcycles. Gambling can be a pretty peaceful business and a man can keep the overhead down. Slot machines, punchboards, policy and numbers games, gambling casinos and bookmaking--the gangsters tried them all, made easy money on them all. Their customers range from the penny numbers players of the big-city slums to the big-money set who keep their change in century notes.

The take is staggering. An average slot machine, the committee estimated, clears $50 a week; a mobster who has placed 200 slots, a comparatively modest effort, can assure himself a gross of $5.000 a week. One of the eight big policy wheels in the Negro section of Chicago netted $1,000,000 a year. A gambling casino in New Jersey cleared $255,271 in a good year, one in Florida, $205,000. Tony Giz-zo, a mobster in Kansas City, admitted that his little newsstand handbook netted him more than $100,000 a year. In all, the committee estimated "conservatively," $20 billion changes hands every year in the U.S. in the big business of illegal gambling.

The Well-Charactered Man. In 1951's gangland, many of the faces are survivors of the death-ride days of Prohibition. But IQSI'S gang lord no longer swaggers about escorted by squads of dark-coated goons with bulges under their armpits, nor is he openly followed by a string of expensive tarts. His clothes are no longer flashy; everything's gotta be in good taste. He is a homebody. He lives comfortably but not fabulously in a respectable neighborhood, contributes to charity, hobnobs with cafe society, is a friend to politicians, sends his children to summer camp and the big kids to college. He allows himself a Cadillac (usually registered in his wife's name) and a home in Miami. He never, never carries a rod. He keeps all his transactions in cash and explains his low-class friends blandly. "Well-charactered people; you just meet them automatically," says New Jersey's Willie Moretti.

Chicago's Tony Accardo, for example, lives in swank River Forest, conducts his operations at the head of a long director's table in a big basement room lined with an antique gun collection. One Christmas Accardo decorated a 40-ft. tree on his lawn, installed electrically driven skaters, which glided around the lawn on tracks to the strains of Christmas carols. Tony wanted to be a good neighbor. He deplores the tattooed dove on his right hand, which twitches when he moves his trigger finger and reminds him of the days when he was an Al Capone bodyguard.

Hard-eyed men with brains like a cash register, the gangsters of 1951 are no kin to Damon Runyon's Harry the Horse. They have taken the business risk out of gambling by making it big. They look on their eager customers with the contempt of a sure-thing businessman for the fellow who throws around sucker money.

The Pattern. Many of Big Crime's big men have paid Kefauver the compliment of disappearing. Jake Guzik vanished from the steam room next door to Chicago's Crime Commission, where he conducts his business over an ivory-handled telephone with a towel around his sagging middle. Charlie Fischetti could be found neither at his Miami estate, nor in Manhattan's Stork Club, nor in the duplex penthouse atop 3100 North Sheridan

Road, where he and his brothers collect art and lavishly entertain visiting mob chieftains. Those that didn't fade were mortally embarrassed by the subpoena servers. "They went around to the butcher, the baker and the candlestick maker," complained Joe Adonis. "They made slurring remarks."

But whether they showed up or not, the mob chieftains left telltale signs everywhere. In city after city, the same pattern of far-flung enterprise and secret partnerships showed up. The committee found that Meyer Lansky and Joe Adonis are busily engaged with dice games in New Jersey and roulette in Miami. Philadelphia's Dave Glass and Cleveland's Al Polizzi are partners in Miami Beach's Sands Hotel. New York's Frank Erickson shared the Colonial Inn in Hallandale, Fla. with Detroit's Mert Wertheimer; Cleveland's Tommy McGinty has "maybe $1,500,000" in Las Vegas' Desert Inn.

The Big Crime bosses seem to patronize the same lawyers and tax accountants. Learning from Capone's unhappy experience, they meticulously file income-tax returns, but the sources of income are merely labeled "self-speculations," "special services," "sundry sources." Tony Accardo had listed $60,000 as "miscellaneous." The Treasury would accept such an accounting from no honest citizen, Kefauver pointed out. Why weren't these itemized? One attorney, mopping his brow nervously, quavered: "You don't ask these men questions."

"To Get Away." 1951's mobster has also moved in on legitimate enterprise. Cleveland's Morris Kleinman and Lou Rothkopf each own an apartment house; Anthony Milano, who exchanges frequent phone calls with Los Angeles' Mickey Cohen, has a loan company and an import firm. Moe Dalitz and three other ex-bootleggers own a substantial share of the Detroit Steel Corp. Across the country, mobsters specialize in service industries--liquor distributors, vending-machine companies--where a bit of muscle, tastefully displayed, may help get customers.

New York's Joe Adonis owns a big piece of the conveying company which, by ICC licensing regulations, holds an effective monopoly on the delivery of cars from the Ford assembly plant at Edgewater, N.J. into the New York area.* Costello owns oil leases and, in the past, owned some big chunks of Wall Street real estate. Philadelphia's "Nig" Rosen owns two dressmaking companies.

