Five Families: The Rise, Decline, and Resurgence of America's Most Powerful Mafia Empires (12 page)

Preparing for the end of Prohibition, Costello concentrated on upgrading his gambling and bookmaking rings. One of his brilliant strokes was arranging “layoff” pools. For a fee, Costello allowed smaller bookies to transfer or spread bets to his organization. When they were overloaded with wagers on one team or a horse and faced huge losses if their customers collectively picked one big winner, they could “lay off” part of their bets to Costello’s pools.

Even before the death of Prohibition, New York’s gangland recognized Costello’s robust success as “King of the Slots,” in a sure-thing gambling gimmick. One of his fronts, the aptly named True Mint Novelty Company, ostensibly a candy-vending-machine outfit, was the biggest supplier of illegal slot machines to mom-and-pop groceries, small soda fountains, and other neighborhood shops. At the height of the slots craze in the early 1930s, Costello’s 25,000 one-armed bandits grossed about $500,000 a day. Profits were enormous, even though he had to share some of it with Luciano and others in the borgata. Naturally, there were protection payoffs to Tammany Hall and police officials to encourage them to ignore the gambling laws.

Conditions got sticky for Costello in 1934 when the reform administration of Republican and Fusion Party mayor Fiorello H. LaGuardia ousted the Tammany Democrats from City Hall. LaGuardia’s police raids on slots suppliers uncovered records revealing that in 1932 alone, Costello’s machines brought in $37 million. Vowing to cleanse the city of “tinhorn” gamblers and racketeers, the feisty LaGuardia got immense publicity mileage by personally wielding an ax to destroy confiscated machines and dumping them into the river.

While LaGuardia’s campaign did rid the city of slots, Costello found an alternate site for his arsenal of machines. Going into partnership with a southern Mafia family and the corrupt Huey Long political machine in Louisiana, he flooded bars and clubs in New Orleans and suburban towns with his one-armed moneymakers. At the time, New Orleans was so openly hospitable to bookies, roulette wheels, and high-stake card games that visitors were genuinely unaware that gambling was illegal in the state.

The LaGuardia administration’s anti-slots crusade was a minor inconvenience hardly interfering with Costello’s overall operations or those of the other Mafia families. As a new boss Costello faced a larger threat from a resentful rival
in his own family, Vito Genovese, who believed he was Luciano’s rightful heir.

Genovese’s ambitions could not be easily dismissed by Costello. He ran one of the toughest crews in the family; his crew had been Luciano’s main hit men. A glare from Genovese’s dark eyes from beneath bushy eyebrows intimidated the bravest mafioso.

Six years younger than Costello, Genovese had emigrated as a teenager from Rosiglino, a town near Naples, had little schooling, spoke passable but broken English, and made his headquarters in the Little Italy section of Manhattan. Despite his reputation as a thief, thug, and killer, the burly Genovese was only arrested once, when he was twenty, on a gun charge, and served sixty days in jail. His penchant for solving problems—even romantic ones—through violence became Mafia lore. Vito’s first wife died in 1931 of tuberculosis, and he fell in love with a married cousin, Anna Vernitico. Associates believed Vito had her husband strangled to death so that he could marry her.

When Costello took over from Luciano, Genovese was branching out into drugs and was the family’s leading narcotics trafficker. A murder case, however, relieved Costello of immediate worries about Genovese’s jealousy. In 1937 Vito was implicated in the killing three years earlier of a partner who had helped him in a swindle. The slaying occurred after the partner had the temerity to complain about not getting his share of the loot. Learning that prosecutors had a witness ready to testify against him, Genovese fled to Italy. The penniless boy immigrant returned to his native land in comfortable circumstances, reportedly with $750,000 in ready cash. Additionally, Anna Genovese made frequent visits as a courier to Vito, each time carrying $50,000 to $100,000 in cash from Genovese’s brother, Michael, who was looking after Vito’s racket interests in the United States.

Genovese’s departure removed internal hostility to Costello’s reign from other factions in the family and quelled resentment of his large slice of the family’s spoils from gambling, loan-sharking, Garment Center shakedowns, and the routine thefts and hijackings. The good times enabled Costello to establish himself in legitimate businesses, using relatives as screens for investments in liquor importing, real estate, and oil companies.

