Five Families: The Rise, Decline, and Resurgence of America's Most Powerful Mafia Empires (14 page)

Dewey had long been distrustful of Hillman and the city’s other powerful clothing industry union head, David Dubinsky, the president of the International Ladies Garment Workers Union. Soon after his appointment as a special prosecutor, Dewey invited the two union dignitaries to his home for dinner, seeking their help in combating the industry’s gangsters. Both adamantly denied the slightest knowledge of any racketeering or union corruption.

Years later, after his retirement, Dewey, in an oral history of his life given to Columbia University, scoffed at Dubinsky’s and Hillman’s assumed ignorance. “They both dealt with these gangsters and knew all about them,” Dewey stated. “But they wouldn’t give me the slightest bit of help of any kind.”

None of the law-enforcement officials and prosecutors who reviewed
Lepke’s claims launched a deep investigation into the assertions of Hillman’s Mob connections. Dewey’s office and the other agencies said they lacked independent corroborating evidence of corruption and other grave felonies described by Lepke and his cronies. Federal and state prosecutors were wary of undertaking an intensive investigation of the politically prominent Hillman in the early 1940s, based on testimony from Lepke, an arch villain on death row, as their prime witness. At that time, Hillman was a supporter of and adviser to President Franklin D. Roosevelt, and any hint that he was linked to organized crime would have ignited a monumental scandal at the White House.

With the allegations against Hillman buried, Lepke’s last hope to escape the electric chair was a 1944 appeal for clemency to the governor of New York State. The governor at that time happened to be Thomas E. Dewey, serving his first term, and he declined to commute the death sentence to life imprisonment.

Thus, Louis Lepke Buchalter, at age forty-seven became the only significant American organized-crime leader to be executed for murder.

In addition to Lepke, Abe Reles’s testimony sent six other Murder Inc. assassins to the electric chair and three others to long prison sentences. On the witness stand, Reles detailed the structure of the gang, identified Don Umberto Anastasia as “our boss” and as the Mob boss of Brooklyn. Don Umberto, however, was never accused of homicide or of any charge involving the lethal Boys from Brooklyn and Murder Inc.

Three days before he was scheduled to testify at Lepke’s murder trial, Kid Twist Reles met a mysterious and puzzling death. He and three other prosecution witnesses were under twenty-four-hour police protection in a ten-room suite at Coney Island’s Half Moon Hotel. Of the four material witnesses in protective custody, Reles was the only one permitted to sleep alone in a private room. Just before dawn on November 12, 1941, Reles plunged to his death from a window in his room.

According to the police, the thirty-seven-year-old Reles used knotted bed-sheet strips, strengthened with a length of copper wire, which he attached to a radiator to lower himself from his sixth-floor window. The makeshift rope snapped, dropping him at least four stories to his death. Three of the five police officers guarding him claimed they were asleep, and two who supposedly were on duty said they had dozed off. Neither the guards nor the three other material witnesses in the suite heard Reles clamber out the window. Seeking explanations for the suspicious death of a vital witness, police officials maintained that Reles had attempted a harebrained escape, or that, as a prank, he had intended
to reenter the building from the floor about ten feet below his room and then return to surprise the police officers with his daredevil stunt.

A skeptical press, wondering if Reles might have been shoved out the window, immortalized his death in news stories such as “The canary who could sing but not fly.”

The publicity over the episode turned the Half Moon, an undistinguished hotel in a fading beach resort, into one of New York’s Mafia landmarks and a tourist curiosity for decades.

At the time of the Murder Inc. trials and Reles’s death, William O’Dwyer, the future mayor and the acquaintance of Frank Costello, was the Brooklyn DA. Several years later, an investigation under another district attorney, Miles F. McDonald, turned up a surprising angle. During Reles’s testimony at four Brooklyn trials, Albert Anastasia had gone into hiding and O’Dwyer’s office had put out a “Wanted” notice to all police precincts that he was being sought for questioning. But after Reles’s death, the “Wanted” notices were withdrawn by O’Dwyer’s office, and the Mafia despot again was visible on the streets of New York and Brooklyn.