If Kefauver's only finding was that some questionable characters had made money out of gambling, few U.S. citizens could work up much moral indignation. Most could discern little moral distinction between plunging on the commodity market or a slot machine, between betting at a legal parimutuel window or at a handbook. Furthermore, the only people gang-men seem to shoot these days are other gangmen. But every citizen could get alarmed over the inevitable result of their drive to power and riches. Equipped with inexhaustible supplies of fresh green cash, they have used it unstintingly to buy immunity from the rule of law, and to corrupt the men who are sworn to uphold it.

Only the Best. The mobs' high-level executives have only scorn for the petty thieves, the park muggers, the petty embezzlers, the maverick holdup men who fill the nation's jails. The crime bosses do not g.o to jail; their boys seldom do. There is always a bondsman ready to spring them, and their money buys the highest-priced legal talent.

Over the years, the mobs' money has bought the men who do the arresting, sometimes even the men who do the judging. Armed with income-tax reports made available to them by President Truman himself, the committee grilled every sheriff and police executive they could find. It was not a pretty showing.

In Miami's Dade County, Sheriff James A. Sullivan's assets had soared from $2,500 to more than $75,000 in his six years in office, and a deputy testified that a fellow deputy had delivered to the sheriff's wife $36,000 in payoff money from gamblers. Over on the west coast, Tampa's Sheriff Hugh Culbreath was apparently in business with the top underworld boss, "Big Red" Italiano, let his brother run a book right in his office. An accountant for the racketeers in the Cuban bolita (a version of numbers in which small numbered balls are shaken up in a burlap bag) told the committee that one weekly expense item meant money for the sheriff, scornfully designated in the books as "Cabeza de melon" or "Melon-head."

Inviting Burglars. In New Orleans, Kefauver drove into town past big neon signs advertising Costello's swank Beverly Club. New Orleans is the domain of Costello's partner, "Dandy Phil" Kastel, and of Carlos ("The Little Man'') Marcello, a squat Sicilian who controls the racing wire for Chicago's Capone syndicate. Marcello is a partner with Kastel and Costello in the Beverly Club, owns a jukebox company, slot machines and a fleet of shrimping vessels. Last year he publicly pistol-whipped a man in the heart of New Orleans, but not a single witness to the event has yet turned up.

One Louisiana sheriff grudgingly admitted that he had between "$10,000 and $15,000, mebbe," stashed in his bedroom, protesting, "Lookahere, you're just inviting burglars." Over the denials of New Orleans' Sheriff John Grosch, his ex-wife told Kefauver that Grosch had $150,000 stowed in a strongbox, that panderers and racketeers used to bring the money to the house in bundles of dirty bills.

The Bag Men. In big cities, it is the police captains who wax rich. In New York, police officials began resigning in droves when a bookmaker named Harry Gross threatened to sing (TIME, Feb. 5). In Philadelphia, one witness testified that the bag man for Police Captain Vincent Elwell came into the station house each month with his pockets bulging, that the total take amounted to $152,000 a month for the city's 38 districts.

The committee probed other payoffs that had reached to the state level. In California, the committee said, representatives of Attorney General Fred Howser had set out to organize protection for all slot-machine and punchboard operations through the whole state. In Missouri, the state government "narrowly escaped falling under the control of gangsters" in 1948, the committee declared. Former State Attorney General Roy McKittrick testified that the late Charlie Binaggio offered him $50,000 to withdraw his rival candidacy to now-Governor Forrest Smith, told him: "I have to have a governor." After election, Binaggio was seen so often leaving Governor Smith's office that reporters dubbed him "BackDoor Charlie." But Binaggio failed to get a wide-open state from Smith; for his unforgivable failure, he died untidily at the hands of his bosses. Said Estes Kefauver: "I don't think we have hardly scratched the surface in showing up officials who are actually linked to and supported by organized gambling."

Biggest Enemy. The committee did not pretend that it could chart the workings of the organizations down to the last detail. But it was convinced that its probing had uncovered in Chicago one of the main springs of the whole nationwide crime net. Its name: the Continental Press Service.

Continental, said Estes Kefauver, is "Public Enemy No. i." It has a monopoly on the transmission of minute-by-minute information from local race tracks to bookies throughout the country. Through distributors which the committee branded dummies, it gets its news by wigwag or telephone from the tracks, flashes it by Western Union teletype throughout the country. It supplies last-minute news on track conditions, horses scratched, changes in jockeys, last-minute odds at the parimutuel windows. Big-time bookies must have it to lay off bets when a "hot" horse gets a dangerously high play, to get the results of a race 1,000 miles away in a matter of minutes, and to keep a winning customer on the hook for the next race. In effect, it takes betting out of the race track and makes it a nationwide operation at countless bookie outlets.

Dummies & the Mob. Ostensibly, Continental was bought by Arthur ("Mickey") McBride for his son Edward, now a law student in Miami University. But son Edward proved to know nothing about the business. Mickey McBride is the multimillionaire who owns the Cleveland Browns football team. But, said the committee, Continental. is not controlled by Mickey McBride, either. It is controlled by "the gangsters who constitute the Capone syndicate."