Unquestionably, the most dangerous of Costello’s activities was his subtle infiltration of important government institutions through his influence in the city’s Democratic Party. He was the shadowy broker who undermined justice in the courts and corrupted major officials to protect mobsters and their rackets.
Picking up from Luciano’s liaisons with Democratic politicians, Costello used outright bribes and secret contributions to cultivate unprecedented criminal control over Tammany Hall.

Dating back to 1789, Tammany Hall (or its official title, the Executive Committee of the New York County Democratic Committee) was the prototypical big-city political machine by the 1930s. The name Tammany Hall was synonymous with rigging elections, awarding municipal contracts, and handing out patronage jobs. Except for an occasional and short-lived victory by reformers uniting with the Republican Party to elect an independent mayor, Tammany had dominated the city’s government for more than one hundred years.

William Marcy Tweed (Boss Tweed), Tammany’s chairman in the 1850s and 1860s, became an unparalled symbol of corruption. His most outrageous plundering was the construction of a courthouse behind City Hall that should have cost $250,000. Under Tweed’s guidance and sticky fingers, the price tag soared to $12 million.

Tweed’s excesses finally landed him in jail, where he died in 1878, but his scandals failed to end Tammany’s influence. He was the last Protestant head of Tammany, and his demise led to a takeover by a succession of Irish-American politicians who were in charge when Costello moved in.

Fiorello LaGuardia’s election in 1933 and his bashing of Tammany unexpectedly made the Democratic machine politicians more subservient than previously to Mob money. Under the benevolent administration of the playboy Mayor Jimmy Walker from 1926 to 1933, Tammany had filled thousands of municipal posts and got kickbacks from job holders. LaGuardia stripped Tammany of its patronage, its horde of civil service jobs, and its ability to obtain graft by fixing municipal contracts. Bereft of its normal flow of funds to ensure elections to scores of vital city posts, including judgeships and district attorneys, Tammany turned to Frank Costello. The Mob boss gladly opened the money spigots and, in return, became the de facto head of Tammany Hall.

“Costello ran Tammany for decades,” noted Ralph F. Salerno, a New York City detective and an expert on organized crime. “A lot of politicians and judges owed their elections and positions to him.”

Until Costello came along, the city’s Democratic Party was largely in the grip of Irish ward heelers. The Mafia boss thought it was time to install more Italian-American district leaders in Tammany’s hierarchy, many of whom were on his payroll, and he did so. The changes in effect placed a Mafia leader in charge of the Democratic Party’s most important branch in the city, with the
power to nominate candidates for the highest elected offices. Thomas Kessner, a biographer of LaGuardia, found that Costello reversed the relationship that had existed between the Mob and Democratic leaders. “In its heyday Tammany had sold organized crime protection, but by the 1940s the gangster Frank Costello called the shots, and before he was through Tammany spoke with an Italian accent,” Kessner wrote.

Other Mafia bosses became indebted to Costello for exerting his sway when their soldiers and associates needed a favor from a judge, a prosecutor, or a well-placed city official. Costello’s ability to pull political and judicial strings enhanced his standing in the Mafia’s Commission and his bargaining strength with other bosses. Among mafiosi, his political savvy earned him a proud nickname: “the Prime Minister.”

Judges, important politicians, congressmen, authors, and New York society and café figures had no qualms about attending soirees that Costello frequently hosted in his penthouse at the Majestic Apartments overlooking Central Park. Tastefully decorated in art deco style, the only ostentatious notes in the apartment were a gold-plated piano and several slot machines. The affable Costello made no attempt to conceal his fascination with gambling, urging his guests to take a whirl at the slots. Unfailingly, every player won a small jackpot of clanking coins. When a guest tried to return the quarters, Costello admonished him, “What do you think I am, a punk? Nobody loses in my house.”

Costello successfully camouflaged his political muscle and his criminal background from the public until 1943, when he was tripped up by a legal wiretap on his home phone installed by rackets investigators working for Frank S. Hogan, the Manhattan DA who succeeded Tom Dewey. The inquiry failed to implicate Costello in any rackets charge, but the wires caught him talking unabashedly about his involvement in election campaigns. A conversation with Thomas Aurelio, who had just gotten Tammany Hall’s nomination for a state supreme court judgeship, clearly exposed Costello’s ability to put judicial robes on obliging candidates.

“Good morning, Francesco, how are you, and thanks for everything,” Aurelio said as an opener.

“Congratulations,” Costello replied. “It went over perfect. When I tell you something is in the bag, you can rest assured.”