Organized-crime insiders said there were persistent rumors that Frank Costello and other Cosa Nostra bosses raised $100,000 for a contract to kill Reles before he could implicate Anastasia. None of the policemen assigned to guard the celebrated canary was ever brought up on charges of bribery or complicity in Reles’s strange finale. Nevertheless, Reles’s plunge effectively ended the Murder Inc. investigation and any possibility of connecting that killing machine to Anastasia and the Mafia in a courtroom. O’Dwyer, in fact, defended the police guards at departmental trials for misconduct, and he promoted the officer in charge of the witness-protection unit.

Ten years later, McDonald impaneled a special grand jury to reinvestigate Reles’s end. It concluded that the guards were inexplicably lax and the original investigation was slipshod. But the jury believed that Reles “met his death while trying to escape.”

The biggest winners from the demise of Lepke, Reles, and Murder Inc. were the five New York borgatas. Whenever necessary, Anastasia and other mafiosi could still muster hit men for important assignments, so the loss of Murder Inc. was not a hardship. And, as a financial windfall, Lepke’s most desirable rackets fell into the laps of the Cosa Nostra families run by Frank Costello and Vincent Mangano.

A Profitable War

O
n Sunday, December 7, 1941, the Japanese attacked Pearl Harbor and other U.S. military bases in Hawaii, and America was at war. No further combat occurred in the American homeland and there were no severe civilian privations, but for most of the nation the four-year duration of the war was a time of rationing of scarce goods and personal sacrifice.

The American Mafia sacrificed nothing. As calculating predators, many mafiosi seized upon wartime conditions as a rare opportunity to make substantial profits. The war would also unexpectedly benefit the Mafia’s only imprisoned leader, Lucky Luciano.

Before Pearl Harbor, except for Dewey’s efforts as special prosecutor and as
Manhattan
DA, law enforcement in the rest of the New York area and in the country generally had been lax, corrupt, or incompetent in coping with the Cosa Nostra. Wartime put additional strains on federal and state police agencies, many of which lost their best personnel to the military services. Confronting new priorities of protecting the country from spies and saboteurs, law enforcement became even less vigilant and less interested in the difficult task of investigating organized crime.

For the first time since the onset of the Great Depression, the war and the huge defense industry created a roaring economy, full employment, and an
abundance of loose money looking to be spent. The New York Mob’s gambling mills in sports betting, horse racing, and numbers expanded mightily during the war as economic worries vanished and other recreational and travel opportunities declined.

But it was wartime rationing and the black market that generated the biggest gains for aspiring mafiosi. The government placed strict curbs on obtaining gasoline, tires, clothes, shoes, meat, butter, canned goods, sugar, and other staples, issuing special stamps, coupons, and permits necessary for purchasing the items. Mobsters became instant abusers, mainly by counterfeiting coupons or by getting corrupt government employees to supply them illegally with the scarce federal stamps and selling them for huge profits.

“Wartime rationing of gasoline, meat, and groceries opened a nationwide black market that the American public patronized as eagerly as it had once bought booze,” Paul Meskill, a journalist and expert on the Mafia in the 1940s, observed.

Overnight, an obscure capo in Brooklyn, Carlo Gambino, become a millionaire by exploiting the rationing system. A refugee from the Mussolini campaign against the Sicilian Mafia, Gambino in 1921 stowed away on an Italian ship, and sneaked into the United States as an illegal alien at age nineteen. He settled in Brooklyn, where he had numerous relatives, and soon brought over two younger brothers—budding mafiosi from Sicily. At the start of the Castellammarese War, he was attached to “Joe the Boss” Masseria’s camp. Before the battle ended in 1931, Gambino switched to the winning Maranzano faction but actually stayed on the sidelines, dodging involvement in any dangerous scrapes.