The mob muscled in by the simple method of eliminating the previous owner, James Ragen. In 1946, Ragen told police that if he was killed, the men responsible would be Tony Accardo, Jake Guzik, and Murray ("The Camel") Humphreys. Ragen was shot down in a noisy ambush on a South Side Chicago corner in 1946, then poisoned in his hospital bed when he showed signs of recovering from his wounds. "After his death," concluded the committee, "the mob took over and that was that."

The Tentacles. Through Continental, the Capone syndicate has a powerful grip on every big bookmaking operation in the country. The committee first picked up its far-flung tentacles in Miami. A man named Harry Russell suddenly appeared in Miami shortly after the 1948 election of Governor Fuller Warren. There he set about muscling into the S & G Syndicate, which did a $26 million-a-year business supplying Continental's racing wire news to its own bookies. Continental abruptly switched off S & G's service. After several days of futile resistance, S & G took in a new partner--Harry Russell.

The links to Chicago were not apparent at first. But the committee found some suspicious links to the governor's mansion in Tallahassee. A dog-track owner named William H. Johnston, whom the committee called "an associate of Capone mobsters," had contributed $100,000 to Governor Fuller Warren's campaign. Russell was a good friend of Johnston's, and his efforts to subdue S & G were greatly helped by the governor's special investigator, who obligingly raided S & G books pointed out by Russell. When Russell became an S & G partner, the investigator as obligingly withdrew from the scene.

Then in Chicago, another committee investigating team learned from a mobster that Harry Russell was a longtime partner of Tony Accardo himself. Later, checking the records of the Erie & Buffalo policy wheel, the Chicago team found a 1949 income-tax report made out by Accardo and Guzik as partners. They were getting $278,666 from the wheel, the report showed, but investigators were more interested in another item further down. The partners had claimed a loss of $7,252 on the S & G Syndicate in Florida. That frugal claim was the first solid proof that Russell had muscled in as a Capone syndicate frontman.

The Texas Trail. The Chicago syndicate's interests are not confined to horse racing. A hood named Pat Manno, who is vice president of a Chicago auto-sales company, in his spare time, is Accardo's specialist on policy. Manno also travels for the syndicate. The committee confronted him with a wire recording of a conversation he had been trapped into by Dallas' Sheriff Steve Guthrie in 1946. Manno had gone to Texas to see Guthrie, then sheriff-elect, about a "program of horse-booking, slot machines, dice, numbers, everything."

Guthrie: "I want to get this straight. The only thing you expect from me is protection on gambling, nothing else?"

Manno: "Something I'm against, that's dope peddlers, pickpockets, hired killers. That's one thing I can't stomach, and that's one thing the fellows up there--the group--won't stand for, things like that. They discourage it."

Guthrie: "Do you think that there's any way that they can find out that there's a tie-up between here and up there in Chicago?"

Manno: "We're not going to come from Chicago down here."

Guthrie: "In other words, they'll all be local boys?"

Manno: "All local fellows ... All we are doing is bankrolling him . . . and keep the--like he calls--the muscle men . . . These people can be called in too, you know."

All-Star Finale. That was about all the committee needed to confirm its worst suspicions of the extent and brazen confidence of the Chicago syndicate. Next week, in the wind-up hearings, Estes Kefauver will bring his roadshow to New York, where an all-star cast, including Frank Costello, Joe Adonis and Meyer Lansky, unhappily awaits him. Then the committee will sit down to write its final report.

What has the committee accomplished? To those who never believe anything until they see it on television, it has shown the new, bland face of igsi's overlords of crime. It has stirred up local crimebusters, lit at least a flash fire under many a city police department.

There have been other, more tangible results. Since the investigation began, at least a dozen sheriffs, deputies and police officers have been removed from office or indicted. The committee has cited 14 witnesses for contempt of Congress. Though the first test case, Harry Russell, was dismissed by Federal Judge F. Dickinson Letts, Kefauver hopes to do better with the rest. There are warrants out for the arrest of 17 others who failed to appear, including Guzik, Fischetti and Kleinman. The Bureau of Internal Revenue has filed tax liens against those who admitted to more wealth than their income taxes showed.

But Kefauver's major target is the racing wire. He is considering legislation to prohibit the interstate transmission of racing information other than results and the interstate transmission of bets by wire. He wants to give the Internal Revenue agents special power (or the gumption) to deal with Big Crimesters' calculatedly vague accounting.

Estes Kefauver has no notion that all gambling can or should be prohibited. He likes a quiet game of stud poker himself. And most U.S. citizens would hate to give up the right to lose--or the hope of winning--a fast buck. But it would be nice if Estes Kefauver could arrange to have it run by a nicer set of fellows.

*Last week Ford admitted "embarrassment" over the situation, asked ICC to license another carrier.

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