“Right now,” the grateful Aurelio continued, “I want to assure you of my loyalty for all you have done. It’s undying.”

At a hearing concerning the nomination, Costello readily admitted that he
had obtained Tammany’s blessings for Aurelio, which assured his election. An imperturbable Costello acknowledged that he had put in office the current Tammany Hall leader, Michael Kennedy, by persuading four district leaders to swing their support to him. Costello had a simple explanation as to why the district leaders followed his advice: they were “old friends.”

The DA released the telephone tapes to the press in an attempt to derail Aurelio’s judgeship. Nevertheless, with Tammany’s backing, Aurelio was elected to a fourteen-year term. The disclosures of Costello’s behind-the-scenes political strength brought him widespread notoriety but failed to loosen his grip on Tammany Hall.

Years later, revelations about a Costello meeting with William O’Dwyer spotlighted how his authority extended to City Hall when the Democrats regained the city’s mayoralty in 1946. A former policeman, lawyer, and judge, the Democrat Bill O’Dwyer was elected in 1940 as the Brooklyn District Attorney. The next year, as the Democratic candidate he was defeated for mayor by Fiorello LaGuardia, who won a third term. In World War II, O’Dwyer, now an army brigadier general, attended a December 1942 cocktail party in Costello’s penthouse. Three top Tammany Hall leaders were also there, and witnesses observed O’Dwyer and Costello having a long, private tête-à-tête in a corner.

It is inconceivable that as a district attorney and an experienced politician O’Dwyer would have been unaware of Costello’s underworld eminence. Political insiders believe that O’Dwyer most likely was looking ahead and courting Costello’s good will and endorsement for the 1945 Democratic mayoral nomination. He did get Tammany’s support and was elected.

The meeting with Costello became public knowledge after O’Dwyer left office. The former mayor contended that he had sought out Costello as part of a military investigation into reports that a business partner of Costello’s was cheating the army in a uniform-manufacturing contract. O’Dwyer, however, admitted that he never filed an official report about contacting Costello or on his presumed inquiry into the uniform contract.

Twice elected mayor in the 1940s, O’Dwyer conceded when he was out of office that he had owed political favors to Costello. Part of the debt was repaid, O’Dwyer acknowledged, by appointing friends of Costello and other Mafia big shots to important municipal positions, including the Fire Department commissioner and the second-highest official in the city’s law department. “There are things you have to do politically if you want cooperation,” O’Dwyer replied cryptically when questioned about the appointments and his relationship with
Costello. The import of O’Dwyer’s admissions was clear: the Mob had been an unseen power in the political governing of America’s largest city for decades.

In the rare interviews that Frank Costello gave, he never admitted any involvement with the Mafia or any attempt to corrupt New York’s government. But it was obvious that he craved the same acceptance in the sophisticated upper-world that he had achieved in the underworld. “Other kids are brought up nice and sent to Harvard and Yale,” he said, lamenting his meager education and his “dees and dose” street-talk diction. “Me? I was brought up like a mushroom.”

Searching for inner peace while hovering between criminal affiliates and respected society, Costello tried psychoanalysis. His analyst suggested that the successful mobster was ashamed of his past and recommended that he ditch his old pals and develop new relationships by spending more time with cultured friends. It was an impossible solution for a borgata boss, and Costello dropped the analyst instead of the gangsters.

Despite an outburst of headlines about Costello’s unsavory background, his importance and influence was recognized by philanthropic groups that sought his support. The Salvation Army named him vice chairman of a charity drive in 1949. Costello gladly turned over the popular Copacabana nightclub, in which he was a secret owner, for a Salvation Army fund-raising dinner. Besides Costello’s mafiosi brethren, the dinner was dutifully attended by scores of judges, city officials, and politicians, all apparently unconcerned by published reports tarnishing Costello as an underworld and political power broker. About the same time, in an interview with the journalist Bob Considine, Costello tried to justify his life. He groped for an explanation defining his chosen career. “For a long time I’ve been trying to figure just what a racketeer is,” Costello said—and then proceeded to give a terse Mafia apologia for the sociological reasons that compelled him to become a criminal. “I never went to school past the third grade, but I’ve graduated from ten universities of hard knocks, and I’ve decided that a racketeer is a fellow who tries to get power, prestige, or money at the expense of entrenched power, prestige, or money.”