A bootlegger, closely associated with Albert Anastasia and Vincent Mangano, one of the founding five New York godfathers, Gambino remained in the illegal booze business even after Prohibition ended and, in 1939, was convicted for conspiracy to defraud the government of liquor taxes. The conviction was overturned because of an illegal federal wiretap, and Gambino sidestepped a two-year prison sentence. When the nation went to war in 1941, Gambino, an economic dynamo in the Mangano family, became an entrepreneur in the black market.

Joseph Valachi, a Mob defector who become a government informer, admitted that he, too, had been a black marketeer. Valachi identified Gambino as the Mafia’s black-market magnate who pocketed millions of dollars from ration
stamps. Gambino, he said, resorted to theft and to bribery to acquire huge supplies of the ration stamps from the Office of Price Administration (OPA), the government agency that oversaw rationing.

“Him and his brother Paul … made over a million from ration stamps during the war,” Valachi later testified before a Senate committee. “The stamps came out of the OPA’s offices. First Carlo’s boys would steal them. Then, when the government started hiding them in banks, Carlo made contact and the OPA men sold him the stamps. He really got rich on that.” Even Valachi, a low-level soldier, cleaned up on the black market, netting about $150,000 a year by bribing OPA workers to hand over valuable stamps. “There were so many legitimate stamps around, I didn’t think it was wise going around with counterfeit stamps,” he said.

Through a twist of fate, the war proved immensely useful to Lucky Luciano, languishing in a maximum security prison in upstate New York, far from the city. At the outbreak of the war with Japan, Germany, and Italy, American and Allied ships were being torpedoed and sunk by Nazi submarines (U-boats) off the East Coast at a horrific rate. More than one hundred twenty vessels and hundreds of lives were lost in the first three months of 1942; no U-boats were sunk.

Fear of sabotage on the New York waterfront, America’s largest port, heightened in February 1942 when the French luxury liner
Normandie
, while being converted into a troop ship, caught fire, capsizing in the Hudson River. Much later, it was determined that the fire was apparently caused by workers using acetylene torches, but in early 1942 Naval Intelligence suspected that the ship had been sabotaged by Axis sympathizers. In June 1942, anxiety about harbor security intensified after eight German spies and saboteurs, who had made it to Long Island and Florida from U-boats, were captured.

Concerned that some of the hundreds of Italian-American longshoremen on the docks and fishermen operating small boats might be Mussolini supporters, secretly aiding the U-boats and saboteurs, a Naval Intelligence unit, B-3, assigned more than one hundred agents to ferret out information. The efforts to unearth leads about possible disloyalty were fruitless. Agents quickly discovered that on the Mob-controlled waterfront, strangers were kept at bay by suspicious, tight-lipped stevedores and commercial fishermen.

Looking for help to protect the port of New York, B-3 officials contacted Frank Hogan, the Manhattan DA. Hogan’s racket investigators set up a meeting for the intelligence officers with Joseph “Socks” Lanza, the head of a
Seafood Workers’ Union local in the Fulton Fish Market and widely recognized as the market’s crime commissar. Lanza’s underworld nickname “Socks” had no relationship to hosiery; it stemmed from his reputation as a vicious Mafia enforcer.

In 1942 Lanza was a capo in the Costello-Luciano family, and at the Fulton Fish Market—the nation’s largest wholesale seafood distribution center—a tyrannical union racketeer. His main stock in trade was double-crossing his union members by extorting bribes from the market’s employers for sweetheart contracts. As a sideline show, suppliers and merchants had to pay off Lanza’s minions for unloading and loading services; otherwise their perishable products would rot before being sold and transported from the market.

Lanza was willing to cooperate with the federal counterspies, but his power was limited to the Fulton market on the East River in lower Manhattan. His authority did not extend to the vital West Side and Brooklyn piers, all dominated by mafiosi through alliances with the International Longshoremen’s Association. Lanza advised the federal agents to reach out to the imprisoned Lucky Luciano, the only man, he said, who could “snap the whip in the entire underworld.”